As filed with the Securities and Exchange Commission on June 30, 2004

         The following exhibit has been omitted pursuant to Rule 12b-25:
   Exhibit 4.10, Amendment, dated as of June 29, 2004, to the loan agreement
     between Grupo Radio Centro, S.A. de C.V. and Scotiabank Inverlat, S.A.

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 20-F

|_|        REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                                       OR

|X|             ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                             SECURITIES EXCHANGE ACT

                   For the fiscal year ended December 31, 2003

                                       OR

|_|             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                   for the transition period from      to

                         Commission File Number: 1-12090

                                   ----------

                        Grupo Radio Centro, S.A. de C.V.
             (Exact name of registrant as specified in its charter)

                               Radio Center Group
                 (Translation of registrant's name into English)

                              United Mexican States
                 (Jurisdiction of incorporation or organization)

                                   ----------

                      Constituyentes 1154 (7(degree) Piso)
                                Col. Lomas Altas
                        C.P. 11950, Mexico, D.F., Mexico
                    (Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

                                                     Name of each exchange
        Title of each class:                          on which registered

Series A Shares, without par value                  New York Stock Exchange*
  ("Series A Shares")
Ordinary Participation Certificates                 New York Stock Exchange*
  ("CPOs"), each CPO representing one
  Series A Share
American Depositary Shares ("ADSs"),                New York Stock Exchange
  each representing nine CPOs

*Not for  trading,  but only in  connection  with the  registration  of American
Depositary  Shares,  pursuant to the requirements of the Securities and Exchange
Commission.

               Securities registered or to be registered pursuant
                       to Section 12(g) of the Act: None

          Securities for which there is a reporting obligation pursuant
                       to Section 15(d) of the Act: None

      Indicate the number of outstanding  shares of each of the issuer's classes
of capital or common  stock as of the close of the period  covered by the annual
report: 162,667,561 Series A Shares

      Indicate by check mark  whether the  Registrant  (1) has filed all reports
required  to be file by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days.

              |X|   Yes                           |_|   No

                  Indicate  by check mark  which  financial  statement  item the
Registrant has elected to follow:

              |_|   Item 17                       |X|   Item 18

================================================================================

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

PART I.........................................................................2

   Item 1.   Identity of Directors, Senior Management,
               Advisers, and Auditors..........................................2

   Item 2.   Offer Statistics and Expected Timetable...........................2

   Item 3.   Key Information...................................................2

   Item 4.   Information on the Company.......................................11

   Item 5.   Operating and Financial Review and Prospects.....................27

   Item 6.   Directors, Senior Management and Employees.......................36

   Item 7.   Major Shareholders and Related Party Transactions................44

   Item 8.   Financial Information............................................46

   Item 9.   The Offer and Listing............................................47

   Item 10.  Additional Information...........................................49

   Item 11.  Quantitative and Qualitative Disclosure
               About Market Risk..............................................62

   Item 12.  Description of Securities other than
               Equity Securities..............................................62

PART II.......................................................................63

   Item 13.  Defaults, Dividend Arrearages And Delinquencies..................63

   Item 14.  Material Modifications to the Rights of Security
               Holders and Use of Proceeds....................................63

   Item 15.  Controls and Procedures..........................................63

   Item 16A. Audit Committee Financial Expert.................................63

   Item 16B. Code of Ethics...................................................63

   Item 16C. Principal Accountant Fees and Services...........................64

PART III......................................................................64

   Item 17.  Financial Statements.............................................64

   Item 18.  Financial Statements.............................................64

   Item 19.  Exhibits.........................................................64

<PAGE>

                                  INTRODUCTION

      Grupo Radio Centro is a corporation organized under the laws of the United
Mexican  States.  As  used in this  Annual  Report  and  except  as the  context
otherwise  requires,  the terms "Grupo Radio Centro" and "the Company"  refer to
Grupo Radio Centro, S.A. de C.V. and its consolidated subsidiaries.

                      PRESENTATION OF FINANCIAL INFORMATION

      In this  Annual  Report  references  to "pesos" or "Ps." are to the lawful
currency of the United Mexican  States  ("Mexico").  References  herein to "U.S.
dollars" or "$" are to United States dollars.

      The Company  publishes  its  financial  statements  in pesos.  Pursuant to
generally accepted accounting  principles in Mexico ("Mexican GAAP"),  financial
data  for all  periods  in the  financial  statements  included  in Item 18 (the
"Consolidated Financial Statements") and, unless otherwise indicated, throughout
this  Annual  Report,  have been  restated in  constant  pesos  (having the same
purchasing power for each period indicated taking into account  inflation) as of
December 31, 2003.

      This Annual Report contains translations of certain peso amounts into U.S.
dollars at  specified  rates  solely for the  convenience  of the reader.  These
translations  should not be construed as  representations  that the peso amounts
actually  represent  such U.S.  dollar  amounts or could be converted  into U.S.
dollars at the rate  indicated.  Unless  otherwise  indicated,  such U.S. dollar
amounts  have been  translated  from pesos at an exchange  rate of Ps.  11.24 to
$1.00,  the noon buying rate for pesos at December  31, 2003 as published by the
Federal Reserve Bank of New York. The peso/U.S. dollar exchange rate is volatile
and,  accordingly,  the  translation  to U.S.  dollars at the  December 31, 2003
exchange  rate may not  accurately  represent  the  financial  condition  of the
Company in U.S. dollar terms as of a subsequent date. On June 23, 2004, the noon
buying   rate  for   pesos  was  Ps.   11.345   to  $1.00.   See  Item  3,  "Key
Information--Exchange  Rate  Information,"  for information  regarding  exchange
rates since January 1, 1999.

      The term  "billion"  as used in this  Annual  Report  means  one  thousand
million.

                           FORWARD-LOOKING STATEMENTS

      This  Annual  Report  contains  words,  such as  "believe,"  "expect"  and
"anticipate" and similar  expressions that identify  forward-looking  statements
that reflect the Company's views about future events and financial  performance.
Actual   results  could  differ   materially   from  those   projected  in  such
forward-looking statements as a result of various factors that may be beyond the
Company's  control,  including,  but not limited to, effects on the Company from
competition with its broadcasting and other operations,  material changes in the
performance  or  popularity  of  key  radio  stations  or  broadcast   programs,
significant  developments  in the Mexican  economic or  political  situation  or
changes  in the  Company's  regulatory  environment.  Accordingly,  readers  are
cautioned not to place undue reliance on these  forward-looking  statements.  In
any event,  these  statements  speak  only as of their  dates,  and the  Company
undertakes no obligation to update or revise any of them, whether as a result of
new information, future events or otherwise.

<PAGE>

                                     PART I

Item 1. Identity of Directors, Senior Management, Advisers and Auditors

      Not applicable.

Item 2. Offer Statistics and Expected Timetable

      Not applicable.

Item 3. Key Information

                             SELECTED FINANCIAL DATA

      The following table presents selected  consolidated  financial information
of the Company and its  subsidiaries  for each of the  periods  indicated.  This
information,  to the extent applicable,  should be read in conjunction with, and
is  qualified  in its  entirety  by  reference  to, the  Consolidated  Financial
Statements,  including  the notes  thereto,  included  elsewhere  in this Annual
Report.  Grupo Radio  Centro's  financial  statements are prepared in accordance
with Mexican  GAAP,  which differ in certain  respects from  generally  accepted
accounting  principles  in the  United  States  ("U.S.  GAAP").  Note  25 to the
Consolidated  Financial  Statements  provides  a  description  of the  principal
differences  between  Mexican  GAAP and U.S.  GAAP as they relate to Grupo Radio
Centro and a  reconciliation  to U.S. GAAP of operating  income,  net income and
shareholders' equity.

      Grupo Radio Centro's  financial  statements were prepared giving effect to
Bulletin  B-10 and  Bulletin  B-12  issued by the  Mexican  Institute  of Public
Accountants. Generally, Bulletin B-10 is designed to provide for the recognition
of certain  effects of  inflation  by  requiring  Grupo Radio  Centro to restate
non-monetary  assets and liabilities using the Mexican Consumer Price Index (the
"INPC"),  to restate the components of  shareholders'  equity using the INPC, to
restate  its  fixed  assets  using  the INPC and to  record  gains or  losses in
purchasing  power from holding  monetary  assets or  liabilities.  Bulletin B-12
requires that the statement of changes in financial  position  reconcile changes
from the  restated  historical  balance  sheet for the prior year to the current
balance  sheet.  Pursuant to Mexican GAAP, the selected  consolidated  financial
information set forth below, and all data in the related Consolidated  Financial
Statements,  have been  restated in constant  pesos at December  31,  2003.  The
effect  of the  inflation  accounting  principles  described  above has not been
reversed in the  reconciliation  to U.S. GAAP.  See Note 25 to the  Consolidated
Financial Statements.

      In 1999,  Grupo Radio  Centro  elected  early to adopt the  provisions  of
Bulletin  D-4,  issued  by the  Mexican  Institute  of  Public  Accountants  and
officially effective beginning January 1, 2000. In accordance with Bulletin D-4,
the  Company's  financial  statements  recognize  the income tax  effects of the
differences in bases of assets and liabilities between financial  accounting and
accounting for tax reporting purposes. In prior years through December 31, 1998,
Grupo Radio Centro  recognized  the effects of deferred taxes for certain timing
differences  expected to reverse over a definite  period of time.  However,  the
Company's  adoption  of  Bulletin  D-4 gave rise to  additional  deferred  taxes
resulting in a net deferred  tax expense of Ps. 64.1 million  recognized  in the
statement of income for the year ended December 31, 1999. The cumulative  effect
of adopting  Bulletin D-4 for years prior to December  31, 1998  resulted in the
recognition of additional  deferred tax liabilities of Ps. 90.6 million in 1999.
This  cumulative  effect is presented as a separate  component in  shareholders'
equity.


                                       2
<PAGE>

<TABLE>
<CAPTION>

                                                                              Year Ended December 31,
                                        ------------------------------------------------------------------------------------------
                                          2003(1)       2003             2002            2001            2000             1999
                                        ---------   ------------    -------------   --------------  --------------  --------------
                                                             (in thousands, except per-ADS data)
<S>                                     <C>               <C>             <C>              <C>           <C>               <C>
Operating Data:
Mexican GAAP:
  Broadcasting Revenue................. $  73,406   Ps.   825,084   Ps.   738,376   Ps.    779,957  Ps.  1,040,630  Ps.    899,988
  Broadcasting Expenses, Excluding
     Depreciation and Amortization.....    43,904         493,593         479,624          504,304         464,238         451,839
                                        ---------   -------------   -------------   --------------  --------------  --------------
  Broadcasting  Income.................    29,502         331,491         258,752          275,653         576,392         448,149
  Depreciation and Amortization........    10,089         113,405         112,327          122,196         117,110         101,384
  Corporate, General and
     Administrative Expenses...........     5,354          60,183          46,911           52,399          75,702          58,497
                                        ---------   -------------   -------------   --------------  --------------  --------------
  Operating  Income(2) (3).............    14,059         157,903          99,514          101,058         383,580         288,268
  Comprehensive Financing Expense......     2,925          32,898          53,210           12,597          33,185          23,587
  Other  (Expense), Net................   (5,870)        (65,982)        (52,487)         (75,993)        (63,724)        (11,300)
  Extraordinary Item(3)................    30,322         340,705               0                0               0               0
  Net (Loss) Income(4).................  (21,865)       (245,795)           2,271           18,470         255,868         122,491
  Minority Interest....................         1               6              14               17             224               1
  Net (Loss) Income per ADS(4) (5).....    (1.21)         (13.60)            0.12             1.01           13.50            5.73
  Common Shares Outstanding(5).........   162,722         162,722         163,235          163,918         170,512         192,236

U.S. GAAP:
  Broadcasting Revenue................. $  73,406   Ps.   825,084   Ps.   738,376   Ps.    779,957  Ps.  1,040,630  Ps.    899,988
  Operating (Loss) Income(2) (3).......  (28,591)       (321,346)         120,896          179,302         460,317         347,096
  Net (Loss) Income(2) (4).............  (28,361)       (318,777)          76,214           96,907         332,619         233,162
  Net (Loss) Income per ADS(2)(4)(5)...    (1.53)         (17.64)            4.23             5.31           17.55           10.91
  Dividends per ADS(6).................      0.28            3.15            0.00             6.92            2.50            0.00
  Common Shares Outstanding(5).........   162,722         162,722         163,235          163,918         170,512         192,236

Balance Sheet Data:
Mexican GAAP:
  Working Capital...................... $(11,271)   Ps. (126,701)   Ps.     (315)   Ps.   (49,897)  Ps.    161,573  Ps.    164,168
  Property and Equipment, Net..........    41,805         469,892         495,940          527,168         539,139         595,333
  Excess Cost over Fair Value of
     Assets of Subsidiaries............    67,802         762,088         841,603          917,502         885,076         945,095
  Total Assets(2)......................   138,197       1,553,336       1,788,752        1,930,353       1,974,214       2,042,162
  Long Term Debt Excluding Current
     Portion...........................    15,112         169,855         164,789          234,463         307,536               0
  Total Debt...........................    20,149         226,473         354,942          414,288         384,421          71,371
  Shareholders' Equity(2)..............    79,869         897,720       1,200,486        1,204,010    1,316,215(7)    1,725,087(8)

U.S. GAAP:
  Total Assets(2)...................... $ 138,002   Ps. 1,551,148   Ps. 1,841,561   Ps.  1,986,087   Ps. 2,026,884   Ps. 2,078,736
  Shareholders' Equity(2)..............    78,029         877,058       1,252,806        1,259,257       1,368,406       1,758,195
</TABLE>

----------

(1)  Peso  amounts  have  been  translated  into  U.S.  dollars  solely  for the
     convenience  of the reader at the rate of Ps.  11.24 per U.S.  dollar,  the
     noon  buying rate for pesos on  December  31,  2003,  as  published  by the
     Federal Reserve Bank of New York. See "--Exchange Rate Information."
(2)  Pursuant to Statement of Financial  Accounting  Standard No. 142 (SFAS 142)
     under U.S. GAAP, amortization of goodwill ceased as of January 1, 2002. For
     purposes  of  presentation  and  comparison,  SFAS 142 was  applied  to the
     financial data for the years ended 2001,  2000 and 1999. The operating loss
     under U.S.  GAAP for the year ended  December 31, 2003  includes a goodwill
     impairment loss of Ps. 152.5 million determined under SFAS 142. See Note 25
     to the Consolidated Financial Statements.
(3)  Extraordinary  item  reflects a  provision  of Ps.  340.7  million  for the
     contingent liability related to the Infored arbitration proceeding.  Unlike
     treatment  under Mexican GAAP, for purposes of U.S. GAAP, such provision is
     charged against operating  income.  See Notes 10 and 25 to the Consolidated
     Financial Statements.
(4)  In  accordance  with  Mexican  GAAP,  net  income  does not give  effect to
     minority interest. In contrast, net income under U.S. GAAP does give effect
     to minority interest. See Note 25 to the Consolidated Financial Statements.
(5)  Amounts  shown  are  the  weighted   average  number  of  Series  A  Shares
     outstanding,  which was used for purposes of  computing  net income per ADS
     under both Mexican and U.S. GAAP.
(6)  The  Company's  dividend  payment  in any  particular  year  relates to the
     immediately preceding fiscal year. The Company did not pay any dividends in
     2002 with respect to 2001.
(7)  In December  2000,  the Company  reduced its capital by Ps.  343.0  million
     (nominal amount) through a payment to its shareholders of that amount.  See
     Item 5,  "Operating  and  Financial  Review  and  Prospects--Liquidity  and
     Capital Resources."
(8)  In 1999, the Company  elected to adopt early the provisions of Bulletin D-4
     issued  by the  Mexican  Institute  of  Public  Accountants,  which  became
     effective on January 1, 2000.  The cumulative  effect of adopting  Bulletin
     D-4 for years prior to December 31, 1998 was the recognition in 1999 of Ps.
     90.6 million in  additional  deferred tax  liabilities.  See Note 20 to the
     Consolidated Financial Statements.


                                       3
<PAGE>

                            EXCHANGE RATE INFORMATION

      Mexico has a free market for foreign exchange,  and the Mexican government
allows the peso to float freely against the U.S.  dollar.  For much of 1998, the
foreign  exchange  markets were volatile as a result of financial crises in Asia
and Russia and financial turmoil in certain Latin American countries,  including
Brazil and Venezuela.  The peso declined during this period,  but was relatively
stable  from  1999  until  2001.  In 2002 the peso  declined  significantly  and
continued to decline  through  2003. In 2004 to date,  the peso has  depreciated
slightly.  There can be no  assurance  that the  government  will  maintain  its
current  policies  with  regard  to the peso or that the peso  will not  further
depreciate or appreciate significantly in the future.

      The following table sets forth, for the periods indicated,  the high, low,
average and period-end exchange rate for the purchase of U.S. dollars, expressed
in pesos per U.S. dollar.

Period                                                Exchange Rate(1)
------                                 -----------------------------------------
Year Ended December 31,                High      Low     Average(2)   Period End
                                       -----    -----    ----------   ----------
1999................................   10.60     9.24       9.56          9.48
2000................................   10.09     9.18       9.47          9.62
2001................................    9.97     8.95       9.33          9.16
2002................................   10.43     9.00       9.75         10.43
2003................................   11.41    10.11      10.85         11.24

Month Ended 2003:

December............................   11.41    11.17

Month Ended 2004:

January.............................   11.10     10.81
February............................   11.25     10.91
March...............................   11.23     10.92
April...............................   11.43     11.16
May.................................   11.63     11.38

----------
(1)   Source: Noon buying rate for pesos reported by the Federal Reserve Bank of
      New York.
(2)   Average of month-end rates.

      Fluctuations  in the exchange  rate  between the peso and the U.S.  dollar
will affect the U.S.  dollar  equivalent of the peso price of Series A Shares on
the Bolsa Mexicana de Valores,  S.A. de C.V. (the "Mexican Stock  Exchange") and
the price of ADSs on the New York Stock Exchange ("NYSE"). The Company pays cash
dividends in pesos, and exchange rate  fluctuations  will affect the U.S. dollar
amounts  received  by holders  of ADSs upon  conversion  by  Citibank  N.A.,  as
depositary  for the ADSs (the  "Depositary"),  of cash dividends on the Series A
Shares underlying the CPOs represented by the ADSs.

      On June 23, 2004, the noon buying rate was Ps. 11.345 to $1.00.


                                       4
<PAGE>

                                  RISK FACTORS

Risks Relating to Our Operations

      If the Company fails to prevail in its challenge in the Mexican  courts to
      the damage award granted in the arbitration  proceedings  with Infored and
      Mr.  Gutierrez  Vivo,  our financial  condition  would be  materially  and
      adversely affected

      In 2002, an arbitration  proceeding  was initiated  against the Company by
Infored, S.A. de C.V. ("Infored"), the producer of the news program Monitor, and
Jose Gutierrez  Vivo,  the principal  anchor of Monitor,  seeking  rescission of
contract  and  damages.   On  March  1,  2004,  an  arbitration   panel  of  the
International  Chamber of Commerce  (the "ICC")  notified the Company of the ICC
panel's  decision to rescind the contract and to award Infored and Mr. Gutierrez
Vivo together a total of $21.1 million,  which represents the amount the Company
would be required to pay after  taking into  account the amounts  prepaid by the
Company under the contract.  The Company plans to challenge the validity of this
decision  in  the  Mexican  courts.  Pending  the  Company's  challenge  of  the
arbitration award, the Company will seek a stay of the enforcement of the damage
award.  If the Mexican courts refuse to grant the Company a stay of enforcement,
it is likely that the Company will not have  sufficient  financial  resources to
pay the award unless it is able to obtain additional  financing.  The Company is
currently engaged in talks with lenders in an effort to obtain standby financing
that could be drawn upon in the event the Company is obligated to make a payment
in connection with the damage award. In addition, should the Company fail in its
challenge,  it expects to pursue various potential sources of funds to cover its
obligations  with  respect to such award,  including  medium-term  or  long-term
financing up to $21.1 million. No assurance can be given that such funds will be
obtained.  Failure by the Company to win a stay of enforcement and,  ultimately,
to prevail in its challenge to the damage award would  materially  and adversely
affect its financial condition.

      If the Company  does not comply with the  financial  covenants in our loan
      agreement,  the lender under that agreement could  accelerate the maturity
      of the loan

      We have  indebtedness  with an outstanding  principal  amount of Ps. 198.1
million at June 23, 2004 under a loan agreement with Scotiabank  Inverlat,  S.A.
This  loan  agreement  contains  covenants  requiring  us  to  maintain  certain
quarterly and year-end  financial  ratios.  If we breach any of these covenants,
the amount then outstanding under the loan agreement could be accelerated by the
lender. In the past, including for the year ending December 31, 2003 and for the
first quarter of 2004,  we have obtained from the lender  waivers of our failure
to comply with these  covenants.  There can be no assurance that we will be able
to comply with these  covenants in the future or that, if we fail to comply,  we
will be able to obtain waivers of such failures.

      Increased  competition  or a  decline  in  popularity  of any of our radio
      formats could reduce our audience share and result in a loss of revenue

      Radio  broadcasting  in  Mexico  is highly  competitive,  and  programming
popularity,  an important factor in advertising sales, is readily susceptible to
change. In the last five years, our average Mexico City audience share decreased
from  34.3%  in  1999  to  32.0%  in  2003.  See  Item  4,  "Information  on the
Company--Business   Overview--Competition."  There  can  be  no  assurance  that
increased  competition within, or a decline in the popularity of, a given format
segment  will not  decrease  our  aggregate  audience  share in the  future.  In
addition,  we face strong  competition  from both  television  and various print
media for  advertising  revenues.  If we are unable to respond to an increase in
competition  or a decline in the  popularity  of any of our radio  formats,  our
revenue and profitability could suffer material adverse consequences.


                                       5
<PAGE>

      If we lose one or more of our key  customers,  we could lose a significant
      amount of our revenue

      Our two  largest  individual  customers  in 2003 and 2002  were  Comercial
Mexicana,  S.A.  de  C.V.  ("Comercial  Mexicana")  and  Gigante,  S.A.  de C.V.
("Gigante").  In 2003,  Comercial  Mexicana and Gigante  accounted  for 3.6% and
3.5%,  respectively,  of our  total  broadcasting  revenue.  In 2002,  Comercial
Mexicana and Gigante  accounted  for 5.5% and 5.3%,  respectively,  of our total
broadcasting  revenue.  Gigante was our largest individual  customer in 2001 and
accounted for 7.7% of our total broadcasting  revenue in that year. In 2003, the
companies  comprising  Grupo  Carso  accounted  for 5.2% of  total  broadcasting
revenue, while in 2002 and 2001, the companies comprising Grupo Gigante, S.A. de
C.V. ("Grupo Gigante") accounted for 7.3% and 9.3%,  respectively,  of our total
broadcasting  revenue.  We cannot assure you that Comercial Mexicana and Gigante
or the  companies  comprising  Grupo  Carso or Grupo  Gigante  will  continue to
purchase  advertising  from us at current levels.  The loss of our  relationship
with any one of our principal  customers could have a material adverse effect on
our results of operations.  See Item 4,  "Information  on the  Company--Business
Overview--Broadcasting Operations--Sale of Air Time and Marketing."

      A decrease  in  advertising  expenditures  by  political  campaigns  could
      substantially reduce our revenue

      Our business is significantly affected by the advertising  expenditures of
political  parties during  election  campaigns in Mexico.  While our revenue has
increased  significantly during congressional  elections,  including 2003, which
occur every three  years,  our revenue  has  increased  even more  significantly
during  presidential  elections,  which occur every six years  (coinciding  with
congressional elections), including 2000. In 2001, 2002 and 2003, advertising by
political  parties  accounted  for 0.1%,  6.1% and  21.1% of total  broadcasting
revenue,  respectively.  A decrease in  advertising  expenditures  by  political
campaigns  during an election year could have a material  adverse  impact on our
results  of  operations.  See  Item  4,  "Information  on the  Company--Business
Overview--Broadcasting  Operations--Sale of Air Time and Marketing," and Item 5,
"Operating and Financial Review and Prospects--Seasonality of Sales."

      The seasonal nature of our business affects our revenue

      Our business is seasonal.  Our revenue from  advertising  sales,  which we
recognize  when the  advertising  is aired,  is generally  highest in the fourth
quarter  because of the high level of  advertising  during the  holiday  season.
Accordingly,  our results of  operations  depend  disproportionately  on revenue
recognized in the fourth quarter,  and a low level of fourth quarter advertising
revenue could have a material  adverse  effect on our results of operations  for
the    year.    See   Item   4,    "Information    on   the    Company--Business
Overview--Broadcasting  Operations--Sale  of Air Time and Marketing" and Item 5,
"Operating and Financial Review and Prospects--Seasonality of Sales."

      Termination  of the  operating  agreement  for  XHFO-FM  could  reduce our
      revenue

      We manage and operate,  but do not own, one of Mexico  City's most popular
radio stations,  XHFO-FM.  That station is an important  source of revenue.  The
agreement  pursuant to which we operate  XHFO-FM is  scheduled  to  terminate on
January 2, 2005.  There can be no assurance  that we will be able to extend this
agreement  or what  the  terms  of any  such  extension  might  be.  See Item 4,
"Information on the Company--Business  Overview--Broadcasting  Operations--Radio
Stations."


                                       6
<PAGE>

      The Mexican Federal Competition Commission may prohibit us from making any
      further investments in radio operations in Mexico

      We, like all Mexican radio licensees, are subject to regulation by several
Mexican governmental  agencies.  As a result of such regulation,  radio licenses
are subject to review and possible revocation, and licensees are prohibited from
transferring  or  assigning  their radio  broadcasting  licenses  without  prior
governmental  approval of both the  transfer  and its terms.  As a result of the
increase in our share of the Mexico City radio market  following  completion  of
the  acquisition  of  Radiodifusion  RED in 1996, we are required by the Mexican
Comision Federal de Competencia (the "Federal  Competition  Commission") to seek
its prior approval in connection with any future investments in radio operations
in  Mexico,  including,  without  limitation,  purchases  and  leases  of  radio
stations,  interests in other radio concerns or transmission sites, irrespective
of the size of such  investments or their related audience share. To the best of
our  knowledge,  other  Mexican radio  broadcasting  companies are not generally
subject to this requirement. No assurance can be given that we will be permitted
by the Federal Competition  Commission to make any particular  investment should
we  desire  to do so.  See  Item  4,  "Information  on  the  Company--Regulatory
Framework--Regulation of Radio Broadcasting by Mexico--Other."

      If the Mexican  government does not renew our broadcasting  licenses,  our
      business could be harmed

      To broadcast commercial radio in Mexico, a broadcaster must have a license
from  the  Secretaria  de   Comunicaciones   y  Transportes  (the  Secretary  of
Communication  and  Transportation  or "SCT").  Because the SCT generally grants
renewals to licensees that have  substantially  complied with applicable law, we
expect our  renewal  applications  that are  currently  pending  to be  granted.
However,  if we are  unable  to renew  these  licenses,  our  business  could be
significantly harmed.

      Our  investments in non-radio  businesses may not be successful due to our
      limited experience outside the radio broadcasting industry

      In addition to our ownership and operation of radio stations and the radio
network,  Organizacion  Impulsora  de Radio,  we may invest from time to time in
other media or communications businesses. Our experience in these businesses may
be limited,  and there can be no assurance that any such business  venture would
succeed.

Risks Relating to Our Principal Shareholders and Capital Structure

      Holders of ADSs are not entitled to attend shareholders  meetings and have
      no voting rights

      Holders of the CPOs,  and  therefore  holders of the ADSs,  have no voting
rights with  respect to the  underlying  Series A Shares.  Pursuant to the trust
agreement  under which the CPOs are  issued,  the trustee for the CPOs will vote
the Series A Shares held in the trust in the same manner as the  majority of the
Series  A  Shares  that are not  held in the  trust  and  that are  voted at the
relevant shareholders meeting. Holders of the CPOs are not entitled to attend or
to address  our  shareholders  meetings.  See Item 7,  "Major  Shareholders  and
Related  Party  Transactions--Major   Shareholders"  and  Item  10,  "Additional
Information--Bylaws--Voting           Rights"          and           "Additional
Information--Bylaws--Limitations Affecting Non-Mexican Holders--Voting Rights."


                                       7
<PAGE>

      Certain members of the Aguirre family  effectively  control our management
      and the decisions of the shareholders, and their interests may differ from
      those of other shareholders

      Certain  members of the Aguirre  family have the power to elect a majority
of our  directors  and control our  management  because  they own a  substantial
majority of the outstanding  Series A Shares not held in the form of CPOs. These
Aguirre family members have established two Mexican trusts,  which they control,
that  together  hold  84,020,646  Series A Shares,  or 51.6% of all  outstanding
Series  A  Shares.   See  Item  7,  "Major   Shareholders   and  Related   Party
Transactions--Major      Shareholders"     and     Item     10,      "Additional
Information--Bylaws--Voting           Rights"          and           "Additional
Information--Bylaws--Limitations Affecting Non-Mexican Holders--Voting Rights."

      Our bylaws include  provisions  that could delay or prevent a takeover and
      thus  deprive  you of a  premium  over  the  market  price  of the ADSs or
      otherwise adversely affect the market price of the ADSs

      The bylaws include certain provisions that could delay, defer or prevent a
third party from acquiring us, despite the possible benefit to our shareholders.
These provisions include  restrictions on the acquisition,  without the approval
of the  Board of  Directors,  of  shares  or  other  securities  of the  Company
representing 30% or more of our capital stock and restrictions on agreements and
other  arrangements,  without the  approval of the Board of  Directors,  for the
exercise of voting rights in respect of shares  representing  30% or more of the
Company's capital stock.  These provisions may deprive you of a premium over the
market price of the ADSs or otherwise  adversely  affect the market price of the
ADSs.      See     Item     10,      "Additional      Information--Bylaws--Other
Provisions--Anti-Takeover Provisions."

      Future sales of Series A Shares by the controlling shareholders may affect
      future market prices of the Series A Shares, CPOs and ADSs

      Actions by members of the  Aguirre  family,  directly  or through  the two
Mexican  trusts  through which they hold their Series A Shares,  with respect to
the disposition of their Series A Shares, may adversely affect the trading price
of the Series A Shares or the CPOs on the Mexican  Stock  Exchange and the price
of the ADSs on the NYSE. There are no contractual  restrictions on the rights of
members of the Aguirre family to sell ADSs, CPOs or Series A Shares.

      You may  not be  able  to  participate  in any  future  preemptive  rights
      offering and, as a result, your equity interest in us may be diluted

      Under  Mexican law, if we issue new shares for cash as a part of a capital
increase,  we must  generally  grant our  shareholders  the right to  purchase a
sufficient  number of shares to maintain  their existing  ownership  percentage.
Rights to purchase shares in these circumstances are known as preemptive rights.
We may not legally be permitted to allow holders of ADSs in the United States to
exercise any  preemptive  rights in any future capital  increases  unless (i) we
file a registration  statement with the U.S.  Securities and Exchange Commission
(the "SEC") with respect to that future  issuance of shares or (ii) the offering
qualifies  for an  exemption  from  the  registration  requirements  of the U.S.
Securities Act of 1933 (the "Securities Act"). At the time of any future capital
increase, we will evaluate the costs and potential  liabilities  associated with
filing a registration  statement with the SEC, the benefits of preemptive rights
to holders of ADSs in the United  States and any other  factors that we consider
important in determining whether to file a registration statement.

      There can be no assurance that we will file a registration  statement with
the SEC to allow  holders  of ADSs in the  United  States  to  participate  in a
preemptive rights offering. In addition, under current Mexican law, sales by the
Depositary of preemptive rights and distribution of the proceeds from such


                                       8
<PAGE>

sales to the ADS holders is not possible.  As a result,  the equity  interest of
ADS  holders in us would be diluted  proportionately.  See Item 10,  "Additional
Information--Bylaws--Preemptive Rights."

Risks Relating to Mexico

      Economic developments in Mexico may adversely affect our business

      Our financial  condition and results of operations are generally  affected
by the strength of the Mexican economy,  as the demand for advertising,  revenue
from which is the principal  source of our earnings,  generally  declines during
periods of economic difficulty.

      In 2002 and 2003,  Mexico's gross domestic  product,  or GDP, grew by 0.9%
and 1.3%,  respectively,  and  inflation  rose to 5.7% and  decreased  to 3.98%,
respectively.  In  2004,  according  to  preliminary  estimates  of the  Mexican
government,  GDP is  expected  to grow by 3.1% and  inflation  is expected to be
4.08%.  If the Mexican  economy  contracts  or if inflation  and interest  rates
increase  significantly,  our  business,  financial  condition  and  results  of
operations could suffer material adverse consequences.

      Economic  conditions in Mexico are heavily  influenced by the condition of
the U.S. economy due to various factors,  including commercial trade pursuant to
the North American Free Trade Agreement (NAFTA),  U.S.  investment in Mexico and
emigration from Mexico to the United States. Events and conditions affecting the
U.S. economy may adversely affect our business, results of operations, prospects
and financial condition.

      In addition,  in recent years, economic crises in Asia, Russia, Brazil and
other emerging markets have adversely  affected the Mexican economy and could do
so again.

      High levels of inflation and high interest rates in Mexico could adversely
      affect our financial condition and results of operations

      Mexico has experienced high levels of inflation and high domestic interest
rates.  The annual rate of  inflation,  as  measured by changes in the  National
Consumer  Price Index,  was 3.98% for 2003.  Inflation  for the first quarter of
2004 was 1.57%.  If inflation in Mexico does not remain within the  government's
projections,  we might not be able to raise our broadcast  advertising  rates to
keep pace with inflation.  More generally, the adverse effects of high inflation
on the Mexican economy might result in lower demand for broadcast advertising.

      Interest rates on 28-day Mexican treasury bills, or Cetes,  averaged 6.23%
during 2003.  On June 23, 2004,  the 28-day Cetes rate was 6.58%.  High interest
rates in Mexico could adversely affect our financing costs.

      Political  events in Mexico could affect Mexican  economic  policy and our
      operations

      Mexican political events may  significantly  affect our operations and the
performance  of Mexican  securities,  including our  securities.  In the Mexican
national  elections  held in July 2000,  Vicente Fox of the  opposition  Partido
Accion Nacional  (National Action Party or PAN) won the presidency.  His victory
ended  more than 70 years of  presidential  rule by the  Partido  Revolucionario
Institucional  (the Institutional  Revolutionary  Party or PRI). Neither the PRI
nor the PAN  currently  has a majority in the Congress or Senate.  The lack of a
majority  party  in the  legislature  and the  lack  of  alignment  between  the
legislature  and the President has resulted in deadlock and prevented the timely
implementation  of


                                       9
<PAGE>

economic  reforms.  Continued delays could have a material adverse effect on the
Mexican economy and on our business.

      Depreciation  of the peso  relative  to the U.S.  dollar  could  adversely
      affect our financial condition and results of operations

      The value of the peso has been subject to  significant  fluctuations  with
respect  to the  U.S.  dollar  in the  past and may be  subject  to  significant
fluctuations  in the  future.  In 2003,  the peso  depreciated  against the U.S.
dollar by year-end by 7.77% and the average  value of the peso  against the U.S.
dollar during 2003 was 11.28% lower than in 2002. In 2002, the peso  depreciated
against  the U.S.  dollar at year-end by  approximately  12.8%,  and the average
value of the peso  against  the U.S.  dollar  during 2002 was 4.2% lower than in
2001. In 2001, the peso appreciated against the U.S. dollar by 4.8% at year-end,
and the average  value of the peso against the U.S.  dollar during 2001 was 1.7%
higher than in 2000. No assurance can be given that the peso will not depreciate
in value relative to the U.S. dollar in the future.

      Fluctuations  in the exchange  rate  between the peso and the U.S.  dollar
will affect the U.S. dollar value of an investment in our equity  securities and
of dividend and other distribution payments on those securities. See "--Exchange
Rate Information."

      On March 1, 2004, as a result of the Infored Arbitration  Proceeding,  the
Company  was  ordered to pay $21.1  million in  damages.  The  Company  plans to
challenge  the  validity of this  decision in the Mexican  courts.  Pending this
challenge,  the Company will seek a stay of the enforcement of the damage award.
There can be no assurance that we will prevail on any of these  challenges.  Any
award  that  we are  ultimately  obligated  to pay as a  result  of the  Infored
Arbitration Proceeding would be payable in U.S. dollars.

      A small  portion of our operating  costs is also payable in U.S.  dollars.
Although  at  December  31,  2003  and  at  May  31,   2004,   we  had  no  U.S.
dollar-denominated indebtedness, we may in the future incur non-peso-denominated
indebtedness.  Declines in the value of the peso  relative  to other  currencies
increase our obligations payable in U.S. dollars,  increase our operating costs,
increase our  interest  costs in pesos  relative to any U.S.  dollar-denominated
indebtedness,  result in foreign  exchange losses and could adversely affect our
ability to meet our U.S.  dollar-denominated  obligations.  Additionally,  since
substantially all our revenue is denominated in pesos, increased costs resulting
from a decline in the value of the peso relative to the U.S.  dollar will not be
offset by any  exchange-related  increase in revenue. See Item 11, "Quantitative
and Qualitative Disclosure About Market Risk."

      Severe  devaluation  or  depreciation  of the  peso  may  also  result  in
disruption  of the  international  foreign  exchange  markets  and may limit our
ability to transfer or to convert pesos into U.S.  dollars and other  currencies
for the purpose of making timely  payments of our  obligations  or our operating
costs payable in U.S. dollars.

      Developments in other emerging  market  countries may affect prices of the
      ADSs

      The  market  value of  securities  of  Mexican  companies  is, to  varying
degrees,  affected by economic and market  conditions in other  emerging  market
countries.   Although   economic   conditions  in  such   countries  may  differ
significantly  from  economic  conditions  in Mexico,  investors'  reactions  to
developments  in any of these other  countries may have an adverse effect on the
market value of securities of Mexican issuers.  In late October 1997,  prices of
both  Mexican   debt   securities   and  Mexican   equity   securities   dropped
substantially,  precipitated  by  a  sharp  drop  in  value  of  Asian  markets.
Similarly,  in the  second  half of 1998,  prices  of  Mexican  securities  were
adversely affected by the economic crises in


                                       10
<PAGE>

Russia  and  Brazil.  There can be no  assurance  that the  market  value of our
securities would not be adversely  affected by events  elsewhere,  especially in
emerging market countries.

Item 4. Information on the Company

                                   THE COMPANY

Organization

      Grupo Radio Centro is a corporation (sociedad anonima de capital variable)
organized under the laws of Mexico. Grupo Radio Centro is a holding company that
operates through its subsidiaries.

      Grupo  Radio  Centro's   principal   executive   offices  are  located  at
Constituyentes  1154 (7(degree)  Piso),  Col. Lomas Altas,  C.P. 11950,  Mexico,
D.F.,  Mexico.  The  telephone  number of Grupo Radio Centro at this location is
(525) 55-728-4800.

History

      Grupo Radio Centro is a family-controlled  radio broadcasting company with
roots in Mexican radio broadcasting dating back over 50 years. Francisco Aguirre
J.,  the  founder  of Grupo  Radio  Centro,  initiated  his  radio  broadcasting
activities in 1946. In 1952, he founded  Organizacion Radio Centro ("ORC"),  the
sole owner and operator of two radio stations, Radio Centro and Radio Exitos. In
1965, the Company  formed  Organizacion  Impulsora de Radio ("OIR"),  to provide
national sales  representation to affiliated radio stations outside Mexico City.
It was incorporated as Tecnica de Desarrollo Publicitario,  S.A. de C.V. on June
8, 1971,  and renamed  Grupo Radio  Centro,  S.A. de C.V. on July 14, 1992.  The
bylaws of the Company provide for its existence until 2070. In 1973, Grupo Radio
Centro expanded its broadcasting  activities by establishing  three new FM radio
stations,  thus  consolidating  its position as the market leader in Mexico City
radio  broadcasting.  In 1983,  Grupo Radio  Centro began  broadcasting  outside
Mexico and in 1986 created  Cadena Radio Centro  ("CRC") to provide  programming
and network sales  representation to affiliated radio stations serving primarily
the  rapidly  growing  Spanish-speaking  population  of the United  States.  The
Company  sold  CRC  in  August  1994.  In  1989,  the  Aguirre  family  began  a
comprehensive process of corporate  reorganization designed to consolidate Grupo
Radio Centro's radio  operations  under the common  ownership of the Company and
the family's non-radio-related  operations under the common ownership of another
company controlled by the Aguirre family outside Grupo Radio Centro. The purpose
of the reorganization was to permit Grupo Radio Centro to focus on radio-related
operations  and to  acquire  the  balance  of shares  of its radio  broadcasting
subsidiaries  that were owned  directly or  indirectly by members of the Aguirre
family  outside  Grupo  Radio  Centro.  As a result of the  reorganization,  the
Company  acquired  substantially  all of the  shares of its  radio  broadcasting
subsidiaries  with the last  transfer of shares  occurring in March 1993. In the
third quarter of 1993, the Company  completed an initial public  offering of its
ADSs and  CPOs,  listing  such  securities  on the NYSE  and the  Mexican  Stock
Exchange,  respectively.  The Company  completed a subsequent public offering of
ADSs and CPOs during the third quarter of 1996. On June 30, 2003,  all CPOs held
by holders that  qualified  as Mexican  investors,  as defined in the  Company's
bylaws  (see  Item 10,  "Additional  Information--Bylaws--Limitations  Affecting
Non-Mexican Holders"),  were exchanged for Series A Shares held in the CPO Trust
(see Item 9, "The Offer and Listing"). In connection with the Amended CPO Trust,
the Series A Shares  commenced  trading on the Mexican Stock  Exchange under the
symbol  "RCENTRO.A"  on June 30, 2003.  The Series A Share  listing is deemed to
include the CPOs, such that the Series A Share trading line will reflect trading
of both Series A Shares and CPOs.


                                       11
<PAGE>

Capital Expenditures and Divestitures

      Capital Expenditures

      Capital  expenditures in 2003,  2002, and 2001 were Ps. 18.7 million,  Ps.
33.4 million and Ps. 152.5 million  respectively.  In 2003, capital expenditures
were financed from working capital. In 2002, capital  expenditures were financed
from working capital.  In 2001, capital  expenditures were financed from working
capital and short-term bank loans.

      The  Company's  principal  capital  expenditures  in  2001  were  made  in
connection with its purchase of the Mexico City radio station XEN-AM on December
31, 2001.  The total purchase price was  approximately  $6.0 million,  including
approximately  $1.0 million in monthly  payments  under an  operating  agreement
effective up to the  consummation of the purchase,  $3.4 million in deposits and
cash delivered upon consummation of the purchase and $1.6 million in payments to
a third  party,  primarily in  connection  with the  termination  of a marketing
services  contract  between the third party and the  previous  owners of XEN-AM.
Approximately  $4.8 million of the total purchase price was paid in 2001 and the
remaining  balance  of $1.2  million  was  paid  during  2002.  See  "--Business
Overview--Business  Strategy--Maintenance  of Leading Market Position," Item 10,
"Additional  Information--Material  Contracts"  and Note 23 to the  Consolidated
Financial Statements.

      Additionally, in February 2001 the Company purchased To2, a company owning
an Internet portal,  for a total purchase price of $2.15 million,  including the
assumption of certain  liabilities  totaling $1.25  million.  In March 2001, the
Company purchased Palco Deportivo,  a company providing  sports-related  content
for various media,  for a total  purchase  price of $4.7 million,  including the
assumption of certain liabilities totaling $0.7 million. These acquisitions were
financed with short-term bank loans. See Item 5, "Operating and Financial Review
and  Prospects--Liquidity and Capital Resources" and Note 24 to the Consolidated
Financial Statements.

      The balance of the Company's capital  expenditures in the 2001-2003 period
were primarily for broadcasting equipment.

      Capital Divestitures

      The Company's capital  divestitures from 2001 to 2003 amounted to Ps. 19.5
million in 2003, reflecting primarily the sale of used company automobiles,  Ps.
25.0 million in 2002,  reflecting  primarily the sale of real estate and Ps. 3.7
million in 2001,  reflecting primarily the sale of obsolete equipment (see Notes
1 and 11 to the Consolidated Financial Statements).

                                BUSINESS OVERVIEW

      Grupo Radio Centro is a leading  radio-broadcasting  company in Mexico and
for each of the last 32 years has been the leading radio  broadcaster,  in terms
of audience  share,  in Mexico City,  the most populous  city in North  America.
Grupo Radio Centro's principal activities are the production and broadcasting of
musical  programs,  news,  interviews and special event programs.  The Company's
revenue is derived primarily from the sale of commercial air time to advertising
agencies and businesses.  The Company's  Mexico City average  audience share for
the year ended  December 31, 2003 was 32.0%,  almost twice that of the next most
popular  radio-broadcasting  company  in Mexico  City for the same  period.  See
"--Broadcasting Operations" and "--Competition."

      Grupo Radio Centro currently owns eight AM and five FM radio stations, and
manages and operates an additional FM station.  Of the 14 radio stations it owns
or operates,  Grupo Radio Centro


                                       12
<PAGE>

operates  five AM and six FM stations in Mexico  City.  The  remaining  three AM
radio stations, including one in Mexico City, are currently managed and operated
by third parties pursuant to operating agreements.

      The Company  manages the 11 radio stations it operates in Mexico City as a
portfolio,  combining  in-depth market research and programming  innovation with
continuous  investment in  state-of-the-art  technology  and human  resources to
produce  high-quality,  popular  programs that target  substantially  all of the
demographic  segments of the Mexico City radio audience  sought by  advertisers.
For the year ended December 31, 2003, Grupo Radio Centro's radio stations ranked
as four of the top ten FM radio  stations  out of a total of 29 FM stations  and
three of the top ten AM stations out of a total of 34 AM stations. The Company's
station  portfolio  includes  one or more of the leading  stations,  in terms of
audience  share,  in  most of the  major  station  format  categories  (such  as
Juvenil--Youth  Oriented and  News/Talk  Show) in Mexico City.  See  "--Business
Strategy."

      In addition to its radio-broadcasting  activities,  the Company, under the
trade  name  Organizacion  Impulsora  de  Radio,  acts  as  the  national  sales
representative  for, and provides  programming  to, a network of  affiliates  in
Mexico.  At December  31,  2003,  the Company  had 111  affiliates  in 73 cities
throughout Mexico.

Business Strategy

      The Company's  strategy is to optimize cash flow from  operations  through
maintaining  its  leading  market  position,   offering  advertisers  top-ranked
stations in almost  every major  station  format,  and  continuing  its focus on
operating efficiency and cost control.

      Maintenance of Leading Market Position

      The Company is focused on maintaining its current  position as the leading
radio broadcaster in Mexico City,  offering  advertisers  top-ranked stations in
almost    all   of   the    major    station    formats,    including    Spanish
Language--Contemporary     Music,    Spanish     Language--Classics,     English
Language--Music, English Language--Contemporary Music, English Language--Classic
Rock,  Juvenil--Youth  Oriented,  Grupera--Diverse  Musical Genres and News/Talk
Show. By maintaining a strong presence in the major station formats,  management
believes  that the Company will  maximize  its share of total radio  advertising
expenditures.  Management  bases such belief on the following  rationale:  (i) a
broadcaster's  revenue is correlated  with its ability to maximize the number of
listeners  within an  advertiser's  given  demographic  parameters  and (ii) the
Company's stations currently cover almost all of the demographic segments of the
radio audience sought by advertisers. In addition, by managing its stations as a
portfolio  and  offering a broad  range of  advertising  packages,  the  Company
believes that it differentiates itself from its smaller competitors,  who cannot
offer as  comprehensive  coverage of the Mexican radio audience.  The Company is
able to offer advertisers exposure to listening audiences targeted to correspond
with the demographic profiles they seek, and is able to provide advertisers with
their choice of either focused or broad audience exposure across a comprehensive
range of income classes and age segments.

      In order to maximize the audience share of its portfolio of stations,  the
Company  recognizes  the  need  to be  responsive  to  the  requirements  of its
listeners and advertisers,  tailoring its stations to the changing circumstances
of the  market.  The  Company  seeks to  manage  its  station  portfolio  by (i)
balancing  the mix of its  station  formats  to  correspond  to the needs of the
overall  market and (ii) being  proactive in the  management of each  individual
station format and adjusting to the evolution of its particular market segment.


                                       13
<PAGE>

      OIR Network Strategy

      As a complement to its radio-broadcasting  activities,  Grupo Radio Centro
operates,  and  continues  its  efforts to expand,  its OIR radio  network.  The
Company simultaneously transmits its news program La Red from 5:45 a.m. to 10:00
a.m.  to the 32 largest  commercial  markets in Mexico  outside  the Mexico City
metropolitan  area.  While  increasing  programming  and  service  revenue,  the
operation of OIR also  facilitates  the  Company's  overall  marketing  efforts,
offering  advertisers  access  to radio  stations  on a  nationwide  basis.  See
"--Business Overview--OIR Network."


                                       14
<PAGE>

Broadcasting Operations

     Radio Stations

         Except as noted,  the following  table sets forth  certain  information
about the Mexico  City  radio  stations  operated  by Grupo  Radio  Centro as of
December 31, 2003:

<TABLE>
<CAPTION>

                                                                             INRA(1)      INRA(1)      INRA(1)  Arbitron(2)
                                                                            2003 Total   2003 Total     2003     2003 Total
                                Power                                         Market      Audience      Band       Market
    Station       Frequency   (Watts)             Station Format              Rank(3)     Share(4)     Rank(5)     Rank(3)
    -------       ---------   -------             --------------              -------     --------     -------     -------

<S>               <C>         <C>        <C>                                     <C>        <C>           <C>        <C>
XEQR-FM.........  107.3 mhz   100,000    Grupera--Diverse Musical Genres         1          9.33%         1          1

XEJP-FM.........  93.7 mhz    100,000    Spanish Language--Contemporary          4          4.19%         4          2
                                         Music

XERC-FM.........  97.7 mhz    100,000    Juvenil--Youth Oriented                 3          5.35%         3          4

XHFO-FM(6)......  92.1 mhz    150,000    English Language--Classic Rock         15          2.74%        14          7

XHFAJ-FM........  91.3 mhz    100,000    English Language--Contemporary          9          3.59%         9         10
                                         Music

XHRED-FM........  88.1 mhz    100,000    News / English Language--Music         26          1.16%        19         24

XERED-AM........  1110 khz    50,000     News / Talk Show                       19          2.13%         2         18

XERC-AM(7)......  790 khz     50,000     News                                   44          0.28%        19         45

XEQR-AM.........  1030 khz    50,000     Spanish Language--Talk Show /          25          1.25%         7         17
                                         Contemporary Music

XECMQ-AM(7).....  1150 khz    20,000     Spanish Language Classics              21          1.73%         4         13

XEN-AM(8).......  690 khz     50,000     News / Talk Show                       46          0.24%        22         29
</TABLE>


                   Arbitron(2)  Arbitron(2)
                    2003 Total     2003         Target
                     Audience      Band       Demographic
    Station          Share(4)     Rank(5)      Segments
    -------          --------     -------      --------
XEQR-FM.........     13.90%          1        13-44 years

XEJP-FM.........      6.70%          2        18-44 years

XERC-FM.........      6.10%          4        8-34 years

XHFO-FM(6)......      4.10%          7        18-44 years

XHFAJ-FM........      2.90%         10        13-24 years

XHRED-FM........      1.60%         16        25+ years

XERED-AM........      1.70%          6        25+ years

XERC-AM(7)......      0.30%         23        25+ years

XEQR-AM.........      1.70%          5        25+ years

XECMQ-AM(7).....      2.20%          2        35+ years

XEN-AM(8).......      0.40%         13        25+ years

----------
(1)   Source: International Research Associates Mexicana, S.A. de C.V. ("INRA").
(2)   Source: Arbitron Inc.
(3)   Total market rank is determined  based on each  station's  annual  average
      share of the total radio audience.
(4)   Total audience share represents each station's annual average share of the
      total radio audience.
(5)   Band rank is determined  based on each  station's  annual average share of
      the radio audience within its broadcasting frequency band (i.e., either AM
      or FM).
(6)   XHFO-FM  is  operated  by Grupo  Radio  Centro  pursuant  to an  operating
      agreement that will terminate on January 2, 2005.
(7)   In October 22, 2001 the Company  switched the  programming of the stations
      XERC-AM and XECMQ-AM.
(8)   On March 1, 2001,  the Company  began  operating  XEN-AM.  On December 31,
      2001, the Company acquired XEN-AM. The Company's ownership of this station
      was approved by the SCT on April 8, 2003.


                                       15
<PAGE>

      XHFO-FM  is  operated  by Grupo  Radio  Centro  pursuant  to an  operating
agreement  that will  terminate on January 2, 2005.  For the year ended December
31, 2003,  XHFO-FM  accounted for  approximately  8.8 % of Grupo Radio  Centro's
broadcasting revenue. There can be no assurance that the Company will be able to
extend  this  agreement  beyond  January  2,  2005 or what the terms of any such
extension might be.

      Programming

      The Company currently  produces all of the programming for the stations it
owns or operates.  Prior to March 3, 2004,  however,  the Monitor news  program,
which was Mexico City's most popular radio news program in 2003, and Red Vial, a
Mexico City  traffic  report  were  produced by Infored  (see  "--Production  of
Programming by Infored"). The news program that replaced Monitor and the traffic
report that replaced Red Vial are produced by the Company  itself.  In addition,
the Company provides programming to its network of affiliates.

      Programming  produced  by the Company  includes  playing  recorded  music,
coverage of live music events (such as concerts),  special musical  programs and
news and talk show programs. For example,  through its Noticentro news division,
the Company produces daily news programs consisting of three-minute  updates and
ten-minute  summaries  of  local,  national  and  international  news  that  are
broadcast through Formato 21, the Company's  24-hour,  all-news  station,  and a
majority of its other stations in Mexico City.

      Grupo Radio Centro's  programming strategy is to tailor the format of each
of its stations to attract targeted  demographic  segments of the radio audience
sought by  advertisers.  To ensure that its  programming  remains  responsive to
shifting  demographic  trends and audience  tastes,  Grupo Radio Centro uses its
internal  research  division  (which  conducts  daily  door-to-door   interviews
throughout  Mexico City) as well as  commercially  available  data to assess the
listening habits and tastes of the Mexico City population.  In 2003, Grupo Radio
Centro conducted  approximately 658,000 interviews.  Grupo Radio Centro believes
that no competitor has developed an internal research capability as extensive as
its own.

      Production and Transmission of Programming

      Grupo Radio Centro has 18 production  studios in which  musical  material,
advertisements and promotional spots are recorded on digital audio tape ("DAT").
During the first half of 2004,  the  Digital  Recording  System was  updated for
advertisements  and music. In addition,  Grupo Radio Centro  maintains 13 on-air
studios,  each of  which  is  linked  to  Grupo  Radio  Centro's  new  automated
programming  computer  network via  optical  fiber.  In most cases,  Grupo Radio
Centro has maintained a consistent design for both production and on-air studios
to provide a familiar work  environment  for employees and to reduce the risk of
error.  Grupo Radio Centro's  primary studio  operations are  substantially  all
digital  and  utilize  state-of-the-art  computer  networks  for the  recording,
scheduling and playing of all news, music, promotional and advertising material.
Currently,  the  Company  has a  single  network  with a  velocity  measured  in
Gigabytes installed in both on-air studios and production  studios,  totaling 30
workstations.

      The new Digital  Recording  System  records  the audio of music,  news and
promotional and advertising material on hard disks from a storage system thereby
transferring  the  audio  directly  to each  workstation  and  then to an  audio
console.  This  programming  feed is then  processed  and sent to one of several
transmitter  sites via VHF  digital or analog  studio  transmitter  links or via
digital linear  high-speed E1 links.  Each signal is periodically  monitored for
quality.


                                       16
<PAGE>

      During 2004,  the Company plans to replace six analog mixer  consoles with
digital mixer consoles.  The replacements will occur at radio stations XECMQ-AM,
XERC-AM (two consoles) and at one studio and two transmitter cabins used by OIR.
The Company  will also  install a new news module  (including  new  hardware and
software)  named "News Room" to modernize the operations of the news division of
the Company and facilitate the rapid  distribution of news information to all of
the Company's radio stations.

      Each station has a main transmitter and two back-up  transmitters.  All AM
transmitters  incorporate solid-state design. Each transmitter site has a diesel
generator with automatic  transfer that allows rapid switchover to back-up power
in the event of power outages. In addition,  the main FM transmitter facility is
equipped  with an  uninterruptible  power supply to prevent the loss of air time
during a cutover  to  back-up  power.  Grupo  Radio  Centro  uses  sophisticated
multiplexing networks for transmission,  which allows five of its AM stations to
operate at two sites, each site using one antenna.  Similarly,  five FM stations
are  multiplexed  into a common  eight-bay  panel antenna  situated on Cerro del
Chiquihuite,  which Grupo Radio Centro believes is ideally located at 540 meters
above the average  terrain level in Mexico City. A sixth FM station  operated by
the Company transmits from the World Trade Center in Mexico City.

      Currently  all AM and FM radio  broadcast  signals in Mexico  are  analog.
There  are  various  efforts  underway  around  the world to  develop,  test and
implement digital audio broadcasting ("DAB"). If implemented,  DAB would largely
eliminate  fading,  static and other  interference  that  adversely  affects the
listening experience.  Various DAB proposals have focused upon either the United
States  "in-band"  broadcasting  model (using  existing  allocations of AM or FM
spectrum) or the European "out-of-band"  broadcasting model. The Camara Nacional
de la  Industria  de Radio y  Television  (the  Mexican  Trade  Association  for
Broadcasters or "CIRT"),  of which the Company is a member, is in the process of
analyzing such proposals,  particularly  the European  model.  The Company is an
active participant in CIRT's efforts to obtain favorable regulation of DAB when,
and if, such technology is implemented in Mexico.  CIRT has created a task force
with  the  Secretaria  de   Comunicaciones   y  Transportes  (the  Secretary  of
Communication  and  Transportation or "SCT") in order to introduce DAB in Mexico
in the future.

      In March 2000,  the SCT issued an order  reserving a certain band of radio
frequency  (the  "L"  band)  for  research  and  development  of  digital  audio
broadcasting.  In October 2000, the SCT issued an order amending all existing AM
and  FM  band  radio  licenses  to  allow  licensees  to  engage  in  DAB  using
technologies to be approved in the future by the SCT. There can be no assurance,
however, as to whether or when DAB will be introduced.

      In October, 2003, the Company was granted by the SCT permission to install
in its Cerro del Chiquihuite  plant, a digital radio system named DAB Eureka 147
which  simultaneously  transmits the  programming  of the radio  stations  Radio
Red-FM,  Stereo  Joya,  Alfa  Radio,  Stereo  97.7  and La Z. The  Company  also
installed a digital  transmitter system through which the Company broadcasts the
programming  of the radio station Alfa Radio.  The results of such tests will be
provided  to the  SCT.  In  addition,  the  Company  plans to  continue  testing
"IBOC-AM",  an in-band on-channel AM system for transmitting digital information
over existing stations.

      In 2003,  Grupo Radio Centro  completed a project to increase the power of
several radio stations--XERED-AM, XECMQ-AM and XEN-AM, from 50 to 100 kilowatts,
20 to 50 kilowatts and 50 to 100 kilowatts,  respectively. The objective of this
effort is to improve the stations'  presence,  coverage and quality of reception
in Mexico City's  metropolitan area.  Definitive  authorization from the SCT was
granted in April 2004.


                                       17
<PAGE>

      Production of Programming by Infored

      Through a series of  transactions  effected  in 1995 and early  1996,  the
Company acquired five radio stations owned by RED as well as the exclusive radio
broadcasting rights to Monitor,  the most popular news and talk radio program in
Mexico.  Contemporaneously  with the  acquisition of RED, the Company  assumed a
programming services agreement between RED and Infored pursuant to which Infored
provided news programming and production  services,  including the production of
Monitor,  to the  Company.  Broadcasting  revenue  from  XERED-AM  and  XHRED-FM
attributable  to  Monitor  represented  a  significant  portion  of Grupo  Radio
Centro's total broadcasting revenue.  Approximately 23.0% and 22.9% and 27.8% of
the Company's  broadcasting revenue for 2001, 2002 and 2003,  respectively,  was
attributable to Monitor.

      On December 23, 1998,  the Company  entered  into a  programming  services
agreement (the "Infored  Agreement")  with Infored and Mr.  Gutierrez  Vivo, the
principal anchor of Monitor,  to provide the Company with original news programs
and  special-event  productions  for radio  until 2015.  The  Infored  Agreement
provided that Mr. Gutierrez Vivo would continue as Monitor's host until at least
the end of 2003.

      Under the Infored Agreement, the Company agreed to make a one-time payment
to Infored totaling  approximately  $15.4 million, of which $4.0 million and Ps.
4.0  million  (nominal  amount)  was paid at  signing  and the  balance of $11.0
million was paid over the course of 1999.  In addition,  Grupo Radio Centro paid
Infored monthly  production fees based on the revenues  derived from Monitor and
the amount of budgeted  expenses,  which  generally  reflected  increases due to
Mexico's  inflation rate, to cover Infored's radio programming  operations.  The
Company also agreed to transfer to Infored two AM radio  stations,  XEFAJ-AM and
XEJP-AM. These transfers were completed in April 2000.

      In  May  2002,  however,  Mr.  Gutierrez  Vivo  and  Infored  intiated  an
arbitration  proceeding  pursuant to which they sought rescission of the Infored
Agreement and damages.  On March 1, 2004, the International  Chamber of Commerce
(the "ICC")  notified  the Company  that,  by majority  vote of two of the three
arbitrators,  the ICC panel held that the Company was in breach of its  contract
with Infored and Mr. Gutierrez Vivo. As a result, the contract was rescinded and
Infored and Mr. Gutierrez Vivo together were awarded a total of $21.1 million in
damages,  which represents the amount the Company would be required to pay after
taking into  account  prepayments  made by the  Company.  The  Company  plans to
challenge  the  validity of this  decision in the Mexican  courts.  Pending this
challenge,  the Company will seek a stay of the enforcement of the damage award.
There can be no assurance that we will prevail on any of these challenges.

      In March 2004,  the Company  replaced  its  Infored-produced  programming,
including Monitor, with similar programming that the Company itself produces.

      Investment in Technology

      Grupo  Radio  Centro   consistently   has  invested  in   state-of-the-art
equipment,  the  development  and  deployment of new  operating  systems and the
training of its engineering and operating personnel. Grupo Radio Centro believes
these  investments  enable  it to  produce  high  quality  programming  with few
scheduling  or on-air  errors and to broadcast a superior  signal to  listeners'
radios. In addition,  Grupo Radio Centro's computer system allows it to maintain
a certifiable log of advertising and to generate real-time affidavits certifying
that advertisements have been aired when and as requested,  thereby reducing its
clients'  monitoring  costs and enhancing  client  goodwill.  Grupo Radio Centro
believes that its  state-of-the-art  equipment and  engineering  staff give it a
competitive edge in Mexico City radio broadcasting.


                                       18
<PAGE>

      Sale of Air Time and Marketing

      Commercial  air time for Grupo Radio  Centro's radio stations is sold both
to  advertising  agencies and directly to  businesses.  The top ten customers in
each of 2003, 2002 and 2001 accounted for approximately  33.4%, 31.4% and 37.7%,
respectively,  of total  broadcasting  revenue of the  Company.  Our two largest
individual  customers in 2003 and 2002 were Comercial  Mexicana and Gigante.  In
2003, Comercial Mexicana and Gigante accounted for 3.6% and 3.5%,  respectively,
of our total  broadcasting  revenue.  In 2002,  Comercial  Mexicana  and Gigante
accounted for 5.5% and 5.3%,  respectively,  of our total broadcasting  revenue.
Gigante was our largest  individual  customer in 2001 and  accounted for 7.7% of
our total broadcasting  revenue in that year. In 2003, the companies  comprising
Grupo Carso accounted for 5.2% of total broadcasting revenue,  while in 2002 and
2001, the companies  comprising Grupo Gigante,  S.A. de C.V.  accounted for 7.3%
and 9.3%, respectively, of our total broadcasting revenue.

      In  addition  to  the  Company's  corporate  clients,   Instituto  Federal
Electoral,  a public  organization  responsible for organizing  presidential and
congressional elections, accounted for 8.1% of our total broadcasting revenue in
2003. The two largest Mexican political  parties,  the PRI and the PAN, together
accounted  for  8.5%  of the  Company's  total  broadcasting  revenue  in  2003,
reflecting the significant campaign advertising expenditures associated with the
triennial  congressional  elections  that year.  By contrast,  in 2002,  the two
political  parties  accounted for 1.3% of broadcasting  revenue,  while in 2001,
they contributed virtually no revenue.

      Sales of commercial  air time vary  throughout  the year and are generally
highest in the fourth quarter of the year and lowest in the first quarter of the
year. See Item 5, "Operating and Financial Review and  Prospects--Seasonality of
Sales."

      At December 31, 2003, the Company had a sales force of 33 individuals,  of
which 19 marketed primarily to advertising  agencies and major customer accounts
and 14 marketed to small and mid-sized accounts.

      Grupo Radio Centro  establishes its  advertising  rates by considering the
cost per  thousand  listeners  as a  reference  to  ensure  that its  rates  are
competitive.  The Company offers  package  discounts to its clients who purchase
air time on multiple  stations,  offering  the largest  discounts to clients who
purchase  air time on all of its  stations.  Higher  rates  apply to clients who
purchase  commercial  air time for "special  events,"  such as live concerts and
special news features.

      In addition, the Company sells commercial air time in advance under a plan
pursuant to which  advertisers  who deposit  cash with Grupo Radio  Centro in an
amount equal to their advertising commitment for an agreed period are guaranteed
the rate in effect at the time of the  purchase for the agreed  period,  and are
granted bonus  advertising  time in addition to the time purchased.  The Company
invests  cash  deposited  pursuant  to  advance  sales,  and  includes  interest
generated  on  such  investments  in  broadcasting  revenue.  In  2003,  revenue
recognized under advance-sale  arrangements,  including related interest income,
accounted for approximately 43.8% of total broadcasting  revenue, as compared to
41.4% for 2002 and 53.3% for  2001.  See Note 15 to the  Consolidated  Financial
Statements.

      The effect of such advance sales is to substitute  the increased  interest
income earned on the advance sale payments for a portion of the operating income
foregone  because of the reduced  effective rate on the advertising time subject
to the advance-sale  arrangements.  The Company believes that such advance sales
are  advantageous to Grupo Radio Centro because the interest income generated by
the proceeds of such advance sales  offsets in part the  effective  reduction in
advertising  rates associated with such sales, and because the bonus advertising
time granted to purchasers  is "dead time" (i.e.,  time that would not otherwise
be sold).  The  Company  also  believes  that its  advance-sales  plan  attracts
advertisers


                                       19
<PAGE>

who would not  otherwise  purchase  advertising  time because of the benefits of
guaranteed rates and bonus time. However, any decrease in the inflation rate for
2004 may reduce the attractiveness of these plans for such advertisers.

OIR Network

      Grupo Radio  Centro,  under the trade name OIR,  provides  national  sales
representation,  programming  and  broadcast-related  services  to a network  of
affiliates.  At December 31, 2003, Grupo Radio Centro had 111 affiliates located
in 73 cities  throughout  Mexico.  During  the last  three  years,  broadcasting
revenue  from  OIR-related  activities  was 2.5% to 1.5% of  total  broadcasting
revenue.  In 2003,  approximately 2.5% of the Company's revenue was attributable
to its work through OIR, and no single  affiliate  represented more than 7.4% of
total OIR-related revenue.

      At December 31, 2003,  17 of the  Company's  OIR-related  affiliates  were
owned  or  controlled  by  shareholders  of the  Company.  Except  as  disclosed
elsewhere    (see   Item   7,   "Major    Shareholders    and   Related    Party
Transactions--Related  Party  Transactions"  and  Note  6  to  the  Consolidated
Financial  Statements),  all commercial relations between such shareholder-owned
or shareholder-controlled stations and Grupo Radio Centro are on an arm's-length
basis.

      Outside  Mexico City,  virtually  all national  radio  advertising  (i.e.,
advertising aimed at a national audience) is sold through networks of affiliated
radio stations. Pursuant to its standard affiliate agreement, terminable at will
by either party on 60 days notice,  OIR agrees to purchase  commercial  air time
from affiliated  stations,  compensating such stations for their air time with a
percentage  of the  revenue  obtained  on the resale of  commercial  air time to
national  advertisers.  The affiliates  agree to broadcast  certain  programs at
specified times with advertising spots of specified duration.  Compensation paid
to affiliates varies depending on the size of the affiliate's market.

      OIR transmits  special event  programs,  including  national  advertising,
directly to certain  affiliates  via  satellite.  As of December  31,  2003,  55
affiliates were able to receive such programs via satellite from Mexico City and
the remaining  affiliates  received recorded  programming on conventional or DAT
cassettes.

Internet and Other Media

      On February  16,  2001,  the  Company  acquired  To2,  an Internet  portal
company.  The Company used this  acquisition  to evaluate the  possibilities  of
leveraging the Internet as a complementary  medium to radio for  distribution of
the Company's content.  In October 2002, the Company decided to cease operations
of this Internet subsidiary because of its limited  profitability and to control
costs.

      On March  14,  2001,  the  Company  acquired  Palco  Deportivo,  a company
providing sports-related content for radio, television,  various print media and
its own Internet  portal.  In addition to using this  acquisition to explore the
use of other media,  the Company  broadcasts  Palco Deportivo radio  programming
daily on XEQR-AM and broadcasts  Palco Deportivo radio spots and  advertisements
on  other  Company  stations.  See  "--The  Company--Capital   Expenditures  and
Divestitures--Capital Expenditures," Item 5, "Operating and Financial Review and
Prospects--Liquidity  and  Capital  Resources"  and Note 24 to the  Consolidated
Financial Statements.

Competition

      Radio  broadcasting  in  Mexico  is highly  competitive,  and  programming
popularity,  an important factor in advertising sales, is readily susceptible to
change.  As of December 31, 2003,  there were 56


                                       20
<PAGE>

commercial  radio  stations in Mexico City (30 AM and 26 FM stations)  and seven
not-for-profit,  public-service  stations  (consisting of four AM and three FM).
These constitute all of the currently  available radio broadcast channels within
Mexico City's AM and FM frequency spectrum.

      Set out below is a table  showing  the number of  stations  in Mexico City
operated by Grupo Radio Centro and each of its six main  competitors at June 23,
2004, and a chart  depicting the audience share of each,  including the audience
share of the stations owned by RED until 1994 and by the Company thereafter.

            Operation of Mexico City Stations by Grupo Radio Centro
                        and its Principal Competitors(1)

                                              AM Stations   FM Stations    Total
                                              -----------   -----------    -----
Grupo Radio Centro (GRC) ....................       5            6           11
Grupo ACIR (ACIR)(2) ........................       3            4            7
Nucleo Radio Mil (NRM) ......................       3            3            6
Radiopolis (TVR)(3) .........................       3            3            6
Organizacion Radio Formula (ORF) ............       3            2            5
Grupo Imagen(4) .............................       0            2            2
Multivision Radio (MVS)(5) ..................       0            2            2
                                                  ----         ----         ----
   Total ....................................      17           22           39

----------
(1)   Source: Grupo Radio Centro.
(2)   In September 2000, Grupo Televisa S.A. de C.V. offered to acquire a 50.05%
      interest in Grupo ACIR. As of May 2001, the Federal Competition Commission
      had  rejected  the proposed  acquisition  and a subsequent  appeal of that
      rejection by Grupo Televisa.  Grupo Televisa has appealed the rejection in
      the Mexican courts, which have not decided the matter.
(3)   A subsidiary of Grupo Televisa.
(4)   Formerly part of MVS.
(5)   Formerly known as Frecuencia Modulada Mexicana.


                                       21
<PAGE>

                  Mexico City Radio Audience Share (1970-2003)(1)


                                     GRAPH


(1)   Source: INRA.
(2)   In 1995,  the Company began  operating the three  stations  owned by Radio
      Programas de Mexico.  Accordingly,  the Company's  audience share includes
      the audience share of these three stations beginning in 1995. In 1996, the
      Company acquired these stations.
(3)   In 1994,  NRM no  longer  owned  XECO-AM  and  XEUR-AM,  and in 1995,  NRM
      purchased XHMM-FM.
(4)   In 1995,  the three  stations  owned by Grupo Artsa were acquired by Grupo
      Acir.
(5)   Includes  average  audience  share of stations owned by Grupo Imagen until
      Grupo Imagen's separation from MVS in December 1999.

      Since 1995, the Company's  average Mexico City audience share has declined
from 37.1% to 32.0% in 2003.  This decline is mainly  attributable  to increased
competition  from other radio stations that have adopted  formats similar to the
Company's  most   successful   formats,   including   Juvenil--Youth   Oriented,
Grupera--Diverse Musical Genres and News/Talk Show.

      Although  the Company  believes  that its  balanced  portfolio  of station
formats  following  the RED  acquisition  reduces  the  impact of a  decline  in
audience share of any one format segment or station (for example,  the Company's
most popular  station,  which was the top-ranked  station in Mexico City for the
year  ended  December  31,  2003,  represented  only  9.2%  of the  total  radio
audience),  there can be no assurance that competition  within,  or a decline in
the  popularity  of, a given format  segment  will not  decrease  the  Company's
aggregate  audience share in the future.  In addition,  the Company faces strong
competition  from both  television  and  various  print  media  for  advertising
revenue.

      OIR Network Competition

      As with radio  broadcasting,  the Mexican  radio-network  market is highly
competitive.  As of December 31, 2003,  there were 27 radio networks serving 743
AM radio  stations and 403 FM radio


                                       22
<PAGE>

stations  outside Mexico City.  The Company  believes that the popularity of its
programming,  its  long-standing  experience in the Mexican  radio  broadcasting
market and the quality of its  broadcast-related  services  enable the Company's
affiliates that are serviced by OIR to compete effectively.

Significant Subsidiaries

      The following table sets forth the Company's  significant  subsidiaries at
December 31, 2003:

<TABLE>
<CAPTION>
                                                                                      Percentage of
                                                                    Jurisdiction      Ownership and
                    Name of the Company                           of Establishment   Voting Interest          Description
-----------------------------------------------------------       ----------------   ---------------      ------------------
<S>                                                                     <C>               <C>                <C>
XEQR, S.A. de C.V                                                       Mexico            99.9%              Radio Station
XERC, S.A. de C.V                                                       Mexico            99.9%              Radio Station
XEEST, S.A. de C.V                                                      Mexico            99.9%              Radio Station
XEQR-FM, S.A. de C.V                                                    Mexico            99.9%              Radio Station
XERC-FM, S.A. de C.V                                                    Mexico            99.9%              Radio Station
XEJP-FM, S.A. de C.V                                                    Mexico            99.9%              Radio Station
XEDKR-AM, S.A. de C.V                                                   Mexico            99.2%              Radio Station
Radio Red, S.A. de C.V                                                  Mexico            99.9%              Radio Station
Radio Red-FM, S.A. de C.V                                               Mexico            99.9%              Radio Station
Radio Sistema Mexicano, S.A                                             Mexico            99.9%              Radio Station
Estacion Alfa, S.A. de C.V                                              Mexico            99.9%              Radio Station
Emisora 1150, S.A. de C.V                                               Mexico            99.9%              Radio Station
Grupo Radio Centro, S.A. de C.V                                         Mexico            99.9%            Marketing Company
Radio Centro Publicidad, S.A. de C.V                                    Mexico            99.9%            Marketing Company
GRC Publicidad, S.A. de C.V                                             Mexico            99.9%            Marketing Company
GRC Medios, S.A. de C.V                                                 Mexico            99.9%            Marketing Company
Promotora Tecnica de Servicios Profesionales, S.A. de C.V               Mexico            99.9%             Service Company
Publicidad y Promociones Internacionales, S.A. de C.V                   Mexico            99.9%             Service Company
</TABLE>

                                       23
<PAGE>
<TABLE>
<CAPTION>
                                                                                      Percentage of
                                                                    Jurisdiction      Ownership and
                    Name of the Company                           of Establishment   Voting Interest          Description
-----------------------------------------------------------       ----------------   ---------------      ------------------
<S>                                                                     <C>               <C>                <C>
Promo Red, S.A. de C.V                                                  Mexico            99.9%             Service Company
Universal de Muebles e Inmuebles, S.A. de C.V                           Mexico            99.8%           Real Estate Company
Inmobiliaria Radio Centro, S.A. de C.V                                  Mexico            99.9%           Real Estate Company
Desarrollos Empresariales, S.A. de C.V                                  Mexico            99.9%           Sub-holding Company
Radiodifusion Red, S.A. de C.V                                          Mexico            99.9%           Sub-holding Company
Enlaces Troncales, S.A. de C.V                                          Mexico            99.9%           Sub-holding Company
</TABLE>

Property and Equipment

      All of Grupo Radio  Centro's  tangible  assets are  located in Mexico.  At
December  31,  2003,  the net  book  value of all  property  and  equipment  was
approximately Ps. 469.9 million ($41.8 million).

      Grupo Radio Centro's  principal  executive offices and studios are located
in Mexico City and are owned by Grupo Radio  Centro.  In 1992 Grupo Radio Centro
purchased the Constituyentes building, a modern, 102,000 square foot building of
which, at December 31, 2003, the Company  occupied  approximately  81,000 square
feet with the remainder  available for leasing to third parties.  In March 1994,
Grupo Radio  Centro  moved its  principal  offices and  broadcasting  operations
(excluding  transmitter  antennae and related equipment) into the Constituyentes
building.  Grupo Radio Centro also owns the transmitter  sites and antenna sites
used by most of its  Mexico  City  radio  stations,  including  related  back-up
facilities.    In    addition,    Grupo   Radio    Centro    currently    leases
satellite-transmission facilities in Mexico City from the Mexican government. As
a result  of a 1993  change  in  applicable  Mexican  law,  Grupo  Radio  Centro
purchased  and  received  authorization  from  Telecomunicaciones  de Mexico,  a
state-owned entity, to operate its own up-link equipment. This up-link equipment
has been operational  since the end of 1994. Grupo Radio Centro continues to own
the  building  in which its  administrative  offices and  studios  were  located
immediately  prior to its move into the  Constituyentes  building.  Grupo  Radio
Centro also owns the land in Mexico City on which the transmission facilities of
XERED-AM are located.

      Grupo Radio  Centro  believes  that its  facilities  are  adequate for its
present needs and are suitable for their intended purpose.


                                       24
<PAGE>

                              REGULATORY FRAMEWORK

      The business of Grupo Radio Centro is subject to regulation  and oversight
by the SCT.  The SCT is part of the  executive  branch  of the  Mexican  federal
government.  Regulation and oversight are governed by the Ley Federal de Radio y
Television  (the  "Federal  Radio  and  Television  Law"),  the Ley  Federal  de
Telecomunicaciones  (the  "Federal  Telecommunications  Law"),  the  regulations
issued pursuant to these laws and the licenses granted by the SCT.

      Regulation of Radio Broadcasting by Mexico

      Licenses. Under the Federal Radio and Television Law, owners and operators
of radio  stations in Mexico must obtain a license  from the Mexican  government
through  the  SCT  to  broadcast  over a  specified  channel.  Applications  are
submitted  to the SCT  and,  after a  formal  review  process  of all  competing
applications and an objection  period by third parties,  a license is granted to
an applicant  with a specific  term of up to 30 years.  The SCT may terminate or
revoke  the  license  at any time upon the  occurrence  of,  among  others,  the
following  events:  failure  to  construct  broadcasting   facilities  within  a
specified time period; changes in the location of the broadcasting facilities or
changes in the  frequency  assigned  without prior  governmental  authorization;
failure to broadcast for more than 60 days without reasonable justification; and
any  violation of any of the other terms of the license.  Under  Mexican law, in
the event of  revocation  of the license for certain  specified  reasons,  Grupo
Radio Centro would forfeit its transmission and antenna  facilities with respect
to the  license.  In the event of early  termination  of the  license  for other
causes,  the Mexican  government would have a right of first refusal to purchase
all these assets at a price fixed by an independent  appraiser.  In addition, in
the event that the SCT  terminates  or revokes a license,  the  licensee may not
obtain a new license for five years and, in some cases,  may be  forbidden  from
obtaining a new license.  Under  current law  governing  the  regulation  of the
licensing and use of the respective AM and FM frequency spectrums, no additional
licenses may be granted for the Mexico City market.

      The licensee has rights to renew the license for periods of up to 30 years
(with  most  terms  for  renewal  currently  being  up  to  12  years)  under  a
non-competitive  renewal  process.  Renewals are generally  granted to licensees
that have substantially  complied with the applicable law. The licenses for nine
of Grupo Radio  Centro's  radio stations are set to expire in 2004. The licenses
for XEDKR-AM (in  Guadalajara)  and XESTN-AM (in  Monterrey)  expired in October
2003 and November 2003,  respectively.  The Company  submitted an application to
the SCT for the  renewal  of the  licenses  that  expired  in 2003 as well as an
application  for the  renewal  of the  licenses  that are set to expire in 2004;
approval of the renewals is still pending. In addition, the license for XHRED-FM
is set to expire in 2007, and the license for XEJP-FM is set to expire in 2012.

      The  licenses  contain  restrictions  on the  transfer  of  shares  of the
licensee,  including the following: the transfer must be to a qualifying Mexican
person;  the transfer  cannot result in a  concentration  of radio  broadcasting
holdings that may be contrary to the public  interest;  and the transfer  cannot
result in a gain to the seller.  All such  transfers are subject to prior notice
to the SCT. In addition,  any  transfer of the license  itself is subject to the
prior  approval  of the SCT. A license  may only be  assigned  if it has been in
effect for more than three years and the licensee  has complied  with all of its
obligations under the license.

      Supervision of  Operations.  The SCT conducts  regular  inspections of the
operations of the radio stations, and the companies or persons to which licenses
have been granted must file annual technical,  statistical,  financial and legal
reports with the SCT.


                                       25
<PAGE>

      Under  Mexican  law,  radio  programming  is not  subject to  judicial  or
administrative  censorship,  except  that  programming  is  subject  to  various
regulations,  including  prohibitions on foul language and  programming  that is
contrary to the general principles of right conduct, national security or public
order.

      Radio  programming is required to promote  Mexico's  cultural,  social and
ideological  identity,  and each licensee is required to make available each day
up  to 30  minutes  of  cultural  or  educational  programming,  or  programming
regarding family counseling or other social matters.  The programming to be used
to fulfill  this  requirement  is  provided  to the  broadcaster  by the Mexican
government.

      Each  licensee  is  required,  during  political  campaigns,  to provide a
limited  amount of  broadcast  time free of charge to all  registered  political
parties.

      Networks.  There are no Mexican  regulations  governing  the ownership and
operation of a radio broadcasting network, such as OIR's network,  separate from
the regulations applicable to operating a radio station.

      Restrictions on  Advertising.  Mexican law regulates the type and contents
of  advertising  that may be broadcast  on radio.  In  addition,  licensees  are
prohibited  from   broadcasting   advertisements   that  are   misleading.   The
advertisements  of certain  products and services are subject to restrictions or
require  government  approval prior to their  broadcast.  Moreover,  the Mexican
government  must  approve any  advertisement  of  lotteries  or raffles,  or any
advertisement  that  promotes  bonuses to consumers for  purchasing  products or
services.

      Mexican law also regulates the amount of advertising that may be broadcast
in any day. Under Mexican regulations, no more than 40% of broadcast time may be
used for  advertisements,  divided  proportionately  among  broadcasting  hours.
Generally, radio stations can have up to 12 two-minute breaks for advertisements
per hour.  Grupo Radio Centro,  from time to time, has obtained waivers from the
Mexican government with respect to these regulations.

      The Company sets its minimum  advertising  rates and registers  such rates
with  the  SCT.  No  advertising  may be sold  at  rates  lower  than  those  so
registered. There are no restrictions on maximum rates that may be charged.

      Broadcast  Tax. Since 1969, all radio stations in Mexico have been subject
to a tax payable by granting the Mexican  government  the right to use a portion
of broadcast time.  Historically,  the Mexican government was entitled to use up
to 12.5% of all daily radio broadcast time. Beginning on October 10, 2002, radio
stations must satisfy this tax by providing the Mexican government 35 minutes of
broadcasting time between the hours of 6:00 a.m. and midnight,  in spots lasting
between 20 to 30 seconds.  The use of this time is not  cumulative  and any time
not used by the Mexican  government  in any day is  forfeited.  The time must be
distributed  on a  proportional  and  equitable  basis  throughout  the relevant
programming period. The programming of public service announcements  provided by
the  Mexican  government  is  prohibited  from  competing  with  the  licensee's
programming  and,  if it is made to  promote  the  consumption  of  products  or
services, must be limited to general promotions of Mexico's goods and services.

      Other.  In June 1993,  the Ley Federal de Competencia  Economica  (Federal
Economic  Competition  Law),  a law to promote fair  competition  and to prevent
monopolistic  practices,  became  effective,  and  regulations  thereunder  were
published  in March 1998.  As a result of the  increase in Grupo Radio  Centro's
share  of  the  Mexico  City  radio  market  following  completion  of  the  RED
acquisition,  the Company is required by the Federal  Competition  Commission to
seek its prior  approval in  connection  with any future  acquisitions  of radio
stations in Mexico, including, without limitation,  purchases or leases


                                       26
<PAGE>

of radio  stations,  interests in other radio  concerns or  transmission  sites,
irrespective of the size of such  investments or their related audience share, a
requirement  to which,  to the best  knowledge  of the  Company,  other  Mexican
broadcasting companies are not subject generally.  Although the Company received
Federal  Competition  Commission  approval of its  acquisition of XEN-AM in July
2001 (see Note 23 to the Consolidated  Financial Statements) because the Company
sold two of its AM  stations  in 2000  (see  "--Business  Overview--Broadcasting
Operations--Production  of Programming  by Infored"),  no assurance can be given
that the Company will be permitted by the Federal Competition Commission to make
any additional investments should it desire to do so.

      The Federal  Telecommunications  Law became effective in Mexico on June 8,
1995. Although this law does not affect the transmission of radio signals of the
type transmitted by the Company's radio stations, it does cover the transmission
of radio  signals  at  certain  frequencies  at which  the  Company  may wish to
transmit in the future.  Among other  requirements,  this new law provides  that
licenses for the transmission of radio signals at certain frequencies be granted
pursuant to a competitive bidding procedure.

      There is a general  prohibition  on the  ownership  of radio  broadcasting
companies by non-Mexicans and Mexican  corporations that allow foreign ownership
of their  voting  securities.  The  adoption  of the North  American  Free Trade
Agreement has not changed these Mexican regulations.

      Intellectual Property

      Mexico.  Grupo Radio  Centro  (directly or through its  subsidiaries)  has
registered  or  filed  for  registration  with  the  Instituto  Mexicano  de  la
Propriedad  Industrial  (the Mexican  Institute of  Industrial  Property) of the
Secretaria de Economia (the  "Ministry of Economy") the following  service marks
(and their  corresponding  design,  where  indicated):  "Radio Red," "Joya," "El
Fonografo del Recuerdo," "Variedades," "Stereo Joya," "NotiCentro" (and design),
"Sensacion" (and design),  "Universal" (and design),  "Stereo 97.7,"  "Alegria,"
"Centro,"  "Formato 21," "Hoy," "OIR," "Palco Deportivo" and "To2." In addition,
Grupo Radio Centro  (directly or through its  subsidiaries)  has  registered  or
filed for  registration the following  commercial  slogans:  "CRC  Radiodifusion
Internacional,"  "Grupo  Radio  Centro  Radiodifusion  de Mexico al Mundo," "ORC
Radiodifusion Valle de Mexico," "OIR Radiodifusion  Nacional," "Radio Centro, la
Estacion de la Gran  Familia  Mexicana"  and "SER  Servicios  Especializados  de
Radiodifusion."  Grupo Radio Centro also obtained the following service marks in
connection  with the  acquisition of RED:  "Radio  Programas de Mexico,"  "RPM,"
"ALFA 91.3," "BANG," "UNIRED," "SERVIRED" and "AUTORED."

      United States. Grupo Radio Centro has registered on the principal register
of the United  States  Patent and  Trademark  Office (the "USPTO") the following
service marks:  "Radio Exitos,"  "Radio  Centro," "En Concierto,"  "Reinas de la
Popularidad,"  "Frente a Frente . . . Fuera Mascaras," "Radio Sensacion," "Radio
Variedades"  and  "Cadena  Radio  Centro  CRC."  Grupo  Radio  Centro  has  also
registered on the principal  register of the USPTO a sound mark  consisting of a
series of musical notes and the words "Radio Variedades."

Item 5. Operating and Financial Review and Prospects

      The  following   discussion   should  be  read  in  conjunction  with  the
Consolidated  Financial  Statements and the Notes thereto included  elsewhere in
this Annual Report. Grupo Radio Centro's Consolidated  Financial Statements have
been prepared in accordance with Mexican GAAP,  which differ in certain respects
from U.S. GAAP.  Note 25 to the  Consolidated  Financial  Statements  provides a
description of the principal  differences between Mexican GAAP and U.S. GAAP, as
they  relate  to  Grupo


                                       27
<PAGE>

Radio Centro,  and a reconciliation to U.S. GAAP of operating income, net income
and shareholders' equity.

      Among other  things,  Mexican  GAAP  requires  that  financial  statements
recognize certain effects of inflation.  In accordance with these  requirements,
the Company has restated  non-monetary  assets and  liabilities  using the INPC,
restated the components of shareholders'  equity using the INPC,  recorded gains
or losses in purchasing  power from holding  monetary  assets or liabilities and
restated   financial  data  for  all  periods  in  the  Consolidated   Financial
Statements,  and throughout this Annual Report, in constant pesos as of December
31, 2003. See Item 3, "Key Information--Selected Financial Data."

General

      Grupo Radio  Centro's  operating  performance  is dependent on a number of
factors,  including its ability to produce  popular radio  programs that attract
the demographic segments of the radio audience sought by advertisers,  its share
of the total radio audience,  the relative  advertising cost efficiency of radio
compared to other media, competition,  the strength of its radio signals and the
quality of its sound, the rate of growth of the local and national economies and
government  regulation and policies.  Grupo Radio Centro's  revenue is generated
mainly from the sale of  commercial  air time.  The primary  operating  expenses
involved  in  owning  and  operating  radio  stations  are  employee   salaries,
programming  expenses,  promotion and advertising  expenses and depreciation and
amortization.

Seasonality of Sales

      Grupo  Radio  Centro's  revenue  varies  throughout  the  year.  Sales  of
commercial  air time,  Grupo  Radio  Centro's  primary  source of  revenue,  are
generally  highest  in the  fourth  quarter  of the year and lowest in the first
quarter of the year. However, Grupo Radio Centro historically has had sufficient
cash flow  from  operations  to meet its  operating  needs in all four  calendar
quarters.  In 2003,  there was a departure from this general pattern in that the
revenue from the sale of commercial air time was highest in the second  quarter,
instead  of  fourth  quarter,  of the  year  because  of  increased  advertising
expenditures  related to congressional  political  campaigns,  and lowest in the
third quarter of the year.

      Advertising  expenditures  by political  campaigns  represent an important
part of the Company's total  broadcasting  revenue.  While the Company's revenue
increases significantly during congressional elections,  which occur every three
years, including 2003, an even more significant increase in revenue results from
presidential   elections,   which  occur  every  six  years   (coinciding   with
congressional  elections),  including  2000. In 1997,  advertising  by political
parties  in  connection  with  congressional   elections  and  the  Mexico  City
gubernatorial  election  represented  9.0% of the Company's  total  broadcasting
revenue.  In 1998 and 1999,  advertising by political  parties decreased to 1.1%
and 6.5%,  respectively,  of total broadcasting  revenue. In 2000, in connection
with  the  presidential  and  congressional  elections,   political  advertising
increased to 20.9% of the Company's total broadcasting  revenue.  Advertising by
political  parties decreased to 0.1% of total  broadcasting  revenue in 2001 and
increased  to 6.1% of total  broadcasting  revenue  in 2002,  mainly  due to the
elections in the State of Mexico,  which  occurred in the first quarter of 2003.
In 2003,  in connection  with  congressional  elections  that took in July 2003,
advertising by political parties increased to 21.1%. See Item 4, "Information on
the  Company--Business  Overview--Broadcasting  Operations--Sale of Air Time and
Marketing."


                                       28
<PAGE>

      The  following  table sets forth the  Company's  broadcasting  revenue and
broadcasting  income  (excluding  depreciation and  amortization) on a quarterly
basis, in each case as a percentage of its respective  total, for 2003, 2002 and
2001.

                                                         Broadcasting Income,
                                                      Excluding Depreciation and
                             Broadcasting Revenue           Amortization
                            ----------------------    --------------------------
                            2003     2002     2001     2003     2002      2001
                            ----     ----     ----     ----     ----      ----
First Quarter ...........   22.8%    16.6%    20.1%    23.2%    (0.3%)    15.4%
Second Quarter ..........   31.0     24.8     23.2     37.6     19.7      23.2
Third Quarter ...........   21.3     20.9     25.1     14.5     10.3      21.5
Fourth Quarter ..........   24.9     37.7     31.6     24.7     70.3      39.9
                           -----    -----    -----    -----    -----     -----
   Total ................  100.0%   100.0%   100.0%   100.0%   100.0%    100.0%

Economic Conditions in Mexico

      Grupo Radio  Centro's  financial  condition and results of operations  are
generally  affected  by the  strength  of the  Mexican  economy,  as demand  for
advertising,  revenue  from  which  is the  principal  source  of the  Company's
earnings,  generally declines during periods of economic difficulty.  The annual
rate of  inflation in Mexico,  as measured by changes in the  National  Consumer
Price Index,  was 3.98% for 2003.  Inflation  for the first  quarter of 2004 was
1.57%. The adverse effects of high inflation on the Mexican economy might result
in lower demand for broadcast advertising.

Cost-Control Measures

      An important element of the Company's  operating strategy is cost control.
In 2001, personnel expenses decreased 2.0% from the previous year as a result of
decreased sales commissions paid to sales personnel in connection with decreased
sales.  In 2002,  personnel  expenses  decreased  6.7%  mainly  as a  result  of
decreased sales commissions paid to sales personnel in connection with decreased
sales.  The Company also ceased the operations of its Internet  portal  company,
To2.  In 2003,  personnel  expenses  decreased  1.9%  mainly  as a  result  of a
reduction in  personnel.  The changes in personnel in 2003 and 2001  resulted in
severance  payments  of Ps. 3.9 and Ps.  4.7  million,  respectively,  which are
included in other  expenses  (net).  See Note 22 to the  Consolidated  Financial
Statements.

Production of Programming

      In March 2004,  as a result of the outcome of the  arbitration  proceeding
with Infored and Mr. Gutierrez Vivo, the Company  replaced its  Infored-produced
programming, including Monitor, with similar programming that the Company itself
produces. The Company currently produces all of the programming for the stations
it    owns    or    operates     (see     "--Business     Overview--Broadcasting
Operations--Production of Programming by Infored").

Loss Contingency

      As a result of the  damages  awarded in the  arbitration  proceeding  with
Infored and Mr. Gutierrez Vivo, we have recorded a provision for this contingent
liability in the amount of $21.1  million.  The Company  plans to challenge  the
validity  of the  arbitration  award  in the  Mexican  courts.  There  can be no
assurance   that  we  will   prevail  in  this   challenge.   (see   "--Business
Overview--Broadcasting Operations--Production of Programming by Infored").


                                       29
<PAGE>

2003 vs. 2002 Results of Operations

      For the year ended December 31, 2003,  broadcasting  revenue was Ps. 825.1
million,  representing a 11.7% increase  compared to Ps. 738.4 million  reported
for the same period of 2002.  This  increase was mainly  attributable  to higher
advertising   expenditures   from  political  parties  in  connection  with  the
congressional elections that took place in July 2003.

      The Company's broadcasting expenses (excluding depreciation,  amortization
and corporate,  general and administrative expenses) for the year ended December
31, 2003, were Ps. 493.6 million,  a 2.9% increase compared to Ps. 479.6 million
reported  for the same period of 2002,  principally  as a result of fees paid in
connection with new programming for one of the Company's radio stations.

      Broadcasting  income  (broadcasting  revenue minus broadcasting  expenses,
excluding depreciation,  amortization and corporate,  general and administrative
expenses)  for the year  ended  December  31,  2003 was Ps.  331.5  million,  an
increase of 28.1% compared to broadcasting  income of Ps. 258.8 million reported
for the same period of 2002.  This  increase was mainly  attributable  to higher
broadcasting revenue.

      Depreciation  and  amortization  expenses for the year ended  December 31,
2003 were Ps. 113.4  million,  representing  an increase of 1.0% compared to Ps.
112.3 million reported for the same period of 2002.

      The Company's corporate,  general and administrative  expenses during 2003
were Ps.  60.2  million,  an increase  of 28.3%  compared  to Ps.  46.9  million
reported  for the same period of 2002.  This  increase  was mainly due to higher
executive  compensation  and  higher  revenue-based  fees  paid  to  Infored  in
connection with the production of the radio news program Monitor during 2003.

      As a result of the foregoing,  the Company's operating income for the year
ended December 31, 2003 was Ps. 157.9 million,  an increase of 58.7% compared to
operating income of Ps. 99.5 million reported for the same period of 2002.

      The Company's comprehensive financing cost decreased from Ps. 53.2 million
during 2002 to Ps. 32.9 million  reported  for 2003.  This  favorable  change of
38.2% is mainly  attributable  to a decrease in the foreign  exchange loss, net,
from Ps. 43.7 million for 2002 to Ps. 6.5 million for 2003,  resulting  from the
Company's  conversion  of its U.S.  dollar-denominated  bank  loans  to  Mexican
peso-denominated  bank loans during the fourth quarter of 2002. The  improvement
in foreign  exchange  loss,  net,  was  partially  offset by a loss on  monetary
position of Ps. 0.31 million in 2003 compared to a gain on monetary  position of
Ps. 9.03 million in 2002, as well as an increase in interest  expense  resulting
from higher interest rates in 2003.

      Other  expenses,  net,  were Ps.  66.0  million in 2003,  representing  an
increase of 25.7% compared to Ps. 52.5 million  reported for 2002. This increase
is mainly due to the sale of certain  non-broadcasting  assets at a gain  during
2002  compared to the sale of certain  non-broadcasting  assets at a loss during
2003,  combined  with  an  increase  in  expenses  related  to  the  arbitration
proceeding with Infored.

      For the year ended December 31, 2003, the Company  reported  income before
extraordinary items and provisions for income tax and employee profit sharing of
Ps. 59.0 million  compared to a loss before  extraordinary  items and provisions
for income tax and employee profit sharing of Ps. 6.2 million reported for 2002.

      As a result of the provision for the  contingent  liability  under Mexican
GAAP resulting from the damages award granted in the arbitration proceeding with
Infored and Mr.  Gutierrez  Vivo,  the Company


                                       30
<PAGE>

reported an  extraordinary  item charge in the amount of Ps.  340.7  million for
2003,  resulting in a loss before  provisions for income tax and employee profit
sharing of Ps. 281.7 million for 2003 compared to a loss before  provisions  for
income tax and employee profit sharing of Ps. 6.2 million reported for 2002.

      The Company  recorded an income tax and employee  profit sharing credit of
Ps. 35.9 million for 2003 compared to Ps. 8.5 million for 2002.

      As a result of the foregoing factors,  the Company recorded a net loss for
2003 of Ps. 245.8 million compared to a net gain of Ps. 2.3 million reported for
2002.

2002 vs. 2001 Results of Operations

      For the year ended December 31, 2002,  broadcasting  revenue was Ps. 738.4
million,  a 5.3% decrease as compared with Ps. 780.0 million  reported for 2001.
This  decrease  is mainly due to the  slowdown  of the  Mexican  economy in 2002
compared with 2001, which was partially offset by advertising revenues generated
from political parties during the fourth quarter of 2002.

      The  Company's   broadcasting   expenses   (excluding   depreciation   and
amortization and corporate,  general and  administrative  expenses) for the year
ended December 31, 2002 were Ps. 479.6 million, a 4.9% decrease as compared with
Ps. 504.3 million reported for 2001. This decrease is primarily  attributable to
the cancellation of non-productive  programs and better control of operating and
advertising expenses of the Company in the fourth quarter of 2002.

      Broadcasting  income for the year ended  December  31, 2002 was Ps.  258.8
million,  a 6.1% decrease as compared with Ps. 275.7 million  reported for 2001.
This decrease is primarily due to the decrease in  broadcasting  revenue,  which
was partially offset by the reduction in broadcasting expenses during 2002.

      Depreciation  and  amortization  for the  year  ended  December  31,  2002
decreased 8.0% to Ps. 112.3 million,  from Ps. 122.2 million  reported for 2001.
This  decrease  is  primarily  attributable  to the  write-off  of  goodwill  in
connection  with some of the  Company's  subsidiaries  in the fourth  quarter of
2002. See Notes 13, 23 and 24 to the Consolidated Financial Statements.

      Corporate, general and administrative expenses for the year ended December
31, 2002 were Ps. 46.9  million,  a decrease of 10.5% as compared  with Ps. 52.4
million  reported  for 2001.  This  decrease  was mainly due to lower  executive
compensation.

      Operating income for 2002 was Ps. 99.5 million, representing a decrease of
1.5%  compared  with Ps.  101.1  million  reported  for 2001.  This  decrease is
primarily  attributable to the decrease in depreciation and amortization  during
2002.

      Comprehensive  financing  cost increased from Ps. 12.6 million during 2001
to Ps. 53.2 million  reported for 2002. This increase is primarily  attributable
to a foreign  exchange  loss of Ps. 43.7  million for 2002,  as compared  with a
foreign exchange gain of Ps. 17.9 million for 2001, as a result of the weakening
of the  peso  against  the U.S.  dollar  in the  fourth  quarter  of 2002.  This
unfavorable  change was partially  offset by a decline in interest  expense from
Ps. 36.8 million in 2001 to Ps. 20.8 million in 2002, primarily resulting from a
decrease in bank debt during 2002.

      Other expenses, net, were Ps. 52.5 million in 2002, compared with Ps. 76.0
million  reported for 2001.  This 30.9% decrease is mainly  attributable  to the
closing of  operations  of To2,  one of our


                                       31
<PAGE>

subsidiaries engaged in Internet  activities,  which resulted in expense savings
compared to expenses  incurred  for that  subsidiary  for the fourth  quarter of
2001.

      As a result,  loss before  provisions for income tax and employees  profit
sharing for the year ended  December 31, 2002 was Ps. 6.2 million  compared with
an income before  provisions  for income tax and employee  profit sharing of Ps.
12.5  million  for 2001.  The  Company  reported  a credit  for  income  tax and
employees  profit  sharing of Ps. 8.5 million for 2002,  compared to a credit of
Ps.  6.0  million  for 2001  that  primarily  resulted  from the use of tax loss
carryforwards in 2001. See Note 20 to the Consolidated Financial Statements.

      As a result of the foregoing factors,  net income for 2002 decreased 87.7%
to Ps. 2.3 million, compared with Ps. 18.5 million reported for 2001.

Liquidity and Capital Resources

      The Company's  primary  source of liquidity is cash flow from  operations.
The Company's operating  activities provided Ps. 221.8 million in 2003, Ps. 40.2
million  in 2002 and Ps.  155.1  million  in 2001.  Cash  flow  from  operations
historically  has been sufficient to cover the Company's  working capital needs.
However, at December 31, 2001, the working capital deficit was Ps. 49.9 million,
due primarily to the Company's  acquisitions of XEN-AM, Palco Deportivo and To2,
which were financed mainly through  short-term loans (see Notes 23 and 24 to the
Consolidated  Financial  Statements).  At December 31, 2002, the working capital
deficit was Ps. 0.3 million.  At December 31, 2003, the working  capital deficit
was  Ps.  126.7  million,  due  primarily  to the  recorded  provision  for  the
contingent liability in connection with the arbitration  proceeding with Infored
and Mr. Gutierrez Vivo.

      As a result of the damages awarded in this arbitration proceeding, we have
recorded  a  provision  for this  contingent  liability  in the  amount of $21.1
million.  The  Company  plans to  challenge  the  validity  of this award in the
Mexican courts.  Should the Company fail in its challenge,  it expects to pursue
various potential sources of funds to cover its obligations with respect to such
award,  including  medium-term or long-term  financing up to $21.1  million.  No
assurance can be given that such funds will be obtained.

      The  Company  expects to be able to meet its  additional  working  capital
needs in 2004 with cash flow from its operations.

      Grupo Radio Centro invests its cash balances  generally in short-term peso
instruments,  including  overnight  and time  deposits,  repurchase  agreements,
certificates of deposit and commercial paper of certain Mexican issuers.

      Indebtedness

      Scotiabank  Inverlat  Loan  Agreement.  On October 30,  2000,  the Company
obtained a five-year, $35 million loan from Banco Inverlat, S.A. (now Scotiabank
Inverlat, S.A.), with interest payable quarterly, at an annual rate equal to the
90-day London Interbank  Offered Rate (LIBOR) plus 3.25%, and principal  payable
bi-annually.  As amended by a letter  agreement,  dated April 17, 2001, the loan
agreement  provided for an annual  interest rate of LIBOR plus 3.00%  (beginning
May 1, 2001) and the  payment of  principal  beginning  October  31,  2001.  The
Company used the proceeds of the loan to fund a capital  reduction in the amount
of Ps. 372.3 million (Ps. 343 million,  nominal amount),  resulting in a payment
of that amount to shareholders.


                                       32
<PAGE>

      The Scotiabank  Inverlat loan agreement contains  covenants  requiring the
Company to maintain certain  financial ratios and to comply with other financial
conditions  that,  among  other  things,  limit the  Company's  ability to incur
additional  indebtedness,  pay  dividends,  pledge  its  assets  and enter  into
transactions  with affiliates.  If we breach any of these covenants,  the amount
then outstanding under the loan agreement could be accelerated by the lender. As
of December  31,  2001,  the Company was not in  compliance  with the  covenants
requiring  that the Company  maintain a certain  ratio of total  liabilities  to
EBITDA (earnings before interest,  taxes,  depreciation and  amortization) and a
certain level of tangible  capital,  each as defined in the loan agreement.  The
Company obtained a waiver from Scotiabank  Inverlat of its  non-compliance  with
the tangible capital financial  covenant through December 31, 2001 and the total
liabilities  to EBITDA  financial  covenant  through March 31, 2002.  Scotiabank
Inverlat  additionally agreed to amend the total liabilities to EBITDA financial
covenant in the loan agreement to increase the ratio permitted  through December
31, 2002.  As a condition to the granting of the waiver and the  amendment,  the
Company  agreed to  convert  the  denomination  of $13.6  million  of the amount
outstanding  under the loan agreement from U.S.  dollars into Mexican pesos,  to
pay interest equal to the Mexican Interbank  Equilibrium  Interest Rate (Tasa de
Interes Interbancaria de Equilibrio or TIIE) plus 2.00% on the converted portion
of the loan and not to pay any  dividends  for so long as the  Company is not in
compliance with any of the financial covenants in the loan agreement as amended.
See Note 14 to the Consolidated Financial Statements.

      Under a subsequent  amendment to the Scotiabank Inverlat loan agreement on
December 10, 2002, the Company agreed to convert the remaining  $23.3 million of
the outstanding  balance under the loan agreement from U.S. dollars into Mexican
pesos,  to pay interest  equal to TIIE plus a variable rate ranging from 2.0% to
3.25%,  depending on the ratio of the Company's total liabilities to EBITDA, and
not to pay any dividends  for so long as the Company is not in  compliance  with
financial  covenants in the loan  agreement  during three  consecutive  quarters
starting with the fourth quarter of 2002.

      On  December  3, 2003,  the  Company  and  Scotiabank  Inverlat  signed an
amendment to the  Scotiabank  Inverlat loan  agreement to increase the principal
amount outstanding of the loan by Ps. 50 million,  to extend the loan's maturity
to October 31, 2007 and to fix the annual interest rate of the consolidated loan
at 10.3%,  subject to the  Company's  compliance  with a certain  ratio of total
liabilities  to  EBITDA,  as  defined in the  amendment  to the loan  agreement.
Failure  to  comply  with  such  ratio  will  result  in  incremental  quarterly
adjustments to the annual interest rate up to a maximum interest rate of 11.55%.
Due to noncompliance in the first quarter of 2004 (described below), the loan is
currently  subject to an annual  interest  rate of 11.05%.  The  proceeds of the
additional  loan  described  above  were  used  to pay in full  the  outstanding
principal of a short-term loan with BBVA Bancomer, S.A.

      As a result of the  provision  recorded  for the  contingent  liability in
connection  with the damages award granted in the  arbitration  proceeding  with
Infored,  (i) at December 31, 2003 and at the end of the first  quarter of 2004,
the  Company  was not in  compliance  with the  covenant  under  the  Scotiabank
Inverlat  loan  agreement  requiring  it to  maintain  a certain  ratio of total
liabilities to shareholders'  equity,  as defined in the loan agreement and (ii)
at the end of the first quarter of 2004, the Company was not in compliance  with
the  covenant  requiring  the  Company  to  maintain  a  certain  ratio of total
liabilities to EBITDA,  as defined in the loan agreement.  On June 15, 2004, the
Company obtained from Scotiabank Inverlat a waiver of its failure to comply with
these covenants for these periods. On June 29, 2004,  Scotiabank Inverlat agreed
to amend the total  liabilities to shareholders'  equity financial  covenant and
the total  liabilities  to EBITDA  financial  covenant in the loan  agreement to
increase the corresponding ratios permitted through December 31, 2004.

      At December 31,  2003,  the  Company's  total  indebtedness  was Ps. 226.5
million,  all of which was related to the  Scotiabank  Inverlat  loan  described
above.  The Company's  short-term  indebtedness was Ps. 56.6 million relating to
the  current  portion  of the  Scotiabank  Inverlat  loan,  while the  Company's
long-


                                       33
<PAGE>

term  indebtedness was Ps. 169.9 million relating to the non-current  portion of
the  Scotiabank  Inverlat loan. The Company's  total  indebtedness  is Ps. 198.1
million at June 23,  2004,  all of which is related to the  Scotiabank  Inverlat
loan described above.

      Short-term  Indebtedness.  Between 2001 and 2003, the Company's short-term
indebtedness was related to the current portion of the Scotiabank  Inverlat loan
and to several  short-term  promissory  notes issued by the  Company.  The first
promissory note,  dated July 24, 2002,  represented  indebtedness  owing to BBVA
Bancomer,  S.A. in the  principal  amount of $5.0  million,  bore interest at an
annual  interest rate equal to LIBOR plus 1.35% and matured on January 17, 2003.
The second promissory note, dated August 2, 2002, represented indebtedness owing
to BBVA Bancomer, S.A. in the principal amount of $1.5 million, bore interest at
an annual rate of LIBOR plus 1.2% and matured on January  17,  2003.  On January
17, 2003, both promissory  notes owing to BBVA Bancomer,  S.A. were combined and
their maturities extended. The combined promissory note, dated January 17, 2003,
represented indebtedness owing to BBVA Bancomer, S.A. in the principal amount of
$6.5 at an annual  interest rate of 2.5% and matured on May 19, 2003. On May 19,
2003, the Company paid the $6.5 million to BBVA  Bancomer,  S.A. and agreed to a
new short-term loan in the amount of Ps. 50.0 million  (nominal  amount),  which
bore  interest at an annual rate of 6.9% and was scheduled to mature on July 17,
2003. BBVA Bancomer, S.A. subsequently agreed to extend the maturity of the loan
to January 26, 2004.  The  principal  and interest  were paid off on December 4,
2003.

      The  third  promissory   note,   dated  November  12,  2002,   represented
indebtedness owing to Banco Nacional de Mexico,  S.A. in the principal amount of
$3.5 million, bore interest at an annual rate of 3.2% and matured on January 10,
2003. On January 10, 2003, the promissory note was extended until March 11, 2003
and the annual  interest rate lowered to 2.78%.  The principal and interest were
paid  off at  maturity  on  March  11,  2003.  See  Note 14 to the  Consolidated
Financial Statements.  The proceeds of the promissory notes described above were
used to finance the Company's  acquisitions of XEN-AM,  Palco Deportivo and To2.
See Item 4, "Information on the Company--The  Company--Capital  Expenditures and
Divestitures--Capital  Expenditures"  and  Notes  23 and 24 to the  Consolidated
Financial Statements.

      The  Company  has not  entered  into any  arrangements  for the purpose of
hedging interest rate or currency risk.

      During  2003,  the  Company's  principal  use of  funds,  other  than  for
operating  purposes and capital  expenditures,  was the payment of  indebtedness
totaling Ps. 61.8 million and the payment of dividends totaling Ps. 56.4 million
(Ps. 55.0 million, nominal amount). In 2003, the Company repurchased on the open
market  57,000  shares of the Company at an aggregate  cost of Ps.  370,000 (Ps.
360,000  nominal  amount).  During 2002,  the Company's  principal use of funds,
other than for operating purposes and capital expenditures,  was for the payment
of indebtedness totaling Ps. 79.0 million. In 2002, the Company repurchased from
the public market  1,230,400 shares at an aggregate cost of Ps. 5.0 million (Ps.
4.6 million,  nominal amount),  representing  approximately  0.7% of outstanding
capital stock. During 2001, the Company's principal use of funds, other than for
operating  purposes and capital  expenditures  (see Item 4,  "Information on the
Company--The    Company--Capital    Expenditures    and    Divestitures--Capital
Expenditures"),  was the payment of dividends  totaling  Ps. 130.7  million (Ps.
115.0  million,  nominal  amount).  Grupo  Radio  Centro  may from  time to time
repurchase  its  outstanding  equity  securities if market  conditions and other
relevant considerations make such repurchases appropriate.


                                       34
<PAGE>

      Contractual  Obligations.   In  the  table  below  we  set  forth  certain
contractual  obligations  as of December 31, 2003,  consisting of debt,  and the
period in which the contractual  obligations  come due. The table below does not
include pension liabilities, deferred taxes or current accounts payable.

<TABLE>
<CAPTION>
                                                                                   Payments Due by Period
                                                                                      (in thousands)
                                                                                  (as of December 31, 2003)
                                                         --------------------------------------------------------------------------
                                                            Total          2004        2005-2006      2007-2008     2009 and beyond
                                                         -----------    ----------    -----------     ----------    ---------------
Contractual Obligations

<S>                                                      <C>            <C>           <C>             <C>              <C>
Long-Term Debt Obligations ....................          Ps. 226,473    Ps. 56,618    Ps. 113,237     Ps. 56,618           0
                                                         -----------    ----------    -----------     ----------    ---------------
  Total .......................................          Ps. 226,473    Ps. 56,618    Ps. 113,237     Ps. 56,618           0
</TABLE>

U.S. GAAP Reconciliation

      Net (loss) income under U.S.  GAAP for 2003,  2002 and 2001 was Ps. (318.8
million),  Ps. 76.2 million and Ps. 97.0 million,  respectively.  The difference
between net income under U.S. GAAP and Mexican GAAP was  primarily  attributable
in 2003, 2002 and 2001, to the  amortization of goodwill with respect  companies
purchased  from  related  parties.  Under  current  Mexican  GAAP,  goodwill  is
amortized  using a  straight-line  method based on an asset's  estimated  useful
life. In July 2001, the Financial  Accounting  Statements Board issued Statement
of  Financial  Accounting  Standard  No.  142,  "Goodwill  and Other  Intangible
Assets."  As a result of SFAS 142,  amortization  of  goodwill  under U.S.  GAAP
ceased as of  January 1, 2002,  and U.S.  GAAP  requires  testing  goodwill  for
impairment at least once a year. The Company was required to adopt this standard
for the year ending December 31, 2002 on its consolidated  financial  statements
under U.S. GAAP. In accordance  with the  requirements  of SFAS 142, the Company
performed an analysis for impairment of its goodwill as of December 31, 2002 and
December  31,  2003.  For the year  ending  December  31,  2002,  no  impairment
adjustment  was  necessary.  For the year ending  December  31, 2003, a goodwill
impairment  adjustment  under U.S. GAAP was necessary in the amount of Ps. 152.5
million ($13.6 million)  relating to the rescission of the Infored Agreement and
the associated decline in anticipated advertising revenues.

      Operating  (loss) income under U.S. GAAP for the years ended  December 31,
2003,  2002 and 2001 was Ps. (321.3)  million,  Ps. 120.9 million and Ps. 102.4,
respectively.  The principal  difference  between  operating (loss) income under
Mexican GAAP and U.S. GAAP is that certain expenses, net of the Company that are
classified  as  non-operating  charges  under  Mexican GAAP are charged  against
operations  under U.S. GAAP. For the year ended December 31, 2003, the Company's
extraordinary  item  relating to the provision  for the  contingent  arbitration
losses is classified as a  non-operating  charge to earnings under Mexican GAAP,
whereas for U.S. GAAP  reporting  purposes this  represents an operating  charge
against the Company's earnings.

      Shareholders'  equity under U.S.  GAAP at December 31, 2003,  December 31,
2002 and December 31, 2001 was  approximately  Ps. 0.9 billion,  Ps. 1.3 billion
and Ps.  1.3  billion,  respectively.  In 2003,  2002 and 2001,  the  difference
between  shareholders' equity under U.S. GAAP and Mexican GAAP was mainly due to
the treatment of  amortization  of goodwill with respect to companies  purchased
from related parties and the prohibition against  amortization of goodwill under
U.S. GAAP as of January 1, 2002.

      For a further discussion of the differences  between Mexican GAAP and U.S.
GAAP as they  relate  to Grupo  Radio  Centro,  see Note 25 to the  Consolidated
Financial  Statements.  Pursuant to Mexican GAAP, Grupo Radio Centro's financial
statements  recognize  certain  effects of inflation in accordance with Bulletin
B-10  and  Bulletin   B-12;   these  effects  have  not  been  reversed  in  the
reconciliation  to U.S. GAAP.  Due to the Company's  adoption of Bulletin D-4 in
1999,  the Company's  financial  statements  for


                                       35
<PAGE>

2003,  2002 and 2001  include an expanded  recognition  of deferred  taxes under
Mexican GAAP that more closely parallels U.S. GAAP.  Accordingly,  there were no
differences  related to deferred taxes that had to be reconciled between Mexican
and U.S. GAAP for purposes of the Consolidated Financial Statements (see Note 25
to the Consolidated Financial Statements).

Item 6.  Directors, Senior Management and Employees

Directors

      Management  of the  business  of the  Company  is  vested  in the Board of
Directors.  At the  shareholders  meeting  held on April 25,  2003,  the Company
amended its bylaws. See Item 10, "Additional  Information--Bylaws."  The bylaws,
as amended,  provide that the Board of Directors  shall  consist of a minimum of
seven and a maximum of twenty  directors and an equal number of their respective
alternate  directors.  Each  director and  alternate  director is elected by the
Company's  shareholders by simple  majority vote at the annual ordinary  general
meeting for a term of one year.  Alternate  directors are authorized to serve on
the Board of Directors in place of directors  who are unable to attend  meetings
or otherwise participate in the activities of the Board of Directors.  Directors
and  alternate  directors  may be Mexican or foreign,  but both the  majority of
directors and the majority of alternate directors must be Mexican.

      Of  the  total  number  of  directors,   and  their  respective  alternate
directors, at least 25% must be independent directors. Independent directors may
not be individuals related to the Company,  such as, among others,  employees or
officers of the Company,  shareholders with directive power over officers of the
Company, important clients,  suppliers,  debtors or creditors of the Company, or
their respective shareholders,  directors or employees. Alternate directors only
serve in  place  of  their  respective  regular  directors  and,  in the case of
alternate  directors of independent  directors,  must also meet the requirements
for independent directors.

      The Board of Directors  currently  consists of twelve  members.  Alejandro
Sepulveda de la Fuente is the Secretary to the Board of  Directors.  The current
members  of the Board of  Directors  were  elected  at the  annual  shareholders
meeting on April 16, 2004. Their names, positions, ages and information on their
principal  business  activities  outside Grupo Radio Centro are listed below. In
addition to the "other  directorships"  listed below, the Aguirre members of the
Board of Directors,  except for Ana Maria Aguirre and Rafael Aguirre, sit on the
boards of directors of various radio stations in Mexico.

<TABLE>
<CAPTION>

<S>                                      <C>                           <C>
Francisco Aguirre G.                     Age:                           62
     (Chairman)                          Years as director:             4
                                         Principal occupation:          Private Investor
                                         Other directorships:           Chairman of the board of Grupo Radio Mexico,
                                                                           S.A. de C.V.

Maria Esther Aguirre G.                  Age:                           64
     (Vice President)                    Years as director:             4
                                         Principal occupation:          Private Investor

Maria Adriana Aguirre G.                 Age:                           57
     (Vice President)                    Years as director:             4
                                         Principal occupation:          Private Investor
</TABLE>


                                       36
<PAGE>

<TABLE>
<CAPTION>

<S>                                      <C>                           <C>
Ana Maria Aguirre  G.                    Age:                           59
                                         Years as director:             33
                                         Principal occupation:          Private Investor
                                         Other directorships:           Director of Avon Cosmeticos, S.A. de C.V.

Carlos Aguirre G.                        Age:                           49
                                         Years as director:             4
                                          Principal occupation:         General Director of Grupo Radio Centro

Rafael Aguirre G.                        Age:                           46
                                         Years as director:             11
                                         Principal occupation:          Private Investor
                                         Other directorships:           Chairman of the Board of the Quintana Roo
                                                                           branch of Bancrecer, S.A.; Director of the
                                                                           Quintana Roo branch of HSBC Mexico, S.A.
                                                                           (formerly Banco Internacional, S.A.);
                                                                           Director of the Yucatan Peninsula branch
                                                                           of Banco Nacional de Mexico, S.A.

Jose Manuel Aguirre G.                   Age:                           41
                                         Years as director:             4
                                         Principal occupation:          Private Investor

Pedro Beltran N.                         Age:                           60
                                         Years as director:             2
                                         Principal occupation:          Finance and Administrative Director and Chief
                                                                           Financial Officer of Grupo Radio Centro

Sergio Nino M.                           Age:                           63
                                         Years as director:             2
                                         Principal occupation:          Financial Advisor

Jose Raymundo Leal M.                    Age:                           58
                                         Years as director:             2
                                         Principal occupation:          Financial Advisor

Thomas Harold Raymond Moffet             Age:                           62
                                         Years as director:             4
                                         Principal occupation:          President of Amsterdam Pacific Securities,
                                                                           LLC (a financial advisory firm)

Luis de la Fuente Baca                   Age:                           58
                                         Years as director:             4
                                         Principal occupation:          Financial Advisor
</TABLE>


                                       37
<PAGE>

      Ms. Maria Esther G. de Aguirre is the Honorary Chairperson for life of the
Board of Directors  of the Company and also is the mother of  Francisco  Aguirre
G., Maria  Adriana  Aguirre G., Maria Esther  Aguirre G., Ana Maria  Aguirre G.,
Carlos Aguirre G., Rafael Aguirre G. and Jose Manuel Aguirre G.

      The bylaws  require that any of the following  transactions  be previously
approved by the Board of Directors:  (i)  transactions  entered into between the
Company and/or its  subsidiaries and any related party of the Company and/or its
subsidiaries outside the ordinary course of business;  (ii) the purchase or sale
of 10% or more of the  Company's  and/or  its  subsidiaries'  assets;  (iii) the
granting of a guarantee  resulting in a potential liability exceeding 30% of the
Company's and/or its subsidiaries' assets; and (iv) any transaction,  other than
the transactions  described above,  involving an amount in excess of one percent
of the Company's and/or its subsidiaries' assets.

      The bylaws  provide that the Board of  Directors  shall meet at least once
every three months and that either the Chairman of the Board of  Directors,  the
Secretary,  at  least  25% of the  members  of the  Board  of  Directors  or any
statutory  auditor of the Company shall be entitled to call for a meeting of the
Board.

      The bylaws provide that holders of Series A Shares representing 10% of the
capital stock of the Company shall be entitled to appoint one regular  member of
the Board of Directors and such member's alternate.

      The bylaws also provide that the Board of Directors  shall  present to the
shareholders  at the  annual  shareholders  meeting  the  reports  of the  Audit
Committee  and that the Board of  Directors  shall be  entitled  to appoint  and
remove the external auditor, taking into consideration the recommendation of the
Audit Committee.

      Executive Committee

      The Company's  bylaws  provide that at an ordinary  general  meeting,  the
shareholders may elect, by simple majority vote, an Executive  Committee of five
to seven  members from among the  Company's  directors  or  alternate  directors
elected or designated at such  shareholders  meeting.  The bylaws of the Company
provide that the Executive  Committee,  with certain exceptions,  is vested with
all powers of the Board of Directors.  Alternate Executive Committee members are
authorized  to serve on the  Executive  Committee  in place of  members  who are
unable to attend  meetings or otherwise  participate  in the  activities  of the
Executive Committee.

      The current  members of the Executive  Committee are Francisco  Aguirre G.
(chairman), Jose Manuel Aguirre G. (vice president), Ana Maria Aguirre G., Maria
Esther  Aguirre  G.,  Maria  Adriana  Aguirre G.,  Carlos  Aguirre G. and Rafael
Aguirre G.

      Audit Committee

      The Audit  Committee  consists  of three  regular  members of the Board of
Directors  appointed to the Audit  Committee by the  shareholders  at the annual
shareholders  meeting. The chairman of the Audit Committee and a majority of its
members must be independent  directors,  as independent is defined under Mexican
securities market law.

      The Audit  Committee  makes  non-binding  recommendations  to the Board of
Directors  with  respect to certain  transactions,  including  any  transactions
entered into by the Company and/or its


                                       38
<PAGE>

subsidiaries with related parties,  any purchase or sale of more than 10% of the
Company's and/or its subsidiaries' assets, any guarantee for an amount exceeding
30% of the Company's and/or its subsidiaries' assets and transactions  involving
more  than 1% of the  Company's  and/or  its  subsidiaries'  assets.  The  Audit
Committee may make  recommendations  to the Board of Directors for the hiring or
removal of the  external  auditor and the approval of any  additional  non-audit
services to be rendered by the external  auditors,  and to propose the hiring of
independent advisors as it may deem necessary in order to make  recommendations.
The Audit  Committee  must  prepare  an  annual  report  on its  activities  for
presentation to the shareholders at the annual  shareholders  meeting and to the
Board of Directors.  All  resolutions of the Audit Committee must be approved by
at least a majority of its independent  members. The Company's statutory auditor
must attend all meetings of the Audit  Committee  but is not entitled to vote at
such  meetings.  There can be no  assurance  that  recommendations  of the Audit
Committee  will  ensure that any  arrangements  with  related  parties are on an
arm's-length basis.

      Currently,  the Audit Committee consists of three members: Sergio Nino M.,
Thomas Harold Raymond Moffet and Luis de la Fuente Baca, as committee  chairman.
As required by our bylaws and Mexican  law,  the  chairman  and two of the three
members,  Mr.  Moffet and Mr. de la Fuente Baca,  are  independent  members,  as
independent is defined under Mexican securities market law.

      Statutory Auditors

      The  Company's  bylaws  provide for one or more  statutory  auditors to be
elected at the ordinary  general meeting of  shareholders  and, if determined at
such meeting, their respective alternates. Additionally, the bylaws provide that
holders  of shares,  with or  without  voting  rights,  representing  10% of the
capital stock of the Company shall be entitled to appoint one statutory auditor,
and such statutory auditor may not be removed until all other statutory auditors
are removed.  Under Mexican law, the duties of statutory auditors include, among
other things,  the examination of the operations,  books,  records and any other
documents of a company and the  presentation of a report of such  examination at
the annual ordinary general meeting of shareholders.  The statutory auditors are
required to attend all meetings of the Board of Directors,  Executive Committee,
Audit Committee and shareholders of the Company.

      The Company currently has one statutory  auditor,  Alejandro  Martinez C.,
and one alternate statutory auditor, Patricio Montiel F.

Executive Officers

      The executive officers of Grupo Radio Centro are as follows:

Carlos Aguirre G.                              Years as officer:          25
     General Director                          Years of service:          30

Pedro Beltran N.                               Years as officer:          18
     Finance and Administrative Director       Years of service:          18
     and Chief Financial Officer

Arturo Yanez F.                                Years as officer:          20
     Administrative Sub-Director               Years of service:          20

Sergio Gonzalez L.                             Years as officer:          20
     Operations Director                       Years of service:          20

Luis Cepero A.                                 Years as officer:          21
     Audio Engineering Director                Years of service:          43


                                       39
<PAGE>

Eduardo Stevens A.                             Years as officer:          14
     Transmission Engineering Director         Years of service:          24

Gonzalo Yanez V.                               Years as officer:          4
     Marketing Director                        Years of service:          7

Rodolfo Nava C.                                Years as officer:          4
     Audit and Information Manager             Years of service:          18

Alvaro Fajardo de la Mora                      Years as officer:          19
     General Counsel                           Years of service:          19

Luis Miguel Carrasco N.                        Years as officer:          6
     Commercial Director                       Years of service:          11

Compensation

      For the year ended December 31, 2003, the aggregate  compensation  for the
executive  officers of the Company  paid or accrued in that year for services in
all capacities was Ps. 22.0 million,  of which approximately Ps. 3.9 million was
paid in the form of bonus awards.  These bonus awards were  determined  based on
various factors,  including  quarterly financial results and station ratings and
rankings.

      The total of payments to Executive  Committee  members for  attendance  at
Executive  Committee  meetings  during  2003 was Ps.  17  million.  The total of
payments to directors for attendance at Board of Director  meetings  during 2003
was Ps. 283,140.

Employees

      At December 31, 2003, Grupo Radio Centro employed a total of 394 full-time
employees,  fewer than half of whom are members of the Sindicato de Trabajadores
de la  Industria  de Radio y  Television,  Similares  y Conexos de la  Republica
Mexicana (the Radio and  Telecommunications  Workers  Union or the "Union").  At
each of December 31, 2002 and December 31, 2001, the Company employed a total of
394 and 406 full-time employees, respectively. Grupo Radio Centro also employs a
varying  number of temporary  employees.  During 2003,  the Company  employed an
average of 99 temporary employees.

      Negotiations  with Union  employees  are  conducted at the industry  level
pursuant to a national contract (the "Contrato Ley") that is administered by the
Union and that  provides for general  employment  terms  applicable to all Union
employees,   although  particular  enterprises  within  the  radio  broadcasting
industry may negotiate separate  contractual  arrangements with the Union in the
event exceptions from the Contrato Ley are desired.  All of Grupo Radio Centro's
current  contractual  relations with Union  employees are pursuant to the stated
terms of the Contrato  Ley. The current  Contrato Ley will expire on January 31,
2006; however,  salary increases are implemented  annually. On February 1, 2004,
the  Company and the Union  agreed to a 4.5%  increase  in  salaries.  Relations
between Grupo Radio  Centro,  its workers and the Union have  historically  been
good; there have been no material disputes between any of the radio broadcasting
subsidiaries of Grupo Radio Centro and any of their employees since the founding
of Grupo Radio Centro.


                                       40
<PAGE>

Share Ownership

      As of June 23, 2004,  the Aguirre  members of the Board of  Directors  had
beneficial  ownership,  through the two Mexican  trusts  through which they hold
their  Series  A  Shares,   of  84,020,646  Series  A  Shares  of  the  Company,
representing  51.6% of the  outstanding  Series  A  Shares.  See Item 7,  "Major
Shareholders and Related Party Transactions--Major Shareholders."

      None of the Company's other directors or officers is the beneficial  owner
of more than 1% of the Company's outstanding capital stock.

Significant  Differences  between New York Stock Exchange  Corporate  Governance
Standards and our Corporate Governance Practices

      Pursuant to Section  303A.11 of the Listed  Company Manual of the New York
Stock Exchange  (NYSE),  we are required to provide a summary of the significant
ways in which our corporate  governance practices differ from those required for
U.S.  companies under the NYSE listing standards.  We are a Mexican  corporation
with shares listed on the Mexican Stock Exchange (Bolsa Mexicana de Valores S.A.
de C.V.).  Our corporate  governance  practices are governed by our bylaws,  the
Mexican  Securities  Market Law (Ley del Mercado de Valores) and the regulations
issued by the  Mexican  Banking and  Securities  Commission  (Comision  Nacional
Bancaria y de Valores).  We also generally  comply on a voluntary basis with the
Mexican  Code  of  Best  Corporate   Practices   (Codigo  de  Mejores  Practicas
Corporativas) as indicated  below,  which was created in January 2001 by a group
of  Mexican  business  leaders  and was  endorsed  by the  Mexican  Banking  and
Securities  Commission.  On an annual  basis,  we file a report with the Mexican
Banking and Securities  Commission and the Mexican Stock Exchange  regarding our
compliance with the Mexican Code of Best Corporate Practices.

      The  table  below  discloses  the  significant   differences  between  our
corporate governance practices and the NYSE standards.

<TABLE>
<CAPTION>

                      NYSE Standards                                 Our Corporate Governance Practices
                      --------------                                 ----------------------------------
<S>                                                            <C>
Director Independence.  Majority of board of directors         Pursuant to the Mexican Securities Market Law and
must be independent.  "Controlled companies," which would      our bylaws, our shareholders are required to appoint
include our company if it were a U.S. issuer, are exempt       a board of directors of between seven and 20
from this requirement.  A controlled company is one in         members, of whom at least  25% must be independent.
which more than 50% of the voting power is held by an          Our board of directors is not required to make a
individual, group or another company, rather than the          determination as to the independence of our
public.ss.303A.01                                              directors.

A director is not independent if such director is:             Under Article 14 Bis of the Mexican Securities
                                                               Market Law and our bylaws, a director is not
                                                               independent if such director is:

    (i)  a person who the board determines has a                 (i) an employee or officer of the company
    material direct or indirect relationship with the            (one-year cooling off period);
    company, its parent or a consolidated subsidiary;
</TABLE>


                                       41
<PAGE>

<TABLE>
<CAPTION>

                      NYSE Standards                                 Our Corporate Governance Practices
                      --------------                                 ----------------------------------
    <S>                                                          <C>
    (ii)  an employee, or an immediate family member of          (ii) a shareholder that, without being an
    an executive officer, of the company, its parent or a        employee or officer of the company, has influence
    consolidated subsidiary, other than employment as            or authority over the company's officers;
    interim chairman or CEO;

    (iii) a person who receives, or whose immediate              (iii) a consultant, or partner or employee of a
    family member receives, more than $100,000 per year          consultant, to the company or its affiliates,
    in direct compensation from the company, its parent          where the income from the company represents 10%
    or a consolidated subsidiary, other than director and        or more of the overall income of such consultant;
    committee fees or deferred compensation for prior
    services only (and other than compensation for
    service as interim chairman or CEO or received by an
    immediate family member for service as a
    non-executive employee);

    (iv)  a person who is affiliated with or employed, or        (iv) an important client, supplier, debtor or creditor (or
    whose immediate family member is affiliated with or          a partner, director or employee thereof). A client and
    employed in a professional capacity, by a present or         supplier is considered important where its sales to or
    former internal or external auditor of the company,          purchases from the company represent more than 10% of the
    its parent or a consolidated subsidiary;                     client's or supplier's total sales or purchases. A debtor
                                                                 or creditor is considered important whenever the relevant
                                                                 financing represents more than 15% of the company's assets
                                                                 or of the debtor's or creditor's assets;

    (v)   an executive officer, or an immediate family           (v) an employee of a fund, association or civil
    member of an executive officer, of another company           company that receives contributions from the
    whose compensation committee's membership includes an        company that represent more than 15% of the total
    executive officer of the listed company, its parent          contributions received;
    or a consolidated subsidiary; or

    (vi)  an executive officer or employee of a company,         (vi) a CEO or other high ranking officer of
    or an immediate family member of an executive officer        another company in which the issuer's CEO or other
    of a company, that makes payments to, or receives            high ranking officer is a member of the board of
    payments from, the listed company, its parent or a           directors; or
    consolidated subsidiary for property or services in
    an amount which, in any single fiscal year, exceeds
    the greater of $1 million or 2% of such other
    company's consolidated gross revenues (charities are
    not included, but any such payments must be disclosed
    in the company's proxy (or, if no proxy is prepared,
    its Form 10-K / annual report)).
</TABLE>


                                       42
<PAGE>

<TABLE>
<CAPTION>

                    NYSE Standards                                 Our Corporate Governance Practices
                    --------------                                 ----------------------------------
<S>                                                            <C>
"Immediate family member" includes a person's spouse,          (vii) a "family member" related to any of the persons
parents, children, siblings, mothers and fathers-in-law,       mentioned above in (i) through (vi). "Family member"
sons and daughters-in-law and anyone (other than domestic      includes a person's spouse, concubine or other relative of
employees) who shares the person's home. Individuals who       up to three degrees of consanguinity or affinity, in the
are no longer immediate family members due to legal            case of (i) and (ii) above, and a spouse, concubine or
separation, divorce or death (or incapacity) are excluded.     other relative of up to one degree of consanguinity or
ss.303A.02(b)                                                  affinity in the case of (iii) through (vi) above.

Executive Sessions.  Non-management directors must meet     There is no similar requirement under our bylaws or
regularly in executive sessions without management.         applicable Mexican law.
Independent directors should meet alone in an executive
session at least once a year.ss.303A.03

Audit committee. Audit committee satisfying the             We will be required to comply with Rule 10A-3 under the
independence and other requirements of Rule 10A-3 under     Securities Exchange Act of 1934 by July 31, 2005. The
the Securities Exchange Act of 1934 and the more stringent  members of our audit committee are not required to satisfy
requirements under the NYSE standards is required.          the NYSE independence and other audit committee standards
ss.ss.303A.06, 303A.07                                      that are not prescribed by Rule 10A-3.

                                                            Our audit committee complies with the requirements
                                                            of the Mexican Securities Market Law and has the
                                                            following attributes:

                                                            We have a three-member audit committee, composed of
                                                            regular members of the board of directors and
                                                            appointed by the shareholders at the ordinary
                                                            general shareholders meeting.

                                                            Under our bylaws, the chairman of our audit
                                                            committee and the majority of its members must be
                                                            independent directors.  Two of the three members of
                                                            our audit committee are independent as such term is
                                                            defined under the Mexican Securities Market
                                                            Law.

                                                            Our audit committee operates pursuant to the Mexican
                                                            Securities Market Law, the regulations issued by the
                                                            National Securities and Banking Commission and our
                                                            bylaws.

                                                            Pursuant to our bylaws and Mexican law, our audit
                                                            committee submits an annual report regarding its
                                                            activities to our board of directors, which in turn
                                                            presents the report to our shareholders at the
                                                            ordinary general shareholders meeting.
</TABLE>


                                       43
<PAGE>

<TABLE>
<CAPTION>

                    NYSE Standards                                 Our Corporate Governance Practices
                    --------------                                 ----------------------------------
<S>                                                            <C>
Nominating/corporate governance committee.                  We are not required to have a nominating/corporate
Nominating/corporate governance committee of independent    governance committee, and it is not expressly recommended
directors is required. The committee must have a charter    by the Mexican Code of Best Corporate Practices.
specifying the purpose, duties and evaluation procedures
of the committee. "Controlled companies," which would
include our company if it were a U.S. issuer, are exempt
from these requirements. ss.303A.04

Compensation committee. Compensation committee of           We are not required to have a compensation committee. Our
independent directors is required, which must approve       bylaws require that our directors' compensation be
executive officer compensation. The committee must have a   determined by the shareholders at the ordinary general
charter specifying the purpose, duties and evaluation       shareholders meeting.
procedures of the committee. "Controlled companies," which
would include our company if it were a U.S. issuer, are
exempt from this requirement. ss.303A.05

Equity compensation plans.  Equity compensation plans       Shareholder approval is not required under Mexican
require shareholder approval, subject to limited            law or our bylaws for the adoption and amendment of
exemptions.ss.303A.08                                        an equity compensation plan.  Currently, we do not
                                                            have an equity compensation plan.

Code of Ethics.  Corporate governance guidelines and a      We have adopted a code of ethics applicable to our
code of business conduct and ethics is required, with       chief executive officer, chief financial officer and
disclosure of any waiver for directors or executive         principal accounting officer or persons performing
officers. ss.303A.10                                          similar functions.  We are required by Item 16B of
                                                            Form 20-F to disclose any waivers granted to such
                                                            persons.  A copy of our code of ethics is available
                                                            on our website at www.radiocentro.com.mx.
</TABLE>

Item 7. Major Shareholders and Related Party Transactions

Major Shareholders

      The Company was incorporated as Tecnica de Desarrollo  Publicitario,  S.A.
de C.V. on June 8, 1971,  with its principal  shareholders  being members of the
Aguirre family.  The Company has undergone several changes in nominal ownership,
but ultimate control has always resided with the Aguirre family.

      On June 3, 1998,  all of the Series A Shares and CPOs owned by the Aguirre
family,  which were held in a trust  established  by the Aguirre  family in 1992
(the "Old Controlling Trust"), were divided into two trusts (the Old Controlling
Trust and the "New Controlling Trust" and, together,  the "Controlling Trusts").
Prior to the  division,  50% of the Series A Shares and CPOs of the Company held
by the Old  Controlling  Trust was held for the  benefit  of Maria  Esther G. de
Aguirre,  with the remainder divided equally among her children.  Simultaneously
with the division, Maria Esther G. de Aguirre acquired a


                                       44
<PAGE>

50% interest in each of the Controlling  Trusts and transferred  those interests
to her  children in equal  parts,  but  reserved  her rights to vote and receive
dividends  in respect of the  Series A Shares and CPOs  previously  held for her
benefit (the "reserved rights").

      On May 25, 1999,  four members of the Aguirre  family made a gift of their
interest  in the  Company's  Series A Shares  and CPOs  held by the  Controlling
Trusts to Maria  Esther G. de  Aguirre.  On the same date,  the  Aguirre  family
amended  the terms of the  Controlling  Trusts to  transfer,  on such date,  the
reserved  rights  held by Maria  Esther G. de Aguirre to her  children  in equal
parts  and to  transfer,  upon the  occurrence  of  certain  events,  the  trust
interests gifted to her by her four children to her seven other  children--Maria
Esther  Aguirre G.,  Francisco  Aguirre G., Maria Adriana  Aguirre G., Ana Maria
Aguirre G., Carlos Aguirre G., Rafael Aguirre G. and Jose Manuel Aguirre G.

      On  April  5,  2000,  Maria  Esther  G.  de  Aguirre  made a  gift  of her
approximate 36% interest in the Controlling Trusts to her seven children holding
interests in such trusts.  Following  this gift and an amendment of the terms of
the  Controlling  Trusts to remove  Maria  Esther G. de Aguirre  as grantor  and
beneficiary,  those seven children owned, in equal parts,  100% of the interests
in the Controlling Trusts. Under the terms of the Controlling Trusts, the Series
A Shares  held by each trust are  ordinarily  voted as directed by a majority of
the beneficiaries of the trust.

      The following table sets forth certain information regarding the ownership
of Series A Shares by holders of more than 5% of the outstanding Series A Shares
as of June 23, 2004. All CPOs  previously  held by the  Controlling  Trusts were
converted to Series A Shares in 2003.

                                              Series A           Percentage of
      Name of Person or Group               Shares Owned      Series A Shares(1)
      -----------------------               ------------      ------------------
      Old Controlling Trust..............    11,669,527              7.2%
      New Controlling Trust..............    72,351,119             44.4%

      ----------
      (1)   Percentages  are based on  162,667,561  Series A Shares  issued  and
            outstanding as of June 23, 2004.

      The voting  rights of the  holders of Series A Shares not held in the form
of CPOs or ADSs are identical.

      The bylaws of the Company  prohibit  the  ownership  of Series A Shares by
persons  who do not  qualify  as  Mexican  investors.  See Item 10,  "Additional
Information--Bylaws--Limitations  Affecting  Non-Mexican  Holders."  At June 23,
2004, to the best knowledge of the Company, approximately 34% of the outstanding
Series A Shares were represented by ADSs. It is not practical for the Company to
determine the number of U.S. holders of CPOs or ADSs.

Related Party Transactions

      Family Control of OIR Network Affiliates

      In addition to their participation in the Company,  members of the Aguirre
family owned or controlled 17 of the 111  affiliates in the network  serviced by
OIR at December 31, 2003.  Affiliated stations owned or controlled by members of
the Aguirre family  accounted for  approximately  18.9%,  25.6% and 24.4% of OIR
revenue  (or 0.5%,  0.3% and 0.3% of Grupo  Radio  Centro's  total  broadcasting
revenue)  for  the  fiscal  years  ended  December  31,  2003,  2002  and  2001,
respectively.  Grupo Radio Centro has provided administrative and other services
to such family-owned stations in the OIR network and under certain circumstances
has  provided  commercial  air time to related  parties,  on terms that are


                                       45
<PAGE>

more favorable than those  provided to unrelated  parties.  The Company does not
believe that such transactions have been material.

      Service Contract

      On January 5, 2000,  Grupo Radio Centro  entered  into a contract  with an
entity owned by Francisco  Aguirre Gomez,  chairman of the Board of Directors of
the Company, for an indefinite term pursuant to which this entity is compensated
for consulting  services and the sale of air time provided to the Company by Mr.
Aguirre.  The Company  incurred  expenses under this contract  totaling Ps. 10.0
million,  Ps.  7.9  million  and  Ps.  7.8  million  in  2003,  2002  and  2001,
respectively. See Note 6 to the Consolidated Financial Statements.

      Sale of Goods and Services

      The  Company  makes  available  to  employees,  including  key  management
personnel,  and  directors  and  directors'  family  members  goods and services
obtained by the Company in barter  transactions.  These goods and  services  are
offered to executive  officers and directors at discounts that are comparable to
the discounts offered to the Company's employees.  In 2003, the Company received
a total of Ps. 3.2 million  from  executive  officers  and  directors  and their
families in connection with these  transactions.  See Note 6 to the Consolidated
Financial Statements.

      Attention to Aguirre Family Matters

      Carlos Aguirre G., the General  Director,  and to a lesser  extent,  Pedro
Beltran,   the  Chief  Financial  Officer,   Arturo  Yanez,  the  Administrative
Sub-Director,  and Alvaro Fajardo, the General Counsel,  have spent a portion of
their time on Aguirre  family  matters for which Grupo Radio Centro has not been
separately compensated.

      For further information regarding  transactions between Grupo Radio Centro
and related parties, see Note 6 to the Consolidated Financial Statements.

Item 8. Financial Information

Consolidated Financial Statements

      See Item 18, "Financial Statements" and pages F-1 through F-44.

Other Financial Information

      Legal and Arbitration Proceedings

      As required  by a decree of a Mexican  civil  judge in  connection  with a
litigation proceeding brought in 2002 by the Company to clarify the amounts owed
in a  contract  dispute  with  Infored  regarding  the  compensation  of certain
sportscasters  for  programming  produced by Infored,  the Company paid Ps. 13.1
million to Infored in June 2004. The amounts were paid from  provisions that had
been created in 2002 by the Company for such purpose.  This matter was unrelated
to the March 2004 arbitration decision regarding the Monitor news program.

      As of June 23, 2004,  other than  proceedings  related to the  arbitration
with  Infored   described   under  Item  4,   "Business   Overview--Broadcasting
Operations--Production  of Programming by Infored,"  neither the Company nor any
of its subsidiaries is engaged in any material litigation or arbitration, and no


                                       46
<PAGE>

material litigation or claim is known to the Company to be pending or threatened
against the Company or any of its subsidiaries.

      Dividend Policy

      The table  below  sets  forth each of the  dividends  paid by the  Company
during the period 1999-2003,  together with per-Series A Share (in nominal pesos
and U.S.  dollars)  and  per-ADS  amounts  translated  into U.S.  dollars at the
exchange rate in effect on each of the respective payment dates.

<TABLE>
<CAPTION>
                                                          Aggregate
                                     Fiscal Year with     Amount of         Dividend Per       Dividend Per         Dividend Per
                                     Respect to which    Dividend Paid     Series A Share     Series A Share            ADS
Date Dividend Paid                   Dividend Paid(1)   (Nominal Pesos)  (Nominal Pesos)(2)  (U.S. dollars)(2)  (U.S. dollars)(2)(3)
------------------                   ----------------   ---------------  ------------------  -----------------  --------------------
<S>                                       <C>              <C>                  <C>                <C>                  <C>
March 3, 2000...................          1999             42,700,000           0.24               0.02                 0.23
March 9, 2001...................          2000            115,000,000           0.70               0.07                 0.65
August 22, 2003.................          2002             55,000,000           0.34               0.03                 0.28
</TABLE>

----------
(1)   The Company paid no dividends with respect to 2001.
(2)   Per Series A Share and ADS amounts  calculated  based on weighted  average
      number of shares  outstanding  during the year in which the  dividend  was
      paid.
(3)   Nominal peso amounts have been  translated to U.S.  dollar  amounts at the
      noon  buying  rate for pesos on the date of  payment of the  dividend,  as
      published by the Federal Reserve Bank of New York.

      The amount of future  dividends  will  depend  upon Grupo  Radio  Centro's
operating results, financial condition and capital requirements and upon general
business  conditions.  The  declaration,  amount and  payment of  dividends  are
determined by a majority  vote of the holders of the Series A Shares,  generally
upon the  recommendation  of the  Company's  Board of  Directors.  At the annual
shareholders meeting of April 16, 2004, no dividend was declared with respect to
2003.  Depending on the Company's  financial  position and  compliance  with the
covenants  in its loan  agreement  with  Scotiabank  Inverlat,  the  Company may
declare    dividends    in   the    future.    See    Item    10,    "Additional
Information--Bylaws--Dividends."

Item 9. The Offer and Listing

      Since July 1, 1993,  the CPOs and the ADSs have been listed on the Mexican
Stock  Exchange  and the NYSE,  respectively.  The ADSs have been  issued by the
Depositary.  Each ADS  represents  nine CPOs.  Each CPO  represents  a financial
interest in one Series A Share.

      The  CPOs  were  originally   issued  by  Nacional   Financiera,   S.N.C.,
Institucion de Banca de Desarrollo,  Direccion  Fiduciaria  ("Nafin") as trustee
for the trust (the "CPO Trust")  created by the trust  agreement,  dated May 24,
1993, as amended,  among the Old Controlling Trust and the Company, as grantors,
and Nafin as CPO trustee. At a general meeting of the Company's  shareholders on
April 25,  2003 and a general  meeting of the CPO holders on May 19,  2003,  the
shareholders and CPO holders  approved  several  amendments to the CPO Trust. On
June 27, 2003,  the parties to the CPO Trust  agreement  entered into an amended
and restated CPO Trust agreement (the "Amended CPO Trust Agreement"), reflecting
those amendments, including the following:

      o     Nafin was  replaced  as the CPO  trustee by GE Capital  Bank,  S.A.,
            Institucion de Banca Multiple, GE Capital Grupo Financiero, Division
            Fiduciaria,  as  successor  trustee  for the  CPO  Trust  (the  "CPO
            Trustee").


                                       47
<PAGE>

      o     The term of the CPO Trust was  extended 20 years until June 29, 2023
            (which term may be further extended).

      o     On June 30, 2003, all CPOs held by holders that qualified as Mexican
            investors,  as  defined  in  the  Company's  bylaws  (see  Item  10,
            "Additional  Information--Bylaws--Limitations  Affecting Non-Mexican
            Holders"), were exchanged for Series A Shares held in the CPO Trust.
            As of June 30,  2003,  qualifying  Mexican  investors  held Series A
            Shares and no longer  held CPOs.  Non-Mexican  holders of CPOs as of
            June 30, 2003  continued  to hold CPOs and, as holders of CPOs,  are
            not entitled to withdraw the Series A Shares held in the CPO Trust.

      In connection  with the Amended CPO Trust,  the Series A Shares  commenced
trading on the Mexican Stock Exchange  under the symbol  "RCENTRO.A" on June 30,
2003.  The Series A Share  listing is deemed to include the CPOs,  such that the
Series A Share  trading  line will  reflect  trading of both Series A Shares and
CPOs.

      Holders of CPOs are able to sell their CPOs (i) to a non-Mexican investor,
in which event the  non-Mexican  investor  would receive such CPOs, or (ii) to a
Mexican investor, in which event the Mexican investor would receive the Series A
Shares underlying such CPOs, directly or by keeping them deposited at an account
at Indeval, maintained by such investor or by an authorized institution. Indeval
or Institucion  para el Deposito de Valores,  S.A. de C.V. is a  privately-owned
securities  depositary that acts as a  clearinghouse  for Mexican Stock Exchange
transactions.

      The  2003  amendments  to the CPO  Trust  did not  affect  the  rights  or
interests of holders of ADSs.

Price History

      The following table sets forth,  for the periods  indicated,  the reported
high and low sale  prices for the  Series A Shares  and the CPOs on the  Mexican
Stock  Exchange (on a nominal  basis) and the reported  high and low sale prices
for the ADSs on the NYSE.

                                         Mexican               New York
                                     Stock Exchange          Stock Exchange
                                 -----------------------   -------------------
                                  Amounts per Series A
                                    Share and per CPO       Amounts per ADS
                                   (in nominal pesos)       (in U.S. dollars)
                                 -----------------------   -------------------
                                    High        Low          High       Low
                                    ----        ---          ----       ---
1999...........................    10.00       4.20          9.00      3.75

2000...........................    15.00       6.90         14.50      5.75

2001...........................     9.00       5.30          8.25      5.20

2002
      First Quarter............     6.30       5.05          6.24      5.10
      Second Quarter ..........     5.95       2.61          6.00      2.61
      Third Quarter............     3.55       3.30          3.63      2.65
      Fourth Quarter...........     3.49       2.25          2.64      1.76
2003
      First Quarter............     3.00       2.40          2.52      1.61
      Second Quarter ..........     6.65       3.00          5.75      2.40
      Third Quarter............     8.41       5.95          7.45      4.95
      Fourth Quarter...........     8.50       7.16          7.00      5.86


                                       48
<PAGE>

                                         Mexican               New York
                                     Stock Exchange          Stock Exchange
                                 -----------------------   -------------------
                                  Amounts per Series A
                                    Share and per CPO       Amounts per ADS
                                   (in nominal pesos)       (in U.S. dollars)
                                 -----------------------   -------------------
                                    High        Low          High       Low
                                    ----        ---          ----       ---
2004
      First Quarter ...........     8.45       5.70          7.14      4.63

Most Recent Six Months
      December 2003............     8.50       8.40          6.98      6.75
      January 2004.............     8.45       8.40          7.14      6.49
      February 2004............     8.45       8.45          6.96      6.70
      March 2004...............     8.45       5.70          6.50      4.63
      April 2004...............     6.30       5.40          4.83      4.20
      May 2004.................     7.40       5.30          5.88      4.05

Trading on the Mexican Stock Exchange

      The Mexican  Stock  Exchange,  located in Mexico  City,  is the only stock
exchange in Mexico.  Founded in 1907,  it is  organized as a  corporation  whose
shares are held by brokerage firms that are  exclusively  authorized to trade on
the  Exchange.  Trading on the Mexican  Stock  Exchange  takes place through the
Sentra, an automated system;  the Exchange's opening and closing times are fixed
so that the  Exchange's  trading day coincides with the trading day of the NYSE.
The Mexican Stock Exchange operates a system of automatic  suspension of trading
in  shares of a  particular  issuer as a means of  controlling  excessive  price
volatility,  but  under  current  regulations  this  system  does  not  apply to
securities,  such as the CPOs,  that are directly or  indirectly  (for  example,
through ADSs) quoted on a stock exchange  (including,  for these  purposes,  the
NYSE) outside Mexico.

      Settlement is effected two business days after a share  transaction on the
Mexican Stock Exchange.  Deferred settlement,  even by mutual agreement,  is not
permitted  without the approval of the Comision  Nacional  Bancaria y de Valores
(National Banking and Securities Commission, the "CNBV"). Most securities traded
on the Mexican Stock  Exchange,  including  those of Grupo Radio Centro,  are on
deposit with Indeval.

Item 10. Additional Information

                                     BYLAWS

      Set forth below is certain  information  concerning the Company's  capital
stock and a brief  summary of certain  significant  provisions  of the Company's
bylaws and Mexican law. This  description does not purport to be complete and is
qualified by reference to the bylaws of the Company, which have been filed as an
exhibit to this  Annual  Report,  and  Mexican  law.  For a  description  of the
Company's  bylaws  relating to the Board of Directors,  Executive  Committee and
statutory auditors, see Item 6, "Directors, Senior Management and Employees."

      At the annual  shareholders  meeting held on April 25,  2003,  the Company
amended its bylaws. The amendments were intended,  among other things, to comply
with the general provisions  applicable to issuers and other participants in the
securities market, published by the CNBV on March 19, 2003.


                                       49
<PAGE>

Organization, Register and Purpose

      The  Company  was  incorporated  on June 8,  1971,  as a  Mexican  limited
liability  stock company  (sociedad  anonima de capital  variable) in accordance
with  Chapter V of the Ley  General  de  Sociedades  Mercantiles  (the  "Mexican
Companies  Law"). It was registered in the Public Registry of Commerce of Mexico
City on August 28, 1992 under number 20694.

      The capital stock of the Company consists of Series A Shares.  In addition
to Series A Shares,  the bylaws  permit the  issuance,  upon the approval of the
CNBV,  of  special   series  of  shares  with  limited  or  no  voting   rights.
Additionally,  the bylaws  permit the Company to issue and sell debt  securities
(certificados bursatiles).

Voting Rights

      Each Series A Share entitles the holder thereof to one vote at any meeting
of the shareholders of the Company. Holders of CPOs are not entitled to exercise
the voting  rights  corresponding  to the Series A Shares held in the CPO Trust.
Such voting rights are exercisable only by the CPO Trustee, which is required to
vote all such Series A Shares in the same manner as the holders of a majority of
the  Series A Shares  that are not held in the CPO Trust and that are voted at a
shareholders meeting. See "--Limitations  Affecting Non-Mexican  Holders--Voting
Rights."

Shareholders Meetings

      General  shareholders  meetings may be ordinary  meetings or extraordinary
meetings.  Extraordinary  general  meetings are those called to consider certain
matters  specified in Article 182 of the Mexican Companies Law and the Company's
bylaws,  including,  principally,  amendments  of the bylaws,  liquidation,  and
merger and transformation from one form of company to another. In addition,  the
Company's  bylaws  require an  extraordinary  general  meeting to  consider  the
removal of the  Company's  capital  stock  from  listing  on the  Mexican  Stock
Exchange or any foreign stock exchange.  General meetings called to consider all
other matters are ordinary meetings, which are held at least once each year.

      An ordinary general meeting of the holders of Series A Shares must be held
at least once each year to consider the approval of the financial  statements of
the Company and certain of its  subsidiaries  for the preceding  fiscal year, to
elect directors for holders of Series A Shares (all of whom are elected annually
for  terms  of one  year),  statutory  auditors  and  members  of the  Executive
Committee, to determine the allocation of the profits or losses of the preceding
year and to consider approval of the report on the Company's repurchase and sale
of shares and the report on the actions of the Audit Committee.

      The quorum for an ordinary general meeting of the Series A Shares in first
call is 50% of such shares,  and action may be taken by a majority of the Series
A Shares present.  If a quorum is not available,  a second meeting may be called
at which  action  may be taken by a  majority  of the  Series A Shares  present,
regardless of the number of such shares. The quorum for an extraordinary general
meeting is 75% of the Series A Shares.  If a quorum is not  available,  a second
meeting  may be  called,  provided  that at  least  50% of the  Series  A Shares
entitled to vote are present. Actions at an extraordinary general meeting may be
taken by a 50% vote of all  outstanding  Series A Shares on first and successive
calls.

      Shareholders  meetings  may be  called  by the  Board  of  Directors,  the
statutory  auditors or a court. The Board of Directors or the statutory auditors
may be required to call a meeting of the  shareholders  by the holders of 33% of
the  Series A Shares.  Additionally,  holders  of  shares,  with full or limited
voting rights,  representing 10% of the capital stock of the Company may require
the Board of Directors or the


                                       50
<PAGE>

statutory  auditors to call  shareholders  meetings  and, in the event that such
holders  do not have  sufficient  information  on the  matters  to be voted  on,
request  postponements  of  shareholders  meetings.  Notice of meetings  must be
published  in the Diario  Oficial de la  Federacion  or a  newspaper  of general
circulation  in Mexico City at least 15 days prior to the  meeting.  In order to
attend a meeting,  shareholders  must  deposit  their  Series A Shares  with the
Company's Secretary at its office in Mexico City or any appointed registrar,  or
submit certificates evidencing a deposit with Indeval. If entitled to attend the
meeting,  a shareholder may be represented by proxy. The directors and statutory
auditors of the Company may not act as proxies. Holders of the Company's shares,
with full or limited voting rights, representing 20% of the capital stock of the
Company have the right to seek  judicial  remedies to block any actions taken by
the  shareholders  with  respect to which such  holders  have the right to vote.
Holders of CPOs and ADSs representing CPOs are not entitled to call shareholders
meetings or seek judicial remedies to block actions taken by the shareholders.

Dividends

      At the annual ordinary general meeting of holders of Series A Shares,  the
Board of  Directors  submits  the  financial  statements  of the Company for the
previous  fiscal  year,  together  with a report  thereon by the  Board,  to the
holders of Series A Shares for  approval.  The holders of Series A Shares,  once
they have approved the  financial  statements,  determine the  allocation of the
Company's  net  profits  for the  preceding  year.  They are  required by law to
allocate  at least  5% of such  net  profits  to a legal  reserve,  which is not
thereafter  available for  distribution  except as a stock  dividend,  until the
amount of the legal reserve equals 20% of the Company's historical capital stock
(before  effect  of  restatement).  See  Note 19 to the  Consolidated  Financial
Statements.  Thereafter,  the  shareholders may determine and allocate a certain
percentage  of net  profits to any  special  reserve,  including  a reserve  for
open-market  purchases of the  Company's  Series A Shares.  The remainder of net
profits is available for distribution. All Series A Shares outstanding and fully
paid at the time a dividend or other  distribution  is declared  are entitled to
share equally in such dividend or other  distribution.  Series A Shares that are
only partially paid participate in dividends or other  distributions in the same
proportion that such Series A Shares have been paid at the time of the dividends
or other distributions.

Liquidation

      Upon liquidation of the Company,  one or more liquidators may be appointed
to wind up its affairs.  All fully paid and outstanding  Series A Shares will be
entitled to participate  equally in any distribution upon liquidation.  Series A
Shares  that are only  partially  paid  participate  in such  distribution  upon
liquidation  in  the  proportion  that  they  have  been  paid  at the  time  of
liquidation.

Preemptive Rights

      Except as described below, in the event of a capital increase, a holder of
existing Series A Shares has a preferential  right to subscribe for a sufficient
number  of Series A Shares  to  maintain  the  holder's  existing  proportionate
holdings of Series A Shares.  Shareholders  will not have  preemptive  rights to
subscribe for Series A Shares issued (i) in connection with mergers, (ii) on the
conversion  of  convertible  debentures  or  (iii)  for  placement  in a  public
offering,  if an  extraordinary  general  shareholders  meeting  called for such
purpose  approved  such  issuance  and waived  preemptive  rights in  connection
therewith in accordance with the procedures  specified in the Company's  bylaws.
Preemptive  rights must be exercised within 15 days following the publication of
notice of the capital  increase in the Diario  Oficial de la  Federacion.  Under
Mexican  law,  preemptive  rights  cannot  be waived in  advance  and  cannot be
represented   by  an  instrument   that  is  negotiable   separately   from  the
corresponding share. Holders of CPOs or ADSs that are U.S. persons or located in
the United States will be unable to participate in the exercise


                                       51
<PAGE>

of such preemptive rights absent  registration of the preemptive rights offering
under the Securities Act, which the Company is not obligated to do.

Variable Capital

      Under the Company's  bylaws and Mexican law, the  Company's  capital stock
must  consist of fixed  capital and may have,  in  addition,  variable  capital.
Shares of the Company's fixed capital stock are called Class I shares and shares
of the Company's  variable  capital stock are called Class II shares.  The fixed
portion of the  Company's  capital  stock may only be  increased or decreased by
resolution of an  extraordinary  general  meeting of  shareholders,  whereas the
variable portion of the Company's capital stock may be increased or decreased by
resolution  of an ordinary or  extraordinary  general  meeting of  shareholders.
Increases  and  decreases in the variable  portion of the capital  stock must be
recorded in the Company's book of capital variations.

      Currently,  the Company's outstanding capital stock consists only of fixed
capital. In the event the Company should have any outstanding  variable capital,
its  outstanding  shares  will  not be  specifically  assigned  to the  fixed or
variable portion.

Limitations Affecting Non-Mexican Holders

      Share Ownership

      Ownership by  non-Mexican  investors of shares of Mexican  enterprises  is
regulated  by the 1993 Ley de  Inversion  Extranjera  (the  "Foreign  Investment
Law"), as amended,  and the 1998 Reglamento de la Ley de Inversion  Extranjera y
del  Registro  Nacional de  Inversiones  Extranjeras  (the  "Foreign  Investment
Regulations")  thereunder.  The Ministry of Economy and the Comision Nacional de
Inversiones  Extranjeras (the "Foreign  Investment  Commission") are responsible
for the  administration of the Foreign Investment Law and the Foreign Investment
Regulations.

      The  Foreign   Investment  Law  reserves   certain   economic   activities
exclusively for the state and reserves  certain other  activities (such as radio
broadcasting)  exclusively for Mexican  individuals or Mexican  corporations the
bylaws of which  contain a  prohibition  on  ownership  by  non-Mexicans  of the
corporation's  voting  securities.  However,  the Foreign  Investment Law allows
foreign investors to own non-voting  securities,  such as the CPOs, of companies
subject to foreign investment restrictions.

      In addition to the limitations  established by the Foreign Investment Law,
the Federal Radio and Television Law and the licenses granted by the SCT provide
restrictions  on  ownership  by  non-Mexicans  of shares of Mexican  enterprises
holding licenses for radio, such as those held by Grupo Radio Centro.

      In order to comply with these  restrictions,  the  Company's  bylaws limit
ownership  of Series A Shares to  qualifying  Mexican  investors.  The  Company,
however,  has received approval from the Foreign Investments  Commission to have
up to 73.5% of its capital  stock  represented  by CPOs issued by the CPO Trust.
The CPOs do not have any  restrictions  on  non-Mexican  ownership,  except that
foreign   governments  or  their  agencies  may  not  own  them.  The  foregoing
restriction  does not  prevent  foreign  state-owned  enterprises  organized  as
separate entities with their own assets to own CPOs. Pursuant to the Amended CPO
Trust  Agreement,  the CPOs may be owned only by holders  that do not qualify as
Mexican  investors as defined in the  Company's  bylaws.  A holder that acquires
CPOs in violation of the restrictions on Mexican ownership will have none of the
rights of a CPO holder with respect to those CPOs.


                                       52
<PAGE>

      The Series A Shares may be owned only by holders  that  qualify as Mexican
investors as defined in the Company's  bylaws.  A holder that acquires  Series A
Shares in violation of the restrictions on non-Mexican  ownership will have none
of the rights of a shareholder with respect to those Series A Shares.

      The Foreign Investment Law and Foreign Investment Regulations also require
that the Company  register any foreign  owner of its shares,  or the  depositary
with  respect to ADSs or global  depositary  shares  representing  its shares or
ordinary participation  certificates representing such shares, with the Registro
Nacional de Inversiones Extranjeras (National Registry of Foreign Investment). A
foreign owner of Series A Shares that has not been registered is not entitled to
vote such Series A Shares or to receive  dividends with respect to such Series A
Shares. The Direccion General de Inversion  Extranjera  (General  Directorate of
Foreign  Investment)  has informed Grupo Radio Centro that it is not required to
register any foreign owner of CPOs.

      Voting Rights

      Each Series A Share entitles the holder thereof to one vote at any meeting
of the  shareholders  of the  Company.  Holders  of CPOs  (and  holders  of ADSs
representing  CPOs) are not entitled to exercise  voting  rights with respect to
the Series A Shares  underlying such CPOs.  Pursuant to the terms of the Amended
CPO Trust  Agreement,  the CPO Trustee votes the Series A Shares held in the CPO
Trust in the same  manner as holders  of a  majority  of the Series A Shares not
held in the CPO  Trust  and  voted at the  relevant  shareholders  meeting.  The
Controlling  Trusts hold a substantial  majority of the Series A Shares not held
in the form of CPOs.  As a  result,  the  Controlling  Trusts  and,  indirectly,
members  of the  Aguirre  family  have  the  power to  elect a  majority  of the
directors of, and control,  the Company.  Additionally,  holders of CPOs or ADSs
are not entitled to attend or to address the Company's shareholders meetings.

      Rights of Appraisal

      Whenever the shareholders approve a change of corporate purpose, change of
nationality or  restructuring  from one type of corporate  form to another,  any
shareholder who has voted against such change or restructuring  has the right to
withdraw  from the Company and receive the amount  calculated  as  specified  in
Mexican law attributable to its shares,  provided such shareholder exercises its
right to withdraw  during the 15-day period  following the meeting at which such
change was approved. Because the CPO Trustee is required to vote the Shares held
in the CPO Trust in the same manner as the holders of a majority of the Series A
Shares that are not held in the CPO Trust and that are voted at the shareholders
meeting,  under no circumstances will the Series A Shares underlying the CPOs be
voted  against  any such  change  and  therefore  appraisal  rights  will not be
available to holders of CPOs or ADSs.

      Termination of the CPO Trust

      The Amended CPO Trust  Agreement and the CPOs issued under the public deed
evidencing  the  issuance of CPOs  pursuant  to the Amended CPO Trust  Agreement
(which deed is  registered  with the Public  Registry of Commerce of the Federal
District of Mexico) are scheduled to expire 20 years after the date of execution
of the  Amended  CPO Trust  Agreement.  The CPO Trust may be extended by the CPO
Trustee upon receipt six months prior to  termination of written notice from the
CPO Technical  Committee (as defined below). If no such notice is received,  the
CPO Trustee will commence the procedure for the  termination  of the Amended CPO
Trust Agreement.  At the time of such termination,  the CPO Trustee will proceed
to sell the Series A Shares held in the CPO Trust and distribute the proceeds of
such sale to the holders of the CPOs on a pro rata basis in accordance  with the
number of CPOs owned by each holder.  Notwithstanding the foregoing, the Amended
CPO Trust Agreement cannot be terminated if any dividends or other distributions
previously received by the CPO Trustee remain unpaid to the CPO holders.


                                       53
<PAGE>

      Upon the  expiration  of the  Amended  CPO  Trust  Agreement,  subject  to
obtaining the applicable  authorizations  from the Mexican  government,  the CPO
Trustee and any CPO holder may execute a new trust agreement with the same terms
as the Amended CPO Trust  Agreement.  There can be no assurance that a new trust
agreement will be executed.

      Administration of the CPO Trust

      Pursuant to the terms of the Amended  CPO Trust  Agreement,  the CPO Trust
will  continue to be  administered  by the CPO Trustee  under the direction of a
technical  committee.  The  technical  committee  of the  CPO  Trust  (the  "CPO
Technical Committee") consists of four members and their respective  alternates.
Each  of the  following  appoints  one  member:  the  Mexican  National  Foreign
Investment  Commission,  the Mexican Stock Exchange,  the Mexican Association of
Securities  Brokerage  Firms, and the common  representative  of the CPO holders
(HSBC,  S.A.,  Institucion de Banca Multiple,  Grupo Financiero  HSBC).  Actions
taken by the CPO  Technical  Committee are required to be approved by a majority
of the members  present at any meeting of such  committee  at which at least the
majority of the members are present.

Other Provisions

      Redemption

      The Series A Shares are subject to redemption  in  connection  with either
(i) a reduction of share capital or (ii) a redemption  with  retained  earnings,
which,  in either case,  must be approved by the  Company's  shareholders  at an
extraordinary  shareholders  meeting.  The  Series A Shares  subject to any such
redemption would be selected by the Company by lot or, in the case of redemption
with retained earnings, by purchasing Series A Shares by means of a tender offer
conducted  on the  Mexican  Stock  Exchange,  in  accordance  with  the  Mexican
Companies Law.

      Purchase by the Company of its Shares

      The Company  generally may not repurchase  its shares,  subject to certain
exceptions.  First,  the Company may  repurchase  shares for  cancellation  with
distributable  earnings  pursuant  to a  decision  of an  extraordinary  general
meeting of shareholders.  Second, pursuant to judicial adjudication, the Company
may acquire the shares of a shareholder in  satisfaction  of a debt owed by such
shareholder to the Company.  The Company must sell any shares acquired  pursuant
to judicial adjudication within three months;  otherwise,  the Company's capital
stock will be reduced and such shares will be  cancelled.  Third,  in accordance
with its bylaws,  the Company is permitted to  repurchase  its own shares on the
Mexican Stock  Exchange  under certain  circumstances  with funds from a special
reserve created for such purpose.  Shares repurchased by the Company may be held
by the Company only for a stated period of time.  If, at the  expiration of such
period,  the shares have not been sold to  investors,  the capital stock must be
reduced  proportionally.  The  maximum  amount  that  may be  authorized  by the
shareholders  to be spent by the  Company  for the  repurchase  of  shares  (see
"--Bylaws--Shareholders  Meetings"  above)  may not exceed the sum of net income
for the prior year plus retained earnings.

      Purchase of Shares by Subsidiaries of the Company

      Subsidiaries or other entities controlled by the Company may not purchase,
directly or indirectly,  shares of the Company,  or shares of companies that are
majority shareholders of the Company or of subsidiaries of the Company.


                                       54
<PAGE>

      Withdrawal Rights

      In the event the Company should have any outstanding variable capital, the
outstanding  variable  portion of the  Company's  capital  stock may be fully or
partially  withdrawn  by the  shareholders.  The  minimum  fixed  portion of the
Company's  capital  stock (the  "Minimum  Capital")  specified in the  Company's
corporate  charter  cannot be withdrawn.  A  shareholder  who wishes to effect a
total or partial withdrawal of its Series A Shares must notify the Company in an
authenticated written notice to that effect. If notice of withdrawal is received
prior to the last quarter of the fiscal year, the withdrawal  becomes  effective
at the end of the  fiscal  year in which the  notice is  given.  Otherwise,  the
withdrawal becomes effective at the end of the following fiscal year.

      Reimbursement of withdrawn Series A Shares is made at the lower of (i) 95%
of the average Series A Share price quoted on the Mexican Stock Exchange, taking
into  account the trading  volume  during the 30 days prior to the date on which
the  withdrawal  becomes  effective for a period up to six months;  and (ii) the
book value per share as calculated from the Company's  financial  statements (as
approved at the annual ordinary general meeting of shareholders)  for the fiscal
year immediately  preceding that in which withdrawal becomes  effective.  In the
event that the period in which the shares were traded is less than 30 days,  the
actual  number  of days in which  the  shares  were  traded  will be taken  into
account.  If the shares are not traded during such period, the book value of the
shares will be used.  Any such  amount to be paid by the Company  becomes due on
the day following the annual ordinary  general meeting of shareholders  referred
to in clause (ii) above.

      Because the Minimum Capital cannot be withdrawn,  requests for withdrawals
are satisfied  only to the extent of the available  variable  capital and in the
order in which they are received; requests which are received simultaneously are
fulfilled pro rata to the extent of the available  variable capital.  Currently,
all Series A Shares of the Company constitute Minimum Capital.

      Conflict of Interest

      A shareholder  that votes on a business  transaction in which its interest
conflicts  with that of the Company may be liable for  damages,  but only if the
transaction would not have been approved without its vote.

      Actions against Directors

      Actions  for civil  liabilities  against  directors  may be  initiated  by
resolution passed at a general ordinary  shareholders  meeting. In the event the
shareholders decide to bring such action, the directors against whom such action
is to be brought  immediately cease to be directors.  Shareholders  representing
not less than 33% of the  outstanding  Series A Shares may  directly  bring such
action against  directors,  provided that (i) such  shareholders did not vote in
favor of abstaining from such action at a relevant shareholders meeting and (ii)
the claim covers all damages  allegedly  suffered by the Company and not only by
such shareholders. Shareholders representing 15% of capital stock of the Company
have  the  right  to  directly  bring  actions  for  civil  liabilities  against
directors,  statutory  auditors  and  members  of the Audit  Committee  in their
capacity  as such.  Any  recovery of damages  with  respect to actions for civil
liabilities against directors will be for the benefit of the Company and not for
the shareholders bringing such actions.

      Obligations of Majority Shareholders

      In  compliance  with CNBV  regulations,  the  Company's  bylaws  include a
provision whereby the shareholders  holding the majority of the voting shares or
having the power to control decisions in the


                                       55
<PAGE>

general  shareholders  meeting or appoint the majority of the Board of Directors
(the  "Controlling  Shareholders")  will be required  to make a public  offer to
purchase all outstanding shares in case the Company requests cancellation of the
registration of its securities with the Registro  Nacional de Valores  (National
Registry of Securities  and or "RNV") or such registry is cancelled by the CNBV.
If the  Controlling  Shareholders  make such a purchase offer but do not acquire
100% of the shares of the Company's  capital stock,  then, prior to cancellation
of the  registration of its securities from the RNVI, the Company shall place in
trust for a minimum of six months an amount of funds  necessary  to acquire  the
remaining shares at the purchase offer price.

      According to the bylaws of the Company,  the price of the offer must be at
least the higher of (i) the average trading price during the previous 30 days on
which the shares may have been quoted for a period up to six months prior to the
effective date of the offer,  or (ii) the book value of the shares in accordance
with the most recent  quarterly  report submitted to the CNBV and to the Mexican
Stock Exchange.

      The trade value in the Mexican Stock  Exchange  shall be the average price
for the volume of operations  that have been carried out during the last 30 days
in which the shares of the  issuer  have been  traded,  prior to the date of the
offer  during a period  that  cannot  exceed six  months.  In the event that the
period in which the shares were traded is less than 30 days,  the actual  number
of days in which the  shares  were  traded  will be taken into  account.  If the
shares are not traded  within such period of time,  the book value of the shares
will be used.

      The Board of Directors  of the Company must provide its opinion  regarding
the  price of the  public  offer  within  the five  business  days  prior to the
commencement  of the offer,  taking into  account the  interests of the minority
shareholders and the opinion of the Audit Committee.  In case that the Board has
a conflict of interest,  it shall  present an opinion  issued by an  independent
expert appointed by the Audit Committee.

      In the event that the Controlling  Shareholders  obtain the consent of the
shareholders  representing  95% of the capital  stock of the Company by means of
resolution  adopted at a  shareholders  meeting,  and the price  offered for the
shares is less than 300,000  investment units (as defined under Mexican law), it
will not be necessary that the Controlling Shareholders carry out a public offer
in the understanding  that in order to the request of cancellation,  the Company
shall place in trust for a minimum of six months an amount of funds necessary to
acquire the remaining shares at the same price of the offer.

      Finally, the bylaws provide that the Controlling  Shareholders may request
authorization  from the CNBV to use a different basis for the  determination  of
the price  provided  that the Board of Directors  presents a  recommendation  to
establish a different price,  after taking into account the opinion of the Audit
Committee, together with the report of an independent expert confirming that the
price is consistent with article 16 of the Securities Market Law.

      Duration

      The Company's existence under the bylaws continues until 2070.

      Anti-Takeover Provisions

      The  bylaws  contain  certain  provisions  intended  to delay or prevent a
takeover  of the  Company  by any person or  persons.  The  bylaws  require  the
approval  of  two-thirds  of the members of the Board of  Directors  for (i) the
acquisition by any person or related  persons,  through one or more  consecutive
transactions  of any  nature,  of shares or other  securities  with full  voting
rights representing 30% or more of


                                       56
<PAGE>

the capital  stock of the Company  and (ii) the  entering  into by any person or
persons of any  agreement or  arrangement  for the exercise of voting  rights in
respect of 30% or more of the capital stock of the Company.

      Any acquisition of shares or other securities of the Company which has not
been  approved by the Board of Directors as required will not be recorded in the
stock registry book of the Company,  will not be acknowledged by the Company and
will not entitle the  acquiring  person to vote or exercise  any other rights in
respect of the acquired  shares or securities.  Similarly,  any person  entering
into any voting  agreement  or  arrangement  which has not been  approved by the
Board of  Directors  as required  will not be entitled to exercise  the relevant
voting  rights  whether  in the  general  shareholders  meeting  or the Board of
Directors  meetings.  In the  event  of  either  an  acquisition  of  shares  or
securities  of the  Company  or the  entering  into  of a  voting  agreement  or
arrangement  without the required approval of the Board of Directors,  the Board
of Directors will have the right to take certain actions including requiring the
acquirer of shares to sell such shares through a public offering, requiring such
acquirer  to acquire all or part of the  remaining  shares of the  Company,  the
rescission  of the  acquisition  of shares and the  termination  of such  voting
agreement or arrangement.

      To the extent  that the Board of  Directors  has the right to approve  any
acquisition  of shares or other  securities or any agreement for the exercise of
voting rights,  the Board of Directors shall decide to approve such  transaction
based on the following factors: (i) the nationality,  moral and financial status
and other  characteristics  of the  contemplated  acquirer,  (ii) the  potential
advantages and disadvantages of the contemplated acquirer's participation in the
Company  and  (iii)  the  contemplated   acquirer's   experience  in  the  radio
broadcasting industry.

      The Chairman and the Secretary of the Board of Directors must be notified,
within  five  days,  of any  acquisition  of shares or other  securities  or the
entering into of any voting  agreements or arrangements  involving 5% or more of
the capital stock of the Company.

                               MATERIAL CONTRACTS

      The Company entered into a $35 million loan agreement with Banco Inverlat,
S.A.  (now  Scotiabank  Inverlat,  S.A.) on October  30,  2000 and  amended  the
agreement on April 17, 2001. On December 10, 2002, the Company  amended the loan
agreement and converted 100% of the  indebtedness  from U.S.  dollars to Mexican
pesos.  On December 3, 2003, the Company  amended the loan agreement to increase
the principal  amount  outstanding of the underlying loan by Ps. 50 million,  to
extend the loan's  maturity to October  31, 2007 and to fix the annual  interest
rate of the consolidated  loan at 10.3%,  which is contingent upon the Company's
compliance with a certain ratio of total liabilities to EBITDA as defined in the
amendment to the loan  agreement.  Failure to comply with such ratio will result
in incremental adjustments quarterly to the annual interest rate as set forth in
the amendment up to a maximum interest rate of 11.55%. The consolidated loan has
an  aggregate  principal  amount of Ps. 198.1  million at June 23, 2004.  Due to
noncompliance  with a financial  covenant in the first quarter of 2004, the loan
is  currently  subject  to an  annual  interest  rate  of  11.05%.  See  Item 5,
"Operating and Financial Review and Prospects--Liquidity and Capital Resources".

      On June 29, 2001, the Company entered into an agreement to extend the term
of the Operating  Agreement,  dated as of December 14, 1998, between the Company
and  Comercializadora  Siete, S.A. de C.V., under which the Company operates the
radio  station  XHFO-FM.  The  agreement is scheduled to terminate on January 2,
2005. See Note 8 to the Consolidated Financial Statements.

      Other than the foregoing,  the only material contracts entered into by the
Company in the  two-year  period  prior to this filing have been entered into in
the ordinary course of business.


                                       57
<PAGE>

                                EXCHANGE CONTROLS

      Mexico has had a free market for  foreign  exchange  since  1991,  and the
government  has allowed the peso to float freely  against the U.S.  dollar since
December 1994.  There can be no assurance that the government  will maintain its
current foreign exchange policies. See Item 3, "Key  Information--Exchange  Rate
Information."

                                    TAXATION

      The following summary contains a description of the principal U.S. federal
income and Mexican  federal tax  consequences  of the  purchase,  ownership  and
disposition  of CPOs or ADSs by a holder  that is a citizen or  resident  of the
United States or a U.S.  domestic  corporation or that otherwise will be subject
to U.S.  federal income tax on a net income basis in respect of the CPOs or ADSs
(a "U.S. holder"), but it does not purport to be a comprehensive  description of
all of the tax  considerations  that may be relevant to an investment in CPOs or
ADSs. In  particular,  this summary deals only with U.S.  holders that will hold
CPOs or ADSs as capital  assets and does not address the tax  treatment  of U.S.
holders  that are  subject  to special  tax rules or that own or are  treated as
owning 10% or more of the voting shares  (including  CPOs) of the Company.  This
summary also  includes a limited  description  of certain U.S. tax  consequences
with respect to non-U.S. holders.

      The  summary is based upon tax laws of the United  States and Mexico as in
effect on the date of this Annual Report,  which are subject to change.  Holders
of CPOs or ADSs should consult their own tax advisers as to the U.S., Mexican or
other tax  consequences  of the purchase,  ownership and  disposition of CPOs or
ADSs, including,  in particular,  the effect of any foreign,  state or local tax
law.

      In  general,  for U.S.  federal  tax  purposes,  and for  purposes  of the
Convention  for the  Avoidance of Double  Taxation and the  Prevention of Fiscal
Evasion and the Protocols  thereto (the "Tax Treaty")  between the United States
and Mexico,  entered into force on January 1, 1994, holders of CPOs or ADSs will
be treated as the beneficial owners of the Series A Shares  represented by those
CPOs or ADSs.

Taxation of Dividends

      Mexican Tax Considerations

      During 2004,  there will be no Mexican income or withholding tax levied on
holders of the CPOs or ADSs who are non-residents of Mexico for tax purposes (as
described below) on dividends paid,  either in cash or in any other form, by the
Company.

      For purposes of Mexican  taxation,  an  individual  is  considered to be a
resident of Mexico if he or she has  established a home in Mexico.  However,  if
such  individual  has a home in a  foreign  country  as well,  he or she will be
considered  a  resident  of Mexico if his or her  center of vital  interests  is
located in Mexico.  A Mexican citizen is presumed to be a resident of Mexico for
tax purposes  unless such person can  demonstrate  otherwise.  A legal entity is
considered to be a resident of Mexico if it has been incorporated under the laws
of Mexico or if its principal administrative office is located in Mexico.

      U.S. Tax Considerations

      The gross amount of any dividends paid with respect to the Series A Shares
represented by CPOs or ADSs, to the extent paid out of the Company's  current or
accumulated earnings and profits, as determined for U.S. tax purposes, generally
will be  includible in the gross income of a U.S.  holder as


                                       58
<PAGE>

ordinary  income  on the day on which  the  dividends  are  received  by the CPO
Trustee and will not be eligible for the dividends received deduction allowed to
corporations  under the Internal  Revenue Code of 1986,  as amended.  Dividends,
which will be paid in pesos,  will be includible in the income of a U.S.  holder
in a U.S. dollar amount  calculated in general by reference to the exchange rate
in effect on the day they are received by the CPO Trustee.  U.S.  holders should
consult their own tax advisors  regarding the treatment of foreign currency gain
or loss, if any, on any pesos received that are converted into U.S. dollars on a
date  subsequent  to the date of receipt by the CPO Trustee.  Subject to certain
exceptions  for  short-term  and hedged  positions,  the U.S.  dollar  amount of
dividends received by an individual prior to January 1, 2009 with respect to the
ADSs will be subject to taxation at a maximum rate of 15% if the  dividends  are
"qualified  dividends."  Dividends paid on the ADSs will be treated as qualified
dividends  if (i) the ADSs are  readily  tradable on an  established  securities
market in the United  States and (ii) the  Company was not, in the year prior to
the year in which the  dividend  was paid,  and is not, in the year in which the
dividend  is paid,  a  passive  foreign  investment  company  ("PFIC"),  foreign
personal holding company  ("FPHC") or foreign  investment  company ("FIC").  The
ADSs are  listed on the New York  Stock  Exchange,  and will  qualify as readily
tradable on an  established  securities  market in the United  States so long as
they are so listed.  Based on the Company's  audited  financial  statements  and
relevant  market and  shareholder  data,  the Company  believes  that it was not
treated as a PFIC, FPHC or FIC for U.S. federal income tax purposes with respect
to its 2003 taxable year. In addition,  based on the Company's audited financial
statements  and its current  expectations  regarding the value and nature of its
assets,  the  sources  and  nature  of  its  income,  and  relevant  market  and
shareholder  data, the Company does not anticipate  becoming a PFIC, FPHC or FIC
for its 2004 taxable year. Based on existing guidance,  it is not entirely clear
whether dividends received with respect to the CPOs will be treated as qualified
dividends,  because it is not clear that the CPOs are readily tradable on a U.S.
exchange.  In  addition,  the U.S.  Treasury  has  announced  its  intention  to
promulgate  rules  pursuant  to  which  holders  of ADSs  or  common  stock  and
intermediaries though whom such securities are held will be permitted to rely on
certifications from issuers to establish that dividends are treated as qualified
dividends.  Because such  procedures  have not yet been issued,  it is not clear
whether  the Company  will be able to comply with them.  Holders of ADSs or CPOs
should consult their own tax advisers  regarding the availability of the reduced
dividend tax rate in the light of their own particular circumstances.

      A holder of CPOs or ADSs that is,  with  respect to the United  States,  a
foreign  corporation  or  nonresident  alien  individual  (a "non-U.S.  holder")
generally  will not be  subject to U.S.  federal  income or  withholding  tax on
dividends received on CPOs or ADSs, unless such income is effectively  connected
with the  conduct by the  non-U.S.  holder of a trade or  business in the United
States.

Taxation of Capital Gains

      Mexican Tax Considerations

      Gains  on the  sale  or  other  disposition  of ADSs  by  holders  who are
non-residents  of Mexico  for tax  purposes  will  generally  not be  subject to
Mexican  income or  withholding  tax.  Deposits of CPOs in exchange for ADSs and
withdrawals  of CPOs in exchange  for ADSs will not give rise to any Mexican tax
or transfer duties.

      Income  generated on the sale of CPOs during 2004 by  individuals or legal
entities who are  non-residents  of Mexico for tax purposes  through the Mexican
Stock Exchange or any other stock  exchange or securities  market in Mexico that
is recognized  by the Mexican  Ministry of Finance,  are  generally  exempt from
Mexican taxes.  However,  sales effected  through a public  offering must comply
with certain restrictions in order to benefit from this exemption.


                                       59
<PAGE>

      Notwithstanding  the  Mexican  taxes on  capital  gains  described  above,
capital  gains  realized  on the  disposition  of CPOs by a U.S.  holder  who is
eligible for tax benefits under the Tax Treaty  generally will not be subject to
Mexican tax, unless such gains are attributable to a permanent  establishment or
fixed base of such U.S. holder in Mexico or if the U.S.  holder owned,  directly
or  indirectly,  25% or more of the issuer's  capital  stock within the 12-month
period preceding such sale or other disposition.

      Exemption  under the Tax Treaty  requires that the U.S.  holder appoints a
legal  representative  in Mexico for income tax  purposes  prior to the sale and
provides such a representative  with a U.S. tax residence  certificate issued by
the U.S.  Internal  Revenue Service.  Additionally,  the U.S. holder must file a
notice with the Mexican tax authorities within 30 days after the appointment has
been made.

      Gains on sales or other  dispositions of CPOs made in circumstances  other
than  those  described  above,  generally  would  be  subject  to  Mexican  tax,
regardless of the nationality or residence of the transferor.

      U.S. Tax Considerations

      Gain or loss realized by a U.S. holder on the sale or other disposition of
CPOs or ADSs will be subject to U.S.  federal income taxation as capital gain or
loss in an amount  equal to the  difference  between the amount  realized on the
disposition and such U.S.  holder's tax basis in the ADSs or the CPOs.  Gain, if
any,  realized by a U.S. holder on the sale or other disposition of CPOs or ADSs
generally  will be treated as U.S.  source  income for U.S.  foreign  tax credit
purposes.  Consequently,  if a Mexican withholding tax is imposed on the sale or
disposition  of CPOs or ADSs,  a U.S.  holder that does not receive  significant
foreign  source  income from other  sources may not be able to derive  effective
U.S. foreign tax credit benefits in respect of these Mexican taxes. U.S. holders
should consult their own tax advisors  regarding the  application of the foreign
tax credit rules to their investment in, and disposition of, CPOs or ADSs.

      Gain or loss realized by a U.S.  holder on such sale,  redemption or other
disposition  generally will be long-term capital gain or loss if, at the time of
disposition,  the CPOs or ADSs have  been  held for more than one year.  The net
amount of long-term  capital gain recognized by an individual holder is taxed at
a reduced rate.

      Deposits and withdrawals of CPOs by U.S. holders in exchange for ADSs will
not  result  in the  realization  of gain or loss for U.S.  federal  income  tax
purposes. Such an exchanging U.S. holder will have a tax basis in the securities
received equal to the basis such holder had in the exchanged securities.  A U.S.
holder's holding period for securities received in such an exchange will include
the  holding  period  such  U.S.  holder  had in the  securities  prior  to such
exchange.

      A  non-U.S.  holder of CPOs or ADSs will not be  subject  to U.S.  federal
income or withholding  tax on gain realized on the sale of CPOs or ADSs,  unless
(i) such gain is effectively  connected with the conduct by the non-U.S.  holder
of a trade or business in the United States or (ii) in the case of gain realized
by an individual non-U.S.  holder, the non-U.S.  holder is present in the United
States for 183 days or more in the taxable  year of the sale and  certain  other
conditions are met.

Other Mexican Taxes

      There are no inheritance, gift, succession or value added taxes applicable
to the ownership,  transfer,  exchange or disposition of CPOs or ADSs by holders
that are  non-residents of Mexico for tax purposes.  There are no Mexican stamp,
issue,  registration  or similar  taxes or duties  payable by holders of CPOs or
ADSs.


                                       60
<PAGE>

      Unless it can be proved  that the  services  were not  utilized in Mexico,
commissions  paid in brokerage  transactions for the sale of CPOs on the Mexican
Stock Exchange are subject to a value added tax rate of 15%.

U.S. Backup Withholding Tax and Information Reporting Requirements

      In general, information reporting requirements will apply to payments by a
paying agent within the United States to a non-corporate  (or other  non-exempt)
U.S. holder of dividends in respect of the CPOs or ADSs or the proceeds received
on the sale or other  disposition of the CPOs or ADSs, and a backup  withholding
tax may apply to such  amounts if the U.S.  holder  fails to provide an accurate
taxpayer  identification  number to the paying agent. Amounts withheld as backup
withholding tax will be creditable against the U.S. holder's U.S. federal income
tax liability,  provided that the required  information is furnished to the U.S.
Internal Revenue Service.

                              DOCUMENTS ON DISPLAY

      Grupo  Radio  Centro is subject  to the  information  requirements  of the
Securities   Exchange  Act  of  1934,  as  amended.  In  accordance  with  these
requirements, Grupo Radio Centro files reports, including annual reports on Form
20-F, and other information with the SEC. These materials, including this Annual
Report,  and the  exhibits  thereto,  may be  inspected  and copied at the SEC's
Public  Reference  Room at 450  Fifth  Street,  N.W.,  Washington,  D.C.  20459.
Information  on the  operation of the Public  Reference  Room may be obtained by
calling the SEC at 1-800-SEC-0330. Any materials filed by Grupo Radio Centro may
also be read and copied at the SEC's  regional  office at Citicorp  Center,  500
West Madison Street,  Suite 1400, Chicago,  Illinois 60661. As a foreign private
issuer,  Grupo Radio  Centro has been  required to make  filings with the SEC by
electronic   means  since   November   2002.   Any  filings  the  Company  makes
electronically  will be  available  to the public over the Internet at the SEC's
web  site  at   http://www.sec.gov.   and  Grupo  Radio   Centro's   website  at
www.radiocentro.com.mx.  (This  URL  is  intended  to  be  an  inactive  textual
reference  only.  It is not intended to be an active  hyperlink to our web site.
The information on our web site,  which might be accessible  through a hyperlink
resulting from this URL, is not and shall not be deemed to be, incorporated into
this Annual Report.)


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<PAGE>

Item 11. Quantitative and Qualitative Disclosure About Market Risk

      The  Company is exposed to market risk from  changes in currency  exchange
rates.

Foreign Currency Exchange Risk

      The Company's principal foreign currency exchange risk involves changes in
the value of the peso relative to the U.S.  dollar.  Provided below is a summary
of the Company's net foreign currency exposure.  For the year ended December 31,
2003, the U.S.  dollar-denominated  assets  represented bank deposits.  The U.S.
dollar-denominated  contingent  liabilities  in  2003  represented  a  potential
obligation in connection with the arbitration  proceeding with Infored described
under  Item  4,  "Business   Overview--Broadcasting   Operations--Production  of
Programming  by Infored." See Notes 4, 10 and 14 to the  Consolidated  Financial
Statements.

                                                            At December 31, 2003
                                                               (in thousands)
                                                            --------------------
U.S. dollar-denominated assets............................       $     601
U.S. dollar-denominated contingent liabilities............         (21,016)
                                                                 ---------
   Net liability position including
     contingent liabilities...............................       $ (20,415)

      Decreases  in the  value of the peso  relative  to the  U.S.  dollar  will
increase the cost in pesos of the Company's foreign  currency-denominated  costs
and expenses and of any obligation the Company might with respect to any foreign
currency-denominated  liabilities.  A  depreciation  of the peso relative to the
U.S. dollar also will result in foreign  exchange  losses,  as the peso value of
the Company's foreign currency-denominated  contingent liability would increase.
The Company generally does not hedge or enter into derivative  transactions with
respect to its foreign currency exposure.

      Although the Company had no foreign-currency  denominated  indebtedness at
December 31, 2003, the Company's total foreign  currency-denominated  contingent
liabilities  at such date  amounted  to $21.1  million  in  connection  with the
Infored  Arbitration  Award. See Item 4,  "Information on the  Company--Business
Overview--Broadcasting  Operations--Production  of  Programming by Infored." and
Note 10 to the Consolidated Financial Statements.  Additionally, a small portion
of the Company's operating expenses are payable in U.S. dollars.

      A hypothetical  and unfavorable  10% change in the currency  exchange rate
would result in total additional  operating  expenses of  approximately  Ps. 2.9
million in 2003.  A  hypothetical  and  unfavorable  10% change in the  currency
exchange rate on December 31, 2003 would have  resulted in an estimated  foreign
exchange  loss of  approximately  Ps.  22.9  million  for 2003,  reflecting  the
increased  value in  pesos of the  Company's  net  foreign  currency-denominated
liability position including contingent liabilities.

Item 12. Description of Securities other than Equity Securities

      Not applicable.


                                       62
<PAGE>

                                     PART II

Item 13. Defaults, Dividend Arrearages And Delinquencies

      None.

Item 14. Material Modifications to the Rights of Security Holders and
         Use of Proceeds

Material Modifications to Security Holders' Rights

      None.

Use of Proceeds

      Not applicable.

Item 15. Controls and Procedures

      We  carried  out  an  evaluation   under  the  supervision  and  with  the
participation of our management, including our chief executive officer and chief
financial  officer,  of the  effectiveness  of the design and  operation  of our
disclosure  controls and procedures as of December 31, 2003.  There are inherent
limitations  to the  effectiveness  of any  system of  disclosure  controls  and
procedures,  including the possibility of human error and the  circumvention  or
overriding  of  the  controls  and  procedures.   Accordingly,   even  effective
disclosure  controls and  procedures  can only provide  reasonable  assurance of
achieving  their  control  objectives.  Based  upon our  evaluation,  our  chief
executive  officer and chief  financial  officer  concluded  that the disclosure
controls  and  procedures  as of  December  31, 2003 were  effective  to provide
reasonable assurance that information required to be disclosed in the reports we
file and submit  under the  Securities  Exchange  Act of 1934,  as  amended,  is
recorded,  processed,  summarized and reported as and when  required.  There has
been no change in our internal control over financial reporting during 2003 that
has  materially  affected,  or is reasonably  likely to materially  affect,  our
internal control over financial reporting.

Item 16A. Audit Committee Financial Expert

      Our  board  of  directors  has  determined  that  Luis de la  Fuente  Baca
qualifies as an "audit  committee  financial  expert" within the meaning of this
Item 16A.

Item 16B.  Code of Ethics

      We have  adopted a code of  ethics,  as  defined  in Item 16B of Form 20-F
under  the  Securities  Exchange  Act of 1934,  as  amended.  Our code of ethics
applies to our chief executive  officer,  chief financial  officer and principal
accounting officer or persons  performing similar functions.  Our code of ethics
is  available  on  our  website  at  www.radiocentro.com.mx.  If  we  amend  the
provisions  of our code of ethics  that  apply to our chief  executive  officer,
chief financial  officer,  principal  accounting  officer or persons  performing
similar  functions,  or if we  grant  any  waiver  of such  provisions,  we will
disclose such amendment or waiver on our website at the same address.


                                       63
<PAGE>

Item 16C. Principal Accountant Fees and Services

Audit Fees

      The  following  table sets forth the fees billed to us by our  independent
auditors, BDO Hernandez,  Marron y Cia., SC, for the fiscal years ended December
31, 2002 and 2003:

                                                        Year ended December 31,
                                                        -----------------------
                                                          2002          2003
                                                        ---------    ---------
                                                            (in thousands)
Audit fees.................................             Ps. 1,765    Ps. 1,660
Audit-related fees.........................                     0            0
Tax fees...................................                     0            0
Other fees.................................                     0            0
                                                        ---------    ---------
   Total fees..............................             Ps. 1,765    Ps. 1,660

      Audit fees in the above table are the aggregate  fees billed in connection
with the audit of our annual financial  statements and the review of our interim
financial statements and statutory and regulatory audits.

Audit Committee Approval Policies and Procedures

      Our  audit  committee  has  not  established   pre-approval  policies  and
procedures  for the  engagement of our  independent  auditors for services.  Our
audit committee expressly approves on a case-by-case basis any engagement of our
independent   auditors  for  audit  and  non-audit   services  provided  to  our
subsidiaries or to us.

                                    PART III

Item 17. Financial Statements

      Not applicable.

Item 18. Financial Statements

      See pages F-1 through F-44, incorporated by reference herein.

Item 19. Exhibits

      Documents filed as exhibits to this annual report:

(a)   List of Financial Statements

Consolidated Financial Statements of Grupo Radio Centro, S.A. de C.V. for the
   Years Ended December 31, 2003, 2002 and 2001

   Report of independent auditors..........................................  F-1

   Consolidated balance sheets as of December 31, 2003 and 2002............  F-3


                                       64
<PAGE>

   Consolidated statements of income for the years ended
      December 31, 2003, 2002 and 2001.....................................  F-4

   Consolidated statements of changes in stockholders'
      equity for the years ended December 31, 2003, 2002 and 2001.........   F-5

   Consolidated statements of changes in financial position
      for the years ended December 31, 2003, 2002 and 2001................   F-6

   Notes to the consolidated financial statements as of and
      for the years ended December 31, 2003, 2002 and 2001................   F-7

      All other  supplemental  schedules  relating  to the  Company  are omitted
because  they are not  required  or  because  the  required  information,  where
material,  is  contained  in the  Consolidated  Financial  Statements  or  Notes
thereto.

(b)   List of Exhibits

Charter (Escritura Constitutiva), together with
   an English translation(a)..............................................   1.1

Amended and Restated Bylaws of Grupo Radio
   Centro, S.A. de C.V., dated April 25, 2003,
   filed as an English translation(h).....................................   1.2

Amended and Restated Controlling Trust Agreement,
   No. F/23020-1, dated April 24, 1992, with amendments
   dated September 2, 1992, May 18, 1993 and
   September 14, 1993, between certain members of
   the Aguirre family and Bancomer, S.A., as trustee,
   together with an English translation (b)...............................   3.1

Amended and Restated CPO Trust Agreement, dated
   as of June 27, 2003, between GE Capital
   Bank S.A., Institucion de Banca Multiple, GE
   Capital Grupo Financiero, as CPO Trustee, and
   Grupo Radio Centro, S.A. de C.V., filed
   as an English translation(h)...........................................   3.2

Trust Agreement, dated June 3, 1998, among
   certain principal shareholders of Grupo Radio
   Centro, S.A. de C.V., together with an
   English translation(c).................................................   3.3

Deposit Agreement, dated June 30, 1993, among
   Grupo Radio Centro, S.A. de C.V., Citibank
   N.A. and holders from time to time of
   American Depositary Receipts issued thereunder,
   including the form of American Depositary
   Receipt(d).............................................................   4.1

Amended and Restated Public Deed, dated as of
   June 27, 2003 (the "Amended and Restated CPO
   Deed"), filed as an English translation(h).............................   4.2

Modifying Agreement, dated December 14, 1998,
   between Grupo Radio Centro, S.A. de C.V. and
   Comercializadora Siete, S.A. de C.V., modifying
   Service Agreement, dated October 2, 1995 with
   respect to XHFO-FM, together with an English
   translation(e).........................................................   4.3

Programming Services Agreement, dated December 23,
   1998, among Grupo Radio Centro, S.A. de C.V.,
   Infored and Jose Gutierrez Vivo, together
   with an English translation(e).........................................   4.4

Loan Agreement, dated October 30, 2000, between
   Grupo Radio Centro, S.A. de C.V. and Banco
   Inverlat, S.A., (the "Loan Agreement"), together
   with an English translation(f).........................................   4.5

Letter Agreement, dated April 17, 2001, between
   Grupo Radio Centro, S.A. de C.V. and Scotiabank
   Inverlat, S.A. (formerly Banco Inverlat, S.A.),
   amending Loan Agreement, together with an
   English translation(f).................................................   4.6


                                       65
<PAGE>

Waiver and Amendment Letter, dated June 19, 2002,
   executed by Scotiabank Inverlat and Grupo Radio
   Centro, S.A. de C.V. in connection with the
   Loan Agreement(g)......................................................   4.7

Amendment, dated December 10, 2002, to the Loan
   Agreement, filed as an English translation(h)..........................   4.8

Amendment, dated December 3, 2003, to the Loan
   Agreement, filed as an English translation.............................   4.9

Amendment, dated as of June 29, 2004, to the
   Loan Agreement, to be filed as an English
   translation pursuant to Rule 12b-25....................................  4.10

Modifying Agreement, dated June 29, 2001, between
   Grupo Radio Centro, S.A. de C.V. and
   Comercializadora Siete, S.A. de C.V., modifying
   Service Agreement, dated October 2, 1995, with
   respect to XHFO-FM, together with an English
   translation(g).........................................................  4.11

List of Subsidiaries of the Company(h)....................................   8.1

Certification pursuant to Section 302 of the
  Sarbanes-Oxley Act of 2002..............................................  12.1

Certification pursuant to Section 302 of the
  Sarbanes-Oxley Act of 2002..............................................  12.2

Certification pursuant to Section 906 of the
  Sarbanes-Oxley Act of 2002..............................................  13.1

----------
(a)  Incorporated by reference to the Company's  Registration  Statement on Form
F-1 (Reg. No. 333-63878) filed on June 4, 1993.

(b)  Incorporated  by  reference  to the  Company's  Annual  Report on Form 20-F
(Commission File No. 001-12090) filed on December 31, 1993.

(c)  Incorporated  by  reference  to the  Company's  Annual  Report on Form 20-F
(Commission File No. 001-12090) filed on June 30, 1998.

(d)  Incorporated by reference to the Company's  Registration  Statement on Form
F-6 (Reg. No. 333-8224) filed on January 16, 1998.

(e)  Incorporated  by  reference  to the  Company's  Annual  Report on Form 20-F
(Commission File No. 001-12090) filed on June 30, 1999.

(f)  Incorporated  by  reference  to the  Company's  Annual  Report on Form 20-F
(Commission File No. 001-12090) filed on May 9, 2001.

(g)  Incorporated  by  reference  to the  Company's  Annual  Report on Form 20-F
(Commission File No. 001-12090) filed on June 24, 2002.

(h)  Incorporated  by  reference  to the  Company's  Annual  Report on Form 20-F
(Commission File No. 001-12090) filed on June 30, 2003.


                                       66
<PAGE>

                                    SIGNATURE

      Pursuant to the requirements of Section 12 of the Securities  Exchange Act
of 1934, the registrant  certifies that it meets all the requirements for filing
on Form 20-F and has duly caused  this annual  report to be signed on its behalf
by the undersigned, thereunto duly authorized.

Date: June 30, 2004

                                                GRUPO RADIO CENTRO, S.A. de C.V.

                                                By: /s/ Pedro Beltran Nasr
                                                    ----------------------------
                                                    Pedro Beltran Nasr
                                                    Chief Financial Officer


                                       67
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.,

                        CONSOLIDATED FINANCIAL STATEMENTS

              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

                                  TOGETHER WITH

                                AUDITORS' REPORT


<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                        Page
                                                                        ----
Report of independent auditors                                       F-1 to F-2

Consolidated Financial Statements:

Consolidated Balance Sheets as of December 31, 2003 and 2002             F-3

Consolidated Statements of Income
       for the years ended December 31, 2003, 2002 and 2001              F-4

Consolidated Statements of Changes in Shareholders' Equity
       for the years ended December 31, 2003, 2002, and 2001             F-5

Consolidated Statements of Changes in Financial Position
       for the years ended December 31, 2003, 2002, and 2001             F-6

Notes to the Consolidated Financial Statements                       F-7 to F-44


<PAGE>

                         Report of Independent Auditors

To the Board of Directors and Shareholders of
Grupo Radio Centro, S.A. de C.V.

We have  audited the  accompanying  consolidated  balance  sheets of Grupo Radio
Centro,  S.A. de C.V. and subsidiaries (as defined in Note 1 to the consolidated
financial  statements)  as of  December  31,  2003  and  2002,  and the  related
consolidated  statements of (loss) income,  changes in shareholders'  equity and
changes in  financial  position  for each of the years in the three year  period
ended  December  31,  2003.  These  consolidated  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America and in Mexico.  Those standards  require that we
plan and  perform the audit to obtain  reasonable  assurance  about  whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of Grupo Radio Centro,
S.A. de C.V. and  subsidiaries as of December 31, 2003 and 2002, and the results
of their operations,  the changes in their shareholders'  equity and the changes
in their financial position for each of the years in the three year period ended
December 31, 2003, in conformity with accounting  principles  generally accepted
in Mexico.


                                      F-1
<PAGE>

Accounting  principles  generally accepted in Mexico vary in certain significant
respects from accounting  principles  generally accepted in the United States of
America.  The  application  of the latter  would have  affected the results from
operations  for each of the years in the three year period  ended  December  31,
2003,  and the  shareholders'  equity and  changes in  financial  position as of
December  31,  2003  and  2002,  to the  extent  summarized  in  Note  27 to the
accompanying consolidated financial statements.

These consolidated financial statements have been translated into English solely
for the convenience of readers of this language.

Hernandez, Marron y Cia., S.C.

Salvador Dacal Alonso, CPA
Partner

Mexico City
March 17, 2004,
except for the matter described in the last
paragraph of Note 14, sub-paragraph a)
which dates are June 15, 2004 and June 29, 2004


                                      F-2
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
          CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2003 AND 2002

(Unless otherwise  specified,  all amounts bearing the symbol "Ps" are expressed
       in thousands of constant Mexican pesos with purchasing power as of
             December 31, 2003. Amounts bearing the symbol "US$" are
                     expressed in thousands of US dollars.)

<TABLE>
<CAPTION>
                                                       2003            2003             2002
                                                   -----------     ------------     ------------
                     ASSETS
                     ------
<S>                                                <C>             <C>             <C>
CURRENT:
   Cash and temporary investments (Note 5)         US   $6,111     Ps    68,676     Ps    40,878
   Accounts receivable:
     Broadcasting, net of allowance for
     doubtful
        accounts of Ps7,411 and Ps1,663                 19,238          216,232          223,789
     Other receivables (Note 7)                            351            3,946            6,183
     Income taxes recoverable                               --               --           18,120
                                                   -----------     ------------     ------------
                                                        19,589          220,178          248,092
                                                   -----------     ------------     ------------
     Guarantee deposits (Note 8)                           615            6,915            7,190
     Others prepaid expenses                               843            9,480            7,387
     Prepaid expenses (Note 10)                             --               --            9,454
                                                   -----------     ------------     ------------
        Total current assets                            27,158          305,249          313,001
                                                   -----------     ------------     ------------
     Prepaid expenses (Note 10)                             --               --          108,729
     Property and equipment, net
        (Notes 11)                                      41,805          469,892          495,940
     Deferred charges, net (Note 12)                     1,102           12,391           18,424
     Excess cost over net book value of net
     assets of
        subsidiaries, net (Note 13)                     67,802          762,088          841,603
     Guarantee deposits (Note 8)                            51              576            7,789
     Other assets                                          279            3,140            3,266




                                                   -----------     ------------     ------------

                                                   US $138,197     Ps 1,553,336     Ps 1,788,752
                                                   ===========     ============     ============
</TABLE>

<TABLE>
<CAPTION>
                                                      2003            2003            2002
                                                   -----------    ------------    ------------
<S>                                               <C>             <C>            <C>
        LIABILITIES
        -----------
CURRENT:

   Notes payable (Note 14)                         US   $5,037    Ps    56,618    Ps   190,153
   Advances from customers
     (Note 15)                                           5,307          59,657          42,446
   Suppliers and other
   accounts
     payable (Note 16)                                   4,759          53,491          66,868
   Taxes payable (Note 17)                               2,318          26,051          13,849
   Contingent liability (Note 10)                       21,008         236,133              --
                                                   -----------    ------------    ------------
        Total current                                   38,429         431,950         313,316
        liabilities

LONG-TERM:
   Notes payable (Note 14)                              15,112         169,855         164,789
   Reserve for labor
   obligations
     (Note 18)                                           2,352          26,445          26,168
   Deferred taxes (Note 20)                              2,435          27,366          83,993
                                                   -----------    ------------    ------------
        Total liabilities                               58,328         655,616         588,266
                                                   -----------    ------------    ------------
   SHAREHOLDERS' EQUITY
   --------------------
     (Note 19):

   Capital stock                                        95,360       1,071,841       1,072,142
   Retained (deficit) earnings                         (11,223)       (126,147)        176,087
   Reserve for repurchase of shares                      3,377          37,952          38,021
   Surplus on restatement of capital                       385           4,332           4,332
   Cumulative effect on prior years
     of initial recognition
     of deferred
     income taxes  (Note 20)                            (8,060)        (90,597)        (90,597)
   Effect from labor liability                             (15)           (168)             --
                                                   -----------    ------------    ------------

   Majority shareholders' equity                        79,824         897,213       1,199,985

   Minority interest                                        45             507             501
                                                   -----------    ------------    ------------
     Total shareholders' equity                         79,869         897,720       1,200,486
                                                   -----------    ------------    ------------
                                                   US $138,197    Ps 1,553,336    Ps 1,788,752
                                                   ===========    ============    ============
</TABLE>


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


                                      F-3
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                        CONSOLIDATED STATEMENTS OF INCOME
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

      (Unless otherwise specified, all amounts bearing the symbol "Ps" are
     expressed in thousands of constant Mexican pesos with purchasing power
     as of December 31, 2003. Amounts bearing the symbol "US$" are expressed
                          in thousands of US dollars.)

<TABLE>
<CAPTION>
                                                            2003             2003           2002          2001
                                                        ------------   ------------   ------------   -----------
                                                          (Note 2)
<S>                                                       <C>               <C>            <C>           <C>
BROADCASTING REVENUES                                   US$   73,406   Ps   825,084   Ps   738,376   Ps  779,957
Broadcasting expenses, excluding
  depreciation and amortization                               43,904        493,593        479,624       504,304
                                                        ------------   ------------   ------------   -----------

    Broadcasting income                                       29,502        331,491        258,752       275,653

Depreciation and amortization                                 10,089        113,405        112,327       122,196
General and administrative corporate expenses
  (Note 21)                                                    5,354         60,183         46,911        52,399
                                                        ------------   ------------   ------------   -----------

    Operating income                                          14,059        157,903         99,514       101,058
                                                        ------------   ------------   ------------   -----------

COMPREHENSIVE COST OF FINANCING

  Interest expense                                             2,409         27,098         20,828        36,761
  Interest income                                                (87)          (973)        (2,318)       (2,944)
  Loss (gain) on foreign currency exchange,
    net (Note 4)                                                 575          6,463         43,734       (17,874)
  Loss (gain) on net monetary position                            28            310         (9,034)       (3,346)
                                                        ------------   ------------   ------------   -----------

                                                               2,925         32,898         53,210        12,597
                                                        ------------   ------------   ------------   -----------

Other expenses, net (Note 22)                                  5,870         65,982         52,487        75,993
                                                        ------------   ------------   ------------   -----------

    Income (loss) before extraordinary item
        and provisions                                         5,264         59,023         (6,183)       12,468

Extraordinary item (Note 10)                                  30,322        340,705           --            --
                                                        ------------   ------------   ------------   -----------

    (Loss) income before provisions                          (25,058)      (281,682)        (6,183)       12,468

Benefit for income taxes and
  employee profit sharing (Note 20)                           (3,193)       (35,887)        (8,454)       (6,002)
                                                        ------------   ------------   ------------   -----------

    Net (loss) income                                   US$  (21,865)  Ps  (245,795)  Ps     2,271   Ps   18,470
                                                        ============   ============   ============   ===========

NET (LOSS) INCOME APPLICABLE TO:
  Majority interest                                     US$  (21,866)  Ps  (245,801)  Ps     2,257   Ps   18,453
  Minority interest                                                1              6             14            17
                                                        ------------   ------------   ------------   -----------

                                                        US$  (21,865)  Ps  (245,795)  Ps     2,271   Ps   18,470
                                                        ============   ============   ============   ===========

NET (LOSS) INCOME PER SHARE                             US$   (0.134)  Ps    (1.511)  Ps     0.013   Ps   0.112
                                                        ============   ============   ============   ===========
</TABLE>

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


                                       F-4
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

      (Unless otherwise specified, all amounts bearing the symbol "Ps" are
     expressed in thousands of constant Mexican pesos with purchasing power
     as of December 31, 2003. Amounts bearing the symbol "US$" are expressed
                          in thousands of US dollars.)

<TABLE>
<CAPTION>
                                                                                                     Surplus
                                                                  Reserve for      Effect from    (deficit) on
                                     Capital        Retained       repurchase         labor        restatement
                                      stock         earnings       of shares       liabilities     of capital
                                  ------------    -----------     -----------     ------------    ------------
<S>                               <C>             <C>             <C>             <C>             <C>
Balances as of December 31,
    2000 (Note 19)                Ps 1,078,998    Ps  308,733     Ps   13,447     Ps       --     Ps    4,252
Increase to the reserve for the
    repurchase of shares                    --        (22,706)         22,706              --              --
Repurchase of shares                    (1,338)            --            (169)             --              --
Net income for the year                     --         18,470              --              --              --
Dividends paid                              --       (130,650)             --              --              --
Sales of shares                          1,338                            132
Cumulative effect of recognition
    of deferred income taxes                --             --              --              --              --
Minority interest                           --            (17)             --              --              --
                                  ------------    -----------     -----------     -----------     -----------
Balances as of December 31,
    2001 (Note 19)                   1,078,998        173,830          36,116              --           4,252
Repurchase of shares                    (6,856)             -           1,905              --              --
Net income for the year                     --          2,271              --              --              --
Cumulative effect of recognition
    of deferred income taxes                --             --              --              --              80
Minority interest                           --            (14)             --              --              --
                                  ------------    -----------     -----------     -----------     -----------
Balances as of December 31,
    2002 (Note 19)                   1,072,142        176,087          38,021              --           4,332
Repurchase of shares                      (301)             -             (69)             --              --
Net loss for the year                       --       (245,795)             --              --              --

Effect of additional liability
    from labor liabilities                  --             --              --            (168)             --
Dividends paid                              --        (56,433)             --              --              --
Minority interest                           --             (6)             --              --              --
                                  ------------    -----------     -----------     -----------     -----------
Balances as of December 31,
    2003 (Note 19)                Ps 1,071,841    Ps (126,147)    Ps   37,952     Ps     (168)    Ps    4,332
                                  ============    ===========     ===========     ===========     ===========
</TABLE>

<TABLE>
<CAPTION>
                                                       Cumulative
                                                        effect on
                                                     prior years of
                                                         initial
                                                       recognition
                                        Minority       of deferred                     Comprehensive
                                        interest      income taxes       Total         income (loss)
                                      -----------    --------------  ------------      -------------
<S>                                   <C>            <C>             <C>               <C>
Balances as of December 31,
    2000 (Note 19)                    Ps      470    Ps  (89,614)    Ps 1,316,286      Ps   32,879
                                                                                       ===========
Increase to the reserve for the
    repurchase of shares                       --             --               --               --
Repurchase of shares                           --             --           (1,507)              --
Net income for the year                        --             --           18,470           18,470
Dividends paid                                 --             --         (130,650)              --
Sales of shares                                                             1,470
Cumulative effect of recognition
    of deferred income taxes                   --            (59)             (59)             (59)
Minority interest                              17             --               --               --
                                      -----------    -----------     ------------      -----------
Balances as of December 31,
    2001 (Note 19)                            487        (89,673)       1,204,010      Ps   18,411
                                                                                       ===========
Repurchase of shares                           --             --           (4,951)              --
Net income for the year                        --             --            2,271            2,271
Cumulative effect of recognition
    of deferred income taxes                   --           (924)            (844)            (844)
Minority interest                              14             --               --               --
                                      -----------    -----------     ------------      -----------
Balances as of December 31,
    2002 (Note 19)                            501        (90,597)       1,200,486      Ps    1,427
                                                                                       ===========
Repurchase of shares                           --             --             (370)              --
Net loss for the year                          --             --         (245,795)        (245,795)

Effect of additional liability
    from labor liabilities                     --             --             (168)            (168)
Dividends paid                                 --             --          (56,433)              --
Minority interest                               6             --               --               --
                                      -----------    -----------     ------------      -----------
Balances as of December 31,
    2003 (Note 19)                    Ps      507    Ps  (90,597)     Ps  897,720      Ps (245,963)
                                      ===========    ===========      ===========      ===========
</TABLE>

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


                                      F-5
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                        CONSOLIDATED STATEMENTS OF INCOME
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

      (Unless otherwise specified, all amounts bearing the symbol "Ps" are
     expressed in thousands of constant Mexican pesos with purchasing power
     as of December 31, 2003. Amounts bearing the symbol "US$" are expressed
                          in thousands of US dollars.)

<TABLE>
<CAPTION>
                                                                            2003           2003           2002          2001
                                                                        ------------   ------------   ------------   -----------
                                                                          (Note 2)
<S>                                                                       <C>              <C>               <C>          <C>
OPERATING ACTIVITIES:
---------------------
Net (loss) income for the year                                          US$  (21,865)  Ps  (245,795)  Ps     2,271   Ps   18,470
Increases (decreases) to income not
  affecting resources:
  Depreciation and amortization                                                3,015         33,890         38,370        43,738


  Amortization of goodwill                                                     7,074         79,515         73,957        78,458


  Deferred income taxes                                                       (5,037)       (56,627)       (14,139)       (9,864)


  Advance payments                                                            10,514        118,183         16,726        10,430
  Reduction in book value of  buildings held for sale
  (Note 12)                                                                      125          1,407          1,754         1,428
                                                                        ------------   ------------   ------------   -----------

                                                                              (6,174)       (69,427)       118,939       142,660

Net change in accounts receivable,
  accounts payable and other                                                  25,908        291,222        (78,726)       12,398
                                                                        ------------   ------------   ------------   -----------

    Resources provided by operating activities                                19,734        221,795         40,213       155,058
                                                                        ------------   ------------   ------------   -----------

FINANCING ACTIVITIES:
---------------------
  Repurchase of shares                                                           (33)          (370)        (4,951)          (37)
  Repayments (proceeds) in bank loans                                        (11,430)      (128,469)       (59,310)       29,851
  Dividends paid                                                              (5,020)       (56,433)         --         (130,558)
                                                                        ------------   ------------   ------------   -----------

    Resources used in financing activities                                   (16,483)      (185,272)       (64,261)     (100,744)
                                                                        ------------   ------------   ------------   -----------

INVESTING ACTIVITIES:
---------------------
  Excluding the recognition of the effects of inflation:
    Equipment                                                                   (776)        (8,725)       (24,985)      (24,043)
    Buildings held for sale                                                    --             --            16,674         --
  Guarantee deposits                                                           --             --             --          (22,800)
  Purchase of equity securities                                                --             --             --         (108,992)
  Effects of inflation                                                         --             --             --           (8,498)
                                                                        ------------   ------------   ------------   -----------

  Resources used in investing activities                                        (776)        (8,725)        (8,311)     (164,333)
                                                                        ------------   ------------   ------------   -----------

Increase (decrease) in cash and temporary
  investments                                                                  2,475         27,798        (32,359)     (110,019)

Cash and temporary investments
  at beginning of year                                                         3,636         40,878         73,237       183,256
                                                                        ------------   ------------   ------------   -----------

Cash and temporary investments
  at end of year                                                        US$    6,111   Ps    68,676   Ps    40,878   Ps   73,237
                                                                        ============   ============   ============   ===========
</TABLE>

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


                                      F-6
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

 (Unless otherwise specified, all amounts bearing the symbol "Ps" are expressed
 in thousands of constant Mexican pesos with purchasing power as of December 31,
        2003. Amounts bearing the symbol "US$" are expressed in thousands
                                 of US dollars.)

NOTE 1   Line of business and composition of the companies

      Grupo Radio Centro,  S.A. de C.V.  ("Grupo Radio Centro" or "the Company")
is a Mexican radio  broadcasting  enterprise  incorporated  on June 8, 1971. Its
principal line of business is the production and radio  broadcasting  of musical
programs,  news,  interviews  and  special  events.  Its  revenues  are  derived
primarily  from the sale of  commercial  airtime  to  advertising  agencies  and
businesses. The Company also operates a radio network in Mexico.

      The following companies,  which comprise or formerly comprised Grupo Radio
Centro,  operate in various sectors of the radio  broadcasting  industry.  Grupo
Radio Centro owns approximately 99.9% of most of its subsidiaries.

<TABLE>
<CAPTION>
                             Companies                                 Notes      2003       2002       2001
--------------------------------------------------------------------  ---------  --------  ---------  ----------
<S>                                                                      <C>        <C>       <C>         <C>
                          Radio stations:
XEQR, S.A. de C.V.                                                                  X         X           X
XERC, S.A. de C.V.                                                                  X         X           X
XEEST, S.A. de C.V.                                                      a          X         X           X
XEQR-FM, S.A. de C.V.                                                               X         X           X
XERC-FM, S.A. de C.V.                                                               X         X           X
XEJP-FM, S.A. de C.V.                                                               X         X           X
XEDKR-AM, S.A. de C.V.                                                              X         X           X
XESTN-AM                                                                 b          X         X           X
Radio Red, S.A. de C.V.                                                             X         X           X
Radio Red-FM, S.A. de C.V.                                                          X         X           X
Estacion Alfa, S.A. de C.V.                                                         X         X           X
Emisora 1150, S.A. de C.V. (formerly XECMQ)                                         X         X           X
Radio Sistema Mexicano, S.A.                                             c          X         X           X

                       Marketing companies:

Grupo Radio Centro, S.A. de C.V.                                                    X         X           X
Radio Centro Publicidad, S.A. de C.V.                                               X         X           X
GRC Publicidad, S.A. de C.V.                                                        X         X           X
GRC Medios, S.A. de C.V.                                                 d          X         X           X

                        Service companies:

Promotora Tecnica de Servicios Profesionales,
       S.A. de C.V.                                                                 X         X           X

Publicidad y Promociones Internacionales,
       S.A. de C.V.                                                                 X         X           X
</TABLE>


                                      F-7
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

<TABLE>
<CAPTION>
                             Companies                                 Notes      2003       2002       2001
--------------------------------------------------------------------  ---------  --------  ---------  ----------
<S>                                                                      <C>        <C>       <C>         <C>
Promo Red, S.A. de C.V.                                                             X         X           X

                      Real estate companies:

Universal de Muebles e Inmuebles, S.A. de C.V.                           e          X         X           X
Inmobiliaria Radio Centro, S.A. de C.V.                                  e          X         X           X

                      Sub-holding companies:

Desarrollos Empresariales, S.A. de C.V.                                             X         X           X
Radiodifusion Red, S.A. de C.V.                                                     X         X           X
Enlaces Troncales, S.A. de C.V.                                          f          X         X           X

                     Non-operating companies:

Musica, Musica, Musica, S.A. de C.V.                                                X         X           X
Promotora de Exitos, S.A. de C.V.                                                   X         X           X
Producciones Artisticas Internacionales, S.A. de C.V.                    g          X         X           X

                       Internet companies:

To2 Mexico, S.A. de C.V.                                                 h          X         X           X
----------------------------------------------------------------------------------------------------------------
</TABLE>

Notes:

a     Radio station  managed and operated by  Comercializadora  Siete de Mexico,
      S.A. de C.V.

b     Radio station  acquired by Radio Red, S.A. de C.V. on September 6, 2000 to
      operate in Monterrey, Nuevo Leon.

c     Subsidiary as of December 31, 2001 (see Note 23).

d     Subsidiary as of April 2, 2001 (see Note 24).

e     On July 8, 2000,  Grupo Radio Centro  established  Trust  N(degree)151548,
      with Banco  Internacional,  S.A.,  as  trustee,  to act as the real estate
      administrator  for  Universal  de Muebles e  Inmuebles,  S.A. de C.V.  and
      Inmobiliaria  Radio  Centro,  S.A. de C.V. On September 30, 2002 the Trust
      was terminated and  consequently  the real estate is  administered  by the
      above-mentioned real estate companies.

f     Includes Palco Deportivo.Com,  S.A. de C.V. and related companies,  all of
      which were merged into this subsidiary on October 1, 2001 (see Note 24).

g     The  subsidiary was  incorporated  as a result of the merger between Grupo
      Radio Centro (the merging  company) and  Centraltena  (the merged company)
      effective October 13, 1999.

h     Subsidiary as of February 16, 2001 (see Note 24).


                                      F-8
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

      The  Company's   radio-station   operations  include  the  production  and
broadcasting  of  musical  programs,   news,  interviews,   special  events  and
advertising in Mexico City's  metropolitan  area. They are based on limited-term
concessions,  subject to renewal, granted by Mexico's Ministry of Communications
and  Transportation  ("SCT").  One of the  station  concessions  granted  to the
Company expired in October 2003 and one in November 2003.  Renewed  applications
for both these  concessions have been filed as described below.  Nine will be up
for renewal in July 2004, one in December 2007 and one in December 2012.

      In  November  2002,  renewal  applications  for the two  concessions  that
expired in 2003 and in May 2003 renewal  applications  for the nine  concessions
that are set to expire in 2004 were  submitted to the Ministry of  Communication
and  Transportation  (Secretaria de  Comunicaciones  y Transportes).  Renewal of
these concessions is still pending.

      The  Company's  marketing  companies  are  or  were  responsible  for  the
programming and sale of commercial  airtime for broadcast by the Company's radio
stations in Mexico City's  metropolitan area and, beginning in 1995, in the rest
of Mexico.

      The  Company's  service  companies  provide   commercial,   technical  and
administrative personnel to the companies comprising Grupo Radio Centro.

      The Company's real estate companies described in Note 1e, own the land and
buildings where the transmission  facilities of the Company's radio stations and
its  commercial  companies are located,  including  the building  where the head
offices and studios of Grupo Radio Centro and its subsidiaries are located.

      The Company's non-operating companies were incorporated for the purpose of
developing new investment projects and are not currently active.

      The   Internet   companies   were   acquired  to  explore  the   Company's
opportunities  for distributing its content through the Internet.  On October 1,
2002 the Internet companies To2 Mexico and Palco Deportivo ceased operations.

      In October 2001, the Company restructured itself to decrease the number of
holding  companies  and  simplify  management.  This  restructuring  resulted in
mergers and acquisitions among subsidiaries of the Company as follows:

* Desarrollos Empresariales, S.A. de C.V. acquired from Grupo Radio Centro, S.A.
de C.V.  99.99% of the shares of  Radiodifusion  Red,  S.A.  de C.V.  and is the
surviving entity following mergers with each of the following subsidiaries:

o     Mensajes Digitales, S.A. de C.V.
o     Industrias Telecentro, S.A. de C.V.

* Enlaces  Troncales,  S.A. de C.V.  acquired 99.99% of the shares of Promo Red,
S.A. de C.V. from  Radiodifusion  Red, S.A. de C.V. and is the surviving  entity
following mergers with each of the following subsidiaries (see Note 13):


                                      F-9
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

o     Palco Deportivo.Com, S.A. de C.V.
o     Palco Shop, S.A. de C.V.
o     Palco Deportivo Multimedia, S.A. de C.V.
o     Palco Deportivo Mexico, S.A. de C.V.

* Promo Red,  S.A.  de C.V.  is the  surviving  entity  following  a merger with
Servicios Corporativos Palco, S.A. de C.V. (see Note 13).

* Radio  Centro  Publicidad,  S.A. de C.V.  is the  surviving  entity  following
mergers with the following subsidiaries:

o     Publicidad Mega, S.A. de C.V.
o     Organizacion Impulsora de Radio, S.A. de C.V.
o     Compania de Servicios Publicitarios, S.A. de C.V.

* GRC  Medios,  S.A.  de C.V. is the  surviving  entity  following a merger with
Expertopolis,  S.A. de C.V. (acquired by Grupo Radio Centro, S.A. de C.V. for Ps
50 in June 2001).

NOTE 2   Basis of consolidation and presentation

      The accompanying consolidated financial statements include the accounts of
Grupo Radio  Centro and its  subsidiaries,  listed in Note 1, as of December 31,
2003 and 2002,  and for the years ended  December 31, 2003,  2002 and 2001.  All
intercompany balances and transactions have been eliminated in consolidation.

      Convenience statements:

      The 2003 US dollar  amounts  (denoted  by the symbol  "US$")  shown in the
financial statements have been included solely for the convenience of the reader
and were  translated  at the rate of Ps  11.24/US$1.00,  the noon buying rate of
Mexican pesos on December 31, 2003, as published by the Federal  Reserve Bank of
New York. Such translation should not be construed as a representation  that the
Mexican peso amounts have been or could be converted  into US dollars at this or
any other rate.

      Certain amounts  reported to the consolidated  financial  statements as of
December  31,  2002 and 2001  have  been  reclassified  to  conform  to the 2003
presentation.

NOTE 3   Summary of significant accounting policies

      The most significant accounting policies followed by Grupo Radio Centro in
the preparation of its consolidated financial statements, are summarized below:

      a.    Recognition of the effects of inflation:

      -     The  consolidated   financial   statements  have  been  prepared  in
            accordance   with  the   guidelines   set  out  in  Bulletin   B-10,
            "Recognition of the Effects of Inflation on Financial  Information,"
            and its  amendments,  issued  by the  Mexican  Institute  of


                                      F-10
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

            Public Accountants. Therefore, the consolidated financial statements
            for the years ended December 31, 2003,  2002 and 2001, are expressed
            in constant  Mexican pesos with purchasing  power as of December 31,
            2003, as determined  by applying  factors  derived from the National
            Consumer Price Index ("NCPI") published by the Banco de Mexico.

                                                           2003    2002    2001
                                                          ------  ------  ------
            Restatement factor using Mexican Inflation    1.0397  1.057    1.044

      -     Capital stock,  retained earnings (deficit),  reserve for repurchase
            of shares and  cumulative  effect on prior years of  recognition  of
            deferred income tax include their restatement effects, determined by
            applying  factors  derived  from  the  NCPI  from  the date of their
            contribution or generation.  These restatements reflect the reserves
            required  to  maintain  shareholders'  equity  accounts  at constant
            levels.

      -     Surplus on restatement of capital  represents the  accumulated  gain
            from  holding   non-monetary   assets.   This  gain  represents  the
            difference  between the value of  non-monetary  assets,  recorded at
            acquisition  cost as compared to the value of the assets as restated
            using factors derived from the NCPI.

      -     (Gain)  loss on net  monetary  position  represents  the  effects of
            inflation,  as measured by the NCPI, on the net monetary  assets and
            liabilities held during the year.

      -     Comprehensive  cost of  financing  consists of  interest  income and
            expense,  foreign-exchange  gains or losses, and the gain or loss on
            net monetary position.

      b.    Temporary investments:

            Stated at cost, plus interest  earned,  which does not exceed market
            value.

      c.    Property and equipment:

            The Company recognizes the effects of inflation through  adjustments
            in general price levels by applying  factors  derived from the NCPI.
            Related  depreciation is calculated  based on estimated useful lives
            of  assets,  as  determined  by  independent  appraisers,  both  for
            acquisition costs and restatement increases.

            During 2003, 2002 and 2001,  impairment losses relating to buildings
            held for sale and  amounting  to Ps  1,407,  Ps 1,754  and Ps 1,428,
            respectively,  were recognized in other expenses in the accompanying
            statements of (loss) income (see Note 22).


                                      F-11
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

      d.    Excess cost over net book value of net assets of subsidiaries:

            Goodwill  can be  amortized  over a period no greater  than 20 years
            from the date of  acquisition.  Amortization  is  calculated  on the
            straight-line method.

      e.    Income Tax ("IT"), Business Assets Tax ("BAT"),  Employees Statutory
            Profit-Sharing ("ESPS") and Deferred Income Taxes:

            IT, BAT and ESPS expense are recognized in the period incurred,  and
            the effects of deferred IT and ESPS are  recognized,  in  accordance
            with  Bulletin  D-4,  Accounting  treatment of income tax,  business
            assets tax and employees profit sharing ("Bulletin D-4"),  effective
            January 1, 2000.  Bulletin D-4 requires deferred IT to be determined
            by  applying  the  enacted  statutory  income  tax rate to the total
            temporary differences between the book value and tax value of assets
            and  liabilities,  considering  when  available,  and  subject  to a
            recoverability  analysis,  tax loss  carryforwards  as well as other
            recoverable  taxes and tax  credits.  Bulletin  D-4 also  requires a
            determination  of the effect of  deferred  ESPS for those  temporary
            differences,  which are of  non-recurring  nature,  arising from the
            reconciliation  of the net  income  of the  period  and the  taxable
            income of the period for ESPS.

            Income taxes are computed based on the consolidated return basis and
            employee  profit sharing is computed on a separate  return basis for
            each entity in the consolidated group. The effect of a statutory tax
            rate change is recognized  in the income  statement of the period in
            which the change occurs and is officially declared (see Note 20).

      f.    Advances from customers:

            Recognized as income when the corresponding airtime is transmitted.

      g.    Employee benefits:

            The costs  related to benefits to which  employees are entitled as a
            result of seniority  premiums and pension plans in the case of union
            personnel,  or by law or by Company  grant,  are  recognized  in the
            results  of  operations  on the  basis of the  present  value of the
            benefits  determined  under  actuarial  estimates,  as services  are
            rendered.  The  amortization  of  unrecognized  prior  service cost,
            changes in assumptions and adjustments based on experience that have
            not been  recognized,  is based on the employee's  estimated  active
            service life.  Other  benefits,  to which employees may be entitled,
            principally  severance benefits and vacations,  are recognized as an
            expense in the year in which they are paid.

            On January 1, 2000, the Company established a pension plan for union
            personnel.  The  Company has  recorded a reserve  for the  estimated
            accrued seniority premium and pension benefits,  the amount of which
            was determined also through actuarial estimates (see Note 18).


                                      F-12
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

            Other  indemnities or  compensation  based on length of service,  to
            which,  under the  terms of  Mexico's  current  Federal  Labor  Law,
            employees  may be  entitled in the event of  dismissal  or death are
            charged to income in the year in which they become payable.

      h.    Earnings per share:

            Net  income  per  share is  computed  on the  basis of the  weighted
            average  number of shares  outstanding  for the years ended December
            31, 2003, 2002 and 2001.

      i.    Transactions in foreign currencies:

            Recorded  at the  buying  rate  published  by the  Banco  de  Mexico
            (Central  Bank) in 2003 and 2002,  which rate is  comparable  to the
            Federal  Reserve Bank of New York on the dates they are entered into
            and/or settled.  For 2001, the rate used was at the noon buying rate
            of the  Federal  Reserve  Bank  of New  York.  Monetary  assets  and
            liabilities in foreign currencies are stated in Mexican pesos at the
            year-end  closing rates of exchange.  The exchange  differences  are
            applied to the year's results from operations.

      j.    Recognition of broadcasting income:

            Recognized when the corresponding airtime is broadcast.

      k.    Barter transactions:

            The Company  exchanges  advertising  time for products and services.
            Broadcasting revenue and the related airtime cost in connection with
            the barter of advertising  time are recognized  when the advertising
            is aired, and the cost of the goods and services  received in such a
            barter  transaction  are recognized  when the goods and services are
            used. The Company  estimates that the value of these operations does
            not exceed market value.

      l.    Use of estimates:

            The preparation of financial  statements requires management to make
            estimates and assumptions that affect reported amounts of assets and
            liabilities at the date of the financial statements and the reported
            amounts of revenues and expenses during the reported periods. Actual
            results could differ from those estimates.

      m.    Concentration of credit risk

            Broadcasting Revenue:

                  The Company's  principal  source of revenue is generated  from
            radio  broadcasting of advertising and promotions for its customers.
            Although the


                                      F-13
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

            Company has several large  customer  accounts,  none  comprised more
            than 10% of the Company's total  broadcasting  revenue in 2003, 2002
            and 2001.

      n.    Repurchase of shares:

            In accordance  with  Mexico's  current Stock Market Law, the Company
            has  created  a  capital  reserve  from  retained  earnings,  called
            "Reserve  for  repurchase  of  shares",  to be used  if the  Company
            repurchases  its  shares.  Shares  repurchased  by the  Company  are
            treated as treasury shares.  Should these shares not be offered anew
            to the investing  public within one year,  the Law requires that the
            treasury shares be canceled, thus resulting in a reduction of common
            stock.

      o.    Comprehensive Income:

            The Company  follows  the  practice  of  recognizing  "Comprehensive
            Income" per the  guidelines of Bulletin  B-4,  issued by the Mexican
            Institute  of Public  Accountants,  which  sets out  disclosure  and
            presentation   rules   concerning   comprehensive   income  and  its
            components.

            The total comprehensive income presented in the statement of changes
            in shareholders' equity, results from the performance of the Company
            for the  period  ended  December  31,  2003 and is  included  on the
            balance sheet as part of shareholders' equity, pursuant to generally
            accepted accounting  principles in Mexico as net income (loss), plus
            deferred  income tax and any  additional  liability  for  retirement
            payments.

      p.    New pronouncements:

            In December 2001, the Mexican Institute of Public Accountants issued
            Bulletin  C-9,   "Liabilities,   Accruals,   Contingent  Assets  and
            Liabilities and Commitments." This Bulletin was effective January 1,
            2003 and supersedes former Bulletin C-9,  "Liabilities" and Bulletin
            C-12,  "Contingencies  and  Commitments."  Bulletin C-9  establishes
            additional  guidance  clarifying  the  accounting  for  liabilities,
            accruals and contingent assets and liabilities,  and establishes new
            standards  for  the  use of  present  value  techniques  to  measure
            liabilities,   and  the  accounting  for  the  early  settlement  of
            liabilities  and  convertible  debt.   Additionally,   Bulletin  C-9
            establishes  new  rules  for  disclosing  commitments  arising  from
            current business  operations.  The adoption of this Bulletin did not
            have a material effect on the Company's financial statements.

            The Mexican Institute of Public Accountants published Bulletin C-15,
            "Impairment in the Value of Long-Lived  Assets and Their  Disposal,"
            which became  effective as of January 1, 2004.  The  application  of
            Bulletin  C-15 is mandatory  for fiscal years  beginning on or after
            January 1, 2004,  but early  adoption is  encouraged.  Bulletin C-15
            establishes,  among other things, new principles for the calculation
            and  recognition  of  impairment  losses for  long-lived  assets and
            including any subsequent  reversals of such  impairment  losses.  It
            also provides  examples of indicators of possible


                                      F-14
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

            impairment  in  the  carrying  amount  of  tangible  and  intangible
            long-lived  assets in use,  including  goodwill.  The calculation of
            such losses requires the determination of recoverable  value,  which
            is now  defined  as  the  greater  of the  net  selling  price  of a
            cash-generating  unit and its  usable  value,  which is the  present
            value of  discounted  future net cash  flows,  using an  appropriate
            discount rate.

            The financial statements were not affected from the adoption of this
            Bulletin or from the corresponding study performed.

            The Company has engaged an independent  business  valuation firm and
            an appraisal  firm to assess  impairment of its  long-lived  assets,
            principally  its  goodwill,  as of December  31, 2003 for U.S.  GAAP
            purposes.   Based  on  the  results  of  these  independent   firms'
            valuations,  the Company recognized an impairment loss of Ps 152,491
            for U.S. GAAP purposes (See note 25.)

NOTE 4   Position in foreign currencies

      The consolidated  balance sheets as of December 31, 2003 and 2002, include
the  following  assets and  liabilities  in US  dollars,  valued at the  closing
year-end foreign exchange rates of Ps 11.2360 / US$ 1.00 and Ps 10.3125/US$1.00,
respectively:

                                                        2003          2002
                                                    -----------   -----------
      Cash and marketable securities                US$     601   US$   1,187
      Liabilities (including contingent
      liabilities)                                      (21,016)      (10,000)
                                                    -----------   -----------
      Net liabilities  (including contingent
      liabilities)                                  US$ (20,415)  US$  (8,813)
                                                    ===========   ===========

      At  March  17,  2004,  the  date  of  these  financial   statements,   the
foreign-exchange rate was Ps 11.10/US$ 1.00.s of December 31, 2003 and 2002, the
net book value of the Company's  property and equipment  denominated  in foreign
currencies was as follows:

                                                        2003         2002
                                                    -----------   -----------
      Transmission equipment                        US$   1,776   US$   1,929
      Studio equipment                                    1,171         1,575
      Helicopters                                           391           500
      Other                                                 402           355
                                                    -----------   -----------
      Net assets in US dollars                      US$   3,740   US$   4,359
                                                    ===========   ===========


                                      F-15
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

NOTE 5   Cash and temporary investments

                                                        2003         2002
                                                    -----------   -----------
      Cash                                          Ps    1,411   Ps      227
      Short-term investments, mainly at
      fixed interest rates                               67,265        40,651
                                                    -----------   -----------
                                                    Ps   68,676   Ps   40,878
                                                    ===========   ===========

      Temporary investments as of December 31, 2003 and 2002 consisted primarily
of deposits at fixed interest rates, with maturities of less than 90 days. Grupo
Radio Centro invests its temporary excess cash in such deposits.

NOTE 6   Related parties

      In the normal course of business,  the Company may sell  broadcast time or
programming  services to various other companies that are related through common
ownership. These sales are recorded at rates not materially different from those
charged to non-related entities for these types of services.

      The  Company  may also  purchase  assets or  services  from these  related
parties.  Grupo Radio Centro  believes that the costs of such assets or services
do not exceed the prices that could be obtained from non-related entities.

      The Company also  provides  certain  services to  affiliated  companies on
terms that are more favorable than those available to non-related companies. The
Company does not believe that any such service arrangements with related parties
are material.

      The Company also  engages in various  leasing or lending  activities  with
such related  parties.  The Company  believes  that the terms of such leasing or
lending  arrangements do not significantly  differ from the terms which could be
obtained from or charged to non-related companies.

      During the years  ended  December  31,  2003,  2002 and 2001,  the Company
conducted the following transactions with related parties:

                                              2003           2002         2001
                                          -----------     ----------   ---------
      Income:
      -------
      Sale of airtime and services
      rendered                            Ps      176     Ps     193   Ps    795
      Building rent                               276            275         299
      Sale of transportation equipment            427            185          --
      Sale of computer equipment                   14              3         160
      Other                                       169            196         304
      Recovery of expenses                         --            317          --


                                      F-16
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

                                             2003           2002         2001
                                         -----------     ----------   ---------
    Expenses:
    ---------
    Purchase of airtime and services
      received                           Ps   (1,914)    Ps  (2,194)  Ps (1,442)
    Fees paid (1)                            (10,016)        (7,881)     (7,857)

      (1) On January 5, 2000 the Company  entered into a contract with an entity
owned by  Francisco  Aguirre  Gomez,  the  president  and a  shareholder  of the
Company.  This entity provides  promotional services to the Company. The Company
incurred  expenses  for such  services  under this  contract  totaling Ps 10,016
(historical  amount),  Ps 7,881 (Ps 7,580  historical  amount)  and Ps 7,858 (Ps
7,150 historical amount) in 2003, 2002 and 2001, respectively.

      During the years ended 2003, 2002 and 2001, the shareholders made personal
use of goods and services that the Company  acquired from barter  operations for
which they paid Ps 3,664, Ps 2,897 and Ps 2,476, respectively.

NOTE 7 Other receivables

      At December 31, 2003 and 2002, the balances in other receivables consisted
of the following:

                                                    2003               2002
                                               --------------     --------------

      Officers and employees                   Ps       2,855     Ps       3,461
      Other (1)                                         1,091              2,722
                                               --------------     --------------

                                               Ps       3,946     Ps       6,183
                                               ==============     ==============

      (1) At  December  31,  2003 and 2002,  the  amounts  include Ps 157 and Ps
1,792, respectively, for receivables from shareholders.

NOTE 8 Service agreements

      In  order  to  manage  the  operations  of  XHFO-FM,  S.A.  de  C.V.  (the
"Station"),  Desarrollos  Empresariales,  S.A. de C.V. ("Desa"),  a wholly-owned
subsidiary  of the Company  entered on October 2, 1995 into a Service  Agreement
(the  "Agreement") with the Station and with  Comercializadora  Siete de Mexico,
S.A. de C.V.  ("Comercializadora").  Under the terms of the Agreement,  Desa was
granted the right to sell the airtime of the Station in exchange  for  providing
operating and administrative services to Comercializadora and the Station.

      On December 14, 1998, the Company entered into a Modifying  Agreement (the
"First  Modifying   Agreement")   renewing  and  modifying  the  Agreement  with
Comercializadora and the Station. On December 30, 1998, a 24 month rights-ceding
contract was signed in which the Company replaced Desa, in order to continue the
operation of the Station by the Company  beginning  January 3, 1999. On December
15, 2000, the parties  renewed the First  Modifying  Agreement for a term of one
year.


                                      F-17
<PAGE>


                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

      On June 29, 2001, the parties  entered into a second  Modifying  Agreement
renewing and modifying the First Modifying Agreement,  effective January 3, 2002
for a term of thirty-six-months.  Under this agreement,  the Company is entitled
to a monthly fee equal to Ps 166 plus US$ 207 from the total revenues  generated
by the Station for providing operating and administrative  services. On July 17,
2001, the Company made a deposit of US$ 2,250 to guarantee its  compliance  with
this agreement, which deposit is to be refunded in monthly installments over the
thirty-six month term.

NOTE 9 Acquisition of Radiodifusion Red

      Through a series of  transactions  effected in May 1995 and January  1996,
the  Company  acquired  from  Corporacion  Medcom,  S.A.  de  C.V.  all  of  the
outstanding  capital stock of Radiodifusion Red. The purchase price consisted of
US$ 23  million  (Ps  146,308  historical  amount)  paid in May 1995 and a fixed
payment of Ps 241,610 (historical amount) with a contingent payment of Ps 80,500
(historical  amount) paid in January 1996. The contingent payment was subject to
the  attainment  by the radio  stations  owned by  Radiodifusion  Red of certain
audience-share targets for each of the following five years.

      For the years ended December 31, 1998,  1997 and 1996, the  audience-share
targets were reached.  Therefore,  the Company was not entitled to any refund of
the contingent payment for those years. In December 1998, in connection with the
Company's entering into a  programming-services  agreement with Infored, S.A. de
C.V.,  ("Infored") and Jose Gutierrez Vivo ("Mr.  Gutierrez") (see Note 10), the
Company  surrendered  its  rights  to any  refund  of the  remaining  contingent
payments for 2000 and 1999. The aggregate  amount of Ps 80,500  corresponding to
the  contingent  payments  was  capitalized  as part of the  purchase  price and
included in goodwill.

      On September 30, 2001, the Company sold its shares of Radiodifusion Red to
Desarrollos Empresariales,  a subsidiary of the Company. This sale resulted in a
loss for tax  purposes of Ps 175,626 (Ps 159,805  historical  amount)  (see Note
20).

NOTE 10 Infored production contract

      On December 23, 1998, in order to continue collaborating in the production
of radio shows and to establish two new joint ventures, the Company signed a new
contract (the  "Production  Contract" or the "Infored  Agreement") with Infored,
the producer at that time of the Monitor news and talk-show,  and  Mr.Gutierrez,
Monitor's  host at that time, to provide the Company with  exclusive  production
services for news and special-event radio shows until June 30, 2015. The Company
committed to air these  programs on XERED-AM and XHRED-FM and  affiliated  radio
stations.

      The Production Contract,  in addition to requiring the Company to continue
paying Infored for the cost of producing its shows,  required the Company to pay
Infored an aggregate of approximately US$ 15,400. Of this amount,  US$ 4,400 and
Ps 4,593 (Ps 4,003  historical  amount)  was paid upon  signing  the  Production
Contract,  US$ 4,000 was paid on  January  31,  1999,  and US$ 7,000 was paid in
eleven equal monthly payments  starting  February 28, 1999. The aggregate amount
of these advance  payments is being  amortized  monthly in equal amounts through
June 2015. In addition,  the Company paid Infored monthly  production fees based
on the revenues


                                      F-18
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

derived  from  Monitor  and the amount of  budgeted  expenses,  which  generally
reflected  increases due to Mexico's  inflation  rate, to cover  Infored's radio
programming operations.

      Prepayments made under the Production Contract as of December 31, 2003 and
2002, were as follows:

                                                    2003               2002
                                               --------------     --------------

      Short-term                               Ps          --     Ps       9,454
      Long-term                                            --            108,729
                                               --------------     --------------
                                               Ps          --     Ps     118,183
                                               ==============     ==============

      The Company  also  transferred  to Mr.  Gutierrez  two AM radio  stations,
XEFAJ-AM,  S.A. de C.V.  and Emisora  1320,  S.A.  de C.V.,  at book value.  The
Company  continues  rendering   maintenance   services,   leasing   transmission
engineering, and leasing broadcasting building for these stations under separate
agreements.

      On May 7, 2002, Mr.  Gutierrez and Infored  notified the Company that they
were  initiating  an  arbitration  proceeding  pursuant to which they sought the
rescission  of the  Production  Contract  entered into on December 23, 1998 (see
Note 9), and damages.

      On March 1, 2004 the  International  Chamber of Commerce  ("ICC") notified
the Company that a final  decision had been made in the  arbitration  proceeding
initiated in 2002 by Infored and Mr. Gutierrez against Grupo Radio Centro. Based
on a majority vote of two of the three arbitrators,  the ICC panel held that the
Company had breached the agreement with Infored and Mr. Gutierrez.  As a result,
the agreement has been  rescinded  and Infored and Mr.  Gutierrez  together have
been awarded Ps 236,133  (US$21,016) in damages which  represents the amount the
Company  would be required to pay after taking into account the amounts  prepaid
by the Company under the contract.  Although the Company intends to contest this
ruling,  a contingent  liability  has been recorded at December 31, 2003 and the
prepayment,  which at December  31, 2003 was Ps 104,572,  was written  off.  The
total  amount of both awards  stood at Ps  340,705,  which is  presented  in the
consolidated  statement  of loss  for the year  ended  December  31,  2003 as an
extraordinary item.

      The Company will appeal the  validity of the  decision  before the Mexican
courts. Pending this challenge,  the Company will seek a stay of the enforcement
of the damage award.

      In  addition,  news  programming  produced  by  Infored  and hosted by Mr.
Gutierrez has been  discontinued.  The Company now produces its news programming
on its own. The Company  believes  that any resulting  reduction in  advertising
revenue will be offset by a reduction in programming costs.

NOTE 11 Property and equipment

      As of December 31, 2003 and 2002,  the balances in property and  equipment
consisted of the following:


                                      F-19
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

<TABLE>
<CAPTION>
                                           Depreciation
                                            per annum            2003                2002
                                           -------------  ---------------   ------------------

<S>                                            <C>                <C>                  <C>
Buildings                                      2.22%      Ps      292,855    Ps        291,487
Transmission equipment                        11.87%              113,828              109,698
Studio equipment                              15.94%              114,323              113,925
Office furniture and equipment                16.48%               41,455               41,317
Computer equipment                            32.22%               58,563               56,394
Transportation equipment                      28.30%               32,795               33,310
Helicopters                                   18.18%               30,791               30,791
Leasehold improvements                         5.00%               11,099               11,085
                                                          ---------------    ------------------
                                                                  695,709              688,007

Less -- Accumulated depreciation                                 (380,868)           (352,113)
                                                          ---------------    -----------------
                                                                  314,841              335,894
Land                                                              127,249              127,249
Buildings held for sale, net                                       27,592               29,361
Equipment in transit                                                  210                3,436
                                                          ---------------    -----------------

                                                          Ps      469,892    Ps        495,940
                                                          ===============    =================
</TABLE>

      During 2003 and 2002,  Inmobiliaria  Radio Centro,  S.A. de C.V. (see Note
1e) rented to Maxcom part of the  building in which the main  executive  offices
and studios of the Company are located.  Rental  income for 2003,  2002 and 2001
amounted to Ps 220, Ps 218 and Ps 214, respectively.

      During the years  ended  December  31,  2003,  2002 and 2001,  the Company
reviewed the realizable  values of those buildings held for sale, and determined
that a reduction was required in their book values of Ps 1,407,  Ps 1,754 and Ps
1,428, respectively. These amounts have been recognized in other expenses in the
accompanying statements of income (see Note 22).

      On September 10, 2002,  the Company sold some of its obsolete fixed assets
for US$2,163, resulting in a gain on sale of Ps 9,039.

NOTE 12 Deferred charges

      As of  December  31,  2003 and 2002,  deferred  charges  consisted  of the
following:


                                      F-20
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

                                                    2003              2002
                                               -------------      -------------

      Systems development projects             Ps      5,597      Ps      5,597
      Installation expenses                            8,876              8,872
      Licenses and patents                             1,024              1,699
                                               -------------      -------------
                                                      15,497             16,168
      Less -- Accumulated amortization               (10,127)            (9,496)
                                               -------------      -------------

                                                       5,370              6,672
      Labor liabilities (see Note 18):

         Intangible assets                             7,021             11,752
                                               -------------      -------------

                                               Ps     12,391      Ps     18,424
                                               =============      =============

NOTE 13 Excess cost over net book value of net assets of subsidiaries

      The  Company   purchased  33%  and  67%  of  the  outstanding   shares  of
Radiodifusion  Red on May  12,  1995  and  January  9,  1996,  respectively.  On
September  30,  2001,  Grupo  Radio  Centro  sold  these  shares to  Desarrollos
Empresariales,  one of its  subsidiaries.  As a result  of these  purchases  and
sales,  the  Company  recorded  excess  cost over book  value of net  assets (or
goodwill)  amounting to Ps 424,750 (Ps 146,308 historical amount) and Ps 743,863
(Ps 313,101), respectively (see Note 9).

      On October 18, 1996, the Company acquired from related parties 100% of the
outstanding  shares  of  Compania  de  Servicios  Publicitarios,  S.A.  de  C.V.
(formerly  Fuerza Vital).  The purchase price was in excess of the book value of
net assets and  resulted  in  goodwill  recorded by the Company of Ps 24,431 (Ps
12,099 historical amount), which has been amortized.

      On February 16, 2001,  the Company  acquired To2 Mexico,  S.A. de C.V. and
recorded  goodwill  in the amount of Ps 17,184  (see Notes 1 and 24),  which was
amortized over two years from the date of acquisition.

      On December 31, 2001, the Company acquired Radio Sistema Mexicano, S.A. de
C.V.  and  recorded  goodwill  in the amount of Ps 52,654  (see Notes 1 and 23),
which is being amortized over 20 years from the date of acquisition.

      On March 14, 2001, the Company acquired Palco Deportivo.Com, S.A. de C.V.,
Palco Shop, S.A. de C.V.,  Palco Deportivo  Multimedia,  S.A. de C.V., and Palco
Deportivo  Mexico,  S.A. de C.V. On October 1, 2001, these companies were merged
with Enlaces  Troncales,  S.A. de C.V. On March 14, 2001,  the Company  acquired
Servicios  Corporativos  Palco,  S.A. de C.V.,  which was merged with Promo Red,
S.A.  de C.V.  on  October  1, 2001 (see  Notes 1 and 24).  As a result of these
acquisitions the Company  recorded  goodwill in an aggregate amount of Ps 43,951
(Ps 38,715 historical  amount),  which is being amortized over 20 years from the
date of acquisition.


                                      F-21
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

      At  December  31,  2003 and 2002,  the  Company  had total  goodwill of Ps
762,088 and Ps 841,603, respectively, which, except as otherwise noted above, is
being  amortized  over 20 years  from the date of  acquisition  of the  relevant
subsidiary.

NOTE 14 Notes payable

      At December 31, 2003 and 2002, notes payable consisted of the following:

                                                    2003                2002
                                                ------------      --------------
      Short-term:

      Scotiabank Inverlat, S.A.        (a)      Ps    56,618      Ps      82,928
      BBVA Bancomer, S.A.              (b)                --              69,696
      Banco Nacional de Mexico, S.A.   (c)                --              37,529
                                                ------------      --------------
                                                      56,618             190,153

      Long-term:

      Scotiabank Inverlat, S.A.        (a)           169,855             164,789
                                                ------------      --------------

                                                Ps   226,473      Ps     354,942
                                                ============      ==============

----------

Notes:

(a)   Represents  payment   obligations  under  a  loan  agreement  and  related
      promissory  note  initially in the amount of US$ 35,000 dated  October 31,
      2000.

      The loan agreement  contains  covenants  requiring the Company to maintain
      certain  financial  ratios and to comply with other  financial  conditions
      that, among other things,  limit the Company's ability to incur additional
      indebtedness, pay dividends, pledge its assets and enter into transactions
      with  affiliates  except  those  required  in  the  normal  course  of its
      operations.  Scotiabank  Inverlat  agreed to amend the financial  covenant
      requiring  that Company  maintain a certain ratio of total  liabilities to
      EBITDA (operating  income before deducting  depreciation and amortization)
      to increase the ratio permitted  through March 31, 2003. As a condition to
      the  granting  of the  waiver and the  amendment,  the  Company  agreed to
      convert US$ 13,600 of the amount outstanding under the loan agreement from
      U.S.  dollars into  Mexican  pesos,  to pay interest  equal to the Mexican
      Interbank  Equilibrium  Interest  Rate (Tasa de Interes  Interbancaria  de
      Equilibrio or TIIE) plus 2.00% on the converted portion of the loan and to
      not pay any dividends for so long as the Company is not in compliance with
      any of the financial covenants in the loan agreement as amended.

      On  December  10,  2002 the loan  agreement  was  amended to  convert  the
      denomination of the remaining  US$23,300 of the  outstanding  balance from
      U.S. dollars to Mexican pesos at a variable  interest rate of TIIE + 2.00%
      to 3.25%,  depending on certain financial ratios.  Principal  payments are
      due  semi-annually  beginning April 30, 2003 and interest payments are due
      quarterly.


                                      F-22
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

      On July 17, 2003,  the loan  agreement  was further  amended to extend the
      term of payment from October 31, 2005 to October 31, 2007.

      On December 3, 2003,  a new  amendment to the loan  agreement  was signed,
      establishing an increase of Ps 50,000 (historical amount) in the principal
      amount of the loan,  an interest  rate which is fixed  between  10.30% and
      11.55%  depending  on the  financial  indicator  of total  liabilities  to
      EBITDA,  the  payment of  principal  every six months  from April 30, 2004
      maturing on October 31, 2007 and the payment of interest quarterly.

      As of the date of this report,  as a result of recognizing a provision for
      the contingent  liability due to the  International  Chamber of Commerce's
      award of damages in the arbitration  proceeding brought by Infored and Mr.
      Gutierrez,  the Company was not in compliance with the financial  covenant
      to  maintain  a certain  ratio of total  liabilities  to EBITDA  and total
      liabilities to total  shareholders'  equity.  The Company has informed the
      bank of this  situation  and requested a waiver of its  non-compliance  of
      certain of these  financial  ratios (see Note 10). On June 15,  2004,  the
      Company obtained a waiver from Scotiabank  Inverlat solely and exclusively
      for non-compliance with the financial covenant to maintain a certain ratio
      of  total  liabilities  to total  shareholders'  equity  reflected  in the
      audited  financial   statements  for  2003  and  the  internal   financial
      statements  as of March 2004 as well as the maximum total  liabilities  to
      EBITDA for the internal financial statements as of March 2004. On June 29,
      2004, the Company reached an agreement with  Scotiabank  Inverlat in which
      the bank  temporarily  amends solely and exclusively the financial  ratios
      with which the Company has been in  noncompliance.  This agreement will be
      in force until December 31, 2004.

(b)   Represents  payment  obligations  under two  promissory  notes.  The first
      promissory  note, dated July 30, 2001, is in the amount of US$ 5,000 at an
      annual  interest rate equal to LIBOR + 0.97745%  (4.95% as at December 31,
      2001) and principal and interest  payable January 25, 2002. On January 25,
      2002, the maturity of the first  promissory  note was extended to July 24,
      2002 and the annual interest rate was decreased to annual interest rate to
      LIBOR + 1.06364%  (3.14% as at January 25,  2002).  On July 24, 2002,  the
      first  promissory  note was  extended  to January  17, 2003 and the annual
      interest  rate was  modified to LIBOR + 1.35%  (3.403% as of December  31,
      2002). The second  promissory note, dated April 5, 2002, was in the amount
      of US$ 700 with an annual  interest rate of LIBOR + 0.63135% and principal
      and interest  payable on August 2, 2002. On August 2, 2002, the promissory
      note was  increased  to US$  1,500 at an annual  interest  rate of LIBOR +
      1.1985% (3.50421% as of December 31, 2002).  Principal and interest on the
      second  promissory  note were payable on January 17, 2003.  On January 17,
      2003, both promissory notes were combined and their  maturities  extended.
      This  combined  promissory  note, in the amount of US$6,500 with an annual
      interest rate of 2.5%, was paid on May 19, 2003. On this date, the Company
      contracted a new short-term loan in the amount of Ps 50.0 million, bearing
      interest at an annual rate of 6.90%, scheduled to mature on July 17, 2003.
      On July 17, 2003, the  promissory  note was renewed at an interest rate of
      6.44%  maturing  on  September  12,  2003.  On that  September  date,  the
      promissory  note was  renewed at an  interest  rate of 5.95%  maturing  on
      October 31. On October 31, the promissory  note was renewed at an interest
      rate of 6.15%  maturing on November 28, 2003. On that date the  promissory
      note was renewed at an interest rate of 7.0% maturing on January 26, 2004.
      The promissory note was paid in full on December 3, 2003.


                                      F-23
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

(c)   Represents a payment  obligation  under a promissory  note dated March 19,
      2002, in the amount of US$ 3,500 with an annual interest rate of 3.58% and
      principal  and  interest  initially  payable on  September  13,  2002.  On
      September 13, 2002, the maturity date of the promissory  note was extended
      and its  annual  interest  rate  decreased  to 3.21%  with  principal  and
      interest  payable on November 12, 2002. On November 12, 2002, the maturity
      date of the  promissory  note was  extended  to January  10,  2003 and the
      annual  interest rate lowered to 3.20%.  On January 10, 2003, the maturity
      date of the promissory  note was extended and its annual interest rate was
      lowered to 2.78%.  The  principal  and  interest  were paid at maturity on
      March 11, 2003.

NOTE 15 Advances from customers

      Advances from customers amounted to Ps 59,657 and Ps 42,446 as of December
31, 2003 and 2002, respectively, representing deposits from customers for future
advertising.  These advances are recognized as income when the corresponding air
time is broadcast. For tax purposes,  income is recognized when the advances are
received.

      NOTE 16 Suppliers and other accounts payable

      At  December  31,  2003 and 2002,  suppliers  and other  accounts  payable
consisted of the following:

                                                   2003                2002
                                              -------------      ---------------

      Media and service suppliers             Ps     42,926      Ps       55,163
      Salaries and fees payable                       6,506                5,356
      Interest                                        1,815                2,912
      Employee profit sharing                           540                1,027
      Other                                           1,704                2,410
                                              -------------      ---------------

                                              Ps     53,491      Ps       66,868
                                              =============      ===============


                                      F-24
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

NOTE 17 Income taxes and other taxes payable

      At December  31, 2003 and 2002,  income tax and other taxes  payable  were
comprised of the following:

                                                  2003                2002
                                              -------------      ---------------

      Taxes on wages and salaries             Ps      5,043      Ps        5,890
      Value-added tax                                19,433                7,959
      Income tax                                      1,575                   --
                                              -------------      ---------------

                                              Ps     26,051      Ps       13,848
                                              =============      ===============

NOTE 18 Seniority premiums

      The Company  maintains a reserve to cover  seniority  premiums and pension
plan  liabilities.  This reserve was determined  through actuarial studies using
the projected  unitary cost method,  in accordance  with Bulletin D-3, issued by
the Mexican Institute of Public Accountants.


                                      F-25
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

      The  actuarial  calculations  as  of  December  31,  2003  and  2002,  are
summarized below:

<TABLE>
<CAPTION>
                                                                   2003                            2002
                                                --------------------------------------------   -------------
                                                                                                 Seniority
                                                 Seniority        Pension                       Premium and
                                                  premium          Plan           Total         pension plan
                                                ------------    ----------    -------------    -------------
<S>                                             <C>             <C>           <C>              <C>
Changes in projected-benefit liabilities
Projected-benefit liabilities at the
    beginning of the year                       Ps    26,877    Ps   1,087    Ps     27,964    Ps     22,344
Service cost                                           1,690            68            1,758            1,755
Interest cost                                            895            42              937              936
Actuarial gain                                        (2,187)          198           (1,989)           3,125
Benefits paid                                           (409)          (20)            (429)            (195)
                                                ------------    ----------    -------------    --------------
Projected-benefit liabilities at the end
  of the year                                   Ps    26,866    Ps   1,375    Ps     28,241    Ps     27,965
                                                ============    ==========    =============    =============

Assets of the plan                              Ps         0    Ps       0    Ps          0    Ps          0
                                                ============    ==========    =============    =============
Funded status                                   Ps   (26,866)   Ps  (1,375)   Ps    (28,241)   Ps    (27,965)
Unrecognized net actuarial loss                         (177)          407              230            2,714
Unrecognized prior service costs                       8,740            58            8,798           10,863
                                                ------------    ----------    -------------    -------------

Net accrued benefit obligation                  Ps   (18,303)   Ps    (910)   Ps    (19,213)   Ps    (14,388)
                                                ============    ==========    =============    =============

Accrued benefit obligation                      Ps    25,189    Ps   1,256    Ps     26,445    Ps     26,140
                                                ============    ==========    =============    =============

Additional liability (seniority premiums)       Ps     6,886    Ps     346    Ps      7,232    Ps     11,752
                                                ============    ==========    =============    =============

Intangible assets (see Note 12)                 Ps     6,834    Ps     187    Ps      7,021    Ps     11,752
                                                ============    ==========    =============    =============

Total labor liabilities                         Ps    25,189    Ps   1,256    Ps     26,445    Ps     26,168
                                                ============    ==========    =============    =============
</TABLE>

Weighted-average assumptions at December 31,

<TABLE>
<CAPTION>
                                                                          2003                  2002
                                                               ------------------------     --------------
                                                               Seniority        Pension        Seniority
                                                                Premium           Plan          Premium
                                                               ---------        -------     --------------

<S>                                                              <C>             <C>        <C>
Discount rate (real rates)                                       4.00%           4.00%      4.00%
Increase in compensation rates (real rates)                      1.00%           1.00%      1.00%
Amortization period of the transition liability (years)          3.09            17.03      5.08 and 14.99
</TABLE>


                                      F-26
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

Components of net cost of benefits for the year

<TABLE>
<CAPTION>
                                                             2003                             2002
                                         ---------------------------------------------     ------------
                                            Seniority        Pension                        Seniority
                                             premium          Plan           Total           Premium
                                         ---------------  -----------     ------------     ------------

<S>                                               <C>              <C>           <C>              <C>
Service cost                             Ps       1,690   Ps       68     Ps     1,758     Ps     1,758
Interest cost                                       895            42              937              937
Amortization of prior service cost                2,585            17            2,602            2,603
                                         --------------   -----------     ------------     ------------

Net cost for the year                    Ps       5,170   Ps      127     Ps     5,297     Ps     5,298
                                         ==============   ===========     ============     ============
</TABLE>

NOTE 19 Shareholders' equity

      The  shareholders  of the Company  approved the  following  changes in the
Company's capital structure during 2003 and 2002:

      During 2003:

      a)    Payment  of  dividends  totaling  Ps 56,433  (Ps  55,000  historical
            amount).

      b)    Repurchase  from the public  market of 57,000  shares,  representing
            0.03% of  outstanding  shares and totaling Ps 370 (Ps 360 historical
            amount).

      During 2002:

      a)    Repurchase from the public market of 1,230,400 shares,  representing
            0.7%  of  outstanding   shares  and  totaling  Ps  4,951  (Ps  4,576
            historical amount).

      After the  aforementioned  changes,  as of December 31, 2003,  the capital
stock of the Company was  comprised of  247,414,768  authorized  common  shares,
representing  the minimum  fixed  capital with no  withdrawal  rights,  of which
162,667,561  shares were  outstanding  and fully paid for and 84,747,207  shares
were treasury  shares.  Shares of stock may be owned only by Mexican  investors.
Capital stock is represented by shares with no par value, and valued as follows:

                                                                Amount Shares
                                                              -----------------

Total authorized capital stock                                      247,414,768
Treasury shares                                                     (84,747,207)
                                                              -----------------

Total outstanding capital stock                                     162,667,561
                                                              =================
Fixed capital stock, subscribed to and paid for               Ps        840,823
Increase from restatement to express in constant
   Mexican pesos with purchasing power as of
   December 31, 2003                                                    231,018
                                                              -----------------

                                                              Ps      1,071,841
                                                              =================


                                      F-27
<PAGE>


                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

The changes in the number of  outstanding  shares as of ended  December 31, 2003
and 2003, were as follows:

<TABLE>
<CAPTION>
                                                                         2003                  2002
                                                                  -----------------      ----------------

<S>                                                                     <C>                   <C>
Shares outstanding at the beginning of the year                         162,724,561           163,954,961
                                                                  =================      ================

Shares outstanding at the end of the year                               162,667,561           162,724,561
                                                                  =================      ================

Capital stock at the end of the year,  expressed in
  constant  Mexican pesos with purchasing power as
  of December 31, 2003                                            Ps      1,071,841      Ps     1,072,142
                                                                  =================      ================
</TABLE>

      Net income for the year is subject to a legal  requirement that 5% thereof
be  transferred to a legal reserve each year until the reserve equals 20% of the
capital  stock.  The legal reserve  included as part of retained  earnings as of
December 31, 2003 and 2002, was Ps 23,172 and Ps 23,061, respectively.

      If earnings for which no corporate tax has been paid are distributed,  the
Company must pay corporate tax on such  earnings  upon the  distribution  of the
dividends (see  discussion of CUFIN and CUFINRE in Note 20). In accordance  with
the new Mexican  Income Tax Law, the statutory  income tax rate was 35% for 2002
and 34% for 2003. However this rate will change to 33% for 2004 and 32% for 2005
and subsequent years.

NOTE 20 Income taxes

      Taxable  income  differs  from  accounting  income  due both to  permanent
differences,  principally  among  which  are  the  treatment  of  non-deductible
expenses  (primarily for goodwill) and the reflection in the income statement of
the effects of inflation,  and to timing  differences  affecting  accounting and
taxable income in different periods.

      A  reconciliation  of the statutory rate to the effective  income tax rate
for the years ending December 31, 2003 and 2002 is as follows:

                                                         2003       2002
                                                       --------  ---------

Statutory tax rate                                      (34.0%)     35.0%
Recognition of the effects of inflation                    1%       50.2%
Nondeductible expenses (primarily goodwill)              37.5%     392.4%
Utilization of tax loss carryforwards                   (17.0%)   (615.6%)
                                                       --------  --------

Effective income tax (benefit) rate                     (12.6%)   (138.0%)
                                                       ========  =========


                                      F-28
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

      Provisions for income tax and employee profit sharing for the years ending
December 31, 2003 and 2002 were as follows:

                                                    2003             2002
                                               ------------      ------------

Current income tax payable                     Ps   64,920       Ps   32,215
Tax on assets                                        3,500             2,245
Amortization of tax loss carryforwards             (48,120)          (29,538)
Deferred income tax benefit                        (55,773)          (13,464)
                                               -----------       -----------

Total income tax (benefit)                         (35,473)           (8,542)
                                               -----------       -----------

Current employee profit sharing                        440               762
Deferred employee profit sharing                      (854)             (674)
                                               -----------       -----------

      Total employee profit sharing                   (414)               88
                                               -----------       -----------

                Total                          Ps  (35,887)      Ps   (8,454)
                                               ===========       ===========

      Beginning in 1999,  determination of the  consolidated  income tax for the
Mexican  companies  took into account a maximum of 60% of the taxable  income or
loss of each of the subsidiaries.  In addition,  commencing in 1999, the taxable
income of those subsidiaries that have tax loss  carryforwards  generated before
1999 have been included in proportion to the Company's  equity ownership of such
subsidiaries  at the end of the  period.  The  controlling  entity  which in any
fiscal year prior to January 1, 1999 had individual tax losses  generated during
consolidation  for tax purposes and pending  deduction  and deducted them in any
fiscal  year to  determine  its  consolidated  taxable  profit or tax loss shall
determine their consolidated taxable income in fiscal years concluded as of 2002
by adding 100% of its taxable profits until said tax losses at the  company-held
level are exhausted.

      The  current  income tax  liability  corresponds  to the tax on 40% of the
taxable  income of the  subsidiaries  that is not subject to  consolidation  for
income tax purposes and excluded from any operating loss  carryforward  benefits
available at the consolidated level.

      Beginning  in 2002,  a new  income  tax law  became  effective  in Mexico,
establishing  that the  income  tax rate will be  decreased  from 35% by 1% each
year, beginning in 2003 until it reaches 32% in 2005.

      Grupo Radio Centro  elected early to adopt the provisions of Bulletin D-4,
issued  by  the  Mexican  Institute  of  Public   Accountants,   which  requires
recognizing  the income tax  effects of the  differences  in bases of assets and
liabilities  between  financial  accounting  and  accounting  for tax  reporting
purposes.

      In  prior  years  through  December  31,  1998,  Grupo  Radio  Centro  had
recognized the effects of deferred taxes for certain timing differences expected
to reverse  over a definite  period of time.  The  Company's  early  adoption of
Bulletin D-4 gave rise to additional  deferred taxes resulting in a net deferred
tax expense of Ps 3,190 recognized in the statement of income for the year ended


                                      F-29
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

December  31, 1999.  The  cumulative  effect of adopting  Bulletin D-4 for years
prior to December 31, 1998 resulted in additional deferred tax liabilities of Ps
89,614 to be  recognized.  The  cumulative  effects of deferred  income tax from
companies acquired during 2002 and 2001 was (Ps 59) and (Ps 924),  respectively.
This  cumulative  effect as of  December  31,  2003 stands at (Ps 90,597) and is
presented as a separate component in shareholders' equity.

      The balance of deferred  taxes as of December 31, 2003 and 2002,  consists
of the following components:

                                                 2003             2002
                                             -----------      -----------

Prepaid expenses for Infored services        Ps       --      Ps  (41,881)
Property and equipment                           (76,898)         (78,767)
Advances from customers                           19,687           14,431
Labor liabilities                                 12,716           11,416
Tax loss carryforwards                            16,742            8,568
Other                                                387            2,240
                                             -----------      -----------
Net deferred tax  liability                  Ps  (27,366)     Ps  (83,993)
                                             ===========      ===========

      Income  taxes  and  employee  profit  sharing  are  calculated  using  the
liability method which requires  recognizing deferred tax assets and liabilities
based on  differences  in bases of  assets  and  liabilities  between  financial
accounting and accounting  for tax reporting  purposes.  The current tax rate is
used to determine the deferred tax assets and liabilities.

      In accordance  with Mexico's  Income Tax Law, tax loss  carryforwards  are
subject to  restatement  for inflation and may be used to offset  taxable income
over the ten years  following  their  generation.  As of December 31, 2003,  the
Company's restated cumulative tax loss carryforwards were as follows:

      Fiscal year
        incurred                     Amount                      Expiration year
      -----------               -------------------              ---------------
         1994                   Ps         2,716                      2004
         1995                              5,801                      2005
         1996                              1,724                      2006
         1997                                  5                      2007
         1998                              2,040                      2008
         1999                                269                      2009
         2000                                567                      2010
         2001                                455                      2011
         2002                              7,090                      2012
         2003                                933                      2013
                                ----------------
                                Ps       21,6000
                                ================

      The Company is authorized to  consolidate  for tax purposes its subsidiary
companies;  as of December 31, 2003 the Company has the  following  consolidated
tax loss carryforwards:


                                      F-30
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

      Fiscal year
        incurred                     Amount                      Expiration year
      -----------             ------------------                 ---------------
         2001                 Ps          53,633                      2011
         2002                                202                      2012
                              ------------------
                              Ps         53,835
                              ==================

      In  accordance  with Mexico's  Income Tax Law, if, in any given year,  the
Company  pays an amount of tax on assets in excess of the  amount of income  tax
payable, this excess may be used to offset income taxes payable in excess of tax
on assets  payable in any of the ten years  following  such year. As of December
31,  2003,  the excess of tax on assets  paid over income  taxes  payable was as
follows:

      Fiscal year
        incurred                    Amount                       Expiration year
      -----------             ------------------                 ---------------
         1994                 Ps           5,864                      2004
         1995                              2,943                      2005
         1996                              1,612                      2006
         1997                                505                      2007
                              ------------------
                              Ps          10,924
                              ==================

      During 2003, the Company amortized Ps 110,035 of tax loss carryforwards in
consolidation, resulting from the period ended December 31, 2001.

      During 2002,  the Company  offset its taxable income by utilizing tax loss
carryforwards in the amount of Ps 76,604  (historical  amounts) from GRC Medios,
S.A. de C.V. and Ps 99 from Radio Sistema Mexicano, S.A. de C.V.

      In 2001,  the Company  offset its  taxable  income by  utilizing  tax loss
carryforwards in the amounts of Ps 5,488 from Palco Deportivo  Multimedia,  S.A.
de C.V.,  Ps 10,162 from Palco  Deportivo  Mexico,  S.A. de C.V.,  Ps 1,270 from
Palco Deportivo.Com, S.A. de C.V. and Ps 58,765 from GRC Medios, S.A. de C.V. In
addition,  in 2001, the Company had a tax deduction of Ps 159,805 as a result of
the tax loss  incurred in the sale of its shares of  Radiodifusion  Red, S.A. de
C.V. (see Note 9).

      The net fiscal profit  account for tax purposes  (the "CUFIN")  represents
the amount of accumulated  earnings that may be distributed  without  additional
corporate  tax charge to the  Company.  As of December  31,  2003,  this account
amounted to Ps 224,278.

      The reinvested net fiscal profit account for tax purposes (the  "CUFINRE")
represents the amount of accumulated  earnings which, when distributed,  will be
subject to the  payment of  additional  income tax by the  Company  (at rates of
approximately  5% multiplied by a factor of 1.5385 on amounts earned in 2000 and
3% multiplied by a factor of 1.5385 on amounts earned in 1999),  until such time
as  the  total  additional  income  tax  equals  35%  of  the  taxable  earnings
corresponding to the year of generation.  As of December 31, 2003 and 2002, this
account amounted to Ps 0.


                                      F-31
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

      As of December 31, 2003, capital stock,  restated for tax purposes,  which
constituted the capital contributions account, amounted to Ps 1,093,498.

NOTE 21 Provisions for senior management bonuses

      The  Company  has a policy of  awarding  bonuses to its senior  executives
based on, among other factors,  the results of the Company's  annual  operations
and individual performance. For the year ended December 31, 2003, provisions for
senior  management  bonuses were Ps 6,306 and are recorded in general  corporate
and administrative expenses. For the year ended December 31, 2002, there were no
provisions for senior management bonuses made.


                                      F-32
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

NOTE 22 Other expenses, net

      The components of other expenses, net, during the years ended December 31,
2003, 2002 and 2001 were as follows:

<TABLE>
<CAPTION>
                                                               2003                2002               2001
                                                        ------------------   ----------------   -----------------
<S>                                                                  <C>                <C>                <C>
Income:
Other                                                   Ps           1,386   Ps         4,677   Ps         4,136
Sale of surplus broadcasting supplies  to
  affiliates of Organizacion de Impulsora de Radio                     178              1,916              1,581
Leasing and maintenance of properties                                  276                275                299
Sale of equipment                                                       --              7,046                 --
                                                        ------------------   -----------------  ----------------

                Total other income                                   1,840             13,914              6,016
                                                        ------------------   -----------------  ----------------
Expenses:
Fees to Executive Committee                                        (17,016)           (15,871)           (16,142)
Maintenance and leasing costs                                      (10,989)           (10,761)           (10,747)
Arbitration costs                                  (c)             (10,322)            (6,216)                 --
Compliance with securities regulations and
  corporate restructuring expenses                                  (9,384)            (6,830)             (8,077)
Other                                                               (4,366)            (4,057)            (8,434)
Losses incurred by affiliated start-up Internet
companies                                          (a)              (4,299)           (17,102)           (25,218)
Indemnities to employees                           (b)              (3,919)                --             (4,701)
Write-off of tax credits                                            (2,904)                --                  --
Loss on sale of equipment                                           (1,718)                --               (301)
Internet subscription                                               (1,498)            (1,729)            (3,841)
Reduction in book value of buildings held for
  sale (see Note 12)                                                (1,407)            (1,754)            (1,428)
Donation                                                                --             (2,081)                 --
Cancellation of projects                                                --                 --             (3,120)
                                                        ------------------   ----------------   ----------------

               Total other expenses                                (67,822)           (66,401)           (82,009)
                                                        ------------------   ----------------   ----------------

                Net other expenses                      Ps         (65,982)  Ps       (52,487)  Ps       (75,993)
                                                        ==================   ================   ================
</TABLE>

----------

Notes:

(a)   During  2001,  the Company  acquired  To2 Mexico,  S.A. de C.V., a company
      owning the Internet website www.to2.com, and Palco Deportivo.Com,  S.A. de
      C.V., a company owning the Internet  website  www.palcodeportivo.com  (see
      Note 24). In 2003,  2002 and 2001,  these  companies  and certain  related
      companies owned by the Company  incurred losses of Ps 4,299, Ps 17,102 and
      Ps 25,218, respectively.


                                      F-33
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

(b)   In recent years the Company  restructured and downsized its administrative
      and operating departments,  with a consequent reduction in personnel. This
      resulted in severance payments, which were charged to other expenses.

(c)   In 2003 and 2002, the Company paid legal fees for arbitration commenced by
      Infored and Mr. Gutierrez in May 2002.

NOTE 23 XEN-AM agreement

      On  March  31,  2001,   the  Company   entered  into  two   agreements  in
contemplation of its acquisition of Radio Sistema Mexicano,  S.A.  ("RSM"),  the
owner of the concession for the radio station XEN-AM.

      Pursuant to an operating  agreement entered into with La Telera Post, S.A.
de C.V.,  the Company  agreed to manage and operate  XEN-AM.  To  guarantee  the
performance of its obligations under the operating  agreement,  the Company paid
to the Sellers (as defined below), on behalf of La Telera Post, a deposit of US$
3,500,  from which a monthly  fee of US$ 80 was  deducted  and paid to La Telera
Post.

      Pursuant to a stock purchase  agreement entered into with Teresa Guadalupe
Vale  Castilla,   Javier  Vale  Castilla  and  Juan  Antonio  Hernandez  Venegas
(together,  the  "Sellers"),   the  Company  agreed  to  purchase,  through  its
subsidiary Desarrollos Empresariales,  S.A. de C.V., all of the capital stock of
RSM on March 1, 2002,  subject  to the  approvals  of the  Mexican  Ministry  of
Communication  and  Transport  and the  Federal  Competition  Commission,  for a
purchase price of  approximately  US$ 3,400. To guarantee its performance  under
the stock purchase agreement, the Company agreed to make monthly deposits of US$
167 up to the  closing  date,  which  amounts  would be applied to the  purchase
price.

      The  agreements  provided that, on the closing date, the Company would use
approximately  US$ 1,630 of the deposit under the operating  agreement to pay La
Telera Post primarily in connection with the termination of a marketing services
contract  between La Telera  Post and RSM (US$  1,100) and  facilitation  of the
transaction  (US$ 530),  and would pay the  remaining  balance  of the  deposit,
together with US$ 500 in cash, to the Sellers in  satisfaction of the balance of
the purchase  price after  application  of the deposits under the stock purchase
agreement.


                                      F-34
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

      On July 12, 2001, the Federal Competition Commission approved the purchase
of RSM by the Company,  and on December 31, 2001,  the parties  consummated  the
transaction. Upon consummation of the transaction, the Company credited US$1,630
of the deposit  under the  operating  agreement  to La Telera Post as  described
above.  As of December 31,  2001,  Ps 11,873 was  liquidated  during 2002 by the
Company to the Sellers,  including  the  remaining  deposits  under the purchase
agreement to be credited  against the  purchase  price and US$ 500 in cash to be
paid in  satisfaction  of the  balance of the  purchase  price.  This  amount is
accounted  for under  Suppliers  and other  accounts  payable (See Note 17). The
purchase of RSM by the Company  remains  subject to the  approval of the Mexican
Ministry of Communication and Transport.

NOTE 24 Investments in Palco Deportivo and To2 Mexico

Palco Deportivo

      On March 14, 2001 the Company acquired Palco  Deportivo.Com,  S.A. de C.V.
(which was merged with  Enlaces  Troncales,  S.A. de C.V. on October 1, 2001,  a
company providing  sports-related content for radio,  television,  various print
media  and its own  Internet  portal  (see  Note 1)).  In  connection  with this
acquisition,  the  Company  paid a  purchase  price  of US$  4,000  and  assumed
liabilities of US$ 700.

      Also on  March  14,  2001,  in  connection  with  its  purchase  of  Palco
Deportivo.Com,  the Company acquired Servicios  Corporativos Palco, S.A. de C.V.
(which was merged with Promo Red,  S.A. de C.V. on October 2, 2001 (see Note 1))
and  assumed an  exclusive  employment  contract  with  Alfredo  Dominguez  Muro
providing that he will continue to be host of Palco Deportivo radio  programming
through 2015.

To2 Mexico

      On February 16, 2001, the Company  purchased from Polom, S.A. de C.V. 100%
of the shares of To2 Mexico,  S.A. de C.V., an Internet portal company and owner
of the website  www.to2.com.  In connection with this  acquisition,  the Company
paid a  purchase  price of US$ 900 and  assumed  liabilities  owing  to  various
Mexican and foreign companies in an aggregate amount of up to US$ 1,250.

      As of March 26, 2001, GRC Medios,  S.A. de C.V. had Ps 155,985 (Ps 139,681
historical amount) of tax loss carryforwards that could be used to offset future
taxable income of the Company on its consolidated tax return.


                                      F-35
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

NOTE 25 Significant differences between Mexican and US GAAP

      The  financial  statements  of the Company are  presented  on the basis of
accounting principles generally accepted in Mexico ("Mexican GAAP").

      Except for  inflation  accounting,  Mexican  GAAP are,  in general  terms,
similar to generally  accepted  accounting  principles in the United States ("US
GAAP"). However, there are other areas in which Mexican accounting standards and
practices differ from the requirements of US GAAP.

      The major differences between Mexican and US GAAP are as follows:

Recognition of the effects of inflation on financial information:

      The  provisions  of  Bulletin  B-10  and its  amendments  relating  to the
recognition  of the  effects  of  inflation  on  financial  information  have no
counterpart  under US GAAP.  However,  as Mexican  GAAP  includes the effects of
inflation in the primary  financial  statements,  the US Securities and Exchange
Commission  does not require the reversal of the  restatement  of the  financial
statements recognizing the effects of inflation.

Deferred income taxes:

      In 1999,  the Company  elected  early to adopt the  provisions of Bulletin
D-4,  issued by the Mexican  Institute  of Public  Accountants,  which  requires
recognizing  the income tax  effects of the  differences  in bases of assets and
liabilities for financial  accounting and accounting for tax reporting purposes,
similar to US GAAP.

      As under US GAAP, the Company recognized deferred taxes in prior years for
Mexican GAAP  purposes for certain  timing  differences,  such as advances  from
customers  and certain  prepaid  expenses,  expected to reverse  over a definite
period of time (see Note 20).

      As a result of the Company's early adoption of Bulletin D-4 in 1999, there
were no differences  related to deferred taxes that had to be reconciled between
Mexican  and US GAAP  for  financial  statement  purposes  for the  years  ended
December  31, 2003 and 2002,  except for the  balance  sheet  classification  of
deferred taxes, under US GAAP, as current and non-current.

      Mexican GAAP requires  that all deferred  taxes be classified as long term
on the balance  sheet;  however,  under US GAAP,  balances of deferred taxes are
classified as either current or non-current,  based on the classification of the
related asset or liability for financial  reporting.  An analysis of the balance
of deferred taxes in accordance  with US GAAP, as of December 31, 2003 and 2002,
is as follows:

<TABLE>
<CAPTION>
                                        2003              2003              2002                 2002
                                   -------------     -------------     --------------      --------------
<S>                                  <C>                    <C>          <C>                       <C>
Current deferred tax:
  Advances from customers          US$     1,751     Ps     19,687     US$      1,331      Ps      14,431
  Tax loss carryforwards                   1,489            16,742
  Other reserves                              34               387                207               2,240
  Prepaid expenses for Infored
    services                                 --               --                 (309)             (3,350)
                                   -------------     -------------     --------------      --------------
  Net current deferred asset               3,274            36,816              1,229              13,321
Non-current deferred tax
  Liability:
  Long-term
  Tax loss carryforwards                     --               --                  790               8,569
  Prepaid expenses and labor
    liabilities                            1,131            12,716             (2,501)            (27,115)
  Property and equipment, net             (6,840)          (76,898)            (7,266)            (78,767)
                                   -------------     -------------     --------------      --------------
  Net long-term deferred tax
    liability                      US$    (2,435)    Ps    (27,366)    US$     (7,748)     Ps     (83,992)
                                   =============     =============     ==============      ==============
</TABLE>


                                      F-36
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

Statement of changes in financial position:

      Under  Mexican  GAAP,  the  Company  presents  statements  of  changes  in
financial  position in constant Mexican pesos. This presentation  identifies the
generation  and  application  of  resources  resulting  in  differences  between
beginning and ending financial statement balances in constant Mexican pesos.

      The changes in the consolidated  financial  statement balances included in
this statement  constitute  cash-flow  activity stated in constant Mexican pesos
(including  monetary  gains,  which are  considered  cash gains in the financial
statements presented in constant Mexican pesos).

      In accordance  with Mexican  GAAP,  the reduction in current and long-term
debt due to  restatement  in constant  Mexican  pesos is presented as a resource
applied  to  financing  activities,  and the  gain  from  monetary  position  is
presented as a component of operating  activities.  SFAS No. 95,  "Statement  of
Cash Flows,"  under US GAAP however,  does not provide  guidance with respect to
inflation-adjusted  financial statements. If the gain from net monetary position
were treated as a component of financing activities for US GAAP purposes,  funds
provided by operating and financing activities would be as follows:

<TABLE>
<CAPTION>
                                                2003                   2003                2002                2001
                                             -----------           ------------        ------------        ------------
<S>                                          <C>                   <C>                <C>                  <C>
Operating activities:
Resources provided by operations, per
   Mexican GAAP                              US$    19,734         Ps   221,795        Ps    40,213        Ps   155,058
Less-- gain on monetary position on
  current and long-term debt                          (987)             (11,095)            (21,403)            (19,192)
                                             -------------         ---------------     ------------        ------------
Resources provided by operations, per
   US GAAP                                   US$    18,747         Ps   210,700        Ps    18,810        Ps   135,866
                                             =============         ============        ============        ============
Financing activities:
Resources applied to financing
  activities, per Mexican
  GAAP                                        US$  (16,483)        Ps  (185,272)         Ps (64,261)       Ps  (100,744)
Plus-- gain on monetary  position on
  current and long-term debt                           987               11,095              21,403              19,192
                                             -------------         ------------        ------------        ------------


Resources applied to financing
  activities, per US GAAP                     US$  (15,496)        Ps  (174,177)       Ps   (42,858)       Ps   (81,552)
                                             =============         ============        ============        ============

Supplemental cash-flow information:
  Interest paid                              US$     2,508         Ps    28,195        Ps    19,924        Ps    30,542
                                             =============         ============        ============        ============

  Taxes paid                                 US$     1,509         Ps    16,966        Ps    12,276        Ps    51,617
                                             =============         ============        ============        ============
</TABLE>


                                      F-37
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

Personnel compensation and seniority premiums:

      Under Mexican GAAP,  vacation expense is recognized when taken rather than
in the period it is earned by the employee, as is required under US GAAP.

      The  Company is  required  under the  Mexican  Labor Law to pay  seniority
premiums to certain employees upon termination of employment. Beginning in 2000,
the Company  established  a pension plan for  unionized  personnel.  The Company
determines  its  liabilities  with respect to such benefits based upon actuarial
studies,  which  is  similar  to the US  GAAP  criteria  of SFAS  87,  "Employee
Accounting for Pensions".

Minority interest:

      Under Mexican GAAP, the minority interest in subsidiaries must be included
as a component of  shareholders'  equity.  In accordance with US GAAP,  minority
interest in  subsidiaries  is generally  shown below  liabilities on the balance
sheet.

Goodwill:

      Under  Mexican and US GAAP,  the excess of cost over net fair value of the
net  assets in  subsidiaries  acquired  is  recognized  as an  intangible  asset
("goodwill").  Under US GAAP,  however,  goodwill  arising from  entities  under
common  control  is not  recognizable.  In  addition,  under US GAAP,  effective
January 1,  2002,  goodwill  is no longer  amortized  but  instead is tested for
impairment at least annually.  For Mexican GAAP purposes,  goodwill is amortized
based  on  the  estimated   useful  lives  of  the  assets   calculated  on  the
straight-line  method. It also establishes,  among other things,  new principles
for the calculation and recognition of impairment  losses for long-lived  assets
and including any subsequent reversals of such impairment losses.

      Under U.S.  GAAP,  in  accordance  with the  requirements  of FAS 142, the
Company  performed an analysis for impairment of its goodwill as of December 31,
2003  resulting in an impairment  charge of Ps 152,491;  there was no impairment
charge required under Mexican GAAP.


                                      F-38
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

Other expenses, net:

      Under Mexican GAAP,  certain net expenses are classified as  non-operating
on the Company's statement of income.  Under US GAAP, some of these net expenses
are classified as operating expenses.

      In  addition,  for  the  year  ended  December  31,  2003,  the  Company's
extraordinary item relating to the provisions for contingent  arbitration losses
is classified as a  non-operating  charge to earnings under Mexican GAAP whereas
for U.S. GAAP reporting  purposes,  this represents an operating  charge against
the Company's earnings.

Convenience statements:

      The 2002 US dollar  amounts  (denoted  by the symbol  "US$")  shown in the
financial statements have been included solely for the convenience of the reader
and were  translated  at the rate of Ps  11.24/US$1.00,  the noon buying rate of
Mexican pesos on December 31, 2003, as published by the Federal  Reserve Bank of
New York. Such translation should not be construed as a representation  that the
Mexican peso amounts have been or could be converted  into US dollars at this or
any other rate.

      The  following  is a summary of the  estimated  adjustments  to net income
(loss) and  shareholders'  equity that would have been  required had the Company
applied US GAAP instead of Mexican GAAP:


                                      F-39
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

<TABLE>
<CAPTION>
                                           2003             2003             2002            2001
                                       ------------     ------------     -----------     -----------
<S>                                      <C>                <C>                <C>            <C>
Net (loss) income, as recorded
  under Mexican GAAP                   US$  (21,865)    Ps  (245,795)    Ps    2,271     Ps   18,470
US GAAP adjustments:
 Amortization of goodwill
  arising from entities under
  common control                                141            1,585           1,585           1,585
 Amortization of goodwill                     6,933           77,930          72,372            --
 Goodwill impairment                        (13,569)        (152,491)           --              --
 Minority interest                               (1)              (6)            (14)            (17)
                                       ------------     ------------     -----------     -----------
Net (loss) income under US GAAP        US$  (28,361)    Ps  (318,777)    Ps    76,214    Ps   20,038
                                       ============     ============     ===========     ===========
Net (loss) income per share (basic
  and diluted) under US GAAP           US$    (0.17)    Ps     (1.96)    Ps     0.46     Ps     0.12
                                       ============     ============     =======-===     ===========
Average common shares outstanding
  (000's)                                   162,722          162,722         163,235         163,918
                                       ============     ============     ===========     ===========
</TABLE>

If SFAS No. 142 had been in effect  prior to January 1, 2002,  our  reported net
income,  net  income  per  share and  shareholders'  equity  would  have been as
follows:

<TABLE>
<CAPTION>
                                           2003             2003             2002              2001
                                       ------------     ------------     -------------    -------------
<S>                                      <C>                <C>                 <C>              <C>
Net (loss) income under US GAAP:       US$  (28,361)    Ps  (318,777)    Ps     76,214    Ps     20,037
  Goodwill amortization                        --               --               --              76,870
                                       ------------     ------------     -------------    -------------
  Adjusted                             US$  (28,361)    Ps  (318,777)    Ps     76,214    Ps     96,907
                                       ============     ============     =============    =============

  Net (loss) income per share under
    US GAAP:                           US$    (0.17)    Ps     (1.96)    Ps       0.46    Ps       0.12
  Effect of goodwill amortization
                                               --              --                --                0.47
                                       ------------     ------------     -------------    -------------
  Adjusted                             US$    (0.17)    Ps     (1.96)    Ps       0.46    Ps       0.59
                                       ============     ============     =============    =============

Shareholders' equity under Mexican     US$   79,869     Ps   897,720     Ps  1,200,486    Ps  1,204,010
  GAAP
US GAAP adjustments:
  Goodwill arising from entities
    under common control                     (1,598)         (17,966)          (19,551)         (21,136)
  Amortization of goodwill                   13,372          150,302            72,372            --
  Goodwill impairment                       (13,569)        (152,491)
  Minority interest                             (45)            (507)             (501)            (487)
                                       ------------     ------------     -------------    -------------
                                             (1,840)         (20,662)           52,320          (21,623)
                                       ------------     ------------     -------------    -------------
Shareholders' equity under
     US GAAP                           US$   78,029     Ps   877,058     Ps  1,252,806    Ps  1,182,387
                                       ============     ============     =============    =============

  Shareholders' equity under US GAAP   US$   78,029     Ps   877,058     Ps  1,252,806    Ps  1,182,387
  Goodwill amortization                        --               --                --             76,870
                                       ------------     ------------     -------------    -------------
  Adjusted                             US$   78,029     Ps   877,058     Ps  1,252,806    Ps  1,259,257
                                       ============     ============     =============    =============
</TABLE>


                                      F-40
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

      In the  income  statement,  employee  profit  sharing is  classified  as a
component  of the tax  provisions  and certain net expenses  are  classified  as
non-operating  under Mexican GAAP. Under US GAAP, these items should be included
or  excluded  as  operating  expenses,   as  applicable.   The  following  is  a
reconciliation of operating income:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                                 2003               2003              2002              2001
---------------------------------------------------------------------------------------------------------------
<S>                                          <C>               <C>                <C>             <C>
 Operating (loss) income under Mexican
   GAAP                                      US$    14,059     Ps     157,903     Ps     99,514    Ps   101,058
---------------------------------------------------------------------------------------------------------------
  Amortization of goodwill
  arising from entities
  under common control                                 141              1,585             1,585           1,585
---------------------------------------------------------------------------------------------------------------

  Other expenses, net                               (5,870)           (65,982)          (52,487)          --
---------------------------------------------------------------------------------------------------------------
  Provisions for contingent
  arbitration losses                               (30,322)          (340,705)            --              --
---------------------------------------------------------------------------------------------------------------

  Amortization of other goodwill                     6,933             77,930            72,372           --
---------------------------------------------------------------------------------------------------------------
  Goodwill impairment                              (13,569)          (152,491)            --              --
---------------------------------------------------------------------------------------------------------------
  Employee profit sharing                               37                414               (88)           (211)
---------------------------------------------------------------------------------------------------------------

 Operating (loss) income under US GAAP        US$ (28,591)     Ps   (321,346)     Ps    120,896    Ps   102,432
---------------------------------------------------------------------------------------------------------------
</TABLE>

If SFAS No.  142 had been in effect  prior to January  1,  2002,  our  operating
income would have been as follows:


<TABLE>
<CAPTION>
                                        2003              2003             2002            2001
                                   --------------    -------------    -------------   -------------
<S>                                  <C>                  <C>               <C>             <C>
Operating (loss) income
  under US GAAP:                   US$    (28,591)   Ps   (321,346)   Ps    120,896   Ps    102,432

  Goodwill amortization                     --               --               --             76,870
                                   --------------    -------------    -------------   -------------
  Adjusted                         US$    (28,591)   Ps   (321,346)   Ps    120,896   Ps    179,302
                                   ==============    =============    =============   =============
</TABLE>

      The basic net (loss)  income per common  share is computed by dividing the
net income  (loss)  available to common  shareholders  by the  weighted  average
number of common shares outstanding.

      Diluted net (loss) income per common share is computed by dividing the net
(loss) income available to common shareholders, adjusted on an "as if" converted
basis,  by the  weighted  average  number  of  common  shares  outstanding  plus
potential dilutive securities.

      For the years  ended  December  31,  2003,  2002 and 2001,  there  were no
outstanding potential dilutive securities of the Company.


                                      F-41
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

Effect of recently issued Accounting Standards:

      In July 2001, the FASB issued Statement of Financial  Accounting  Standard
No.  141  (SFAS  141),  "Business  Combinations,"  and  Statement  of  Financial
Accounting  Standard No. 142, "Goodwill and Other Intangible Assets" (SFAS 142).
SFAS 141  requires  that  the  purchase  method  of  accounting  be used for all
business  combinations  initiated  after June 30, 2001. SFAS 141 also sets forth
criteria for  recognizing  and reporting  separately  from  goodwill  intangible
assets  acquired  in a business  combination  accounted  for under the  purchase
method.  SFAS 141 applies to all business  combinations  closing  after June 30,
2001,  except for business  combinations  initiated  prior to June 30, 2001 that
contemplate the pooling method of accounting. As the Company's previous business
combinations have been accounted for under the purchase method, the Company does
not expect the adoption of SFAS 141 to have a material  impact on its  financial
position or results of operations.

      For purposes of the  reconciliation to U.S. GAAP, the Company adopted SFAS
142 and SFAS 144 effective January 1, 2002. SFAS 142 eliminates the amortization
of goodwill and  intangible  assets with  indefinite  life,  and  addresses  the
amortization of intangible  assets with finite lives and impairment  testing and
recognition  for goodwill and intangible  assets.  SFAS 144 establishes a single
model for the impairment of long-lived  assets and broadens the  presentation of
discontinued  operations  to include  disposal of  individual  businesses.  As a
result of such  adoption,  beginning  January 1, 2002,  amortization  ceased for
goodwill under U.S. GAAP.

      As a  result  of the  implementation  of SFAS  142 and  144  during  2002,
pursuant to which  goodwill is defined as an  intangible  asset with  indefinite
life and is no longer amortized,  the Company ceased the amortization of the net
amounts of goodwill as of January 1, 2002;  therefore such amounts will be fixed
and subject to  impairment  testing as  required by the new rules.  For the year
ended December 31, 2003 and 2002, goodwill under Mexican GAAP continued to be an
amortizable  intangible asset. In compliance with the accounting rules set forth
by SFAS 142, the Company assesses goodwill and indefinite-lived  intangibles for
impairment  annually,  unless events occur that require more  frequent  reviews.
Long-lived assets, including amortizable intangibles,  are tested for impairment
if impairment  triggers occur.  Discounted cash flow analyses are used to assess
the possible  impairment  of both  amortizable  and  non-amortizable  intangible
assets,  while  undiscounted  cash flow  analyses are used to assess  long-lived
asset impairment.

      If an assessment indicates impairment,  the impaired asset is written down
to its fair market value based on the best information available. Estimated fair
market value is generally measured with discounted  estimated future cash flows.
The useful lives of  amortizable  intangibles  are evaluated  periodically,  and
subsequent to impairment reviews, to determine whether revision is warranted. If
cash flows related to a  nonamortizable  intangible are not expected to continue
for the  foreseeable  future,  a useful  life  would be  assigned.  Considerable
management judgment is necessary to estimate  undiscounted and discounted future
cash flows.  Assumptions  used for these cash flows are consistent with internal
forecasts and industry practices.

      The  Company  adopted  the  provisions  of SFAS  142 for US GAAP  purposes
reported in 2002 and determined that no impairment adjustment was required.


                                      F-42
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

      In June 2001, the FASB issued Statement of Financial  Accounting  Standard
No. 143 (SFAS 143), "Accounting for Asset Retirement Obligations," which applies
the  requirements  of  Statement  of  Financial   Accounting  Standard  No.  19,
"Financial  Accounting and Reporting by Oil and Gas Producing  Companies" to all
companies. SFAS 143 addresses financial accounting and reporting for obligations
associated with the retirement of tangible  long-lived assets resulting from the
acquisition,  construction, development and/or normal use of such assets and the
associated  asset  retirement  costs.  SFAS  143  applies  to  asset  retirement
obligations  that a party is  required  to settle as a result of an  existing or
enacted  law,  statute,  ordinance,  or  written or oral  contract,  or by legal
construction  of a contract  under the doctrine of  estoppel.  SFAS 143 requires
that the fair  value  of a  liability  for an  asset  retirement  obligation  be
recognized  in the period in which it is  incurred if a  reasonable  estimate of
fair value can be made. The fair value of the liability is added to the carrying
amount  of  the  associated  asset  and  this  additional   carrying  amount  is
depreciated  over the life of the asset. The liability is accreted at the end of
each period through charges to operating  expense.  If the obligation is settled
for an amount other than the carrying amount of the liability,  the Company will
recognize a gain or loss on settlement. While the Company is not yet required to
adopt SFAS 143, it does not expect that the adoption will have a material effect
on the financial condition or results of operations of the Company.

      In April 2002, the FASB issued SFAS 145,  "Rescission  of FASB  Statements
No.  4,  44  and  64,   Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections".  SFAS No. 145 amends  existing  guidance  on  reporting  gains and
losses on the  extinguishment of debt to prohibit the classification of the gain
or loss as extraordinary, as the use of such extinguishments have become part of
the risk management  strategy of many  companies.  SFAS No. 145 also amends SFAS
No. 13 to require sale-leaseback accounting for certain lease modifications that
have economic effects similar to  sale-leaseback  transactions.  The adoption of
SFAS  No.  145 is not  expected  to  have a  material  effect  on the  Company's
financial statements.

      In June 2002, the FASB issued SFAS 146,  "Accounting for Costs  Associated
with Exit or Disposal  Activities." SFAS 146 addresses financial  accounting and
reporting for costs  associated with exit or disposal  activities and supercedes
Emerging Issues Task Force (EITF) Issue 94-3, "Liability Recognition for Certain
Employee  Termination  Benefits  and  Other  Costs  to  Exit an  Activity."  The
provisions of SFAS 146 are effective  for exit or disposal  activities  that are
initiated  after  December  31, 2002,  with early  application  encouraged.  The
adoption of SFAS 146 is not expected to have a material  effect on the Company's
financial statements.

      In  November  2002,  the  FASB  issued   Interpretation  45,  "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees of Indebtedness to Others, an interpretation of FASB Statements 5, 57
and 107  and a  rescission  of  FASB  Interpretation  34."  This  interpretation
elaborates on the disclosures  required by a guarantor in its interim and annual
financial   statements  about  its  obligations  under  guarantees  issued.  The
interpretation  also  clarifies  that a guarantor is required to  recognize,  at
inception  of a  guarantee,  the fair value of the  obligation  undertaken  as a
liability.   The  initial   recognition  and   measurement   provisions  of  the
interpretation  are  applicable to guarantees  issued or modified after December
31,  2002  and are not  expected  to have a  material  effect  on the  Company's
financial statements.

      In December 2002, the FASB issued SFAS 148,  "Accounting  for  Stock-Based
Compensation  - Transition  and  Disclosure,  an amendment of FASB Statement No.
123." This


                                      F-43
<PAGE>

                        GRUPO RADIO CENTRO, S.A. DE C.V.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     AS OF DECEMBER 31, 2003, 2002 AND 2001

statement amends FASB Statement 123, "Accounting for Stock-Based  Compensation,"
to provide  alternative methods of transition for a voluntary change to the fair
value method of accounting for stock-based employee  compensation.  In addition,
this statement  amends the disclosure  F-56  requirements of SFAS 123 to require
prominent  disclosures  in both annual and  interim  financial  statements.  The
adoption of SFAS 148 is not expected to have a material  effect on the Company's
financial statements.

      In May 2003, the FASB issued SFAS No. 149, "Amendments of Statement 133 of
Derivative  Instruments  and  hedging  Activities."  SFAS  No.  149  amends  and
clarifies  financial  accounting  and  reporting  for  derivative   instruments,
including  certain  derivative  instruments  embedded in other contracts and for
hedging  activities  under FASB  Statement No. 133,  "Accounting  for Derivative
Instruments  and Hedging  Activities."  SFAS No. 149 is generally  effective for
contracts  entered  into or  modified  after  June  30,  2003  and  for  hedging
relationships  designated  after  June  30,  2003.  As the  Company  has no such
instruments,  the  adoption  of this  statement  did not have an  impact  on the
Company's financial condition or results of operations.

      In May  2003,  the FASB  issued  SFAS No.  150,  "Accounting  for  Certain
Financial Instruments with Characteristics of both Liabilities and Equity." SFAS
No. 150  establishes  standards  for how an issuer  measures  certain  financial
instruments  with  characteristics  of both  liabilities and equity and requires
that an issuer classify a financial  instrument  within its scope as a liability
(or asset in some  circumstances).  SFAS No.  150 was  effective  for  financial
instruments  entered  into or  modified  after May 31,  2003 and  otherwise  was
effective and adopted by the Company on July 1, 2003. As the Company has no such
instruments,  the  adoption  of this  statement  did not have an  impact  on the
Company's financial condition or results of operations.

      During   December   2003,   the  FASB  issued   Interpretation   No.  46R,
"Consolidation  of Variable  Interest  Entities" ("FIN 46"),  which requires the
consolidation  of certain  entities that are determined to be variable  interest
entities ("VIE"). An entity is considered to be a VIE when either (i) the entity
lacks sufficient  equity to carry on its principal  operations,  (ii) the equity
owners of the entity  cannot make  decisions  about the entity's  activities  or
(iii) the entity's  equity neither  absorbs  losses or benefits from gains.  The
Company owns no interests in variable interest entities,  and therefore this new
interpretation has not affected the Company's consolidated financial statements.


                                      F-44
<PAGE>

                                  Exhibit Index

Exhibit
Number                           Description of Exhibit
-------                          ----------------------

  1.1    Charter (Escritura Constitutiva),  together with an English translation
         (incorporated  by reference to our  Registration  Statement on Form F-1
         (Reg. No. 333-63878) filed on June 4, 1993).


  1.2    Amended and Restated  Bylaws of Grupo Radio Centro,  S.A. de C.V. dated
         April 25, 2003, filed as English translation (incorporated by reference
         to our Annual Report on Form 20-F (Commission File No. 001-12090) filed
         on June 30, 2003).

  3.1    Amended and Restated Controlling Trust Agreement, No. F/23020-1,  dated
         April 24, 1992, with  amendments  dated September 2, 1992, May 18, 1993
         and September 14, 1993,  between  certain members of the Aguirre family
         and Bancomer,  S.A., as trustee,  together with an English  translation
         (incorporated   by  reference  to  our  Annual   Report  on  Form  20-F
         (Commission File No. 001-12090) filed on December 31, 1993).

  3.2    Amended and  Restated CPO Trust  Agreement,  dated as of June 27, 2003,
         between GE Capital Bank S.A., Institucion de Banca Multiple, GE Capital
         Grupo Financiero, as CPO Trustee, and Grupo Radio Centro, S.A. de C.V.,
         filed as an  English  translation  (incorporated  by  reference  to our
         Annual Report on Form 20-F  (Commission  File No.  001-12090)  filed on
         June 30, 2003).

  3.3    Trust  Agreement,   dated  June  3,  1998,   among  certain   principal
         shareholders  of Grupo Radio  Centro,  S.A. de C.V.,  together  with an
         English translation  (incorporated by reference to our Annual Report on
         Form 20-F (Commission File No. 001-12090) filed on June 30, 1998).

  4.1    Deposit Agreement,  dated June 30, 1993, among Grupo Radio Centro, S.A.
         de C.V.,  Citibank  N.A.  and  holders  from  time to time of  American
         Depositary  Receipts issued thereunder,  including the form of American
         Depositary  Receipt  (incorporated  by  reference  to our  Registration
         Statement on Form F-6 (Reg. No. 333-8224) filed on January 16, 1998).

  4.2    Amended  and  Restated  Public  Deed,  dated as of June 27,  2003  (the
         "Amended  and  Restated  CPO  Deed"),  filed as an English  translation
         (incorporated   by  reference  to  our  Annual   Report  on  Form  20-F
         (Commission File No. 001-12090) filed on June 30, 2003).

  4.3    Modifying  Agreement,  dated  December  14, 1998,  between  Grupo Radio
         Centro,  S.A.  de  C.V.  and  Comercializadora  Siete,  S.A.  de  C.V.,
         modifying  Service  Agreement,  dated  October 2, 1995 with  respect to
         XHFO-FM,   together  with  an  English  translation   (incorporated  by
         reference  to our  Annual  Report  on Form  20-F  (Commission  File No.
         001-12090) filed on June 30, 1999).

<PAGE>

                                  Exhibit Index
                                   (continued)

  4.4    Programming  Services  Agreement,  dated December 23, 1998, among Grupo
         Radio Centro,  S.A. de C.V., Infored and Jose Gutierrez Vivo,  together
         with an English translation  translation  (incorporated by reference to
         our Annual Report on Form 20-F (Commission File No. 001-12090) filed on
         June 30, 1999)  (incorporated by reference to our Annual Report on Form
         20-F (Commission File No. 001-12090) filed on June 30, 2003).

  4.5    Loan  Agreement,  dated  October 30, 2000,  between Grupo Radio Centro,
         S.A. de C.V. and Banco Inverlat,  S.A., (the "Loan Agreement") together
         with an English  translation  (incorporated  by reference to our Annual
         Report on Form 20-F  (Commission  File No.  001-12090)  filed on May 9,
         2001).

  4.6    Letter  Agreement,  dated April 17, 2001,  between  Grupo Radio Centro,
         S.A. de C.V. and Scotiabank  Inverlat,  S.A.  (formerly Banco Inverlat,
         S.A.),  amending Loan Agreement,  together with an English  translation
         (incorporated   by  reference  to  our  Annual   Report  on  Form  20-F
         (Commission File No. 001-12090) filed on May 9, 2001).

  4.7    Waiver  and  Amendment  Letter,   dated  June  19,  2002,  executed  by
         Scotiabank  Inverlat and Grupo Radio Centro, S.A. de C.V. in connection
         with the Loan Agreement (incorporated by reference to our Annual Report
         on Form 20-F (Commission File No. 001-12090) filed on June 24, 2002).

  4.8    Amendment,  dated December 10, 2002, to the Loan Agreement, filed as an
         English translation  (incorporated by reference to our Annual Report on
         Form 20-F (Commission File No. 001-12090) filed on June 30, 2003).

  4.9    Amendment,  dated December 3, 2003, to the Loan Agreement,  filed as an
         English translation.

 4.10    Amendment,  dated as of June 29,  2004,  to the Loan  Agreement,  to be
         filed as an English translation pursuant to Rule 12b-25.

 4.11    Modifying  Agreement,  dated June 29, 2001, between Grupo Radio Centro,
         S.A.  de C.V.  and  Comercializadora  Siete,  S.A.  de C.V.,  modifying
         Service  Agreement,  dated  October 2, 1995,  with  respect to XHFO-FM,
         together with an English translation  (incorporated by reference to our
         Annual Report on Form 20-F  (Commission  File No.  001-12090)  filed on
         June 24, 2002).

  8.1    List of Subsidiaries of the Company  (incorporated  by reference to our
         Annual Report on Form 20-F  (Commission  File No.  001-12090)  filed on
         June 30, 2003).

 12.1    Certification  pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
         2002.

 12.2    Certification  pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
         2002.

 13.1    Certification  pursuant  to Section  906 of the  Sarbanes-Oxley  Act of
         2002.