As filed with the Securities and Exchange
      Commission on June 30, 2010


UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549




Form
20-F





ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)


OF THE
SECURITIES EXCHANGE ACT OF 1934





for the
fiscal year ended December 31, 2009


Commission
File Number: 1-12090





Grupo
Radio Centro, S.A.B. 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° Piso)


Col.
Lomas Altas


C.P.
11950, México, D.F., México


(Address
of principal executive offices)





Alfredo
Azpeitia Mera


Constituyentes
1154 (7° Piso)


Col.
Lomas Altas


C.P.
11950, México, D.F., México


aazpeitia@grc.com.mx


(5255)
5728 48 00


(Name,
telephone, e-mail and/or facsimile number and address of company contact
person)





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




Title of each class:
                    
                    Name of each exchange on which
      registeredSeries
      A Shares, without par value (“Series A Shares”)
                    
                    New
      York Stock Exchange*Ordinary
      Participation Certificates (“CPOs”), each CPO representing one Series A
      Share
                    
                    New
      York Stock Exchange*American
      Depositary Shares (“ADSs”), each representing nine CPOs
                    
                    New
      York Stock
Exchange


*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: 162,724,561 Series A
Shares




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.   ̈YesxNo




If this
report is an annual or transition report, indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Securities Exchange
Act     of 1934.   ̈  Yes    x  No




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.xYes ̈No




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). N/A




Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer or a
non-accelerated filer.  See definition of “accelerated filer and large
accelerated filer” in Rule 12b-2 of the Exchange Act.  (Check
one):Large accelerated
filer ̈Accelerated
filer ̈Non-accelerated
filerx




Indicate
by check mark which basis of accounting the registrant has used to prepare the
financial statements included in this filing:




U.S. GAAP ̈     
International Financial
Reporting Standards ̈    
 Otherx




Indicate
by check mark which financial statement item the registrant has elected to
follow:   ̈Item 17xItem 18




If this
is an annual report, indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).   ̈YesxNo





TABLE
OF CONTENTS




PagePART I
                    
                    2Item 1.
                    Identity
      of Directors, Senior Management and Advisers
                    2Item 2.
                    Offer
      Statistics and Expected Timetable
                    2Item 3.
                    Key
      Information
                    2Item 4.
                    Information
      on the Company
                    1Item 4A.
                    Unresolved
      Staff Comments
                    28Item 5.
                    Operating
      and Financial Review and Prospects
                    28Item 6.
                    Directors,
      Senior Management and Employees
                    37Item 7.
                    Major
      Shareholders and Related Party Transactions
                    42Item 8.
                    Financial
      Information
                    45Item 9.
                    The
      Offer and Listing
                    48Item 10.
                    Additional
      Information
                    50Item 11.
                    Quantitative
      and Qualitative Disclosures About Market Risk
                    64Item 12.
                    Description
      of Securities Other than Equity Securities
                    64Item 12A.
                    Debt
      Securities
                    64Item 12B.
                    Warrants
      and Rights
                    64Item 12C.
                    Other
      Securities
                    65Item 12D.
                    American
      Depositary Shares
                    65PART II
                    
                    66Item 13.
                    Defaults,
      Dividend Arrearages and Delinquencies
                    66Item 14.
                    Material
      Modifications to the Rights of Security Holders and Use of
      Proceeds
                    66Item 15.
                    Controls
      and Procedures
                    66Item 16A.
                    Audit
      Committee Financial Expert
                    67Item 16B.
                    Code
      of Ethics
                    67Item 16C.
                    Principal
      Accountant Fees and Services
                    68Item 16D.
                    Exemptions
      from the Listing Standards for Audit Committees
                    68Item 16E.
                    Purchases
      of Equity Securities by the Issuer and Affiliated
    Purchasers
                    68Item 16F.
                    Change
      in Registrant’s Certifying Accountant.
                    68Item 16G.
                    Corporate
      Governance
                    68PART III
                    
                    72Item 17.
                    Financial
      Statements
                    72Item 18.
                    Financial
      Statements
                    72Item 19.
                    Exhibits
                    72


i


INTRODUCTION




Grupo
Radio Centro, S.A.B. de C.V. 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.B. de C.V. and its consolidated
subsidiaries.




PRESENTATION
OF FINANCIAL INFORMATION




The
Company publishes its financial statements in Mexican pesos.  Our
financial statements have been prepared in accordance with the Mexican Financial
Reporting Standards, or MFRS, issued by the Consejo Mexicano para la
Investigación y Desarrollo de Normas de Información Financiera (Mexican
Board for Research and Development of Financial Information
Standards).




Through
the end of 2007, MFRS required us to recognize certain effects of inflation in
our financial statements by restating financial statements from prior periods in
constant pesos as of the end of the most recent period presented.  Due
to a change in MFRS effective January 1, 2008, we are no longer required to
recognize the effects of inflation in our financial statements, unless the
economic environment in which we operate qualifies as
“inflationary.”  Because of the relatively low level of inflation in
recent years, the Mexican economy did not qualify as inflationary in 2008 or
2009.  As a result, we are presenting our 2008 and 2009 financial
statements without inflation accounting.  We have not restated
financial statements for prior periods; therefore, financial information for
dates and periods prior to 2008 continue to be expressed in constant pesos as of
December 31, 2007.




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. 13.0576 to U.S.$ 1.00, the exchange rate for pesos on December 31,
2009, as published by the U.S. Federal Reserve Board.  On June 18,
2010, the exchange rate for pesos was Ps. 12.5430 to U.S.$
1.00.  See Item 3, “Key Information—Exchange Rate Information,” for
information regarding exchange rates since January 1, 2005.




In this
Annual Report, references to “pesos” or “Ps.” are to the lawful currency of
Mexico.  References herein to “U.S. dollars” or “U.S.$” are to United
States dollars.




FORWARD-LOOKING
STATEMENTS




This
Annual Report contains words such as “believe,” “expect,” “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.  These factors, some of which are discussed in Item 3, “Key
Information—Risk Factors,” include projections of operating revenues, net
income, net income per share, capital expenditures, indebtedness levels,
dividends, capital structure or other financial items or ratios; statements
about our future financial performance or the economic performance of Mexico or
other countries; effects on the Company from competition with its broadcasting
operations; material changes in the performance or popularity of key radio
stations or broadcast programs; the loss of one or more key customers or a
reduction in the advertising expenditures of key customers; a change in the
seasonality of the Company’s business; the ability of the Company to make
additional investments in radio operations or renew its broadcasting licenses;
significant developments in the Mexican economic or political situation; changes
in the Company’s regulatory environment or fluctuations in inflation rates or
exchange rates.  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.





PART
I




Item
1.  Identity of Directors, Senior Management and Advisers




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, our audited consolidated financial
statements as of December 31, 2009 and 2008 and for the years ended December 31,
2009, 2008 and 2007 (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 MFRS, which differ
in certain respects from generally accepted accounting principles in the United
States, or U.S. GAAP.  Note 23 to the Consolidated Financial
Statements provides a description of the principal differences between MFRS and
U.S. GAAP as they relate to Grupo Radio Centro, including differences related to
certain cash flow information and a reconciliation to U.S. GAAP of operating
income, net income and shareholders’ equity.




For dates
and periods prior to 2008, Grupo Radio Centro’s financial statements were
prepared giving effect to Bulletin B-10, Recognition of the Effects of
Inflation, and Bulletin B-12, Statements of Changes in Financial Position, under
MFRS.  Beginning on January 1, 2008, in accordance with the adoption
of MFRS B-10, we ceased to recognize the effects of inflation on our financial
information. As a result, we have not applied the effects of inflation
accounting to our financial information in 2008 and 2009.  In our
financial information for 2008 and 2009, inflation adjustments for prior periods
have not been removed from shareholders’ equity and the re-expressed amounts for
non-monetary assets and liabilities at December 31, 2007 became the accounting
basis for those assets and liabilities beginning on January 1, 2008 and for
subsequent periods, as required by MFRS.  For dates and periods prior
to 2008, the selected consolidated financial information set forth below, and
data in the related Consolidated Financial Statements, have been restated in
constant pesos as of December 31, 2007.  See Item 5, “Operating and
Financial Review and Prospects—Changes in Inflation Accounting.”




Due to
the adoption of MFRS B-10, effective January 1, 2008, inflation accounting
methods do not apply unless the economic environment in which the Company
operates is “inflationary” for purposes of MFRS.  An environment is
considered inflationary if the cumulative inflation rate equals or exceeds an
aggregate of 26% over the three preceding years.  Because of the
relatively low level of Mexican inflation in recent years, the cumulative
inflation rate in Mexico over the three-year period preceding December 31, 2008
does not qualify the Mexican economic environment as inflationary.  As
a result, we have not applied the effects of inflation accounting to our
financial information in 2008 and 2009.  In our financial information
for 2008 and 2009, inflation adjustments for prior periods have not been removed
from shareholders’ equity and the re-expressed amounts for non-monetary assets
and liabilities at December 31, 2007 became the accounting basis for those
assets and liabilities beginning on January 1, 2008 and for subsequent periods,
as required by MFRS.  See Item 5, “Operating and Financial Review and
Prospects—Changes in Inflation Accounting.”


2





Year
      Ended December 31,2009(1)
                      
                      
                      2009
                      
                      
                      2008
                      
                      
                      2007
                      
                      
                      2006
                      
                      
                      2005(in
      thousands, except per ADS data)Operating
      Data:MFRS:Broadcasting
      revenue
                      
                      U.S.$
                      60,185
                      
                      
                      Ps.
                      785,869
                      
                      
                      Ps.
                      735,105
                      
                      
                      Ps.
                      654,760
                      
                      
                      Ps.
                      825,590
                      
                      
                      Ps.
                      638,204Broadcasting
      expenses(2)(3)
                      
                      
                      45,568
                      
                      
                      
                      595,011
                      
                      
                      
                      452,350
                      
                      
                      
                      421,970
                      
                      
                      
                      460,072
                      
                      
                      
                      423,857Broadcasting
      income
                      
                      
                      14,617
                      
                      
                      
                      190,858
                      
                      
                      
                      282,755
                      
                      
                      
                      232,790
                      
                      
                      
                      365,518
                      
                      
                      
                      214,347Depreciation
      and amortization
                      
                      
                      1,993
                      
                      
                      
                      26,024
                      
                      
                      
                      31,720
                      
                      
                      
                      33,687
                      
                      
                      
                      37,183
                      
                      
                      
                      39,957Corporate, general
      and administrative expenses(3)
                      
                      
                      1,144
                      
                      
                      
                      14,939
                      
                      
                      
                      14,461
                      
                      
                      
                      14,774
                      
                      
                      
                      14,813
                      
                      
                      
                      14,575Operating
      income
                      
                      
                      11,480
                      
                      
                      
                      149,895
                      
                      
                      
                      236,574
                      
                      
                      
                      184,329
                      
                      
                      
                      313,522
                      
                      
                      
                      159,816Comprehensive
      cost of financing
                      
                      
                      3,112
                      
                      
                      
                      40,615
                      
                      
                      
                      7,678
                      
                      
                      
                      5,850
                      
                      
                      
                      39,842
                      
                      
                      
                      13,779Other
      expenses, net
                      
                      
                      5,092
                      
                      
                      
                      66,495
                      
                      
                      
                      56,880
                      
                      
                      
                      45,806
                      
                      
                      
                      59,511
                      
                      
                      
                      52,490Extraordinary
      item(4)
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      263,523
                      
                      
                      
                      -Net income
      (loss)(5)
                      
                      
                      340
                      
                      
                      
                      4,443
                      
                      
                      
                      126,765
                      
                      
                      
                      91,119
                      
                      
                      
                      434,748
                      
                      
                      
                      70,099Minority
      interest
                      
                      
                      (4,131
                      )
                      
                      
                      (53,943
                      )
                      
                      
                      45
                      
                      
                      
                      21
                      
                      
                      
                      63
                      
                      
                      
                      16Net income (loss) per
      ADS(5)(6)
                      
                      
                      0.02
                      
                      
                      
                      0.25
                      
                      
                      
                      7.01
                      
                      
                      
                      5.04
                      
                      
                      
                      24.08
                      
                      
                      
                      3.88Common shares
      outstanding(6)
                      
                      
                      162,725
                      
                      
                      
                      162,725
                      
                      
                      
                      162,725
                      
                      
                      
                      162,725
                      
                      
                      
                      162,500
                      
                      
                      
                      162,657U.S.
      GAAP:Broadcasting
      revenue
                      
                      U.S.$
                      60,185
                      
                      
                      Ps.
                      785,869
                      
                      
                      Ps.
                      735,105
                      
                      
                      Ps.
                      654,760
                      
                      
                      Ps.
                      825,590
                      
                      
                      Ps.
                      638,204Operating (loss)
      income(4)
                      
                      
                      6,388
                      
                      
                      
                      83,400
                      
                      
                      
                      179,694
                      
                      
                      
                      138,523
                      
                      
                      
                      517,534
                      
                      
                      
                      107,326Net income
      (loss)(5)
                      
                      
                      340
                      
                      
                      
                      4,443
                      
                      
                      
                      126,720
                      
                      
                      
                      91,098
                      
                      
                      
                      434,685
                      
                      
                      
                      70,083Net income (loss) per
      ADS(5)(6)
                      
                      
                      0.25
                      
                      
                      
                      3.23
                      
                      
                      
                      7.01
                      
                      
                      
                      5.04
                      
                      
                      
                      24.08
                      
                      
                      
                      3.88Dividends per
      ADS(6)(7)
                      
                      
                      0.42
                      
                      
                      
                      5.53
                      
                      
                      
                      5.53
                      
                      
                      
                      5.53
                      
                      
                      
                      4.01
                      
                      
                      
                      -Balance
      Sheet Data:MFRS:Working
      capital
                      
                      U.S.$
                      18,913
                      
                      
                      Ps.
                      246,967
                      
                      
                      Ps.
                      212,776
                      
                      
                      Ps.
                      170,056
                      
                      
                      Ps.
                      133,545
                      
                      
                      Ps.
                      (123,008
                      )Property
      and equipment, net
                      
                      
                      35,224
                      
                      
                      
                      459,941
                      
                      
                      
                      465,034
                      
                      
                      
                      461,555
                      
                      
                      
                      481,220
                      
                      
                      
                      513,259Excess
      cost over fair value of assets of subsidiaries
                      
                      
                      63,478
                      
                      
                      
                      828,863
                      
                      
                      
                      828,863
                      
                      
                      
                      828,863
                      
                      
                      
                      828,734
                      
                      
                      
                      828,734Total
      assets
                      
                      
                      147,575
                      
                      
                      
                      1,926,955
                      
                      
                      
                      1,743,638
                      
                      
                      
                      1,700,445
                      
                      
                      
                      1,722,173
                      
                      
                      
                      1,709,011Long-term
      debt excluding current portion
                      
                      
                      9,956
                      
                      
                      
                      130,000
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      61,128Total debt(8)
                      
                      
                      13,019
                      
                      
                      
                      170,000
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      122,255Shareholders’
      equity(9)
                      
                      
                      103,884
                      
                      
                      
                      1,356,479
                      
                      
                      
                      1,432,790
                      
                      
                      
                      1,406,025
                      
                      
                      
                      1,387,446
                      
                      
                      
                      1,081,619U.S.
      GAAP:Total
      assets
                      
                      U.S.$
                      146,795
                      
                      
                      Ps.
                      1,916,790
                      
                      
                      
                      1,801,377
                      
                      
                      
                      1,779,008
                      
                      
                      
                      1,763,734
                      
                      
                      
                      1,750,572Shareholders’
      equity(9)
                      
                      
                      103,106
                      
                      
                      
                      1,346,314
                      
                      
                      
                      1,422,404
                      
                      
                      
                      1,396,585
                      
                      
                      
                      1,378,019
                      
                      
                      
                      1,072,255





(1)
            Peso
      amounts have been translated into U.S. dollars solely for the convenience
      of the reader at the rate of Ps. 13.0576 per U.S. dollar, the
      exchange rate for pesos on December 31, 2009, as published by the U.S.
      Federal Reserve Board.  See “—Exchange Rate
      Information.”


(2)
            Excludes
      depreciation, amortization and corporate, general and administrative
      expenses.


(3)
            Certain
      amounts in the 2005 financial statements, as originally issued, have been
      reclassified for uniformity of presentation with the 2009, 2008, 2007 and
      2006 financial statements.


(4)
            The
      extraordinary item recorded in 2006 reflects the reversal in June 2006 of
      a provision for the contingent liability related to an arbitration
      proceeding.  See Item 5, “Operating and Financial Review and
      Prospects—Loss Contingency” and Item 8, “Financial Information—Other
      Financial Information—Legal and Arbitration
  Proceedings.”


(5)
            In
      accordance with then-applicable MFRS, net income for dates and periods
      prior to 2008 does not give effect to minority interest.  Net
      income under U.S. GAAP and, for dates and periods beginning in 2008 under
      MFRS, does give effect to minority interest.  See Note 23 to the
      Consolidated Financial Statements.


(6)
            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
      MFRS and U.S. GAAP and dividends per ADS under U.S.
  GAAP.


(7)
            The
      Company declares dividends in any given year for the immediately preceding
      fiscal year.  On March 24, 2010, the Company paid dividends in
      the aggregate amount of Ps. 100.0 million with respect to 2009. In
      2009, the Company paid dividends in the aggregate amount of Ps. 100.0
      million with respect to 2008.  In 2008, the Company paid
      dividends in the aggregate amount of Ps. 100.0 million with respect
      to 2007. In 2007, the Company paid dividends in the aggregate amount of
      Ps. 71.9 million with respect to 2006.  The Company did not
      pay any dividends in 2006 with respect to
2005.


(8)
            Total
      debt consists of bank debt.  See Item 5, “Operating and
      Financial Review and Prospects—Liquidity and Capital
      Resources—Indebtedness.”


(9)
            In
      2006, the Company reduced its capital by Ps. 128.5 million
      (Ps. 120.0 million nominal amount) through cash payments to its
      shareholders equal to that
amount.


3


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.  There can be no
assurance that the government will maintain its current policies with regard to
the peso or that the peso will not appreciate or depreciate 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
      End2005
                
                
                11.41
                
                
                
                10.41
                
                
                
                10.87
                
                
                
                10.632006
                
                
                11.46
                
                
                
                10.43
                
                
                
                10.90
                
                
                
                10.802007
                
                
                11.27
                
                
                
                10.67
                
                
                
                10.93
                
                
                
                10.922008
                
                
                13.94
                
                
                
                9.92
                
                
                
                11.21
                
                
                
                13.832009
                
                
                15.41
                
                
                
                12.63
                
                
                
                13.58
                
                
                
                13.06Month
      Ended 2009:December
      31
                
                
                13.07
                
                
                
                12.63
                
                
                
                
                
                
                
                13.06Month
      Ended 2010:January
      31
                
                
                13.03
                
                
                
                12.65February
      28
                
                
                13.19
                
                
                
                12.76March
      31
                
                
                12.74
                
                
                
                12.30April
      30
                
                
                12.41
                
                
                
                12.16May
      31
                
                
                13.14
                
                
                
                12.27





(1)
            Sources:  Federal
      Reserve Bank of New York and the U.S. Federal Reserve
    Board.


(2)
            Average
      of month-end rates.




On June
18, 2010, the exchange rate was Ps. 12.5430 to U.S.$ 1.00.




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 American
Depositary Shares, or “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 certificados de participación
ordinaria (ordinary participation certificates, or “CPOs”) represented by
the ADSs.


4


RISK
FACTORS




Risks
Relating to Our Operations




We
have not complied with a financial covenant in our credit facility, and although
we have obtained a waiver, the lender may not provide future waivers and could
accelerate the maturity of the loan and proceed against our
collateral





We have
entered into a credit facility for a secured peso-denominated loan having an
outstanding aggregate principal amount of Ps. 180 million as of the date
hereof.  This amount is guaranteed by several of our subsidiaries and
secured by a first priority lien on substantially all of our property, including
our corporate headquarters but excluding any equipment used for
broadcasting.




The
credit facility contains covenants requiring us to maintain certain financial
ratios and comply with other financial conditions that, among other things,
limit our ability to incur additional indebtedness, pay dividends, pledge assets
and enter into transactions with affiliates.  We were not in
compliance with the fixed charges coverage ratio, as defined in the credit
facility, as of March 31, 2010.  We obtained a waiver from the lender
of this non-compliance for the first quarter of 2010 as well as the second
quarter ending June 30, 2010.  There is significant uncertainty as to
whether we will be able to comply with the fixed charges coverage ratio for the
third quarter of 2010.  If we fail to comply with this covenant or any
other covenant under the credit facility, there can be no assurance that we will
be able to obtain waivers of such failures or that the lender will not
accelerate amounts due under the credit facility.  If we are unable to
repay amounts due under the credit facility, the lender could proceed against
the collateral securing our indebtedness.  Such events would have a
material adverse effect on our business, financial condition and results of
operations.




We
may be unsuccessful in addressing the challenges and risks presented by our new
investment in the United States




In April
2009, we began to provide programming to, and sell advertising time on, KXOS-FM
(formerly, KMVN-FM), a radio station broadcasting in Los Angeles, California
that is owned by Emmis Communications Corporation.  Our investment in
the United States involves risks to which we have not previously been exposed
and presents different or greater risks, including from competition and
regulation, than those present in Mexico.  Our potential for success
must be considered in light of the expenses, complications and delays frequently
encountered in connection with a new business.  Moreover, the start-up
costs and the losses we have incurred in connection with the radio station in
Los Angeles have placed demands upon our liquidity and cash flow.  In
2009, our U.S. operations generated an operating loss of Ps. 107.3
million.  We cannot predict whether or when our operations in the
United States will become profitable.




In
light of operating losses in our start-up operations in the United States, we
may not have sufficient sources of cash to meet our working capital
needs




Although cash flow from operations
historically has been sufficient to cover our working capital needs, our
investment in April 2009 in a Los Angeles radio station has resulted in
increased working capital requirements.  On June 1, 2010, we borrowed
Ps. 30 million under the revolving tranche of our credit facility to meet
working capital needs and we may need to do so again in the
future.  We have remaining borrowing capacity of Ps. 30 million under
our credit facility, but our ability to borrow under that facility is subject to
compliance with covenants or our ability to obtain a waiver of non-compliance
with those covenants.  There can be no assurances that we will be able
to meet our working capital needs, or, if we are in non-compliance with our debt
covenants, that we will be able to borrow further amounts under the credit
facility.  Such events would have a material adverse effect on our
financial condition and results of operations.


5


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 is highly competitive, and programming popularity, an important
factor in advertising sales, is readily susceptible to change.  There
can be no assurance that increased competition within, or a decline in the
popularity of, a given format will not decrease our aggregate audience share in
the future.  In addition, we face strong competition for advertising
revenues from both television and various print media.  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.




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




Our two
largest individual customers in 2007, 2008 and 2009 were Nueva Wal Mart de
México, S.A.B. de C.V. (“Nueva Wal Mart”) and Tiendas Comercial Mexicana, S.A.B.
de C.V. (“Comercial Mexicana”). In 2009, Nueva Wal Mart represented 7.0% and
Comercial Mexicana represented 4.0% of our total broadcasting revenue,
(excluding revenue from our operations in the United States).  In
2008, Nueva Wal Mart represented 6.6% and Comercial Mexicana represented 3.7% of
our total broadcasting revenue.  In 2007, Nueva Wal Mart represented
5.6% and Comercial Mexicana represented 4.2% of our total broadcasting
revenue.  The companies comprising Grupo Cifra and Grupo Carso are
also key customers, representing 11.3% and 6.4%, respectively, of our total
broadcasting revenue in 2009 (excluding revenue from our operations in the
United States).




In
October 2008, Comercial Mexicana’s parent company, Controladora Comercial
Mexicana, S.A.B. de C.V. (“CCM”), defaulted on certain of its debt and filed for
bankruptcy protection in the Mexican courts.  Since then, Comercial
Mexicana has purchased less advertising from us and we cannot predict how the
restructuring of CCM will affect Comercial Mexicana or its continued
relationship with us.  We also cannot assure you that Nueva Wal Mart,
Comercial Mexicana or the companies comprising Grupo Carso and Grupo Cifra will
continue to purchase advertising from us at current levels or at
all.  The loss of our relationship with any one of our principal
customers could have a material adverse effect on our results of
operations.




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.


6


The
Mexican Federal Competition Commission may prohibit us from making additional
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 the
acquisition of Radiodifusión RED, S.A. in 1996, we are required by the Mexican
Comisión Federal de
Competencia (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.




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
Secretaría de Comunicaciones y
Transportes(Secretary of Communication and Transportation, or
“SCT”).  Because the SCT generally grants renewals to licensees that
have substantially complied with applicable law, we expect that our future
renewal applications will be granted.  However, if we were unable to
renew these licenses in the future, our business could be significantly
harmed.




Adverse global economic conditions and, in particular, the slowdown of
the U.S. and Mexican economies, could have a negative impact on our liquidity,
business, and results of operations, and may affect a portion of our client
base




Our
business is influenced by general economic conditions worldwide and in
Mexico.  The risks associated with our business become more acute in
periods of a slowing economy or recession, which may be accompanied by a
decrease in advertising.  A decline in the level of business activity
of our advertisers could have an adverse effect on our revenue and profit
margins.  In response to current market conditions, customers may
choose to make fewer expenditures, to slow their spending on or cancel our
services or to seek contract terms more favorable to them.  Adverse
economic conditions may also lead to an increase in the number of our customers
that are unable to pay for services.  If these events were to occur,
it could have a material adverse effect on our business and results of
operations.




Many
lenders and institutional investors have reduced and, in some cases, ceased to
provide funding to borrowers. Continued disruption of the credit markets could
adversely affect our borrowing capacity.  Our ability to expand our
business may be limited if, in the future, we were unable to access or increase
our existing credit facilities on favorable terms or at all.  These
disruptions could negatively affect our liquidity, business and results of
operations.




If
we are required by the Mexican courts to pay a pending arbitration award, it may
have a material adverse effect on our financial condition




We are
party to legal proceedings in Mexico relating to an arbitration award granted in
2004 against us in favor of Infored, S.A. de C.V. and Mr. José Gutiérrez
Vivó.  If we are ultimately unsuccessful in challenging the
enforcement of the arbitration award, we will be required to finance all or part
of the amount due.  Our ability to obtain financing is subject to
various factors, including general market conditions, our financial condition
and results of operations and the fact that we have pledged substantially all of
our assets under outstanding indebtedness.  Accordingly, we may not be
able to obtain financing in a timely manner, or on acceptable terms, or at
all.  If we incur additional indebtedness or we are unable to obtain
financing when needed, our financial condition may be materially and adversely
affected.


7


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.




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 a Mexican trust,
which they control, that holds 51.6%, of the outstanding Series A Shares as
of March 16, 2010.




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




Our
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 our shares or
other securities 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 our 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.




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 Mexican trust through
which they hold most of 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,
other than those contained in our U.S.$ 21 million credit facility, which
requires the Aguirre family to maintain 51% of our capital stock.




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




Under
current Mexican law, if we issue new shares for cash as a part of a capital
increase, we generally must 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 be legally 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 (“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.  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.


8


We cannot
assure you 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.  Furthermore, under current Mexican law, sales by the
Depositary of preemptive rights and distribution of the proceeds from such sales
to ADS holders are not possible.  As a result, the equity interest of
ADS holders would be diluted proportionately.  In addition, preemptive
rights will not arise under current Mexican law upon the sale of newly issued
shares in a public offering or the resale of shares of capital stock previously
repurchased by us.




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, from which we
derive revenue constituting the principal source of our earnings, generally
declines during periods of economic difficulty.




In 2009,
Mexico’s gross domestic product, or GDP, fell by 6.5% and inflation was
3.6%.  In 2008, Mexico’s GDP grew by 1.3% and inflation was
6.5%.  The Mexican economy is experiencing a downturn.In 2010, according to
preliminary estimates of the Mexican government, GDP is expected to increase by
3.9% and inflation is expected to be 5.2%.  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 with the U.S., 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 the past, 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 in the
past.  The annual rate of inflation, as measured by changes in the
INPC, was 3.6% for 2009.  Inflation for the first quarter of 2010 was
2.4%.  If inflation in Mexico does not remain within the government’s
projections, we may 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 may result in lower demand for broadcast
advertising.




Interest
rates on 28-day Mexican treasury bills, or Cetes, averaged 5.4% during
2009.  During the first quarter of 2010, the average 28-day Cetes rate
was 4.5%.  High interest rates in Mexico could adversely affect our
financing costs, and to the extent that we incur peso-denominated debt in the
future, it could be at high interest rates.


9


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.  We cannot assure you
that the current political situation or any future political developments will
not have a broad adverse effect on growth trends in the Mexican broadcasting
industry or in the economy generally, or directly and adversely affect
us.




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 2009, the peso appreciated against the U.S. dollar at
year-end by 5.6%, while the average value of the peso against the U.S. dollar
during 2009 was 16.5% lower than in 2008.  In 2008, the peso
depreciated against the U.S. dollar at year-end by 26.6%, and the average value
of the peso against the U.S. dollar during 2008 was 2.7% lower than in
2007.  In 2007, the peso depreciated against the U.S. dollar at
year-end by 1.1%, and average value of the peso against the U.S. dollar during
2007 was 0.3% lower than in 2006.  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.




In 2009,
our operating costs payable in U.S. dollars increased due to our investment in a
radio station in Los Angeles, California.  These expenses represented
22% of our consolidated broadcasting expenses in 2009.  We prepaid the
first two years of fees (U.S.$ 14 million) under the related local marketing
agreement and, beginning in April 2011, we will begin making monthly fee
payments of U.S.$583,000. Although at December 31, 2009, we had no U.S.
dollar-denominated indebtedness, we may incur U.S. dollar-denominated
indebtedness in the future.  Declines in the value of the peso
relative to the U.S. dollar increase our operating costs, increase our interest
costs in pesos relative to any U.S. dollar-denominated indebtedness, increase
our obligations payable in U.S. dollars, 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.  Since we fund our operations in the United
States with peso-denominated revenue earned in Mexico, the decline of the peso
relative to the decline in the U.S. dollar could increase our operating
costs.




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 operating costs or obligations payable in U.S.
dollars.




Developments
in other countries may affect the price of the ADSs




As is the
case with respect to securities of issuers from other emerging markets, the
market value of securities of Mexican companies is, to varying degrees, affected
by economic and market conditions in other countries.  Although
economic conditions in other countries may differ significantly from economic
conditions in Mexico, investors’ reactions to developments in other countries
may have an adverse effect on the market value of securities of Mexican
issuers.  In recent years, for example, economic conditions in Mexico
have become increasingly correlated to economic conditions in the United States
as a result of NAFTA and increased economic activity between the two
countries.  Adverse economic conditions in the United States and other
related events could have a material adverse effect on the Mexican
economy.  Prices of Mexican securities also dropped substantially as a
result of developments in Russia, Asia, Brazil and Argentina in the late
1990s.  The Mexican securities markets also have been adversely
affected by ongoing developments in the global credit markets.  We
cannot assure you that events in other emerging market countries, in the United
States or elsewhere, will not have a material adverse effect on our business,
financial condition or results of operations.


10


Item
4.  Information on the Company




THE
COMPANY




Organization




Grupo
Radio Centro is a corporation (sociedad anónima bursátil 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° Piso), Col. Lomas Altas, C.P. 11950, México, D.F., México.  The
telephone number of Grupo Radio Centro is (525) 55-728-4800.




History




Grupo
Radio Centro is a family-controlled radio broadcasting company with roots in
Mexican radio broadcasting dating back approximately 60
years.  Francisco Aguirre J., the founder of Grupo Radio Centro,
initiated his radio broadcasting activities in 1946.  In 1952, he
founded Organización Radio Centro(“ORC”), the sole owner
and operator of two radio stations, Radio Centro and Radio Exitos.  In
1965, the Company formed Organización Impulsora de Radio (“OIR”), to provide
national sales representation to affiliated radio stations outside Mexico
City.  The Company was incorporated as Técnica de Desarrollo
Publicitario, S.A. de C.V. on June 8, 1971, renamed Grupo Radio Centro, S.A. de
C.V. on July 14, 1992 and renamed Grupo Radio Centro, S.A.B. de C.V. on
July 31, 2006.  The bylaws of the Company provide for its indefinite
existence.




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 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 these securities on the
NYSE and the Mexican Stock Exchange.  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, pursuant to the Company’s bylaws (see Item 10, “Additional
Information—Bylaws and Mexican Law—Limitations Affecting Non-Mexican
Holders—Share Ownership”), 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 arrangement, 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,
so the Series A Share trading line reflects trading of both Series A Shares and
CPOs.


11


Capital
Expenditures and Divestitures




Capital
Expenditures




Capital
expenditures were Ps. 27.7 million in 2009, Ps. 36.4 million in 2008
and Ps. 14.3 million in 2007.  In 2009, 2008 and 2007, capital
expenditures were financed from working capital.  In 2009, the
Company’s principal capital expenditures were for transportation equipment,
leasehold improvements and broadcasting equipment.  In 2008 and 2007,
the Company’s principal capital expenditures were for transportation equipment,
which consists primarily of promotional trucks and vans.  The increase
in 2009 compared to 2008 was primarily due to increased expenditures related to
leasehold improvements.




Capital
Divestitures




During
2009, the Company had capital divestitures in the amount of Ps. 6.6
million, principally related to transportation equipment.  During
2008, the Company had capital divestitures in the amount of Ps. 1.2
million, principally related to the sale of transportation
equipment.  In 2007, the Company had capital divestitures in the
amount of Ps. 0.79 million, principally related to the sale of
transportation equipment.  See Notes 1 and 12 to the Consolidated
Financial Statements.




BUSINESS
OVERVIEW




Grupo
Radio Centro is a leading radio broadcasting company in Mexico.  For
more than 30 years, the Company 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 music, entertainment, news and special event
programs.  The Company’s revenue is derived primarily from the sale of
commercial airtime to advertising agencies and businesses.  According
to IBOPE AGB México (“IBOPE”), the Company’s Mexico City average audience share
for the year ended December 31, 2009 was 43.4%, more than twice that of the next
most popular radio broadcasting company in Mexico City for the same
period.  See “—Broadcasting Operations” and
“—Competition.”




In
Mexico, Grupo Radio Centro currently owns eight AM and five FM radio
stations.  The Company manages and operates an additional FM
station.  Of these 14 radio stations, Grupo Radio Centro operates five
AM and six FM stations in Mexico City and one AM station in both Guadalajara and
Monterrey.  The remaining AM radio station in Mexico City is managed
and operated by a third party pursuant to an operating agreement.




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.  According to IBOPE, for the year ended December 31,
2009, Grupo Radio Centro’s radio stations ranked as five of the top 10 FM radio
stations (out of a total of 31 FM stations) and three of the top 10 AM stations
(out of a total of 35 AM stations). See “—Business Strategy.”


12


In the
United States, we entered into an agreement on April 3, 2009 with Emmis
Communications Corporation (“Emmis”), a U.S. radio broadcasting
company.  We agreed to provide programming to, and sell advertising
time on, KXOS-FM for up to seven years.  KXOS-FM is an Emmis-owned
radio station broadcasting in Los Angeles, California, on the 93.9 FM frequency.
We began operating
the station in the contemporary Spanish-language hits format on April 15,
2009.  We operate KXOS-FM through our subsidiary, Grupo Radio Centro
LA, LLC (“GRC-LA”), which was incorporated on March 13, 2009 as a Delaware
limited liability company.  According to Arbitron Inc., a media and
marketing research firm, as of December 31, 2009, KXOS-FM had an audience share
of 1.6% and was ranked 25th out of
a total of 62 stations in the Los Angeles metropolitan area and an audience
share of 3.3% and was ranked 11th in
terms of the Hispanic population.




In
addition to its radio broadcasting activities, the Company, under the trade name
Organización Impulsora de
Radio, acts as the national sales representative for, and provides
programming to, a network of affiliates in Mexico.  At December 31,
2009, the Company had 107 affiliates in 75 cities throughout
Mexico.




Business
Strategy




The
Company’s strategy is to optimize cash flow from operations by maintaining its
leading market position.




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 major station formats, including the following:




·
            Grupera—Diverse
      Musical Genres,




·
            Juvenil—Youth
      Oriented,




·
            Spanish
      Language—Contemporary Music,




·
            English
      Language—Classic Rock,




·
            English
      Language—Contemporary Music,




·
            Spanish
      Language—Classics, News/Talk Show,
and




·
            English
      Language—Music/News.




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
rationales:  (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 distinguishes itself from its smaller
competitors, who cannot offer as comprehensive coverage of the Mexican radio
audience.  The Company offers advertisers exposure to listening
audiences targeted to correspond with the demographic profiles advertisers seek
and provides advertisers with their choice of either focused or broad audience
exposure across a comprehensive range of income classes and age
groups.


13


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
balancing the mix of its station formats to correspond to the needs of the
overall market and being proactive in the management of each individual station
format and adjusting to the evolution of its particular market
segment.




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 de Radio Red” from
5:45 a.m. to 10:00 a.m. to the 26 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 “—OIR Network.”


14


Broadcasting Operations




Radio
Stations




Except as
noted, the following table sets forth certain information about the radio
stations Grupo Radio Centro operates in Mexico City as of December 31,
2009:


Station
                      
                      Frequency
                      
                      Power
                          (Watts)
                      
                      Station Format
                      
                      Total
                          Market
                          Rank(1)(2)
                      
                      
                      Total
                          Audience
                          Share(1)(3)
                      
                      
                      Band
                          Rank(1)(4)
                      
                      Target
                          Demographic
                          SegmentsXEQR-FM
                      
                      107.3 mhz
                      
                      
                      100,000
                      
                      Grupera—Diverse Musical Genres
                      
                      
                      1
                      
                      
                      
                      14.9
                      %
                      
                      
                      1
                      
                      13-44 yearsXERC-FM
                      
                      97.7 mhz
                      
                      
                      100,000
                      
                      Juvenil—Youth Oriented
                      
                      
                      8
                      
                      
                      
                      3.2
                      %
                      
                      
                      7
                      
                      8-34 yearsXEJP-FM
                      
                      93.7 mhz
                      
                      
                      100,000
                      
                      Spanish Language—Contemporary Music
                      
                      
                      4
                      
                      
                      
                      6.9
                      %
                      
                      
                      4
                      
                      18-44 yearsXHFO-FM(5)
                      
                      92.1 mhz
                      
                      
                      150,000
                      
                      English Language—Classic Rock
                      
                      
                      5
                      
                      
                      
                      5.7
                      %
                      
                      
                      5
                      
                      18-44 yearsXHFAJ-FM
                      
                      91.3 mhz
                      
                      
                      100,000
                      
                      English Language—Contemporary Music
                      
                      
                      13
                      
                      
                      
                      2.6
                      %
                      
                      
                      11
                      
                      13-24 yearsXEQR-AM
                      
                      1030 khz
                      
                      
                      50,000
                      
                      Spanish Language—Talk Show
                      
                      
                      6
                      
                      
                      
                      4.3
                      %
                      
                      
                      1
                      
                      25+ yearsXEJP-AM
                      
                      1150 khz
                      
                      
                      50,000
                      
                      Spanish Language Classics
                      
                      
                      11
                      
                      
                      
                      2.7
                      %
                      
                      
                      2
                      
                      35+ yearsXERED-AM
                      
                      1110 khz
                      
                      
                      100,000
                      
                      News / Talk Show
                      
                      
                      24
                      
                      
                      
                      1.0
                      %
                      
                      
                      6
                      
                      25+ yearsXHRED-FM
                      
                      88.1 mhz
                      
                      
                      100,000
                      
                      News / English Language—Music
                      
                      
                      21
                      
                      
                      
                      1.1
                      %
                      
                      
                      16
                      
                      25+ yearsXERC-AM
                      
                      790 khz
                      
                      
                      50,000
                      
                      News
                      
                      
                      39
                      
                      
                      
                      0.4
                      %
                      
                      
                      14
                      
                      25+ yearsXEN-AM
                      
                      690 khz
                      
                      
                      100,000
                      
                      News / Talk Show
                      
                      
                      37
                      
                      
                      
                      0.5
                      %
                      
                      
                      13
                      
                      25+ years







(1)
            Source:
      IBOPE AGB México.


(2)
            Total
      market rank is determined based on each station’s annual average share of
      the total radio audience.


(3)
            Total
      audience share represents each station’s annual average share of the total
      radio audience.


(4)
            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).


(5)
            XHFO-FM
      is operated by Grupo Radio Centro pursuant to an operating agreement that
      was renewed on October 16, 2008  for five years ending on
      January 2, 2014.  For the year ended December 31, 2009, XHFO-FM
      accounted for approximately 14.6% of Grupo Radio Centro’s broadcasting
      revenue.


15


Programming




The
Company currently produces all of the programming for the stations it owns or
operates.  The Company also provides programming to its network of
affiliates.




The
programming the Company produces includes playing recorded music, covering live
music events (such as concerts), and airing special musical programs and news
and talk show programs.  Through its Noticentro news division, the
Company produces daily news programs consisting of three-minute updates and
10-minute summaries of local, national and international news that are broadcast
through Formato 21, the Company’s 24-hour all-news station, and the majority of
its other stations in Mexico City.




The
Company’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 regularly conducts 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.  Grupo
Radio Centro conducted approximately 250,000 in 2009 and 247,000 interviews in
2008.  The Company believes that no competitor has developed an
internal research capability as extensive as its own.




Production
and Transmission of Programming




Audio
Engineering.  Grupo Radio Centro has 18 production studios in which
musical material, advertisements, informational messages, news and promotional
spots are recorded on hard drive, compact disk, and DVD-audio through the
Maestro Automation System.  This system permits the direct
transmission of audio recordings to the Company’s 35 workstations, where they
are processed and sent to broadcast sites.




Grupo
Radio Centro also maintains 13 on-air studios, each of which is linked to Grupo
Radio Centro’s automated programming computer network via fiber
optics.  Grupo Radio Centro’s primary studio operations are
substantially fully digital and utilize state-of-the-art computer networks to
record, schedule and play all news, music, promotional and advertising
material.  Currently, the Company has a single high-speed computer
network installed both in on-air studios and in production studios.




Grupo
Radio Centro’s news division uses the News Room system, which enables news
writers to provide radio announcers with information directly through scrolling
text that runs across a flat-panel screen while the announcers are on
air.  The system is used primarily in the Formato 21 radio station,
but it also provides information to news centers in other radio
stations.  The News Room system, which receives news reports from the
Associated Press (AP), Agence France-Presse (AFP), Notimex F and Reuters, has
reduced considerably the amount of paper used during news programs.




In 2008,
the Company installed two digital mixer consoles used by OIR.




Transmission.  Each
of the Company’s radio stations 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 switch to back-up power in case of a power
outage.  In addition, the main FM transmitter facility is equipped
with an uninterruptible power supply to prevent the loss of airtime during the
transfer to back-up power.


16


Grupo
Radio Centro uses multiplexed networks for transmission, which allows five of
its AM stations to operate at three sites, each using one
antenna.  Similarly, five FM stations are multiplexed in a common
panel master antenna on the Cerro del Chiquihuite, which Grupo Radio Centro
believes is ideally located at 540 meters above the average terrain level in
Mexico City.  One FM radio station operated by the Company transmits
from the World Trade Center building in Mexico City.




In 2007,
the Company renovated a location to serve as an alternate transmission site as a
back-up studio and production space.  This facility is equipped with
two small production studios, six transmission booths for talk show or news
programs, and five workstations for music programs.  The facility also
has a sophisticated multiplexing network for up to five stereo channels for the
FM stations and six digital encoders/decoders to connect to the transmitting
plants.  If there is an emergency, the alternate site can be
controlled remotely from the XERC-FM, XEJP-FM and XEQR-FM radio stations in
Mexico City.




In 2008,
the Company began renovating an additional alternate transmission site for the
studios of 11 of the Company’s Mexico City radio stations.  The
alternate site, which was completed in 2009, is equipped with two small
production studios, six transmitter booths for talk show and news programs, and
five workstations for music programs.




In
December 2008, the Company obtained authorization from the SCT to increase the
power at two stations: XEDKR-AM (in Jalisco) was increased from one to 10
kilowatts, and XESTN-AM (in Monterrey) was increased from one to five
kilowatts.   In June 2009, the Company completed a new
transmission site and the new building from which XEDKR-AM currently operates.
In September 2009, the Company completed upgrades to its XESTN-AM transmission
site.  Both stations now operate with increased power.




Investment
in Technology




Grupo
Radio Centro consistently invests in state-of-the-art equipment, the development
and deployment of new operating systems and the training of its engineering and
operating personnel.  The Company believes these investments enable it
to produce high-quality programming with few 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, which reduces customers’ monitoring costs and
enhances customers’ goodwill.  The Company believes that its equipment
and engineering staff give it a competitive edge in Mexico City radio
broadcasting.




Currently,
all AM and FM radio broadcast signals in Mexico are analog.  However,
there are various efforts underway to develop, test and implement radio digital
audio broadcasting (DAB), using either the  “in-band-on-channel” U.S.
broadcasting model or the “out-of-band” European broadcasting
model.  If implemented, DAB would largely eliminate fading, static and
other interference that adversely affects the listening experience.




The Cámara Nacional de la Industria de
Radio y Televisión (National Chamber of the Radio and Television
Industries, or “CIRT”) is in the process of analyzing DAB proposals and has
created a task force with the Comisión Federal de
Telecomunicaciones (Mexican Federal Telecommunications Commission or
“Cofetel”) in order to introduce DAB in Mexico in the future.  CIRT
and Cofetel have announced plans to issue digital radio standards in
2009.  However, there can be no assurance as to whether or when DAB
will be introduced.


17


The
Company actively participates in the analysis of the adoption of DAB in Mexico
through its representation in CIRT and by supporting Cofetel’s Comité Mixto de Tecnologías
Digitales (Mixed Committee on Digital Technology).




The
Company has also supported the adoption of DAB in Mexico by installing and
operating advanced digital radio transmission systems on an experimental
basis.  In 2005, the Company temporarily installed a powerful digital
transmission system called the Eureka 147 Digital Audio Broadcasting (DAB) at
its Cerro del Chiquihuite plant.  The Eureka 147 DAB system is
equipped to transmit simultaneously up to five different radio
programs.  In 2005 and 2006, the Company performed tests of the new
system, for representatives of the SCT and CIRT’s Comité de Nuevas Tecnologías
(Committee on New Technology), to demonstrate the application and capabilities
of Digital Multimedia Broadcasting (DMB) technology, which enables a single
broadcasting station to transmit video and audio and data for multiple
applications.




In 2007,
the Company tested an upgraded Eureka 147 DAB system in its broadcasting
facilities at the Constituyentes building.  The Company operated the
upgraded system, which offered additional channels greater capabilities, until
March 2008.




From
October to December 2008, the Company tested a Digital Broadcasting System from
its Constituyentes building.  The system’s capabilities included the
transmission on one digital radio channel of two video programs, eight audio CD
quality programs, data, and a webcam signal. The Company demonstrated the system
with a reduced power transmitter during “CIRT Radio Week” in October
2008.   The demonstration included more than 20 different types
of DAB receivers.




Sale
of Airtime and Marketing




Commercial
airtime for Grupo Radio Centro’s radio stations is sold both to advertising
agencies and directly to businesses.  The Company’s top 10 customers
accounted for approximately 30.2% of total broadcasting revenue (excluding
revenue from our operations in the United States) in 2009, 2008 and
2007.  Our two largest individual customers in 2009, 2008 and 2007
were Nueva Wal Mart and Comercial Mexicana.  In 2009, Nueva Wal Mart
represented approximately 7.0% and Comercial Mexicana represented approximately
4.0% of our total broadcasting revenue (excluding revenue from our operations in
the United States).  In 2008, Nueva Wal Mart represented approximately
6.5% and Comercial Mexicana represented approximately 3.7% of our total
broadcasting revenue.  In 2007, Nueva Wal Mart represented
approximately 5.6% and Comercial Mexicana represented approximately 4.2% of our
total broadcasting revenue.




The
companies comprising Grupo Cifra and Grupo Carso also are key
customers.  In 2009, the companies comprising Grupo Cifra accounted
for 11.3% of our total broadcasting revenue (excluding revenue from our
operations in the United States), and the companies comprising Grupo Carso
accounted for 6.4% of our total broadcasting revenue (excluding revenue from our
operations in the United States).  In 2008, the companies comprising
Grupo Cifra accounted for 7.7% of our total broadcasting revenue, and the
companies comprising Grupo Carso accounted for 7.3% of our total broadcasting
revenue.  In 2007, the companies comprising Grupo Cifra accounted for
7.1% of our total broadcasting revenue, and the companies comprising Grupo Carso
accounted for 8.4% of our total broadcasting revenue.




Sales of
commercial airtime 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.”


18


At
December 31, 2009, the Company had a sales force of 29 individuals, of which 15
marketed primarily to advertising agencies and major customer accounts, and 14
marketed to small and mid-sized customer 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 customers who
purchase airtime on multiple stations; the largest discounts are offered to
customers who purchase airtime on all of its stations.  The Company
charges higher rates to customers who purchase airtime during “special events,”
such as live concerts and special news features.




The
Company sells some commercial airtime in advance.  The advance-sales
arrangements guarantee the rate in effect at the time of purchase to advertisers
who deposit cash with Grupo Radio Centro in an amount equal to their advertising
commitment for an agreed period.  These advertisers are also 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 2009, revenue
recognized under advance-sale arrangements, including related interest income,
accounted for approximately 24.9% of total broadcasting revenue (excluding
revenue from our operations in the United States), compared to 33.7% for 2008
and 32.5%for
2007.




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 sold
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 the
benefits of guaranteed rates and bonus airtime under its advance-sales plans
attract advertisers who would not otherwise purchase advertising
time.  However, any decrease in future inflation rates 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, 2009, Grupo Radio Centro had 107
affiliates located in 75cities throughout
Mexico.  During the
last three years, broadcasting revenue from OIR-related activities ranged from
3.0% to 3.2% of total broadcasting revenue (excluding revenue from our
operations in the United States).  In 2009, approximately 3.0% of the
Company’s revenue (excluding revenue from our operations in the United States)
was attributable to its work through OIR, and no single affiliate represented
more than 7.1% of total OIR-related revenue.




At
December 31, 2009, 13 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 advertising aimed at a national audience is sold
through networks of affiliated radio stations.  Pursuant to its
standard affiliate agreement, which is terminable at will by either party on 60
days’ notice, OIR agrees to purchase commercial airtime from affiliated
stations, compensating such stations for their airtime with a percentage of the
revenue obtained on the resale of commercial airtime to national
advertisers.  The affiliates agree to broadcast certain programs at
specified times with advertising spots of specified
duration.  Compensation paid to each affiliate varies depending on the
size of each affiliate’s market.


19


OIR
transmits special event programs, including national advertising, directly to
certain affiliates via satellite.  In December 2005, the Company
installed a new satellite up-link system with state-of-the-art technologies,
including Digital Video Broadcasting (DVB) transmission, with 10 digital stereo
channels.  All of our affiliates are able to receive OIR special event
programs via satellite from Mexico City.  Between January and March
2006, we replaced the receivers of our affiliates that obtain OIR programs via
satellite with more cost-effective units.




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, 2009, there were 59 commercial radio
stations in Mexico City (34 AM and 25 FM stations) and eight not-for-profit,
public-service stations (two AM and six FM).  These stations
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 December 31, 2009, and a
chart depicting the audience share of each.




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




AM
      Stations
                  
                  
                  FM
      Stations
                  
                  
                  TotalGrupo
      Radio Centro
                  
                  
                  5
                  
                  
                  
                  6
                  
                  
                  
                  11Grupo
      Acir
                  
                  
                  3
                  
                  
                  
                  4
                  
                  
                  
                  7Televisa
      Radio
                  
                  
                  3
                  
                  
                  
                  3
                  
                  
                  
                  6NRM
      Comunicaciones
                  
                  
                  3
                  
                  
                  
                  3
                  
                  
                  
                  6Grupo
      Radio Fórmula
                  
                  
                  3
                  
                  
                  
                  2
                  
                  
                  
                  5Grupo
      Imagen
                  
                  
                  0
                  
                  
                  
                  2
                  
                  
                  
                  2MVS
      Radio
                  
                  
                  0
                  
                  
                  
                  2
                  
                  
                  
                  2Total
                  
                  
                  17
                  
                  
                  
                  22
                  
                  
                  
                  39








(1)     Source:
Grupo Radio Centro.


20




Mexico
City Radio Audience Share (1970-2009)(1)












(1)
            Sources:
      INRA, Arbitron, Inc. and IBOPE.


(2)
            In
      1995, the Company began operating the three stations owned by Radio
      Programas de México.  Accordingly, from 1995, the Company’s
      audience share includes the audience share of these three
      stations.  In 1996, the Company acquired these
      stations.


(3)
            In
      1995, Grupo Acir acquired the three stations owned by Grupo
      Artsa.


(4)
            As
      of 1994, Núcleo Radio Mil (NRM) no longer owns XECO-AM and
      XEUR-AM.  In 1995, NRM purchased
  XHMM-FM.


(5)
            Includes
      average audience share of stations owned by Grupo Imagen until its
      separation from MVS Radio in December
1999.




According
to IBOPE, the Company’s Mexico City audience share increased to 43.4% in
2009.  According to IBOPE, the Company’s average Mexico City audience
share decreased slightly from 43.6% in 2007 to 42.9% in 2008.  The
Company has experienced gradual declines in previous years, which were mainly
attributable to increased competition from other radio stations that adopted
formats similar to the Company’s most successful formats, including
Juvenil—Youth Oriented, Grupera—Diverse Musical Genres and News/Talk
Show.




The
Company believes that its balanced portfolio of station formats reduces the
impact of a decline in audience share of any one format segment or
station.  For example, the Company’s most popular station, XEQR-FM,
which was the top-ranked station in Mexico City for the year ended December 31,
2009, represented only 14.6% of the Company’s total radio
audience.  However, there can be no assurance that competition within,
or a decline in the popularity of, a given format will not decrease the
Company’s aggregate audience share in the future.




In
addition, the Company faces strong competition for advertising revenue from both
television and various print media.


21


OIR
Network Competition




The
Mexican radio-network market is highly competitive.  As of December
31, 2009, there were 27 radio networks serving 742 AM radio stations and 478 FM
radio 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 served by OIR to compete effectively.




Significant
Subsidiaries




The
following table sets forth the Company’s significant subsidiaries at December
31, 2009:




Name of the Company
                                        
                                        Jurisdiction of
                                          Establishment
                                        
                                        Percentage of
                                          Ownership and
                                          Voting Interest
                                        
                                        DescriptionXEQR,
      S.A. de C.V.
                                        
                                        Mexico
                                        
                                        
                                        99.9
                                        %
                                        Radio
      stationXERC,
      S.A. de C.V.
                                        
                                        Mexico
                                        
                                        
                                        99.9
                                        %
                                        Radio
      stationXEEST,
      S.A. de C.V.
                                        
                                        Mexico
                                        
                                        
                                        99.9
                                        %
                                        Radio
      stationXEQR-FM,
      S.A. de C.V.
                                        
                                        Mexico
                                        
                                        
                                        99.9
                                        %
                                        Radio
      stationXERC-FM,
      S.A. de C.V.
                                        
                                        Mexico
                                        
                                        
                                        99.9
                                        %
                                        Radio
      stationXEJP-FM,
      S.A. de C.V.
                                        
                                        Mexico
                                        
                                        
                                        99.9
                                        %
                                        Radio
      stationXEDKR-AM,
      S.A. de C.V.
                                        
                                        Mexico
                                        
                                        
                                        99.2
                                        %
                                        Radio
      stationRadio
      Red, S.A. de C.V.
                                        
                                        Mexico
                                        
                                        
                                        99.9
                                        %
                                        Radio
      stationRadio
      Red-FM, S.A. de C.V.
                                        
                                        Mexico
                                        
                                        
                                        99.9
                                        %
                                        Radio
      stationRadio
      Sistema Mexicano, S.A.
                                        
                                        Mexico
                                        
                                        
                                        99.9
                                        %
                                        Radio
      stationEstación
      Alfa, S.A. de C.V.
                                        
                                        Mexico
                                        
                                        
                                        99.9
                                        %
                                        Radio
      stationEmisora
      1150, S.A. de C.V.
                                        
                                        Mexico
                                        
                                        
                                        99.9
                                        %
                                        Radio
      stationGrupo
      Radio Centro LA, LLC
                                        
                                        United
      States of America
                                        
                                        
                                        51.0
                                        %1
                                        Radio
      stationRadio
      Centro Publicidad,S.A.
      de C.V.
                                        
                                        Mexico
                                        
                                        
                                        99.9
                                        %
                                        Marketing
      company




1 As the
result of a capital reduction in February 2010, the Company now owns 100% of
Grupo Radio Centro LA, LLC.  See Item 7, “Major Shareholders and
Related Party Transactions—Related Party Transactions—Investment in
GRC-LA.”


22





Name of the Company
                      
                      Jurisdiction of
                        Establishment
                      
                      Percentage of
                        Ownership and
                        Voting Interest
                      
                      DescriptionGRC
      Publicidad, S.A. de C.V.
                      
                      Mexico
                      
                      
                      99.9
                      %
                      Marketing
      companyGRC
      Medios, S.A. de C.V.
                      
                      Mexico
                      
                      
                      99.9
                      %
                      Marketing
      companyGRC
      Comunicaciones, S.A. de C.V.
                      
                      Mexico
                      
                      
                      100
                      %
                      Marketing
      companyGRC
      Radiodifusión, S.A. (formerly Aerocer, S.A.)
                      
                      Mexico
                      
                      
                      99.9
                      %
                      Marketing
      companyPromotora
      Técnica de Servicios Profesionales, S.A. de C.V.
                      
                      Mexico
                      
                      
                      99.9
                      %
                      Service
      companyPublicidad
      y Promociones Internacionales, S.A. de C.V.
                      
                      Mexico
                      
                      
                      99.9
                      %
                      Service
      companyTo2
      México, S.A. de C.V.
                      
                      Mexico
                      
                      
                      100
                      %
                      Service
      companyPromo
      Red, S.A. de C.V.
                      
                      Mexico
                      
                      
                      99.9
                      %
                      Service
      companyUniversal
      de Muebles e Inmuebles, S.A. de C.V.
                      
                      Mexico
                      
                      
                      99.8
                      %
                      Real
      estate companyInmobiliaria
      Radio Centro,S.A.
      de C.V.
                      
                      Mexico
                      
                      
                      99.9
                      %
                      Real
      estate companyDesarrollos
      Empresariales,S.A.
      de C.V.
                      
                      Mexico
                      
                      
                      99.9
                      %
                      Sub-holding
      companyRadiodifusión
      Red, S.A. de C.V.
                      
                      Mexico
                      
                      
                      99.9
                      %
                      Sub-holding
      companyEnlaces
      Troncales, S.A. de C.V.
                      
                      Mexico
                      
                      
                      99.9
                      %
                      Sub-holding
      companyMúsica,
      Música, Música, S.A. de C.V.
                      
                      Mexico
                      
                      
                      90.9
                      %
                      Non-operating
      companyPromotora
      de Éxitos, S.A. de C.V.
                      
                      Mexico
                      
                      
                      90.9
                      %
                      Non-operating
      companyProducciones
      Artísticas Internacionales, S.A. de C.V.
                      
                      Mexico
                      
                      
                      99.9
                      %
                      Non-operating
      company





On March
31, 2009, the Company merged three of its marketing subsidiaries, Radio Centro
Publicidad, S.A. de C.V., GRC Publicidad, S.A. de C.V., and GRC Medios, S.A. de
C.V., into GRC Comunicaciones, S.A. de C.V.




Property
and Equipment




All of
Grupo Radio Centro’s tangible assets are located in Mexico.  At
December 31, 2009, the net book value of all property and equipment was
approximately Ps. 459.9 million (U.S.$ 35.2 million).


23


Grupo
Radio Centro’s principal executive offices and studios are located in Mexico
City and are owned by the Company.  In 1992 Grupo Radio Centro
purchased the Constituyentesbuilding, a 102,000
square foot building of which, at December 31, 2009, the Company occupied
approximately 81,000square
feet.  The remainder is 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 Mexican law,
Grupo Radio Centro purchased and received authorization from Telecomunicaciones
de México, a state-owned entity, to operate its own up-link
equipment.  This up-link equipment has been operational since the end
of 1994 and was upgraded in December 2005 and the first quarter of 2006 (see
“—Business Strategy—Production and Transmission of Programming”).




Grupo
Radio Centro continues to own the building in which its administrative offices
and studios were located immediately before its move into theConstituyentes
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.




Substantially
all of the Company’s property, excluding its broadcasting equipment, is subject
to a first priority lien under our credit facility.  See Item 5,
“Operating and Financial Review and Prospects—Liquidity and Capital
Resources—Indebtedness.”


24


REGULATORY
FRAMEWORK




The
business of Grupo Radio Centro is subject to regulation and oversight by the SCT
and Cofetel.  The SCT is part of the executive branch of the Mexican
federal government and Cofetel is a separate administrative agency independent
of the SCT.  Regulation and oversight are governed by the Ley Federal de Radio y
Televisión (Federal Radio and Television Law), the Ley Federal de
Telecomunicaciones (Federal Telecommunications Law), the regulations
issued pursuant to these laws and the licenses granted by the SCT.  We
are also subject to oversight by the Procuraduría Federal del
Consumidor (Federal Agency for Consumer Protection) and the Comisión Federal de Competencia
Económica (Federal Competition Commission).




Regulation
of Radio Broadcasting by Mexico




Licenses.  Under
the Federal Radio and Television Law, amended by the Mexican Congress in April
2006, 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.  After a call for bids and a public bidding process, a
20-year license is granted to the winning applicant upon payment of a
fee.  The SCT through Cofetel, 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 specific 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, if the Company’s license
were revoked for certain specified reasons, Grupo Radio Centro would forfeit to
the Mexican government its transmission and antenna facilities with respect to
the license.  If the license were terminated early 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, if
the SCT, through Cofetel, terminates or revokes a license, the licensee may not
obtain a new license for one to five years and, in some cases, may be forbidden
from obtaining a new license at all.  Under current regulations, we
believe that it is unlikely that additional licenses will be granted in the
Mexico City market.




The
licensee has a preferential right to renew the license for periods of up to 20
years (with most terms for renewal currently being granted for up to 12 years)
under a non-competitive renewal process.  Renewals are generally
granted to licensees that have substantially complied with the applicable law
and the terms of their licenses.  The licenses for nine of Grupo Radio
Centro’s radio stations (XEQR-AM, XERC-AM, XEEST-AM, XEJP-AM, XERED-AM, XEN-AM,
XEQR-FM, XERC-FM AND XHFAJ-FM) were renewed and are now set to expire in
2016.  The license for XHRED-FM was renewed and is now set to expire
in 2019.  The license for XEJP-FM is set to expire in
2012.  The license for XEDKR-AM (in Guadalajara) will expire in
October 2015, and the license for XESTN-AM (in Monterrey) will expire in
November 2015.




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 is subject to the
prior approval of the SCT.  A license may only be assigned if the
license has been in effect for more than three years, the licensee has complied
with all of its obligations under the license and has obtained a favorable
opinion of the Federal Competition Commission.




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


25


Under
Mexican law, radio programming is not subject to judicial or administrative
censorship, except that programming is subject to various regulations, including
prohibitions on explicit 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 to provide a limited amount of broadcasting time free of
charge to all registered political parties and the Instituto Federal Electoral
(Federal Electoral Institute or “IFE”).  See “— Political
Advertising.”




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.  Licensees are also
prohibited from broadcasting advertisements that are
misleading.  Advertisements for certain products and services are
subject to restrictions or require government approval before 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 total broadcast
time may be used for advertisements.  That time must be divided
proportionately among broadcasting hours.




The
Company sets its minimum advertising rates and registers such rates through
Cofetel.  Commercial airtime may not be sold at lower rates than those
registered with the SCT.  There are no restrictions on maximum rates
that may be charged.




Broadcast Tax.  All
radio stations in Mexico are subject to a tax payable by granting the Mexican
government the right to use a portion of broadcast time.  Radio
stations must satisfy this tax by providing the Mexican government with several
advertising spots lasting between 20 to 30 seconds each.  The amount
of broadcasting time allotted to the government is currently fixed at 35 minutes
each day between 6:00 a.m. and midnight.  The use of this time is
not cumulative, and the Mexican government forfeits any time it does not use in
any day.  The Mexican government’s spots must be distributed on a
proportional and equitable basis throughout the relevant programming
period.




Public
service announcements provided by the Mexican government are prohibited from
competing with the licensee’s programming, and Mexican government programming
that promotes the consumption of products or services must be limited to the
general promotion of Mexico’s goods and services.




Political
Advertising.  Several articles of the Mexican constitution
relating to political parties and elections were amended in November
2007.  A new electoral code implementing the amendments became
effective on January 15, 2008.  The constitutional amendments and the
electoral code prohibit political parties from directly or indirectly purchasing
broadcast time on any radio or television station.  In addition,
private individuals and entities are prohibited from purchasing advertising on
radio or television aimed at influencing voter preferences.


26


The
Mexican government is allotted a certain amount of time under concession
agreements with broadcasters and, in turn, gives a portion of that time to the
IFE to distribute among the political parties (during election years) and for
the use of the IFE.  The broadcast time that political parties receive
through the IFE is free of charge and airs during primetime
hours.  During campaign season, the IFE is granted 48 minutes of the
65 minutes the Mexican government receives daily as a broadcast
tax.  In other periods, the IFE receives eight minutes.  The
time allocated by IFE to political parties is the only broadcast time at their
disposal as, under the electoral code, political parties are prohibited from
purchasing broadcast time.  IFE has supervisory powers and is able to
administer sanctions for violations of the provisions of the electoral
code.




Other.  Mexican
companies are subject to the Ley Federal de Competencia
Económica (Federal Economic Competition Law), which promotes fair
competition and prevents monopolistic practices.




As a
result of the increase in Grupo Radio Centro’s share of the Mexico City radio
market following its acquisition of Radiodifusión RED, S.A. in 1996, 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 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 generally are not
subject.  The Company received Federal Competition Commission approval
of its acquisition of XEN-AM in July 2001 because the Company sold two of its AM
stations in 2000.  No assurance can be given that the Federal
Competition Commission will permit the Company to make any additional
investments should it desire to do so.




The
Federal Economic Competition Law was amended in 2006.  These
amendments strengthened the authority of the Federal Competition Commission,
expanded the definition of monopolistic practices, provided a more rigorous
approval process for business combinations and established more stringent
penalties, including substantially higher fines and the divestiture of
assets.  As a result, it is possible that the Federal Competition
Commission will more strictly enforce the Federal Economic Competition Law,
which could restrict our operations.




The
Federal Telecommunications Law was also amended in 2006, and interpretive
regulations were issued in October 2007.  The amendments to the
Federal Telecommunications Law subject radio and television broadcasting
companies such as Grupo Radio Centro to the oversight of Cofetel.  The
Federal Telecommunications Law also covers the transmission of restricted radio
signals and other telecommunications services at certain
frequencies.




The
Federal Telecommunications Law expanded Cofetel’s authority to conduct public
auctions of available radio and television frequencies.  Under this
law, while the SCT retains the ultimate authority to issue licenses, Cofetel is
permitted to engage in granting, prorogation, and completion of concessions,
permissions and allocations to use and operate frequency bands attributed to the
broadcasting service, acting as a branch of the SCT.




Mexican
law prohibits 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
did not change these Mexican regulations.


27


Intellectual
Property




Mexico.  Grupo
Radio Centro (directly or through its subsidiaries) has registered or filed for
registration with the Instituto Mexicano de la Propiedad
Industrial (Mexican Institute of Industrial Property) the following
service marks (and their corresponding design, where indicated):




·
              “Radio
      Red”
              ·
              “Stereo
      97.7”·
              “Joya”
              ·
              “Alegría”·
              “El
      Fonógrafo del Recuerdo”
              ·
              “Centro”·
              “Variedades”
              ·
              “Formato
      21”·
              “Stereo
      Joya”
              ·
              “Hoy”·
              “NotiCentro”
      (and design)
              ·
              “OIR”·
              “Sensación”
      (and design)
              ·
              “Palco
      Deportivo”·
              “Universal”
      (and design)
              ·
              “To2”·
              “Radio
      Programas de México”
              ·
              “UNIRED”·
              “RPM”
              ·
              “SERVIRED”·
              “ALFA
      91.3”
              ·
              “AUTORED”·
              “BANG”





In
addition, Grupo Radio Centro (directly or through its subsidiaries) has
registered or filed for registration the following commercial
slogans:




·
            “CRC
      Radiodifusión Internacional”


·
            “Grupo
      Radio Centro Radiodifusión de México al
Mundo”


·
            “ORC
      Radiodifusión Valle de México”


·
            “OIR
      Radiodifusión Nacional”


·
            “Radio
      Centro, la Estación de la Gran Familia
Mexicana”


·
            “SER,
      Servicios Especializados de
Radiodifusión”




United
States.  Grupo Radio Centro has filed for registration with the
United States Patent and Trademark Office for the following service
mark:




·
            “Radio
      Éxitos”





Item
4A.  Unresolved Staff Comments




Not
applicable.




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 MFRS, which differ in certain respects from
U.S. GAAP.  Note 23 to the Consolidated Financial Statements provides
a description of the principal differences between MFRS and U.S. GAAP, as they
relate to Grupo Radio Centro, including differences related to certain cash flow
information and a reconciliation to U.S. GAAP of operating income, net income
and shareholders’ equity.




Beginning
in 2008, the inflation accounting methods previously required by MFRS no longer
apply, except if the economic environment in which we operate qualifies as
inflationary.  See “—Changes in Inflation Accounting.”  As a
result, the financial information in the Consolidated Financial Statements and
throughout this Annual Report, for dates and periods after January 1, 2008 has
been presented without inflation accounting.  The financial
information for dates and periods prior to January 1, 2008 has been expressed in
constant pesos as of December 31, 2007.


28


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, its 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 airtime. 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 airtime, 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.  Grupo Radio Centro historically has had
sufficient cash flow from operations to meet its operating needs in all four
calendar quarters.




The
following table sets forth the Company’s broadcasting revenue and broadcasting
income (excluding depreciation, amortization and corporate, general and
administrative expenses) on a quarterly basis, in each case as a percentage of
its respective total, for 2009, 2008 and 2007.




Broadcasting
      Revenue
                
                
                Broadcasting
      Income2009
                
                
                2008
                
                
                2007
                
                
                2009
                
                
                2008
                
                
                2007First
      quarter
                
                
                19.8
                %
                
                
                17.4
                %
                
                
                19.1
                %
                
                
                22.8
                %
                
                
                8.5
                %
                
                
                7.7
                %Second
      quarter
                
                
                22.6
                
                
                
                23.6
                
                
                
                22.2
                
                
                
                24.3
                
                
                
                22.9
                
                
                
                19.2Third
      quarter
                
                
                24.3
                
                
                
                27.5
                
                
                
                27.1
                
                
                
                6.8
                
                
                
                30.8
                
                
                
                31.4Fourth
      quarter
                
                
                33.3
                
                
                
                31.5
                
                
                
                31.6
                
                
                
                46.1
                
                
                
                37.8
                
                
                
                41.7Total
                
                
                100
                %
                
                
                100
                %
                
                
                100
                %
                
                
                100
                %
                
                
                100
                %
                
                
                100
                %





Historically,
advertising expenditures by political campaigns represented an important part of
the Company’s total broadcasting revenue during the congressional elections that
occur every three years, including 2006, and during presidential elections that
occur every six years (coinciding with congressional elections), including
2006.  Since January 2008, Mexican law has prohibited political
parties and private individuals from purchasing broadcast time for political
advertising on any radio or television station.  As a result, we no
longer receive revenues from advertising by political campaigns.See Item 4,
“Information on the Company—Business Overview—Broadcasting Operations—Sale of
Airtime and Marketing.”




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.


29


Mexico
began to enter a recession in the fourth quarter of 2008 during which GDP fell
by approximately 1.6%.  GDP fell by 6.5% in 2009 and grew by 4.3% in
the first quarter of 2010.  If the Mexican economy continues to
experience a recession or the existing recession becomes more severe, if
inflation or interest rates increase significantly or if the Mexican economy is
otherwise adversely impacted, our business, financial condition or results of
operations could be materially and adversely affected.




The
annual rate of inflation in Mexico, as measured by changes in the INPC, was 3.6%
for 2009.  Inflation for the first quarter of 2010 was
2.4%.  The adverse effects of high inflation on the Mexican economy
might result in lower demand for broadcast advertising.




Loss
Contingency




In 2002,
Infored, S.A. de C.V. (“Infored”) and José Gutiérrez Vivó initiated an
arbitration proceeding against us, seeking the rescission of a production
contract and damages.  In March 2004, an arbitration panel of the
International Chamber of Commerce notified us of its decision to rescind the
contract and award Infored and Mr. Gutiérrez Vivó, collectively, U.S.$ 21.1
million.  As a result of the damages award, we recorded a provision
for this contingent liability in the amount of U.S.$ 21.1 million as of
December 31, 2003.  For the year ended December 31, 2005, we
recorded Ps. 14.3 million and, for the year ended December 31, 2004, we
recorded Ps. 7.0 million in interest relating to this
provision.  As of March 31, 2006, the provision amounted to
Ps. 253.6 million (nominal amount).  We challenged the validity
of the arbitration award, and on June 16, 2006, a Mexican court set aside
and refused to enforce the arbitration award in Mexico.  As a result,
we reversed the provision and recorded it as an extraordinary income item in
June 2006.




Since the
June 2006 decision, legal proceedings have continued, and in June 2008, the June
2006 decision was reversed.  We currently do not consider it necessary
to record a provision for this matter because the June 2008 decision does not
impose an obligation to pay the arbitration award and we have continued to
challenge the award’s validity in the Mexican courts.  See
Item 8, “Financial Information3⁄4Other Financial
Information3⁄4Legal and
Arbitration Proceedings.”




Changes
in Inflation Accounting




Through
the end of 2007, MFRS required us to recognize certain effects of inflation in
our financial statements.  It also required us to restate financial
statements from prior periods in constant pesos as of the end of the most recent
period presented.  As discussed below, due to the current level of
inflation in Mexico, we have not applied the effects of inflation to our
financial information in 2008 and 2009.




Due to
the adoption of MFRS B-10, effective January 1, 2008, inflation accounting
methods no longer apply unless the economic environment qualifies as
“inflationary” for purposes of MFRS.  An environment is considered
inflationary if the cumulative inflation rate equals or exceeds 26% over the
three preceding years (equivalent to an average of 8% in each
year).  Because of the relatively low level of Mexican inflation in
recent years (3.6% in 2009, 6.5% in 2008 and 3.8% in 2007), the cumulative
inflation rate in Mexico over the three-year period preceding December 31, 2009
does not qualify the Mexican economic environment as inflationary.




As a
result, we have not applied the effects of inflation to our financial
information in 2009 and 2008.  In our financial information for 2009
and 2008, inflation adjustments for prior periods have not been removed from
shareholders’ equity and the re-expressed amounts for non-monetary assets and
liabilities at December 31, 2007 became the accounting basis for those assets
and liabilities beginning on January 1, 2008 and for subsequent periods, as
required by MFRS. In this respect, our financial statements for 2009 and 2008
are not comparable to those for prior periods.


30


In
comparing our results for 2009, 2008 and any future periods without inflation
accounting to results for prior periods that used inflation accounting, we
consider that the most important effects of the cessation of inflation
accounting, and of related changes in other accounting standards, to be as
follows:




·
            We
      no longer recognize monetary gains and losses attributable to the effects
      of inflation on our monetary assets and
  liabilities.




·
            We
      have ceased to adjust the carrying values of non-monetary assets for
      inflation.




·
            We
      no longer restate results of prior periods.  Financial
      information for dates and periods prior to 2008 will continue to be
      expressed in constant pesos as of December 31,
  2007.




·
            We
      have ceased to use inflation-adjusted assumptions in determining our
      employee benefit obligations and instead use nominal discount rates and
      other assumptions.




Changes
in MFRS




Note 3 to
our Consolidated Financial Statements discusses new accounting pronouncements
under MFRS that came into force in 2008 and 2009.  The 2008 and 2009
pronouncements have already been fully implemented in the financial statements
included in this Annual Report.  Certain pronouncements have required
us to change our financial presentation in 2009 in ways that have not had a
material effect on our results of operations and our balance sheet.




Critical
Accounting Policies




Impairment
Testing




The
Company is required to test for impairment of its long-lived assets in use,
including goodwill and other intangible assets, at least on an annual
basis.  To calculate impairment loss of long-lived assets in use, it
is necessary to determine the asset’s recovery value.  Recovery value
is defined as the greater of the net sales price of a cash-generating unit of
the asset and the asset’s use value, which is the present value of estimated
future cash flows.  The determination of the underlying assumptions
related to the recoverability of long-lived assets, including goodwill and other
intangible assets, is subjective and requires the exercise of considerable
judgment.  Any changes in key assumptions about the Company’s business
and prospects, or changes in market conditions, could result in an impairment
charge.




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 at the time services
are rendered by employees, based on the present value of the benefits determined
under actuarial estimates.  The amortization of unrecognized prior
service cost, which represents changes in assumptions and adjustments based on
experience that has not been recognized, is based on the employee’s estimated
active service life.  Other benefits to which employees may be
entitled in accordance with Mexican law are recognized as an expense in the year
in which they are paid.




The
Company records a reserve for the estimated accrued seniority premiums,
severance payments under certain circumstances and pension benefits, the amount
of which is determined through actuarial estimates.


31


2009
vs. 2008 Results of Operations




For the
year ended December 31, 2009, broadcasting revenue was Ps. 785.9 million,
representing a 6.9% increase compared to the Ps. 735.1 million reported in
2008.  The increase in broadcasting revenue was mainly attributable to
a Ps. 27.2 million increase in advertising expenditures by the Company’s Mexican
customers, who purchased more airtime in 2009 than in 2008 and to Ps. 23.6
million in revenues from the radio station we operate in Los
Angeles.




The
Company’s broadcasting expenses (excluding depreciation, amortization and
corporate, general and administrative expenses) for the year ended December 31,
2009 were Ps. 595.0 million, an increase of 31.5% compared to the
Ps. 452.4 million reported in 2008.  This increase was primarily
due to (i) broadcasting expenses of Ps. 130.9 million incurred in connection
with the radio station we operate in Los Angeles, which the Company began
operating in April 2009, and (ii) higher sales commissions to the Company’s
sales force, as a result of the increase in broadcasting revenue during
2009.




Broadcasting
income (i.e., broadcasting revenue minus broadcasting expenses, excluding
depreciation, amortization and corporate, general and administrative expenses)
for the year ended December 31, 2009 was Ps. 190.9 million, a decrease of
32.5% compared to the Ps. 282.8 million reported in 2008.  This
decrease was mainly attributable to the increase in broadcasting expenses, as
described above.




Depreciation
and amortization expenses for the year ended December 31, 2009 were
Ps. 26.0 million, a decrease of 18.0% compared to the Ps. 31.7 million
reported in 2008.  This decrease was due to a reduction in the
Company’s depreciable asset base.




The
Company’s corporate, general and administrative expenses for the year ended
December 31, 2009 were Ps. 14.9 million, slightly higher than the
Ps. 14.5 million reported in 2008.




As a
result of the foregoing, the Company reported operating income of Ps. 149.9
million for the year ended December 31, 2009, a 36.6% decrease compared to the
Ps. 236.6 million reported in 2008.




Other
expenses, net, for the year ended December 31, 2009 were Ps. 66.5 million,
a 16.9% increase compared to the Ps. 56.9 million reported in
2008.  This increase was mainly attributable to legal expenses
incurred in connection with the transactions related to the radio station we
operate in Los Angeles that the Company entered into with Emmis in April
2009.




The
Company’s comprehensive financing cost for 2009 was Ps. 40.6 million,
compared to the Ps. 7.7 million reported in 2008.  This increase
was mainly due to interest expense related to the Company’s Ps. 200.0
million loan obtained from Banco Inbursa, S.A. in March 2009 and net foreign
exchange loss attributable to an appreciation of the peso against the U.S.
dollar, which resulted in a decline in the peso value of the Company’s U.S.
dollar-denominated loan to GRC-LA.




For the
year ended December 31, 2009, the Company reported income before taxes of
Ps. 42.8 million, compared to Ps. 172.0 million reported in 2008,
mainly due to an increase in broadcasting expenses and comprehensive financing
cost, as described above.




The
Company recorded income taxes of Ps. 38.3 million for the year ended
December 31, 2009, compared to Ps. 45.3 million recorded in 2008, primarily
due to lower taxable income.  The Company’s effective tax rate
increased to 89.6% in 2009 from 26.3% in 2008.  Although after 2007 we
no longer recognize the effects of inflation in our financial statements, we do
continue to recognize the impact of inflation for tax purposes.  This
causes our pretax income to be affected by taxable monetary gain or loss on our
net monetary liabilities and by higher depreciation due to the application of
inflation indexation on our assets.  Additionally, our effective tax
rate was higher in 2009 than in 2008 because of the Company’s assessment that
the tax losses resulting from the operating losses from the Company’s Los
Angeles radio station will not be utilized to offset future taxable income in
2010.  Accordingly, the Company recorded a reserve against the total
deferred tax benefits that would be derived from such tax
losses.


32


As a
result of the foregoing, the Company recorded net income of Ps. 4.4 million
for the year ended December 31, 2009, compared to net income of Ps. 126.8
million reported in 2008.  The Company’s lower net income in 2009
reflected, in large part, operating losses generated by the radio station we
operate in Los Angeles.  In 2009, the Aguirre family owned 49% of the
investment in this station.  However, following a capital reduction of
GRC-LA in February 2010, described under Item 7, “Major Shareholders and Related
Party Transactions— Related Party Transactions –Investment in GRC-LA,” the
Company owns 100% of this investment.  As a result, future losses or
income generated by GRC-LA will not be offset by the family’s minority interest
and will be borne fully by the Company.




2008
vs. 2007 Results of Operations




For the
year ended December 31, 2008, broadcasting revenue was Ps. 735.1 million,
representing a 12.3% increase compared to the Ps. 654.8 million reported in
2007.  The increase in broadcasting revenue was mainly attributable to
an increase in advertising expenditures by the Company’s customers, who
purchased more airtime in 2008 than in 2007.  This increase in
advertising was the result of a highly competitive environment, in which the
Company sought to gain market share by offering attractive sales packages, as
well as increasing the size of its sales force.




The
Company’s broadcasting expenses (excluding depreciation, amortization and
corporate, general and administrative expenses) for the year ended December 31,
2008 were Ps. 452.4 million, an increase of 7.2% compared to the
Ps. 422.0 million reported in 2007.  This increase was primarily
due to (i) expenses related to extensive advertising campaigns undertaken by the
Company; (ii) higher sales commissions to the Company’s sales force, as a result
of the increase in broadcasting revenues; and (iii) higher expenses related
to the Company’s market research in 2008 than in 2007.




Broadcasting
income (i.e., broadcasting revenue minus broadcasting expenses, excluding
depreciation, amortization and corporate, general and administrative expenses)
for the year ended December 31, 2008 was Ps. 282.8 million, an increase of
21.5% compared to the Ps. 232.8 million reported in 2007.  This
increase was mainly attributable to the increase in broadcasting revenue
described above.




Depreciation
and amortization expenses for the year ended December 31, 2008 were
Ps. 31.7 million, a decrease of 5.8% compared to the Ps. 33.7 million
reported in 2007.  This decrease was due to the Company no longer
recording depreciation on certain Company assets whose useful lives have
ended.




The
Company’s corporate, general and administrative expenses for the year ended
December 31, 2008 were Ps. 14.5 million, a slight decrease compared to the
Ps. 14.8 million reported in 2007.




As a
result of the foregoing, the Company reported operating income of Ps. 236.6
million for the year ended December 31, 2008, a 28.3% increase compared to the
Ps. 184.3 million reported in 2007.




Other
expenses, net, for the year ended December 31, 2008 were Ps. 56.9 million,
a 24.2% increase compared to the Ps. 45.8 million reported in
2007.  This increase was mainly attributable to higher legal expenses
for litigation relating to a pending arbitration award in 2008 than in
2007.


33


The
Company’s comprehensive financing cost for 2008 was Ps. 7.7 million, a
30.5% increase compared to the Ps. 5.9 million reported in
2007.  This increase was mainly due to fees paid in connection with
the amendment of the Company’s credit facility in 2008.  The increase
in comprehensive financing cost was partially offset by the fact that the
Company did not record a loss on its net monetary position in 2008, due to a
change in MFRS regarding inflation accounting, compared to a loss on net
monetary position of Ps. 3.5 million recorded in 2007.




For the
year ended December 31, 2008, the Company reported income before taxes of
Ps. 172.0 million, a 29.6% increase compared to the Ps. 132.7 million
reported in 2007, mainly due to the increase in broadcasting revenue, described
above.




The
Company recorded income taxes of Ps. 45.3 million for the year ended
December 31, 2008, compared to Ps. 41.6 million recorded in 2007, primarily
due to higher taxable income due to an 12.3% increase of income, which was only
partially offset by a 7.2% increase in broadcast expenses.




As a
result of the foregoing, the Company reported net income of Ps. 126.8
million for the year ended December 31, 2008, an increase of 39.2% compared to
net income of Ps. 91.1 million reported in 2007.




Liquidity
and Capital Resources




The
Company’s primary source of liquidity is cash flow from
operations.  The Company’s operating activities provided Ps. 55.4
million in 2009, Ps. 69.3 million in 2008 and Ps. 153.5 million in
2007.  Working capital at December 31, 2009 was Ps. 247.0 million
and at December 31, 2008 was Ps. 212.8 million.




Although
cash flow from operations historically has been sufficient to cover the
Company’s working capital needs, the Company’s investment in April 2009 in a Los
Angeles radio station has resulted in increased working capital
needs.  On June 1, 2010, the Company borrowed Ps. 30 million under the
revolving tranche of its credit facility to meet its working capital needs and
it may need to do so again in the future.  The Company currently
expects to be able to meet its working capital needs in 2010 with cash flow from
operations. The Company has remaining borrowing capacity of Ps. 30 million under
its credit facility but its ability to borrow under that facility is subject to
compliance with covenants or its ability to obtain a waiver of non-compliance
with those covenants.  There can be no assurances that the Company
will be able to meet its working capital needs, or, if it is in non-compliance
with its debt covenants, that it will be able to borrow further amounts under
the credit facility.  Such events would have a material adverse effect
on the Company’s financial condition and results of operations.




During
2009, the Company’s principal use of funds, other than for operating purposes
and capital expenditures was the payment of dividends in the amount of
Ps. 100.0 million and the repayment of indebtedness in the principal amount
of Ps. 30.0 million.  In 2008, the Company’s principal use of
funds, other than for operating purposes and capital expenditures was the
payment of dividends in the amount of Ps. 100.0 million. In 2007, the
Company’s principal use of funds, other than for operating purposes and capital
expenditures was the payment of dividends in the amount of Ps. 71.9
million.  Grupo Radio Centro may from time to time repurchase its
outstanding equity securities if market conditions and other relevant
considerations make such repurchases appropriate.




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


34


Indebtedness




We have
entered into a credit facility with Banco Inbursa S.A., Institución de Banca
Múltiple, Grupo Financiero Inbursa for a secured peso-denominated loan in two
tranches in an aggregate principal amount equivalent to up to U.S. $21.0
million.  As of the date hereof, Ps. 180 million is outstanding under
this credit facility.  The first, non-revolving tranche is for a
peso-denominated amount equivalent to up to U.S. $14 million to be used for
capital expenditures and other corporate purposes.  The second,
revolving tranche is for a peso-denominated amount equivalent to up to U.S. $7
million to be used for working capital purposes.




On March
26, 2009, we drew down on the first tranche, in the amount of Ps. 200
million, to finance the prepayment of the first two years of fees under the
local marketing agreement we entered into with Emmis.  We are required
to repay the principal amount over five years in 20 quarterly installments
beginning June 1, 2009 and make quarterly interest payments at an annual rate of
13% through March 18, 2010 and at 9.5% thereafter.  On June 1, 2010,
we borrowed Ps. 30 million under the second tranche for working capital
purposes.  We are required to repay this amount on December 1, 2010
and make monthly interest payments at a variable interest rate of the Mexican
Interbank Equilibrium Interest Rate (“Tasa de Interes Interbancaria de
Equilibrio” or “TIIE”) plus 3%.




Amounts
borrowed under the credit facility are guaranteed by several of our subsidiaries
and secured by a first priority lien on substantially all of our property,
including our corporate headquarters but excluding any equipment used for
broadcasting.




As of the
date hereof, our remaining borrowing capacity under the credit facility is Ps.
30 million.  The credit facility will expire on June 16,
2015.  The principal conditions to drawing down include that we are in
compliance with our obligations under the credit facility; there be no material
adverse change resulting in a loss or liability to us equivalent to 5% or more
of our total assets (as such condition is more fully defined in the credit
facility) and no material adverse change in the banking environment or
international capital markets; borrowed amounts be secured by a first priority
lien on substantially all of our property; and there be no event of default
under the credit facility has occurred.  If any of the conditions to
draw down is not met or waived, we will be unable to obtain funds under the
credit facility.




The
credit facility contains covenants requiring us to maintain certain financial
ratios and comply with other financial conditions that, among other things,
limit our ability to incur additional indebtedness, pay dividends, pledge assets
and enter into transactions with affiliates. The financial covenants (using
terms defined in the credit facility) include an interest coverage ratio of at
least 2.5 to 1, a total debt to EBITDA ratio of no more than 3 to 1, a fixed
charges coverage ratio of at least 1.75 to 1, a cash balance of at least U.S.$
1.75 million, and shareholders’ equity of at least Ps. 850
million.




We were
not in compliance with the fixed charges coverage ratio as of March 31,
2010.  We obtained a waiver from the lender of this non-compliance for
the first quarter of 2010 as well as the second quarter ending June 30,
2010.  There is significant uncertainty as to whether we will be able
to comply with the fixed charges coverage ratio for the third quarter of
2010.  If we fail to comply with this covenant or any other covenant
under the credit facility, there can be no assurance that we will be able to
obtain waivers of such failures or that the lender will not accelerate amounts
due under the credit facility.  If we are unable to repay amounts due
under the credit facility, the lender could proceed against the collateral
securing our indebtedness.  Such events would have a material adverse
effect on our business, financial condition and results of
operations.


35


Off-Balance
Sheet Arrangements




In 2009,
the Company had no off-balance sheet arrangements that have or, in the opinion
of the Company, are reasonably likely to have a current or future effect on the
Company’s financial condition.




Contractual
Obligations




In the
table below we set forth contractual obligations consisting of long-term debt as
of December 31, 2009 and the period in which the contractual obligations come
due.  The amount of our long-term debt reported in the table excludes
interest and fee payments, which are primarily variable amounts. The
table below does not include pension liabilities, tax liabilities or accounts
payable.




Payments
      Due by Period
                  (as
      of December 31, 2009)Total
              
              
              2010
              
              
              2011-2012
              
              
              2013-2014
              
              
              2015
      and
                  beyond(in
      millions of Mexican pesos)Contractual
      obligations:Total
      debt(1)
              
              Ps.
              170.0
              
              
              Ps.
              40.0
              
              
              Ps.
              80.0
              
              
              Ps.
              50.0
              
              
              Ps.
              0







(1)
            Excludes
      interest payments, fees and the effect of derivative financial
      instruments.




U.S.
GAAP Reconciliation




Net
income under U.S. GAAP was Ps.  4.4 million for 2009, Ps. 126.7
million for 2008 and Ps. 91.1 million for 2007.  For the year
ended December 31, 2009, no U.S. GAAP adjustment to net income was required
because, as of January 1, 2009, a minority interest in subsidiaries is treated
as a part of shareholders’ equity under both U.S. GAAP and MFRS.  The
slight difference between net income under MFRS and U.S. GAAP for the years
ended December 31, 2008 and 2007 was due to the treatment under U.S. GAAP of a
minority interest in subsidiaries of the Company as a liability.




Operating
income under U.S. GAAP was Ps. 83.4 million for the year ended December 31,
2009, Ps. 179.7 million for 2008 and Ps. 138.5 million for
2007.  For the years ended December 31, 2009, 2008 and 2007, certain
other expenses, net of the Company that are classified as non-operating charges
under MFRS are charged against operating income under U.S. GAAP.




Shareholders’
equity under U.S. GAAP was Ps. 1,346.3 million at December 31, 2009,
Ps.1,422.4 million at December 31, 2008 and Ps. 1,396.6 million at December
31, 2007.  In all years, the difference between shareholders’ equity
under MFRS and U.S. GAAP was mainly due to the U.S. GAAP limitation, which
unlike MFRS, does not allow the Company to record an increase in value of
previously impaired buildings held for sale.




Pursuant
to MFRS, for dates and periods prior to 2008, 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, the Company’s financial statements for 2009, 2008 and 2007 include
an expanded recognition of deferred taxes under MFRS 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.




For a
further discussion of the differences between MFRS and U.S. GAAP as they relate
to Grupo Radio Centro, see Note 23 to the Consolidated Financial
Statements.


36


Item
6.  Directors, Senior Management and Employees




Directors




Management
of the business of the Company is vested in the board of directors and the chief
executive officer.  Our bylaws provide that the board of directors
consist of a minimum of seven and a maximum of 21 directors and an equal number
of alternate directors.  The Company’s shareholders elect each
director and alternate director by simple majority vote at the annual ordinary
general meeting.  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.  A person who has acted as an external
auditor of the Company or of companies that form a part of the Company’s
corporate group or consortium during the year prior to appointment may not be a
director.




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, controlling shareholders, important customers, 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, alternates of independent directors, must also
meet the requirements for independent directors.




The board of directors currently consists of 12
members.  Alejandro Sepulveda de la Fuente is the secretary to the
board of directors.  The current members of the board of directors
were reelected at the annual shareholders meeting on March 16, 2010 for a
one-year term.  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, two
Aguirre members of the board of directors, Francisco Aguirre and María Adriana
Aguirre, sit on the boards of directors of various radio stations in
Mexico.





Name
            
            Position
            
            Age
            
            Years as
                director
            
            Principal occupation
            
            Other directorshipsFrancisco Aguirre
      G.
            
            Chairman
            
            68
            
            10
            
            Private
      investor
            
            Chairman
      of the board of Grupo Radio México, S.A. de C.V.María
      Esther Aguirre G.
            
            First
      Vice Chairperson
            
            70
            
            10
            
            Private
      investor
            
            –María
      Adriana Aguirre G.
            
            Second
      Vice Chairperson
            
            63
            
            10
            
            Private
      investor
            
            –Ana
      María Aguirre G.
            
            Director
            
            65
            
            39
            
            Private
      investor
            
            –Carlos
      Aguirre G.
            
            Director
            
            55
            
            10
            
            Chief
      Executive Officer of Grupo Radio Centro
            
            –


37





Name
              
              Position
              
              Age
              
              Years as
                  director
              
              Principal occupation
              
              Other directorshipsRafael
      Aguirre G.
              
              Director
              
              52
              
              17
              
              Private
      investor
              
              Director
      of the Quintana Roo branch of HSBC México, S.A. (formerly Banco
      Internacional, S.A.); Director of the Yucatan Peninsula branch of Banco
      Nacional de México, S.A.José
      Manuel Aguirre G.
              
              Director
              
              47
              
              10
              
              Real
      estate investor
              
              –Pedro
      Beltrán N.
              
              Director
              
              66
              
              8
              
              Finance
      & Administrative Director and Chief Financial Officer of Grupo Radio
      Centro
              
              –Luis
      Alfonso Cervantes Muñiz
              
              Director
              
              54
              
              5
              
              Attorney
              
              –Gustavo
      Gabriel Llamas Monjardín
              
              Director
              
              47
              
              5
              
              Public
      accountant
              
              –Thomas
      Harold Raymond Moffet
              
              Director
              
              68
              
              10
              
              President
      of Amsterdam Pacific Capital, LLC (a financial advisory
    firm)
              
              –Luis
      Manuel de la Fuente Baca
              
              Director
              
              64
              
              10
              
              Financial
      advisor
              
              –




Francisco
Aguirre G., María Adriana Aguirre G., María Esther Aguirre G., Ana María Aguirre
G., Carlos Aguirre G., Rafael Aguirre G. and José Manuel Aguirre G. are
siblings.  Until she passed away on June 23, 2008, their mother María
Esther G. de Aguirre was the honorary chairperson of the board of directors of
the Company.




Francisco
Aguirre G., María Esther Aguirre G., María Adriana Aguirre G., Ana María Aguirre
G., Carlos Aguirre G., Rafael Aguirre G. and José Manuel Aguirre G. are
shareholders of the Company.  Pedro Beltrán N. is an employee of the
Company and Luis Alfonso Cervantes Muñiz is an advisor to affiliates of the
Company.  Thomas Harold Raymond Moffet, Gustavo Gabriel Llamas
Monjardín and Luis de la Fuente Baca are independent directors, as defined under
the Mexican Securities Market Law.




The
Company’s bylaws provide that the board of directors shall meet at least four
times during each fiscal year.  Each of the chairman of the board of
directors, the chairman of the Audit Committee, the chairman of the Corporate
Practices Committee or at least 25% of the members of the board of directors is
entitled to call a meeting of the Board and to include items in the agenda for
each meeting.




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.


38


The
bylaws also provide that the board of directors shall present to the
shareholders at the annual shareholders meeting (i) the report on the
transactions and activities in which it has been involved in accordance with the
Mexican Securities Market Law, (ii) the report on the main accounting and
information policies and criteria employed in the preparation of financial
information, (iii) the reports prepared by the chairpersons of the Audit
Committee and the Corporate Practices Committee and (iv) the report prepared by
the chief executive officer together with the external auditors’
report.  The board of directors shall also present its opinion on the
content of the report prepared by the chief executive officer.




The
bylaws of the Company were amended on April 22, 2005 to provide that,
independently and without prejudice to the exercise of the powers granted to the
board of directors pursuant to Mexican law, the board of directors is entitled
to grant or delegate in favor of the Audit Committee those powers that it deems
necessary or convenient to comply with the legal and regulatory provisions
applicable to the Company, as well as to determine the rules pursuant to which
the Audit Committee shall exercise such powers, including the right to revoke or
modify them.




The
bylaws of the Company were further amended on July 31, 2006 to meet the
requirements of the Mexican Securities Market Law. The amendments granted the
board of directors and the Audit Committee greater authority and provided for
the creation of the Corporate Practices Committee.  The amendments to
the bylaws also increased the authority that the board of directors may exert
over the Company’s accounting, auditing and internal control.  With
prior favorable opinion from the Audit Committee, the board of directors may
approve the Company’s financial statements, internal control and audit
guidelines and accounting policies.




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’s operations are subject to the same rules
applicable to the operation 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 José Manuel Aguirre G.
(chairman), Carlos Aguirre G. (vice-chairman), Ana María Aguirre G., María
Esther Aguirre G., María Adriana Aguirre G., Rafael Aguirre G. and Francisco
Aguirre G.




Audit
Committee




The Audit
Committee consists of Thomas Harold Raymond Moffet, Gustavo Gabriel Llamas
Monjardín and Luis Manuel de la Fuente Baca (chairman).  All three
members of the Audit Committee also serve on the Company’s board of
directors.  The shareholders ratified the appointment of these members
to the Audit Committee and Mr. de la Fuente Baca’s appointment as committee
chairman at the annual shareholders’ meeting held on March 16,
2010.  As required by our bylaws and applicable law, all members of
the Audit Committee are independent, as defined under Mexican Securities Market
Law and Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).  See Item 16A, “Audit Committee Financial
Expert.”  In order for a meeting of the Audit Committee to be valid,
the majority of its members must be present, and the Audit Committee must adopt
resolutions by majority vote.




The
chairman of the Audit Committee may not also be the chair of the board of
directors and is appointed and removed exclusively through a majority vote of
the shareholders.  The shareholders base their decision on the
experience, ability and professional prestige of the appointee.  The
chairman of the Committee must submit an annual report on the activities of the
Audit Committee to the board of directors.


39


The Audit
Committee is responsible for assisting the Board in overseeing the activities of
the Company.  The members evaluate the performance, opinions and
reports of the external auditor.  In addition, the Audit Committee is
responsible for regulation within the Company.  The Audit Committee
investigates possible violations of internal guidelines and also verifies the
establishment of internal controls and the filing of related
information.  Additionally, the Audit Committee renders an opinion on
the report regarding the financial information and results of operations of the
Company, which is filed by the chief executive officer, and provides further
information concerning that report to the board of directors.




The Audit
Committee further assists the board of directors in oversight activities by
requesting periodic meetings with executive officers.  The Audit
Committee also monitors the filing of information related to the internal
control systems and internal audits of the Company and is responsible for
preparing an opinion on the report filed by the chief executive
officer.  Additionally, the Audit Committee is responsible for
verifying that the chief executive officer abides by the resolutions adopted in
shareholder meetings and by the board of directors.




Corporate
Practices Committee




The
Corporate Practices Committee consists of Thomas Harold Raymond Moffet, Gustavo
Gabriel Llamas Monjardín and Luis Manuel de la Fuente Baca, with Mr. de la
Fuente Baca (chairman).  All three members of the Corporate Practices
Committee also serve on the Company’s board of directors.  The
shareholders ratified the appointment of these members to the Corporate
Practices Committee and Mr. de la Fuente Baca’s appointment as committee
chairman at the annual shareholders’ meeting held on March 16,
2010.  As required by our bylaws and applicable law, all members are
independent, as defined by the Mexican Securities Market Law and Rule 10A-3 of
the Exchange Act.  In order for a meeting of the Corporate Practices
Committee to be valid, the majority of its members must be present, and the
Corporate Practices Committee must adopt resolutions by majority
vote.




In
accordance with the Securities Market Law, the Corporate Practices Committee is
responsible for rendering opinions to the board of directors and requesting the
opinions of independent experts if the Corporate Practices Committee considers
it necessary.  The Corporate Practices Committee assists the board of
directors in generating reports on the main accounting policies and the criteria
used to prepare the financial statements of the Company.  The
Corporate Practices Committee also reports on the transactions and activities of
the Company in which the board of directors intervened.  The Corporate
Practices Committee may call shareholders’ meetings and contribute items to the
agenda when needed.




The
chairman of the Corporate Practices Committee must submit an annual report on
the activities of the Corporate Practices Committee to the board of
directors.  This report includes information regarding related party
transactions, waivers granted and the performance and compensation of the
Company’s executive officers.




40




Executive
Officers




The
executive officers of Grupo Radio Centro are as follows:





Name
                  
                  Position
                  
                  Years
      as
                      officer
                  
                  Years
      of
                      serviceCarlos
      Aguirre G.
                  
                  Chief
      Executive Officer
                  
                  31
                  
                  36Pedro
      Beltrán N.
                  
                  Finance
      & Administrative Director and Chief Financial Officer
                  
                  24
                  
                  24Arturo
      Yáñez F.
                  
                  Auditing
      Director
                  
                  26
                  
                  26Sergio
      González L.
                  
                  Operations
      Director
                  
                  26
                  
                  26Luis
      Cepero A.
                  
                  Audio
      Engineering Director
                  
                  27
                  
                  49Eduardo
      Stevens A.
                  
                  Transmission
      Engineering Director
                  
                  20
                  
                  30Gonzalo
      Yáñez V.
                  
                  Marketing
      Director
                  
                  10
                  
                  13Rodolfo
      Nava C.
                  
                  Treasurer
      and Financial Information Manager
                  
                  10
                  
                  24Alvaro
      Fajardo de la Mora
                  
                  General
      Counsel
                  
                  25
                  
                  25Luis
      Miguel Carrasco N.
                  
                  Commercial
      Director
                  
                  12
                  
                  17Alfredo
      Azpeitia Mera
                  
                  Investor
      Relations Manager
                  
                  21
                  
                  17





Compensation




For the
year ended December 31, 2009, the aggregate compensation for the executive
officers of the Company paid or accrued in that year for services in all
capacities was Ps. 24.3 million, of which approximately Ps. 6.5
million was paid in the form of bonus compensation.  The bonus
compensation amounts 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 2009 was Ps. 22.2 million.  The total of payments
to directors for attendance at Board of Director meetings during 2009 was
Ps. 174,240.  The total payments to Audit Committee members for
attendance at Audit Committee meetings during 2009 was
Ps. 550,000.




Board
Practices




None of
the directors have entered into a service contract with the Company that
provides for benefits upon termination of employment.




Employees




At
December 31, 2009, Grupo Radio Centro employed a total of 481 full-time
employees, fewer than halfof whom are members of
the Sindicato de Trabajadores
de la Industria de Radio y Televisión, Similares y Conexos de la República
Mexicana (Radio and Telecommunications Workers Union, or the
“Union”).  The Company employed a total of 484 full-time employees at
December 31, 2008 and a total of 458 full-time employees at December 31,
2007.  Grupo Radio Centro also employs a varying number of temporary
employees.  During 2009, the Company employed an average of 81
temporary employees.  All employees of Grupo Radio Centro work in
Mexico City.




41




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 if 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
was renewed on February 1, 2010; however, salary increases are implemented
annually.  On February 1, 2010, the Company and the Union agreed to a
5.0% 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.




Share
Ownership




As of
December 31, 2009, the Aguirre members of the board of directors had beneficial
ownership, through a Mexican trust through which they hold 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.




Item
7.  Major Shareholders and Related Party Transactions




Major
Shareholders




The
Company was incorporated as Técnica 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
had been 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”).  Before 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 María
Esther G. de Aguirre, with the remainder divided equally among her
children.  Simultaneously with the division, María Esther G. de
Aguirre acquired a 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 interests in
the Company’s Series A Shares and CPOs held by the Controlling Trusts to María
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 María 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—María Esther Aguirre G.,
Francisco Aguirre G., María Adriana Aguirre G., Ana María Aguirre G., Carlos
Aguirre G., Rafael Aguirre G. and José Manuel Aguirre G.




On April
5, 2000, María 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 María Esther G. de Aguirre as grantor and
beneficiary, those seven children owned, in equal parts, 100% of the interests
in the Controlling Trusts.   In 2003, all CPOs held by the
Controlling Trusts were converted to Series A Shares.




42




In 2007,
the Controlling Trusts were amended to change the trustee and consolidate the
Controlling Trusts.  Pursuant to agreements dated June 15, 2007,
Bancomer, S.A. was replaced with Banco IXE S.A. as trustee of each Controlling
Trust.  Pursuant to an agreement dated June 18, 2007, the New
Controlling Trust was dissolved and all of its assets were transferred to the
Old Controlling Trust (now referred to simply as the “Trust”).  The
same seven members of the Aguirre family continue to own, in equal parts, 100%
of the interests in the Trust.  Under the terms of the Trust, the
Series A Shares held by the Trust are ordinarily voted as directed by a majority
of the beneficiaries of the Trust.




The
following table sets forth certain information regarding the beneficial
ownership of Series A Shares by beneficial holders of more than 5% of the
outstanding Series A Shares as of December 31, 2010.




Name
      of Person or Group
                  
                  Series
      A Shares
                      Beneficially
      Owned
                  
                  
                  Percentage
      of
                      Series
      A
                      Shares(1)The
      Trust
                  
                  
                  84,020,646
                  
                  
                  
                  51.6
                  %María
      Esther Aguirre G.
                  
                  
                  84,020,646
                  (2)
                  
                  
                  51.6
                  %Francisco
      Aguirre G.
                  
                  
                  84,020,646
                  (2)
                  
                  
                  51.6
                  %María
      Adriana Aguirre G.
                  
                  
                  84,020,646
                  (2)
                  
                  
                  51.6
                  %Ana
      María Aguirre G.
                  
                  
                  84,053,946
                  (2)(3)
                  
                  
                  51.7
                  %Carlos
      Aguirre G.
                  
                  
                  84,044,046
                  (2)
      (4)
                  
                  
                  51.6
                  %Rafael
      Aguirre G
                  
                  
                  84,020,646
                  (2)
                  
                  
                  51.6
                  %José
      Manuel Aguirre G.
                  
                  
                  84,020,646
                  (2)
                  
                  
                  51.6
                  %





(1)
            Percentages
      are based on 162,724,561 Series A Shares issued and outstanding as of
      December 31, 2009.




(2)
            All
      Series A Shares beneficially owned by the Trust (the “Family Shares”) are
      held for the benefit of the Aguirre Family and are deemed to be
      beneficially owned by each member of the Aguirre Family, each of whom is
      deemed to share power to vote or dispose, or direct the vote or
      disposition of, the Family Shares as a member of the Technical Committee
      of the Trust.




(3)
            Includes
      33,300 Series A Shares beneficially owned by Ana María Aguirre G. in
      addition to Family Shares.




(4)
            Includes
      2,600 ADSs beneficially owned by Carlos G. Aguirre in addition to Family
      Shares.




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 and Mexican Law—Limitations Affecting Non-Mexican
Holders—Share Ownership.”  At April 30, 2010, to the best knowledge of
the Company, approximately 3.3% of the outstanding Series A Shares was
represented by ADSs.  It is not practical for the Company to determine
the number of U.S. holders of CPOs or ADSs, the portion of each class of
securities held in Mexico or the number of record holders in
Mexico.




Related
Party Transactions




The
Company engages in a variety of transactions with
affiliates.  Pursuant to the Company’s bylaws, the operating rules of
the board of directors and Mexican law, the Corporate Practices Committee of
Company’s board of directors must express an opinion on, and the Company’s board
of directors has exclusive power to approve, any transaction with a related
party unless the transaction (i) is considered to be not material based on
the value of the transaction; (ii) is entered into with a controlled entity,
provided that such a transaction is either in the ordinary course of the
Company’s business and carried out at market price or supported in valuations
prepared by external experts; or (iii) is entered into with employees, provided
that the transaction is conducted under the same conditions as it would be for a
client or as a result of general labor benefits.




43




Investment
in GRC-LA




On May
13, 2009, certain members of the Aguirre family acquired a 49% equity stake in
Grupo Radio Centro LA, LLC, a wholly-owned subsidiary of the Company formed to
provide programming to KXOS-FM pursuant to the local marketing agreement with
Emmis Communications Corporation.  In exchange for their 49% equity
stake, the Aguirre family members agreed to be responsible for 49% of the cost
of the Company’s investment.  On February 26, 2010, the Company
undertook a capital reduction of Grupo Radio Centro LA, LLC by returning U.S.$
1.47 million in capital contributions to certain members of the Aguirre family,
which was the same amount initially invested by them.  As a result of
the capital reduction, the Company is the sole shareholder of Grupo Radio Centro
LA, LLC.




Family
Control of OIR Network Affiliates




In
addition to their ownership interest in the Company, members of the Aguirre
family owned or controlled 13 of the 107 affiliates in the network serviced by
OIR at December 31, 2009.  Affiliated stations owned or controlled by
members of the Aguirre family accounted for approximately 10.3% of OIR revenue
(or 0.3% of the Company’s total broadcasting revenue) for 2009 (excluding
revenue from our operations in the United States), 9.6% of OIR revenue (or 0.3%
the Company’s total broadcasting revenue) for 2008, and 11.7% of OIR revenue (or
0.4% of the Company’s total broadcasting revenue) for 2007.  The
Company has provided administrative and other services to such family-owned
stations in the OIR network and under certain circumstances has provided
commercial airtime to related parties, on terms that are 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 G., 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 airtime provided to the Company by Mr.
Aguirre.  The Company incurred expenses under this contract totaling
Ps. 4.0 million in 2009, Ps. 3.3 million in 2008 and Ps. 3.6
million in 2007.  See Note 6 to the Consolidated Financial
Statements.




Sale
of Doubtful Accounts Receivable




In
December 2006, the Company sold to an entity owned by Francisco Aguirre G.
accounts receivable representing Ps. 40.3 million owed to it mainly by
political parties in connection with purchases of airtime from 2003 to 2005 for
a cash purchase price of Ps. 12.2 million.  The Company had been
unsuccessful in its attempts to collect the accounts receivable and,
accordingly, increased its allowance for doubtful accounts beginning in
2005.  The Company sold the accounts receivable because




·
            it
      believed, based on its past efforts, that the accounts receivable were not
      recoverable, and




·
            the
      sale enabled the Company to take a tax deduction in connection with the
      unrecoverable accounts receivable, which deduction otherwise would not
      have been available without bringing legal proceedings against the
      customers.  The Audit Committee ratified this transaction on
      February 19, 2007.




44




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.  The Company received a
total of Ps. 3.3 million in 2009, Ps. 3.0 million in 2008 and
Ps. 1.6 million in 2007 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 Chief Executive Officer, Pedro Beltrán, the Chief Financial
Officer, and Alvaro Fajardo, the General Counsel, have spent a portion of their
time on Aguirre family matters for which the Company has not been separately
compensated.




Loans
to Executive Officers and Directors




In
October 2006, the Company extended a loan in the amount of Ps. 3.2 million
(nominal amount) to a company controlled by Ana María Aguirre G., a member of the
board of directors.  The loan bore interest at an annual rate of 10.5%
and was repaid in full in May 2007.  The proceeds of the loan were
used for purposes unrelated to the business of the Company.  Neither
the Audit Committee nor the Corporate Practices Committee was asked to consider
this transaction.




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-41.




Other
Financial Information




Legal
and Arbitration Proceedings




Through a
series of transactions effected in 1995 and 1996, the Company acquired five
radio stations owned by Radiodifusión RED, S.A., as well as the exclusive radio
broadcasting rights to Monitor, a news and talk radio program.  On
December 23, 1998, the Company entered into an agreement with Infored and Mr.
Gutiérrez Vivó, the principal anchor of Monitor, pursuant to which they would
provide the Company with original news programs and special-event productions
until 2015 (the “Infored Agreement”).  The Infored Agreement provided
that Mr. Gutiérrez Vivó would continue as Monitor’s host until at least the
end of 2003.




45




In May
2002, Mr. Gutiérrez Vivó and Infored initiated an arbitration proceeding
pursuant to which they sought rescission of the Infored Agreement and
damages.  On March 1, 2004, the International Chamber of Commerce, or
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. Gutiérrez Vivó.  As a result, the contract
was rescinded and Infored and Mr. Gutiérrez Vivó together were awarded a total
of U.S.$ 21.1 million in damages, which represents the amount the Company would
be required to pay under the contract after taking into account prepayments made
by the Company.  The Company challenged the validity of this decision
in the Mexican courts and, on November 11, 2004, Civil Judge 63 of the Federal
District Superior Tribunal of Justice, set aside the arbitration
award.  Infored and Mr. Gutiérrez Vivó initiated an amparo, which is a type of
proceeding used to challenge the legality of a decision under Mexican law, in
November 2004.  On August 11, 2005, District Judge 6 of Civil Matters
granted Infored and Mr. Gutiérrez Vivó an amparo, in effect overturning
the November 2004 decision.  On August 25, 2005, the Company
challenged District Judge 6’s ruling in a proceeding before the Federal
District’s Thirteenth Circuit Court of Civil Matters.  On
June 16, 2006, the Federal District’s Thirteenth Circuit Court of Civil
Matters ratified the decision of the Civil Judge 63 of the Federal District
Superior Tribunal of Justice to set aside the arbitration award and refused to
enforce the arbitration award in Mexico.




Following
an appeal by Infored and Mr. Gutiérrez Vivó, on January 30, 2007, the Mexican
Supreme Court (Suprema Corte
de Justicia de la Nación), in a 5 to 4 decision based on procedural
grounds, reversed the Federal District’s Thirteenth Circuit Court of Civil
Matters’ decision that had ratified a lower court’s decision to set aside the
arbitration award.  The Supreme Court remanded the case to the
Thirteenth Circuit Court, instructing the court to reexamine the matter under
different procedural rules, which required the court to review the merits of the
case.  On June 12, 2008, the Thirteenth Circuit Court reversed its
prior decision, granted the amparoof Infored and Mr.
Gutiérrez Vivó, denied the amparoof the Company, and
remanded the case to Civil Judge 63 of the Federal District Superior Tribunal of
Justice.  On July 11, 2008, Civil Judge 63 of the Federal District
Superior Tribunal of Justice ruled that the decision that set aside the
arbitration award was invalid.  The July 2008 decision of Civil Judge
63 of the Federal District Superior Tribunal of Justice did not constitute an
order to pay the arbitration award, the enforcement of which remains subject to
lower court review.




In August
2008, the Company challenged the arbitration award as unconstitutional in an
amparo filed with
District Judge 6 of Civil Matters.  District Judge 6 dismissed the
amparo based on
procedural grounds.  The Company challenged this action before the
Thirteenth Circuit Court, and in February 2009, that court ruled the Company’s
amparo was admissible
and remanded it to District Judge 6 of Civil Matters.  In April 2009,
District Judge 6 of Civil Matters granted the Company’s amparo, in part, but
dismissed the amparo
with respect to the Company’s challenge of the constitutionality of certain
provisions of the Mexican commercial code.  The Company then appealed
this dismissal to the Thirteenth Circuit Court in July 2009, which in turn
referred the constitutional question to the Mexican Supreme
Court.  The Mexican Supreme Court accepted the constitutional matter
for review in October 2009, and its decision is pending.




The
Company plans to continue to challenge the validity of the arbitration award in
the Mexican courts.  If the Company is ultimately unsuccessful in
challenging the enforcement of the arbitration award in Mexico, it will be
required to finance any amounts due.  See Item 5, “Operating and
Financial Review and Prospects—Liquidity and Capital Resources.” The Company’s ability to
obtain financing is subject to various factors, including general market
conditions, the Company’s financial condition and results of operations and the
fact that the Company has pledged substantially all of its assets under its
outstanding indebtedness.  Accordingly, the Company may not be able to
obtain financing in a timely manner, or on acceptable terms, or at
all.  If the Company incurs additional indebtedness or it is unable to
obtain financing when needed, the Company’s financial condition and results of
operations may be materially and adversely affected.




The
Company is involved in various other legal proceedings related to the Infored
and Gutiérrez Vivó transaction. In 2004, the Company and a subsidiary, along
with four minority shareholders, initiated two lawsuits against Mr. Gutiérrez
Vivó and Ms. María Ivonne Gutiérrez Vivó to seek rescission of the stock
purchase agreement entered into as an “accessory contract” to the Infored
Agreement. One case pertains to the shares of the licensee of the radio station
formerly known as XEJP-AM (now XENET-AM), and the other case pertains to the
shares of the licensee of the radio station formerly known as XEFAJ-AM (now
XEINFO-AM). These proceedings have been suspended pending a final determination
in the arbitration.




46




In
addition, in 2008, Mr. Gutiérrez Vivó and Infored initiated additional claims
against the Company for alleged violations of labor law in connection with the
Infored Agreement.  In 2009, Mr. Gutiérrez Vivó and Infored initiated
a civil law suit against the Company and individual members of the Aguirre
family, seeking consequential damages in an amount of approximately
Ps. 9.46 billion arising out of the Company’s alleged wrongful failure to
pay the arbitration award.  The Company’s management believes that
these cases will be resolved in favor of the Company.




The
Company is also involved in a variety of labor claims initiated by former
employees between 2000 and 2004 seeking an aggregate amount of approximately
Ps. 49.6 million.  The Company has not recorded a provision for
these claims, as the Company’s management believes that the cases will be
resolved in favor of the Company.




Other
than proceedings related to labor claims and proceedings related to the
arbitration with Infored described above, neither the Company nor any of its
subsidiaries is currently engaged in any material litigation or arbitration, and
no 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
from 2006 to 2009, 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.




Date Dividend Paid
              
              Fiscal
                  Year with
                  Respect to
                  which
                  Dividend
                  Paid
              
              Aggregate Amount of
                  Dividend Paid
                  (Nominal Pesos)
              
              
              Dividend
                  Per Series A
                  Share
                  (Nominal
                  Pesos)(1)
              
              
              Dividend Per
                  Series A Share
                  (U.S. dollars)(1)
              
              
              Dividend Per
                  ADS
                  (U.S. dollars)(1)(2)May
      7, 2007
              
              2006
              
              Ps.
              70,000,000
              
              
              
              0.43
              
              
              
              0.04
              
              
              
              0.36March
      14, 2008
              
              2007
              
              Ps.
              100,000,000
              
              
              
              0.61
              
              
              
              0.06
              
              
              
              0.51April
      13, 2009
              
              2008
              
              Ps.
              100,000,000
              
              
              
              0.61
              
              
              
              0.05
              
              
              
              0.42March
      24, 2010
              
              2009
              
              Ps.
              100,000,000
              
              
              
              0.61
              
              
              
              0.05
              
              
              
              0.44





(1)
            Per
      Series A Share and ADS amounts are calculated based on number of shares
      outstanding on the date of payment of the
  dividend.


(2)
            Nominal
      peso amounts have been translated to U.S. dollar amounts at the exchange
      rate for pesos on the date of payment of the dividend, as published by the
      Federal Reserve Bank of New York and the U.S. Federal Reserve
      Board.




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.  Depending on the Company's financial position and
compliance with the covenants in its credit facility, the Company may declare
dividends in the future.  See Item 10, “Additional Information—Bylaws
and Mexican Law—Dividends.”




On August
1, 2006, the Company reduced its fixed capital stock by a total of
Ps. 128.5 million (Ps. 120.0 million nominal amount) through the
payment of cash to its shareholders on August 7 and October 2,
2006.  The payment was made with cash flow from
operations.  See Item 5, “Operating and Financial Review and
Prospects—Capital Reduction.”




47




Item
9.  The Offer and Listing




Since
July 1, 1993, the CPOs have been listed on the Mexican Stock Exchange and the
ADSs have been listed on the NYSE.  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., Institución de Banca de
Desarrollo, Dirección 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:




·
            Nafin
      was replaced as the CPO trustee by GE Capital Bank, S.A., Institución de
      Banca Múltiple, GE Capital Grupo Financiero, División Fiduciaria, as
      successor trustee for the CPO Trust (the “CPO
  Trustee”).




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




·
            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 and Mexican Law––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 S.D. Indeval, S.A. de C.V., Institución para
el Depósito de Valores, 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.




On April
6, 2010 GE Money Bank, S.A., Institución de Banca Múltiple, GE Capital Grupo
Financiero (formerly GE Capital Bank, S.A.) was replaced as CPO Trustee of the
CPO Trust, by Banco Multiva, S.A., Institución de Banca Múltiple, Grupo
Financiero Multiva, División Fiduciaria (“Multiva”), as a result of the
divesture by GE Money of its managing trust portfolio, which included the
Trust.  Multiva assumed the position of CPO Trustee under the
Trust.




48




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
                                    Stock Exchange
                                  
                                  
                                  New York
                                    Stock ExchangeAmounts per Series A
                                      Share and per CPO
                                      (in nominal pesos)
                                  
                                  
                                  Amounts per ADS
                                      (in U.S. dollars)High
                                  
                                  
                                  Low
                                  
                                  
                                  High
                                  
                                  
                                  Low2005
                                  
                                  
                                  9.92
                                  
                                  
                                  
                                  8.08
                                  
                                  
                                  
                                  7.75
                                  
                                  
                                  
                                  6.452006
                                  
                                  
                                  13.10
                                  
                                  
                                  
                                  7.15
                                  
                                  
                                  
                                  10.75
                                  
                                  
                                  
                                  5.502007
                                  
                                  
                                  18.95
                                  
                                  
                                  
                                  12.30
                                  
                                  
                                  
                                  15.65
                                  
                                  
                                  
                                  8.902008
                                  
                                  
                                  16.00
                                  
                                  
                                  
                                  9.50
                                  
                                  
                                  
                                  14.14
                                  
                                  
                                  
                                  5.21First
      quarter
                                  
                                  
                                  16.00
                                  
                                  
                                  
                                  12.00
                                  
                                  
                                  
                                  12.58
                                  
                                  
                                  
                                  9.63Second
      quarter
                                  
                                  
                                  14.00
                                  
                                  
                                  
                                  13.00
                                  
                                  
                                  
                                  14.14
                                  
                                  
                                  
                                  10.60Third
      quarter
                                  
                                  
                                  13.25
                                  
                                  
                                  
                                  11.10
                                  
                                  
                                  
                                  11.84
                                  
                                  
                                  
                                  10.28Fourth
      quarter
                                  
                                  
                                  14.00
                                  
                                  
                                  
                                  9.50
                                  
                                  
                                  
                                  10.83
                                  
                                  
                                  
                                  5.212009
                                  
                                  
                                  14.10
                                  
                                  
                                  
                                  7.00
                                  
                                  
                                  
                                  10.60
                                  
                                  
                                  
                                  2.96First
      quarter
                                  
                                  
                                  14.00
                                  
                                  
                                  
                                  7.00
                                  
                                  
                                  
                                  9.99
                                  
                                  
                                  
                                  2.96Second
      quarter
                                  
                                  
                                  11.5
                                  
                                  
                                  
                                  7.00
                                  
                                  
                                  
                                  8.25
                                  
                                  
                                  
                                  4.36Third
      quarter
                                  
                                  
                                  11.50
                                  
                                  
                                  
                                  8.99
                                  
                                  
                                  
                                  8.89
                                  
                                  
                                  
                                  5.85Fourth
      quarter
                                  
                                  
                                  14.10
                                  
                                  
                                  
                                  8.99
                                  
                                  
                                  
                                  10.60
                                  
                                  
                                  
                                  7.07Most Recent Six MonthsDecember
      2009
                                  
                                  
                                  14.10
                                  
                                  
                                  
                                  11.75
                                  
                                  
                                  
                                  10.60
                                  
                                  
                                  
                                  8.00January
      2010
                                  
                                  
                                  14.00
                                  
                                  
                                  
                                  10.00
                                  
                                  
                                  
                                  8.87
                                  
                                  
                                  
                                  8.45February
      2010
                                  
                                  
                                  13.10
                                  
                                  
                                  
                                  11.86
                                  
                                  
                                  
                                  8.86
                                  
                                  
                                  
                                  8.00March
      2010
                                  
                                  
                                  12.30
                                  
                                  
                                  
                                  9.00
                                  
                                  
                                  
                                  9.00
                                  
                                  
                                  
                                  8.01April
      2010
                                  
                                  
                                  12.00
                                  
                                  
                                  
                                  11.30
                                  
                                  
                                  
                                  8.95
                                  
                                  
                                  
                                  7.94May
      2010
                                  
                                  
                                  11.75
                                  
                                  
                                  
                                  9.36
                                  
                                  
                                  
                                  8.60
                                  
                                  
                                  
                                  7.50




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 currently held by brokerage firms that are exclusively authorized to
trade on the Exchange.  Trading on the Mexican Stock Exchange takes
place through the Sentra 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 three 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 CNBV.  Most securities traded on
the Mexican Stock Exchange, including those of Grupo Radio Centro, are on
deposit with Indeval.




49




Item
10.  Additional Information




BYLAWS
AND MEXICAN LAW




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 Mexican law and the bylaws of the Company, which have
been filed as an exhibit to this Annual Report.  For a description of
the Company’s bylaws relating to the board of directors, Executive Committee,
Audit Committee and Corporate Practices Committee, see Item 6, “Directors,
Senior Management and Employees.”




The
bylaws of the Company were amended on July 31, 2006 to incorporate provisions
required by the Mexican Securities Market Law.  The most recent
amendment to the bylaws was on December 16, 2009.




Mexican
Securities Market Law




On
December 30, 2005, a new Mexican Securities Market Law was
enacted.  The law became effective on June 28, 2006 and, in some
cases, it provided issuers until December 2006 to adopt the new corporate
governance requirements.  The Securities Market Law introduces
significant changes to the regime in which issuers operate,
including:




·
            the
      establishment of the sociedad anónima bursátil, a separate corporate form
      of organization for issuers with stock registered with the Comisión Nacional Bancaria y
      de Valores (Mexican National Banking and Securities Commission or
      the “CNBV”) and listed on the Mexican Stock Exchange, which provides for a
      new set of corporate governance
requirements;




·
            the
      redefinition of the functions and structure of the board of directors,
      including (i) increasing the number of members of the board of
      directors (up to 21, with independent members comprising at least 25%) and
      (ii) requiring that the status of members of the board of directors as
      independent be determined by the shareholders’ meeting, subject to the
      CNBV’s authority to challenge such
  determination;




·
            the
      application of a legal framework to the chief executive officer (director
      general) and executive officers (directivos relevantes)
      entrusted with the day-to-day management of the
  issuer;




·
            the
      adoption of a clear definition of fiduciary duties, including but not
      limited to the duty of care and the duty of loyalty, for members of the
      board of directors and, in certain cases to its secretary, the chief
      executive officer and other executive
officers;




·
            the
      increase in liability for members of the board of directors and its
      secretary with respect to the operations and performance of the issuer,
      including (i) payment of damages and losses resulting from the breach of
      their duty of care or loyalty and (ii) criminal penalties from one to 12
      years of imprisonment for certain illegal acts involving willful
      misconduct.  Civil actions under (i) above may be brought by the
      issuer or by shareholders that represent 5% or more of the capital stock
      of the issuer; and criminal actions under (ii) above may be brought by the
      issuer, the Secretaría
      de Hacienda y Crédito Público(Mexican Ministry of Finance and
      Public Credit) after consultation with the CNBV, and in certain cases, by
      injured shareholders;




50




·
            the
      elimination of the requirement that the issuer have a statutory auditor
      and the delegation of specific obligations of corporate governance and
      oversight to the audit committee, the corporate practices committee and
      the external auditors;




·
            the
      requirement that all the members of the audit and corporate practices
      committees be independent as such term is defined under the new law,
      except with respect to the corporate practices committee in the case of
      issuers like us that have controlling
  shareholders;




·
            the
      enhancement of the functions and responsibilities of the audit committee,
      including (i) the evaluation of the performance of the external auditor,
      (ii) the review and discussion of the financial statements of the issuer
      and the conveyance to the board of directors of the committee’s
      recommendations regarding the approval of such financial statements, (iii)
      the surveillance of internal controls and internal audit procedures of the
      issuer, (iv) the reception and analysis of recommendations and
      observations regarding the committee’s functions by the shareholders,
      members of the board of directors and senior management, and the authority
      to act upon such recommendations and observations, (v) the authority
      to call a shareholders’ meeting and to contribute to the meeting’s agenda
      and (vi) the oversight of the execution of resolutions enacted at meetings
      of shareholders or the board of
directors;




·
            the
      requirement that the shareholders’ meeting approve all transactions that
      represent 20% or more of the consolidated assets of the issuer within a
      given fiscal year; and




·
            the
      inclusion of a new set of rules requiring an issuer to obtain prior
      authorization from the CNBV to effect public offerings of securities and
      tender offers.




Organization
and Register




The
Company was incorporated on June 8, 1971, as a Mexican limited liability stock
company (sociedad anónima de
capital variable) in accordance with Chapter V of the Ley General de Sociedades
Mercantiles(the “Mexican Companies Law”).  It was registered
in the Registro Público de
Comercio de la Ciudad de México (the “Public Registry of Commerce of
Mexico City”) on August 28, 1992 under number 20694.  Pursuant to the
Mexican Securities Market Law, Grupo Radio Centro adopted the corporate form of
sociedad anónima bursátil de
capital variable on July 31, 2006 through an amendment to its
bylaws.




Purpose




The
Company’s purpose is, among others, to market advertising services through media
as well as to represent or act as an agent of all types of associations, civil
or commercial companies, services, industrial or commercial corporations and in
general, Mexican or foreign individuals or entities and to provide consulting
and technical assistance services related to accounting, commercial, financial,
tax, legal or administrative issues for companies in which it is a shareholder
or for other third parties.




Share
Capital




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
competent authorities such as the Ministry of Economy and of the CNBV, of
special series of shares including those with limited or no voting
rights.




51




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, among others, amendments to 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.




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 for the preceding fiscal year, to elect directors for holders of Series
A Shares 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 Audit Committee, the
Corporate Practices Committee or a court. Holders of 10% of the Series A Shares
may require the chairpersons of the board of directors, the Audit Committee or
the Corporate Practices Committee to call a meeting of the shareholders.
Additionally, if holders of shares with full or limited voting rights
representing 10% of the capital stock of the Company do not have sufficient
information on the matters to be voted on, those shareholders may request one
postponement of shareholders’ meetings per matter. These postponements may be
extended for up to three business days if necessary. Notice of meetings must be
published in the Diario
Oficial de la Federación or a newspaper of general circulation in Mexico
City at least 15 days before 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 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.




52




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 or (ii) on the
conversion of convertible debentures, if an extraordinary general shareholders
meeting called for such purpose approved such issuance or conversion 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 Federación.  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 of such preemptive rights absent registration of the
preemptive rights offering under the U.S. Securities Act of 1933, which the
Company is not obligated to do.




Under the
new Mexican Securities Market Law, however, if Grupo Radio Centro were to
increase its capital stock to effect a public offering of newly issued shares or
were to resell any repurchased shares, no preemptive rights would be available
to the holders of outstanding shares as a result of the issuance or
resale.




Variable
Capital




Under the
Company’s bylaws and Mexican law, the Company’s capital stock must consist of
fixed capital and may include 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.




53




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




The
bylaws of the Company were amended on December 13, 2006, to increase the
Company’s minimum capital stock.  On December 16, 2009, the Company’s
bylaws were further amended to increase the peso amount of our fixed minimum
capital stock to Ps. 1,611,620,660.  We did not authorize or issue any
new shares.  As of the date hereof, we have 247,414,768 authorized
common shares, of which 162,724,561 shares are outstanding and fully paid for
and 84,690,207 shares are held in treasury shares.




Limitations
Affecting Non-Mexican Holders




Share
Ownership




Ownership
by non-Mexican investors of shares of Mexican enterprises is regulated by the
1993 Ley de Inversión
Extranjera (Foreign Investment Law), as amended, and the 1998 Reglamento de la Ley de Inversión
Extranjera y del Registro Nacional de Inversiones Extranjeras (Foreign
Investment Regulations) thereunder.  The Secretaría de Economía
(Ministry of Economy) and the Comisión Nacional de Inversiones
Extranjeras(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.  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
shares.  The Company, however, has received approval from the Foreign
Investment 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.




54




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 Dirección General de Inversión
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 Trust holds a substantial majority of the Series A
Shares not held in the form of CPOs.  As a result, the Trust 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 Mexico City) 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 before termination of written notice from the technical
committee of the CPO Trust.  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.




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.




55




See Item
9, “The Offer and Listing” on the replacement of the CPO Trustee by Multiva on
April 6, 2010.




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 consists of four
members and their respective alternates.  Each of the following
appoints one member: the Foreign Investment Commission, the Mexican Stock
Exchange, the Asociación Mexicana de Intermediarios Bursátiles, A.C. (Mexican
Association of Securities Brokerage Firms) and the common representative of the
CPO holders (HSBC México, S.A., Institución de Banca Multiple, Grupo Financiero
HSBC).  Actions taken by the technical committee of the CPO Trust must
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 the Mexican Securities Market
Law, the Company is permitted to repurchase its own shares at their current
market price on the Mexican Stock Exchange under certain circumstances with
funds from a special reserve created for such purpose.  The maximum
amount that may be authorized by the shareholders to be spent by the Company for
the repurchase of shares (see “—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, shares of companies that are majority
shareholders of the Company or invest in derivative instruments having shares of
the Company as underlying assets.  However, subsidiaries or other
entities controlled by the Company may acquire equity interests in investment
companies that in turn invest in shares of the Company.




56




Conflict
of Interest




A
shareholder who 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.  In accordance with the
Securities Market Law, a conflict of interest is assumed, unless proven
otherwise, when a controlling shareholder votes in favor of or against
transactions and in so doing obtains benefits that not obtained by other
shareholders, the Company or its controlled entities.




Additionally,
any members of the board of directors who have a conflict of interest must
abstain from discussing or voting on any matter.  This condition does
not affect the quorum requirement for Board meetings.




Duty
of Care




The
members of the board of directors must comply with the duty of care by acting in
good faith and in the best interest of the Company and its controlled
entities.  In order to obtain the necessary information to comply with
the duty of care, the members are authorized to request information on the
Company and its controlled entities as well as solicit meetings with executive
officers and other persons that may contribute to the decision-making processes
of the Board.




Duty
of Loyalty




Directors
and the secretary of the board of directors are bound to preserve the
confidentiality of information regarding the Company when such information has
not been made public.  As part of the duty of loyalty, directors must
inform the Audit Committee and the external auditor of any irregularities that
occurred during the tenure of former board members as well as any irregularities
that become apparent during their tenure.




Directors
who breach the duty of loyalty may be jointly liable with other directors and
must indemnify the Company against any losses or damages caused by the
breach.  Such individuals shall be removed from their
positions.




Actions
Against Directors




Actions
for civil liabilities against the directors, the secretary of the board of
directors or executive officers may be initiated by resolution passed at a
general ordinary shareholders meeting.  If 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 5% of the outstanding Series A Shares may directly bring such action
provided that the claim covers all damages allegedly suffered by the Company or
its controlled entities and not only by such shareholders.  Any
recovery of damages with respect to actions for civil liabilities against
directors, the secretary of the Board or executive officers will be for the
benefit of the Company or its controlled entities and not for the shareholders
bringing such actions.




Obligations
of Majority Shareholders




If the
Company seeks to cancel the registration of its shares with the Registro Nacional de Valores
(National Registry of Securities, or “RNV”) or the registry is cancelled by the
CNBV, shareholders holding the majority of the voting shares or having the power
to control decisions in the general shareholders meeting or appoint the majority
of the board of directors (the “controlling shareholders”) must offer to
purchase all outstanding shares before cancellation.  If the
controlling shareholders make such a purchase offer but do not acquire 100% of
the shares of the Company’s capital stock, then before cancellation of the
registration of its securities from the RNV, the controlling shareholders 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.




57




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 before 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 the Mexican Stock
Exchange.




The trade
value in the Mexican Stock Exchange shall be the average adjusted price per
volume of transactions carried out during the last 30 days in which the shares
of the Company have been traded, before the date of the offer during a period
that cannot exceed six months.  If the number the shares were traded
for fewer 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
tender offer within the ten business days after the commencement of the offer,
taking into account the opinion of the Corporate Practices Committee, and
disclose its opinion through the Mexican Stock Exchange.  The opinion
provided by the board of directors may include the opinion of an independent
expert.  The Board must also disclose any conflicts of interests that
any director may have in connection with the offer.  The directors and
the chief executive officer of the Company must publicly disclose their decision
with respect to whether or not they will sell any of their own securities issued
by the Company.




If the
controlling shareholders obtain the consent of the shareholders representing 95%
of the capital stock of the Company through a resolution adopted at a
shareholders meeting, and the bid price for the shares is less than 300,000
investment units, as defined under Mexican law, the controlling shareholders
will not be required to conduct a tender offer, as long as to obtain the
cancellation, the Company places in trust for a minimum of six months an amount
of funds necessary to acquire the remaining shares at the same price as the
offer price.




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 Corporate
Practices Committee, together with the report of an independent expert
confirming that the price is reasonably appropriate.




Duration




The
Company’s existence under the bylaws is indefinite.




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 the (i) 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 the capital stock of the Company and (ii) 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.




58




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




On
October 16, 2008, the Company entered into an agreement to extend the term of
the Operating Agreement, dated as of December 30, 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, 2014.  See Note 9 to the Consolidated Financial
Statements.




For a
description of the Company’s bank credit facility, see Item 5, “Operating and
Financial Review and Prospects—Liquidity and Capital
Resources—Indebtedness.”




On April
3, 2009, the Company entered into a local marketing agreement with certain
subsidiaries of Emmis Communications Corporation, a U.S. radio broadcasting
company.  Under the local marketing agreement, the Company has agreed
to provide programming to, and sell advertising time on, KXOS-FM, a radio
station broadcasting in Los Angeles, California, for up to seven
years.  The Company will pay Emmis U.S.$ 7 million per year, plus
expenses incurred by Emmis with respect to the station.  On April 7,
2009, the Company advanced U.S.$ 14 million (approximately Ps. 200 million)
as prepayment for the first two years of fees under the local marketing
agreement.  The Company financed the prepayment with a bank loan in an
aggregate principal amount of Ps. 200 million.




In
connection with the local marketing agreement, the Company also entered into a
seven-year call and put option agreement with Emmis to purchase the assets of
KXOS-FM.  Pursuant to the agreement, the Company is entitled to
exercise its call option to purchase the KXOS-FM station assets at any time
during its seven-year term, and Emmis is entitled to require the Company to
purchase the station’s assets during the seventh year of the
term.  If, at the time of the exercise of the call or put, the Company
is not qualified under U.S. law to own a U.S. radio station, the Company must
assign the agreement to a qualified third party.  The purchase price
under this agreement is U.S.$ 110 million.




59




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




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. The Mexican Ministry of Finance announced on
June 16, 2010 certain restrictions applicable to Mexican financial institutions,
which limit their ability to purchase U.S. dollars (in cash) from the
public.  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, that own or are treated
as owning 10% or more of the voting shares (including CPOs) of the Company or
that may have acquired Series A Shares issued by 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
2010, 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 person is deemed to have his or her center of vital interests in
Mexico if (i) more than 50% of the person’s aggregate annual income is derived
from Mexican sources, or (ii) the person’s main center of professional
activities is located in Mexico.  A Mexican citizen is presumed to be
a resident of Mexico for tax purposes unless such person can demonstrate
otherwise.




60




A legal
entity is considered to be a resident of Mexico for tax purposes 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 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 (the “Code”).  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 after 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 before January 1, 2011 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
before 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”). 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 for
U.S. federal income tax purposes with respect to its 2008 or 2009 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 for its 2010 taxable year. 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 (and, to the
extent required by an applicable tax treaty, is attributable to a permanent
establishment of such non-U.S. holder in the United States).




61




Taxation
of Capital Gains




Mexican
Tax Considerations




Gains
obtained during 2010 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 2010 by individuals or legal entities that
are non-resident 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.





The tax
exemption described in the previous paragraph will not be applicable to
pre-negotiated trades executed through the Mexican Stock Exchange, which
preclude the holders’ acceptance of offers more competitive than those received
prior to and during the period in which they are offered for sale. The exemption
will not be applicable in the case of a person or group of persons that,
directly or indirectly, holds 10% or more of the shares representing our capital
stock, or that holds a controlling interest in us, if in a 24-month period, a
sale of 10% or more of our fully paid shares, or of a controlling interest in
us, is carried out through one or several simultaneous or successive
transactions, including those carried out through derivative instruments or
other similar transactions.





If the
abovementioned requirements are not met, 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 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 appoint a legal
representative in Mexico for income tax purposes prior to the sale and provide
such a representative with a U.S. tax residence certificate issued by the U.S.
Internal Revenue Service, corresponding to the same tax year in which the income
is obtained. 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.




62




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.  The deduction of capital losses is subject to
limitations under the Code.




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 before 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 (and, to the extent required by an applicable
tax treaty, is attributable to a permanent establishment of such non-U.S. holder
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.




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 16%, effective January 1,
2010.




The
Single Rate Business Tax Law establishes that individuals and legal entities
deemed as Mexican residents for tax purposes, as well as foreign residents with
a permanent establishment in Mexico, are obligated to pay this tax, regardless
of where the income is generated, on revenues obtained from engaging in the
following activities: (i) transfer of goods; (ii) rendering of independent
services; and (iii) granting of temporary use or enjoyment of
goods.




In
accordance with the Single Rate Business Tax Law, the sale or other disposition
of CPOs by holders who are non-residents of Mexico for tax purposes are not
considered as taxable transactions.




Additionally,
in accordance with the Single Rate Business Tax Law, dividends (either in cash
or in any other form) earned by the abovementioned holders are also not deemed
as taxable income for purposes of this tax.




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 (or through certain U.S.-related financial
intermediaries) 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 allowed as a refund or will be creditable against the
U.S. holder’s U.S. federal income tax liability, provided that the required
information is properly furnished to the U.S. Internal Revenue
Service.




63




DOCUMENTS
ON DISPLAY




Grupo
Radio Centro is subject to the information requirements of the Exchange
Act.  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 100 F
Street, N.E, Room 1580, Washington, D.C. 20549.  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 website at http://www.sec.gov and Grupo Radio Centro’s website at
http://www.grc.com.mx.  (This URL is intended to be an inactive
textual reference only.  It is not intended to be an active hyperlink
to our website.  The information on our website, 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.)




Item
11.  Quantitative and Qualitative Disclosures 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.  For the year ended December
31, 2009, the Company had net foreign currency exposure of U.S.$ 531,000,which consisted of
short-term U.S. dollar-denominated bank deposits.  The Company
acquired these instruments for purposes other than trading
purposes.  See Note 4 to the Consolidated Financial
Statements.




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 of the Company with respect to any foreign currency denominated
liabilities.  The Company generally does not hedge or enter into
derivative transactions with respect to its foreign currency
exposure.




A
hypothetical and unfavorable 10% change in the currency exchange rate would
result in total additional operating expenses of approximately Ps. 4.5
million in 2009.




Item
12.  Description of Securities Other than Equity
Securities




Item
12A. Debt Securities




Not
applicable.




Item
12B. Warrants and Rights




Not
applicable.




64




Item
12C. Other Securities




Not
applicable.




Item
12D.  American Depositary Shares




Citibank,
N.A. serves as the Depositary for our ADSs.  Holders of our ADSs are
required to pay various fees to the Depositary, and the Depositary may refuse to
provide any service for which a fee is assessed until the applicable fee has
been paid.




ADS
holders are required to pay the Depositary amounts in respect of expenses
incurred by the Depositary or its agents on behalf of ADS holders, including
expenses arising from compliance with applicable law, taxes or other
governmental charges, cable, telex and facsimile transmission, or conversion of
foreign currency into U.S. dollars.  The Depositary may decide in its
sole discretion to seek payment by either billing holders or by deducting the
fee from one or more cash dividends or other cash distributions.




ADS
holders are also required to pay additional fees for certain services provided
by the Depositary, as set forth in the table below.




Depositary service
                
                Fee payable by ADS
                    holdersIssuance
      and delivery of ADSs, including in connection with stock
      dividends
                
                Up
      to U.S.$ 5.00 per 100 ADSs (or portion thereof)Withdrawal
      or surrender of ADSs
                
                Up
      to U.S.$ 5.00 per 100 ADSs (or portion thereof)Cash
      distributions
                
                Up
      to U.S.$ 2.00 per 100 ADSs (or portion
thereof)




Direct
and indirect payments by the Depositary





The
Depositary does not make any direct or indirect payments to us.




65




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




Disclosure
Controls and Procedures




We have
evaluated, with the participation of our chief executive officer and chief
financial officer, the effectiveness of our disclosure controls and procedures
as of December 31, 2009.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 our disclosure controls and procedures were effective to provide reasonable
assurance that information required to be disclosed by us in the reports that we
file or submit under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the applicable rules and forms,
and that it is accumulated and communicated to our management, including our
chief executive officer and chief financial officer, as appropriate to allow
timely decisions regarding required disclosure.




There has
been no change in our internal control over financial reporting during 2008 that
has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.




Management’s
Report on Internal Control over Financial Reporting




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act.  Under the supervision and with the
participation of our management, including our principal executive officer and
principal financial officer, we conducted an evaluation of the effectiveness of
our internal control over financial reporting based on the framework in Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission.




66




Our
internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
Mexican Financial Reporting Standards.  Our internal control over
financial reporting includes those policies and procedures that (i) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the Company; (ii)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with Mexican Financial
Reporting Standards, and that receipts and expenditures of the Company are being
made only in accordance with authorizations of management and directors of the
Company; and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the Company’s
assets that could have a material effect on the financial
statements.




Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements.  Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.




Based on
our evaluation under the framework in Internal Control—Integrated Framework, our
management concluded that our internal control over financial reporting was
effective as of December 31, 2009.




BDO
Hernández Marrón y Cía., S.C., or BDO, an independent registered public
accounting firm, that has audited our financial statements, has issued an
attestation report on management’s assessment of our internal control over
financial reporting, which appears under Item 18 of this Annual Report on Form
20-F.




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” and as independent, as independence is defined under
the Mexican Securities Market Law and the rules of the NYSE that are applicable
to foreign private issuers. Mr. de la Fuente Baca acquired his expertise by
serving as the chief executive officer and chief financial officer of various
Mexican corporations over the last 30 years.  See Item 6. “Directors,
Senior Management and Employees—Directors—Audit Committee.”




Item
16B.  Code of Ethics




We have
adopted a code of ethics, as defined in Item 16B of Form 20-F under the Exchange
Act.  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
http://www.grc.com.mx.  (This URL is intended to be an inactive
textual reference only.  It is not intended to be an active hyperlink
to our website.  The information on our website, 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.)  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.




67




Item
16C.  Principal Accountant Fees and Services




Audit
Fees




The
following table sets forth the fees billed to us by our independent registered
public accounting firm, BDO, for the fiscal years ended December 31, 2008 and
2009:




Year ended December 31,2009
                
                
                2008(in
      thousands)Audit
      fees
                
                Ps.
                1,746
                
                
                Ps.
                1,974Audit-related
      fees
                
                
                256
                
                
                
                320Total
      fees
                
                Ps.
                2,002
                
                
                Ps.
                2,294





Audit
fees in the above table are the aggregate fees billed by BDO in connection with
the audit of our annual financial statements and the review of our interim
financial statements and statutory and regulatory
audits.  Audit-related fees in the above table are the aggregate fees
incurred in connection with the evaluation and review by BDO of our internal
control over financial reporting.  BDO has not billed us fees related
to any other services.




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.




Item
16D.  Exemptions from the Listing Standards for Audit
Committees




Not
applicable.




Item 16E.  Purchases of
Equity Securities by the Issuer and Affiliated Purchasers




The
Company did not make any purchases of its equity securities in
2008.




Item 16F.  Change in
Registrant’s Certifying Accountant.




Not
applicable.




Item 16G. Corporate
Governance.




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




On
November 4, 2003, the NYSE established new corporate governance rules applicable
to listed companies.  These rules, and the amendments thereto, are
codified in Section 303A of the NYSE’s Listed Company Manual.  Under
these rules, foreign private issuers are subject to a more limited set of
corporate governance requirements than U.S. domestic issuers.  As a
foreign private issuer, pursuant to Rule 303A.11 of the Listed Company Manual of
the NYSE, we must provide a brief description of any significant difference
between our corporate governance practices and those followed by U.S. companies
in accordance with the NYSE listing standards.




68




The table
below discloses the significant differences between our corporate governance
practices and the NYSE rules.  See Item 6, “Directors, Senior
Management and Employees—Directors.”




Section of the
                NYSE Listed
                Company
                Manual
            
            New York Stock Exchange Corporate
                Governance Rules for Domestic Issuers
            
            Our Corporate Governance PracticesDirector
      Independence303A.01
            
            Majority
      of board of directors must be independent. “Controlled companies,” which
      would include our company if it were a U.S. issuer, are exempt from this
      requirement. A controlled company is one in which more than 50% of the
      voting an individual, group holds power or another company, rather than
      the public.
            
            Pursuant
      to our bylaws, our shareholders are required to appoint a board of
      directors of between seven and 21 members, of whom at least 25% must be
      independent.
              
              In
      accordance with the Securities Market Law, our general shareholders’
      meeting is required to make a determination as to the independence of our
      directors, though such determination may be challenged by the CNBV. There
      is no exemption from the independence requirement for controlled
      companies.Executive
      Sessions303A.03
            
            Non-management
      directors must meet regularly without management in executive sessions
      over which a non-management director must preside. The name of the
      non-management director presiding at all such sessions (or the procedure
      by which one is selected for each session) must be disclosed in the
      company’s proxy (or, if no proxy is filed, its Form 10-K / annual report).
      Independent directors should meet alone in an executive session at least
      once a year.
            
            There
      is no similar requirement under our bylaws or applicable Mexican
      law.Nominating/Corporate
      Governance Committee303A.04
            
            Nominating/corporate
      governance committee of independent directors is required. The committee
      must have a charter specifying the purpose, duties and annual evaluation
      procedures of the committee. “Controlled companies,” which would include
      our company if it were a U.S. issuer, are exempt from these
      requirements.
            
            We
      currently do not have a nominating/corporate governance
      committee.
              
              As
      required under the Mexican Securities Market Law, we have formed a
      corporate practices committee.·
            The
      committee is composed of directors who are appointed by either the board
      of directors after nomination by its chairman or by the shareholders at
      the general shareholders’ meeting.




69




Section of the
                  NYSE Listed
                  Company
                  Manual
              
              New York Stock Exchange Corporate
                  Governance Rules for Domestic Issuers
              
              Our Corporate Governance Practices·
              Currently,
      all members of our corporate practices committee are independent as
      defined under the Mexican Securities Market Law and Rule
      10A-3.·
              The
      chairman of the committee is appointed and removed exclusively by the
      shareholders at the general shareholders’ meeting.·
              Pursuant
      to our bylaws and to Mexican law, the chairman of our corporate practices
      committee submits an annual report regarding its activities to our board
      of directors, which in turn presents the report to our shareholders at the
      general shareholders’ meeting.Compensation
      Committee303A.05
              
              Compensation
      committee of independent directors is required, which must approve CEO
      compensation and offer recommendations to the board concerning non-CEO
      executive officer compensation. The committee must have a charter
      specifying the purpose, duties and evaluation procedures of the
      committee.
              
              Our
      bylaws require that our directors’ compensation be determined by the
      shareholders at the general shareholders’ meeting.
                
                The
      board of directors is authorized to approve the compensation policies for
      the CEO and other executive officers.Audit
      Committee303A.06
                303A.07
              
              Audit
      committee satisfying the independence and other requirements of Rule 10A-3
      under the Securities Exchange Act of 1934, as amended and the more
      stringent requirements under the NYSE standards is
    required.
              
              We
      have been required to comply with Rule 10A-3 since July 31, 2005 and have
      formed an audit committee that satisfies the requirements of Rule 10A-3.
      The audit committee is not required to satisfy the NYSE independence and
      other audit committee standards that are not prescribed by Rule
      10A-3.·
              The
      audit committee is composed of directors who are appointed by either the
      board of directors after nomination by its chairman or by the shareholders
      at the general shareholders’
meeting.




70




Section of the
                NYSE Listed
                Company
                Manual
            
            New York Stock Exchange Corporate
                Governance Rules for Domestic Issuers
            
            Our Corporate Governance Practices·
            All
      members of the audit committee are independent as defined by the
      Securities Market Law and Rule 10A-3.·
            The
      chairman of the audit committee is appointed and removed exclusively by
      the shareholders at the general shareholders’ meeting and submits an
      annual report regarding the activities of the committee to the board of
      directors, which in turn presents the report to the shareholders at the
      general shareholders’ meeting.Equity
      Compensation Plans303A.08
            
            Equity
      compensation plans, and material amendments thereto, require shareholder
      approval, subject to limited exemptions.
            
            Under
      Mexican law, shareholder approval is required for the adoption and
      amendment of an equity compensation plan. We do not currently have an
      equity compensation plan.Code
      of Ethics303A.10
            
            Corporate
      governance guidelines and a code of business conduct and ethics are
      required, with disclosure of any waiver for directors or executive
      officers.
            
            We
      have adopted a code of ethics applicable to our chief executive officer,
      chief financial officer and principal accounting officer or persons
      performing similar functions. We must disclose any waivers granted to such
      persons. A copy of our code of ethics is available on our website at
      www.radiocentro.com.mx.Certification
      Requirements303A.12
            
            CEO
      must (1) certify annually that unaware of any violation of the NYSE
      corporate governance listing standards and (2) notify the NYSE in writing
      after any executive officer becomes aware of any material non-compliance
      with NYSE corporate governance standards. An annual Written Affirmation
      (as well as interim Written Affirmations in certain circumstances) must be
      executed and submitted to the NYSE in the form it
    prescribes.
            
            Mexican
      securities regulations require us to submit annually to the CNBV a report
      and certification of the chairman and secretary of our board of directors
      regarding the degree of our compliance with the provisions of the Mexican
      Code of Best Corporate Practices.
              
              The
      NYSE rules require that we execute and submit an annual Written
      Affirmation (as well as interim Written Affirmations in certain
      circumstances) to the NYSE in the form it prescribes and that our CEO
      notify the NYSE in writing after any executive officer becomes aware of
      any material non-compliance with NYSE corporate governance
      standards.




71




PART
III




Item
17.  Financial Statements




Not
applicable.




Item
18.  Financial Statements




See pages
F-1 through F-45, 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.B. de C.V. for the Years Ended
December 31, 2009, 2008 and 2007




Reports
      of independent auditors
                                    
                                    F-1Consolidated
      balance sheets as of December 31, 2009 and 2008
                                    
                                    F-3Consolidated
      statements of income for the years ended December 31, 2009, 2008 and
      2007
                                    
                                    F-4Consolidated
      statements of changes in shareholders’ equity for the years ended December
      31, 2009, 2008 and 2007
                                    
                                    F-5Consolidated
      statement of cash flows for the years ended December 31, 2009 and
      2008
                                    
                                    F-6Consolidated
      statements of changes in financial position for the year ended December
      31, 2007
                                    
                                    F-7Notes
      to the consolidated financial statements as of and for the years ended
      December 31, 2009, 2008 and 2007
                                    
                                    F-8
      to
F-45





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.




72




(b)           List
of Exhibits




Charter
      (Escritura
      Constitutiva), together with an English translation (a)
                    
                    1.1Amended
      and Restated Bylaws of Grupo Radio Centro, S.A.B. de C.V., dated December
      16, 2009, filed as an English translation
                    
                    1.2Deposit
      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)
                    
                    2.1Amended
      and Restated Controlling Trust Agreement, No. F/23020-1, dated April 24,
      1992, with amendments dated September 2, 1992, May 18, 1993, September 14,
      1993, May 25, 1999 and April 5, 2000 between certain members of the
      Aguirre family and Bancomer, S.A., as trustee, together with an English
      translation(b)
                    
                    3.1Trustee
      Substitution Agreement with respect to the Amended and Restated
      Controlling Trust Agreement of Trust F/632 (formerly Trust No. F/23020-1),
      dated June 15, 2007, between certain members of the Aguirre family,
      Bancomer, S.A., as the old trustee and IXE Banco, S.A., as the new
      trustee, filed as an English translation (l)
                    
                    3.2Trust
      Agreement, No. F/29307-6, dated June 3, 1998, among certain principal
      shareholders of Grupo Radio Centro, S.A. de C.V., together with an English
      translation(c)
                    
                    3.3Trustee
      Substitution Agreement with respect to the Trust Agreement of Trust F/633
      (formerly Trust No. F/29307-6), dated June 3, 1998, among certain
      principal shareholders of Grupo Radio Centro, S.A. de C.V., Bancomer,
      S.A., as the old trustee and IXE Banco, S.A., as the new trustee, filed as
      an English translation
                    
                    3.4Trust
      Dissolution Agreement with respect to Trust F/633, dated June 18, 2007,
      between certain members of the Aguirre family and IXE Banco, S.A., as
      trustee, filed as an English translation (l)
                    
                    3.5Amended
      and Restated CPO Trust Agreement, dated as of June 27, 2003, between GE
      Capital Bank S.A., Institución 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)
                    
                    3.6Amended
      and Restated Public Deed, dated as of June 27, 2003 (the “Amended and
      Restated CPO Deed”), filed as an English translation(h)
                    
                    4.1Modifying
      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)
                    
                    4.2Modifying
      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)
                    
                    4.3Modifying
      Agreement, dated September 7, 2004, 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, filed as an
      English translation(j)
                    
                    4.4Programming
      Services Agreement, dated December 23, 1998, among Grupo Radio Centro,
      S.A. de C.V., Infored and José Gutiérrez Vivó, together with an English
      translation(e)
                    
                    4.5Credit
      Agreement, dated May 16, 2006, among Grupo Radio Centro, S.A. de C.V, as
      borrower; Radio Centro Publicidad, S.A. de C.V., GRC Publicidad, S.A. de
      C.V. and GRC Medios, S.A. de C.V., as several obligors; Desarrollos
      Empresariales, S.A. de C.V., Radiodifusión Red, S.A. de C.V., Inmobilaria
      Radio Centro, S.A. de C.V. and Universal de Muebles e Inmuebles, S.A. de
      C.V., as guarantors; and GE Capital CEF México, S. de R.L. de C.V. and
      Banco Inbursa, S.A., Institución de Banca Múltiple, Grupo Financiero
      Inbursa, as creditors, (the “Credit Agreement”), filed as an English
      translation(k)
                    
                    4.6




73




Amendment
      to the Credit Agreement, dated May 16, 2008, filed as an English
      translation(m)
              
              4.7Second
      Amendment to the Credit Agreement, dated June 4, 2008, filed as an English
      translation(m)
              
              4.8Third
      Amendment to the Credit Agreement, dated May 14, 2009, filed as an English
      translation
              
              4.9Local
      Marketing Agreement, dated as of April 3, 2009, among KMVN, LLC, KMVN
      License, LLC, Grupo Radio Centro LA, LLC and Grupo Radio Centro, S.A.B. de
      C.V.(n)
              
              4.10Put
      and Call Agreement, dated as of April 3, 2009, among KMVN, LLC, KMVN
      License, LLC, Grupo Radio Centro LA, LLC and Grupo Radio Centro, S.A.B. de
      C.V.(n)
              
              4.11List
      of Subsidiaries of the Company
              
              8.1Certification
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
              
              12.1Certification
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
              
              12.2Certification
      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
(Commission File 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
(Commission File 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.




(i)
Incorporated by reference to the Company’s Annual Report on Form 20-F
(Commission File No. 001-12090) filed on July 1, 2004, as amended by
amendment filed on July 2, 2004.




(j)
Incorporated by reference to the Company’s Annual Report on Form 20-F
(Commission File No. 001-12090) filed on June 29, 2005.




(k)Incorporated by reference to the Company’s Annual Report on Form 20-F
(Commission File No. 001-12090) filed on June 30, 2006.




(l)
Incorporated by reference to our Annual Report on Form 20-F (Commission File No.
001-12090) filed on July 2, 2007.




74




(m)
Incorporated by reference to our Annual Report on Form 20-F (Commission File No.
001-12090) filed on July 30, 2008.




(n)
Incorporated by reference to the Form 8-K of Emmis Communications Corporation
(Commission File No. 0-23264) filed on April 8, 2009.




75




GRUPO RADIO CENTRO, S.A.B.
DE C.V. AND SUBSIDIARY COMPANIES
  CONSOLIDATED FINANCIAL
STATEMENTS
  AS OF DECEMBER 31, 2009 AND
2008 AND FOR THE YEARS ENDED DECEMBER
 31, 2009, 2008 AND
2007
  TOGETHER WITH
THE
  INDEPENDENT AUDITORS’
REPORT
  
  GRUPO RADIO CENTRO, S.A.B.
DE C.V. AND SUBSIDIARY COMPANIES
  CONSOLIDATED FINANCIAL
STATEMENTS
  AS OF DECEMBER 31, 2009,
2008 AND 2007 AND FOR THE YEARS ENDED
 DECEMBER 31, 2009, 2008 AND
2007
  INDEX
  PageIndependent
      auditors’ report
                            F-1Consolidated
      Financial Statements:Consolidated
      Balance Sheets as of December 31, 2009 and 2008
                            F-3Consolidated
      Statements of Incomefor
      the years ended December 31, 2009, 2008 and 2007
                            F-4Consolidated
      Statements of Changes in Shareholders’ Equityfor
      the years ended December 31, 2009, 2008 and 2007
                            F-5Consolidated
      Statements of Cash Flowsfor
      the years ended December 31, 2009 and 2008
                            F-6Consolidated
      Statement of Changes in Financial Positionfor
      the year ended December 31, 2007
                            F-7Notes
      to the Consolidated Financial Statements
                            F-8 – F-45
  
  Report of
Independent Registered Public Accounting Firm
  To the
Shareholders of
 Grupo
Radio Centro, S.A.B. de C.V.:
  We have
audited the consolidated balance sheets of Grupo Radio Centro, S.A.B. de C.V.
and its subsidiaries as of December 31, 2009 and 2008 and the related
consolidated statements of income and consolidated statements of changes in
shareholders’ equity for the years ended December 31, 2009, 2008 and 2007, the
consolidated statements of cash flows for the years ended December 31, 2009 and
2008 and the consolidated statement of changes in financial position for the
year ended December 31, 2007. These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audits.
  We
conducted our audits in accordance with generally accepted auditing standards in
Mexico and the standards of the Public Company Accounting Oversight Board
(United States). These standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement and prepared in accordance with Mexican financial
reporting standards. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
  As
mentioned in Note 3b to the financial statements, as of January 1, 2008, the
Company adopted the financial reporting standard MFRS B-2, Statement of Cash Flows,
which supersedes Bulletin B-12, Statement of Changes in Financial
Position, which was in effect until December 31, 2007. As mentioned in
Note 3b, the Company also adopted, as of January 1, 2008, MFRS B-10, Effects of
inflation.
  In our
opinion, the accompanying consolidated financial statements present fairly, in
all material respects, the consolidated financial position of Grupo Radio
Centro, S.A.B. de C.V. and subsidiaries as of December 31, 2009 and 2008, and
the consolidated statements of income and consolidated statements of changes in
shareholders’ equity for the years ended December 31, 2009, 2008 and 2007, and
consolidated statements of cash flows for the years ended 2009 and 2008, and the
consolidated statement of changes in financial position for the year ended
December 31, 2007 in conformity with Mexican Financial Reporting Standards.
  These
financial statements have been translated into English solely for the
convenience of readers of this language. In all cases where there are any
inconsistencies between the English and Spanish versions, the Spanish version
shall be considered authoritative and controlling.
  BDO
Hernández Marrón y Cía., S.C.
  /s/ Luis Alberto Cámara PuertoLuis
      Alberto Cámara PuertoAudit
      Partner
 
 Mexico
City
 February
19, 2010, except for the event described in Note 26, dated June 25,
2010.
  F-1
 
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the
Board of Directors and Shareholders of
 Grupo
Radio Centro, S.A.B. de C.V. and subsidiaries
  We have
audited Grupo Radio Centro, S.A.B. de C.V. and its subsidiaries’ internal
control over financial reporting as of December 31, 2009, based on criteria
established in Internal Control – Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). Grupo Radio
Centro, S.A.B. de C.V.’s management is responsible for maintaining effective
internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting, included in the
accompanying “Item 15, Management’s Report on Internal Control Over Financial
Reporting”. Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit.
  We
conducted our audit in accordance of the standard of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. Our audit also included performing such
other procedures as we considered necessary in the circumstances. We believe
that our audit provided a reasonable basis for our opinion.
  A
company's internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with Mexican financial reporting standards. A company's internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with Mexican financial
reporting standards, and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial
statements.
  Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
  In our
opinion, Grupo Radio Centro, S.A.B. de C.V. and its subsidiaries maintained, in
all material respects, effective internal control over financial reporting as of
December 31, 2009, based on the COSO criteria.
  We have
also audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the consolidated financial statements of Grupo
Radio Centro, S.A.B. de C.V. and its subsidiaries as of December 31, 2009 and
2008, and the related consolidated statements of income and consolidated
statements of changes in shareholders’ equity for each of the three years ended
December 31, 2009, 2008 and 2007 and consolidated statements of cash flow for
the years ended December 31, 2009 and 2008 and the consolidated statement of
changes in financial position for the year ended December 31, 2007, and our
report dated February 19, 2010, except for Note 26 which is dated as of June 25,
2010.
  BDO
Hernández Marrón y Cía., S.C.
  /s/ Luis Alberto Cámara PuertoLuis
      Alberto Cámara PuertoAudit
      Partner
 
 Mexico
City
 February
19, 2010, except for the event described in Note 26, dated June 25,
2010.
  F-2
  GRUPO RADIO CENTRO, S.A. B.
DE C.V. AND SUBSIDIARY COMPANIES
 CONSOLIDATED BALANCE
SHEETS  AS OF DECEMBER 31, 2009 AND 2008
 (The
figures that contain the symbol "Ps" are expressed in thousands of Mexican pesos
and
 the
figures that contain the symbol "US$" are expressed in thousands of U.S.
dollars, Note 2)
 
 ASSETS
                                              
                                              2009
                                              
                                              
                                              2008CURRENT
      ASSETS:Cash
      and equivalents and liquid demandinvestments  (Note
      5)
                                              
                                              US$
                                              13,443
                                              
                                              
                                              Ps
                                              175,537
                                              
                                              
                                              Ps
                                              93,054Accounts
      receivable:Broadcasting,
      net of allowance fordoubtful
      accounts of Ps 23,916in
      2009 and 2008
                                              
                                              
                                              23,335
                                              
                                              
                                              
                                              304,701
                                              
                                              
                                              
                                              301,101Taxes
      recoverable
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              3,007Others
      (Note 7)
                                              
                                              
                                              526
                                              
                                              
                                              
                                              6,863
                                              
                                              
                                              
                                              6,22523,861
                                              
                                              
                                              
                                              311,564
                                              
                                              
                                              
                                              310,333ADVANCE
      PAYMENTS (Note 8)
                                              
                                              
                                              9,037
                                              
                                              
                                              
                                              117,996
                                              
                                              
                                              
                                              38,179Total
      current assets
                                              
                                              
                                              46,341
                                              
                                              
                                              
                                              605,097
                                              
                                              
                                              
                                              441,566PROPERTY
      AND EQUIPMENT, NET (Note 12 )
                                              
                                              
                                              35,224
                                              
                                              
                                              
                                              459,941
                                              
                                              
                                              
                                              465,034ADVANCE
      PAYMENTS (Note 8)
                                              
                                              
                                              2,042
                                              
                                              
                                              
                                              26,662
                                              
                                              
                                              
                                              -DEFERRED
      CHARGES, NET (Note 13)
                                              
                                              
                                              233
                                              
                                              
                                              
                                              3,039
                                              
                                              
                                              
                                              4,850EXCESS
      COST OVER NET BOOK VALUEOF
      ASSETS OF SUBSIDIARIES, NET (Note 14)
                                              
                                              
                                              63,478
                                              
                                              
                                              
                                              828,863
                                              
                                              
                                              
                                              828,863OTHER
      ASSETS
                                              
                                              
                                              257
                                              
                                              
                                              
                                              3,353
                                              
                                              
                                              
                                              3,325US$
                                              147,575
                                              
                                              
                                              Ps
                                              1,926,955
                                              
                                              
                                              Ps
                                              1,743,638
  LIABILITIES
                                          
                                          2009
                                          
                                          
                                          2008CURRENT
      LIABILITIES:Suppliers
      and other accounts payable (Note 16)
                                          
                                          US$
                                          6,451
                                          
                                          
                                          Ps
                                          84,230
                                          
                                          
                                          Ps
                                          67,388Advances
      from clients (Note 3-j)
                                          
                                          
                                          13,441
                                          
                                          
                                          
                                          175,502
                                          
                                          
                                          
                                          142,543Income
      tax and other taxespayable
      (Note 17)
                                          
                                          
                                          4,327
                                          
                                          
                                          
                                          56,495
                                          
                                          
                                          
                                          18,859Notes
      payable (Note 15)
                                          
                                          
                                          3,209
                                          
                                          
                                          
                                          41,903
                                          
                                          
                                          
                                          -Total
      current  liabilities
                                          
                                          
                                          27,428
                                          
                                          
                                          
                                          358,130
                                          
                                          
                                          
                                          228,790LONG-TERM
      LIABILITIES:Notes
      payable (Note 15)
                                          
                                          
                                          9,956
                                          
                                          
                                          
                                          130,000
                                          
                                          
                                          
                                          -Labor
      liabilities (Note 18)
                                          
                                          
                                          5,045
                                          
                                          
                                          
                                          65,871
                                          
                                          
                                          
                                          60,276Deferred
      taxes (Note 20)
                                          
                                          
                                          1,262
                                          
                                          
                                          
                                          16,475
                                          
                                          
                                          
                                          21,782Total
      liabilities
                                          
                                          
                                          43,691
                                          
                                          
                                          
                                          570,476
                                          
                                          
                                          
                                          310,848CONTINGENCIES
      (Note  22)
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -SHAREHOLDERS' EQUITY (Note
    19):Capital
      stock
                                          
                                          
                                          86,571
                                          
                                          
                                          
                                          1,130,410
                                          
                                          
                                          
                                          1,130,410Retained
      earnings
                                          
                                          
                                          16,558
                                          
                                          
                                          
                                          216,204
                                          
                                          
                                          
                                          257,818Reserve
      for the repurchase of shares
                                          
                                          
                                          3,357
                                          
                                          
                                          
                                          43,837
                                          
                                          
                                          
                                          43,837Cumulative
      effect from conversion
                                          
                                          
                                          (14
                                          )
                                          
                                          
                                          (183
                                          )
                                          
                                          
                                          -Controlled
      interest
                                          
                                          
                                          106,472
                                          
                                          
                                          
                                          1,390,268
                                          
                                          
                                          
                                          1,432,065Uncontrolled
      interest
                                          
                                          
                                          (2,588
                                          )
                                          
                                          
                                          (33,789
                                          )
                                          
                                          
                                          725Total
      shareholders' equity
                                          
                                          
                                          103,884
                                          
                                          
                                          
                                          1,356,479
                                          
                                          
                                          
                                          1,432,790US$
                                          147,575
                                          
                                          
                                          Ps
                                          1,926,955
                                          
                                          
                                          Ps
                                          1,743,638
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  F-3
  GRUPO RADIO CENTRO, S.A. B.
DE C.V. AND SUBSIDIARY COMPANIES
 CONSOLIDATED STATEMENTS OF
INCOME
 FOR THE YEARS ENDED DECEMBER
31, 2009, 2008, AND 2007
 
 (The
figures that contain the symbol "Ps" are expressed in thousands of Mexican pesos
and
 the
figures that contain the symbol "US$" are expressed in thousands of U.S.
dollars, Note 2)
 
 2009
                            
                            
                            2008
                            
                            
                            2007Broadcasting
      income
                            
                            US$
                            60,185
                            
                            
                            Ps
                            785,869
                            
                            
                            Ps
                            735,105
                            
                            
                            Ps
                            654,760Broadcasting
      expenses, excludingdepreciation
      and amortization
                            
                            
                            45,568
                            
                            
                            
                            595,011
                            
                            
                            
                            452,350
                            
                            
                            
                            421,970Broadcasting
      income
                            
                            
                            14,617
                            
                            
                            
                            190,858
                            
                            
                            
                            282,755
                            
                            
                            
                            232,790Depreciation
      and amortization
                            
                            
                            1,993
                            
                            
                            
                            26,024
                            
                            
                            
                            31,720
                            
                            
                            
                            33,687Corporate general and administrative expenses
                            
                            
                            1,144
                            
                            
                            
                            14,939
                            
                            
                            
                            14,461
                            
                            
                            
                            14,774Operating
      income
                            
                            
                            11,480
                            
                            
                            
                            149,895
                            
                            
                            
                            236,574
                            
                            
                            
                            184,329Other
      expenses, net (Note 21)
                            
                            
                            (5,092
                            )
                            
                            
                            (66,495
                            )
                            
                            
                            (56,880
                            )
                            
                            
                            (45,806
                            )Comprehensive
      cost of financing:Interest
      expense
                            
                            
                            (1,803
                            )
                            
                            
                            (23,528
                            )
                            
                            
                            (8,376
                            )
                            
                            
                            (2,767
                            )Interest
      income
                            
                            
                            4
                            
                            
                            
                            53
                            
                            
                            
                            228
                            
                            
                            
                            399Foreign
      exchange loss (gain), net (Note 4)
                            
                            
                            (1,313
                            )
                            
                            
                            (17,140
                            )
                            
                            
                            470
                            
                            
                            
                            (5
                            )Loss
      from monetary position
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (3,477
                            )(3,112
                            )
                            
                            
                            (40,615
                            )
                            
                            
                            (7,678
                            )
                            
                            
                            (5,850
                            )Income
      before tax on income
                            
                            
                            3,276
                            
                            
                            
                            42,785
                            
                            
                            
                            172,016
                            
                            
                            
                            132,673Tax
      on income (Note 20)
                            
                            
                            2,936
                            
                            
                            
                            38,342
                            
                            
                            
                            45,251
                            
                            
                            
                            41,554Net
      income
                            
                            US$
                            340
                            
                            
                            Ps
                            4,443
                            
                            
                            Ps
                            126,765
                            
                            
                            Ps
                            91,119Net
      income corresponding to:Controlled
      interest
                            
                            
                            4,471
                            
                            
                            
                            58,386
                            
                            
                            
                            126,720
                            
                            
                            Ps
                            91,098Uncontrolled
      interest
                            
                            
                            (4,131
                            )
                            
                            
                            (53,943
                            )
                            
                            
                            45
                            
                            
                            
                            21US$
                            340
                            
                            
                            Ps$
                            4,443
                            
                            
                            Ps
                            126,765
                            
                            
                            Ps
                            91,119Net
      income per share
                            
                            US$
                            0.0275
                            
                            
                            Ps$
                            0.3588
                            
                            
                            Ps
                            0.7790
                            
                            
                            Ps
                            0.5598
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  F-4
  GRUPO RADIO CENTRO, S.A. B.
DE C.V. AND SUBSIDIARY COMPANIES
 CONSOLIDATED STATEMENT OF
CHANGES IN SHAREHOLDERS' EQUITY
 FOR THE YEARS ENDED DECEMBER
31, 2009, 2008, AND 2007
 
 (The
figures that contain the symbol "Ps" are expressed in thousands of Mexican pesos
and
 the
figures that contain the symbol "US$" are expressed in thousands of U.S.
dollars, Note 2)
 
 Reserve
      for
                          
                          
                          Excess
                          
                          
                          Cumulativerepurchase
                          
                          
                          in
      the
                          
                          
                          effect
      of
                          
                          
                          Effect
      fromCapital
                          
                          
                          Retained
                          
                          
                          Cumulative
      effect
                          
                          
                          of
                          
                          
                          restatement
                          
                          
                          deferred
                          
                          
                          labor
                          
                          
                          Uncontrolled
                          
                          
                          
                          
                          
                          Comprehensivestock
                          
                          
                          earnings
                          
                          
                          from
      conversion
                          
                          
                          shares
                          
                          
                          of
      capital
                          
                          
                          income
      tax
                          
                          
                          obligations
                          
                          
                          holding
                          
                          
                          Total
                          
                          
                          incomeBalances
      as of December 31, 2006 (Note 19)
                          
                          Ps
                          1,130,410
                          
                          
                          Ps
                          314,077
                          
                          
                          Ps
                          -
                          
                          
                          $
                          43,837
                          
                          
                          $
                          5,084
                          
                          
                          $
                          (106,320
                          )
                          
                          $
                          (310
                          )
                          
                          $
                          667
                          
                          
                          $
                          1,387,445
                          
                          
                          $
                          434,748Dividends
      paid
                          
                          
                          -
                          
                          
                          
                          (71,934
                          )
                          
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (8
                          )
                          
                          
                          (71,942
                          )
                          
                          
                          -Reclassification
      of the excess in the restatement of shareholders' equity and from the
      cumulative effect of deferred income tax
                          
                          
                          -
                          
                          
                          
                          (101,236
                          )
                          
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          (5,084
                          )
                          
                          
                          106,320
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Effect
      from the additional liability from labor obligations
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (597
                          )
                          
                          
                          -
                          
                          
                          
                          (597
                          )
                          
                          
                          (597
                          )Reclassification
      from the effect of labor obligations in the shareholders'
      equity
                          
                          
                          -
                          
                          
                          
                          (907
                          )
                          
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          907
                          
                          
                          
                          -
                          
                          
                          
                          -Net
      income for the year
                          
                          
                          -
                          
                          
                          
                          91,119
                          
                          
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          91,119
                          
                          
                          
                          91,119Uncontrolled
      interest
                          
                          
                          -
                          
                          
                          
                          (21
                          )
                          
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          21
                          
                          
                          
                          -
                          
                          
                          
                          -Balances
      as of December 31, 2007 (Note 19)
                          
                          
                          1,130,410
                          
                          
                          
                          231,098
                          
                          
                          
                          -
                          
                          
                          
                          43,837
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          680
                          
                          
                          
                          1,406,025
                          
                          
                          
                          90,522Dividends
      paid
                          
                          
                          -
                          
                          
                          
                          (100,000
                          )
                          
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (100,000
                          )
                          
                          
                          -Net
      income for the year
                          
                          
                          -
                          
                          
                          
                          126,765
                          
                          
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          126,765
                          
                          
                          
                          126,765Uncontrolled
      interest
                          
                          
                          -
                          
                          
                          
                          (45
                          )
                          
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          45
                          
                          
                          
                          -
                          
                          
                          
                          -Balances
      as of December 31, 2008 (Note 19)
                          
                          
                          1,130,410
                          
                          
                          
                          257,818
                          
                          
                          
                          -
                          
                          
                          
                          43,837
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          725
                          
                          
                          
                          1,432,790
                          
                          
                          
                          126,765Dividends
      paid
                          
                          
                          
                          
                          
                          
                          (100,000
                          )
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (100,000
                          )Net
      income  for the year
                          
                          
                          
                          
                          
                          
                          4,443
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          4,443
                          
                          
                          
                          4,443Effect
      of  foreign currency translation
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (183
                          )
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (183
                          )Uncontrolled
      holding
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          -In
      the year's result
                          
                          
                          -
                          
                          
                          
                          53,943
                          
                          
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (53,943
                          )
                          
                          
                          -
                          
                          
                          
                          -Contribution
      of minority Shareholders
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          19,429
                          
                          
                          
                          19,429Balances
      as of December 31, 2009 (Note 19)
                          
                          Ps
                          1,130,410
                          
                          
                          Ps
                          216,204
                          
                          
                          Ps
                          (183
                          )
                          
                          Ps
                          43,837
                          
                          
                          Ps
                          -
                          
                          
                          Ps
                          -
                          
                          
                          Ps
                          -
                          
                          
                          Ps
                          (33,789
                          )
                          
                          Ps
                          1,356,479
                          
                          
                          Ps
                          4,443
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  F-5
 GRUPO RADIO CENTRO, S.A. B.
DE C.V. AND SUBSIDIARY COMPANIES
 CONSOLIDATED STATEMENTS OF
CASH FLOWS
 FOR THE YEARS ENDED DECEMBER
31, 2009 AND 2008
 
 (The
figures that contain the symbol "Ps" are expressed in thousands of Mexican pesos
and
 the
figures that contain the symbol "US$" are expressed in thousands of U.S.
dollars, Note 2)
 
 2009
                                                                                                                                                  
                                                                                                                                                  2008OPERATING
      ACTIVITIES:Income
      before tax on income:
                                                                                                                                                  Ps
                                                                                                                                                  42,785
                                                                                                                                                  
                                                                                                                                                  Ps
                                                                                                                                                  172,016Adjustments
      to reconcile income beforetaxes
      on  income to net cash  provided by operating
      activities:Depreciation
      and amortization
                                                                                                                                                  
                                                                                                                                                  26,024
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  31,720Deferred
      income tax
                                                                                                                                                  
                                                                                                                                                  (5,307
                                                                                                                                                  )
                                                                                                                                                  
                                                                                                                                                  16,652Pension
      plan Expense
                                                                                                                                                  
                                                                                                                                                  5,595
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  1,671Interest
      expense
                                                                                                                                                  
                                                                                                                                                  23,528
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  8,376Other
      items
                                                                                                                                                  
                                                                                                                                                  1,944
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  (348
                                                                                                                                                  )94,569
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  230,087Decrease
      (Increase) in accounts receivable and
      others
                                                                                                                                                  
                                                                                                                                                  39,742
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  (145,659
                                                                                                                                                  )Increase
      advance lease payments
                                                                                                                                                  
                                                                                                                                                  (117,528
                                                                                                                                                  )
                                                                                                                                                  
                                                                                                                                                  -Decrease
      in suppliers
                                                                                                                                                  
                                                                                                                                                  40,290
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  17,178Tax
      on income paid
                                                                                                                                                  
                                                                                                                                                  (21,148
                                                                                                                                                  )
                                                                                                                                                  
                                                                                                                                                  (31,988
                                                                                                                                                  )(58,644
                                                                                                                                                  )
                                                                                                                                                  
                                                                                                                                                  (160,469
                                                                                                                                                  )Net
      cash used in  operating
      activities
                                                                                                                                                  
                                                                                                                                                  35,925
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  69,618INVESTING
      ACTIVITIES:Contribution
      of minority shareholders
                                                                                                                                                  
                                                                                                                                                  19,429
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  -Effect
      of  foreign currency
      translation
                                                                                                                                                  
                                                                                                                                                  (183
                                                                                                                                                  )
                                                                                                                                                  
                                                                                                                                                  -Acquisition
      of properties and equipment
                                                                                                                                                  
                                                                                                                                                  (21,064
                                                                                                                                                  )
                                                                                                                                                  
                                                                                                                                                  (35,199
                                                                                                                                                  )Net
      cash used in  investing
      activities
                                                                                                                                                  
                                                                                                                                                  (1,818
                                                                                                                                                  )
                                                                                                                                                  
                                                                                                                                                  (35,199
                                                                                                                                                  )Excess
      cash to be applied in financing
      activitiesFINANCING
      ACTIVITIES:Proceeds
      from loan obtained
                                                                                                                                                  
                                                                                                                                                  200,000
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  -Loan
      payments
                                                                                                                                                  
                                                                                                                                                  (30,000
                                                                                                                                                  )
                                                                                                                                                  
                                                                                                                                                  -Interest
      paid
                                                                                                                                                  
                                                                                                                                                  (21,624
                                                                                                                                                  )
                                                                                                                                                  
                                                                                                                                                  (8,376
                                                                                                                                                  )Dividends
      paid
                                                                                                                                                  
                                                                                                                                                  (100,000
                                                                                                                                                  )
                                                                                                                                                  
                                                                                                                                                  (100,000
                                                                                                                                                  )Net
      cash provided by (used in) financing
      activities
                                                                                                                                                  
                                                                                                                                                  48,376
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  (108,376
                                                                                                                                                  )CASH
      AND CASH EQUIVALENTS:Increase
      for the year
                                                                                                                                                  
                                                                                                                                                  82,483
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  (73,957
                                                                                                                                                  )Balance
      at the beginning of the year
                                                                                                                                                  
                                                                                                                                                  93,054
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  167,011Balance
      at the end of the year
                                                                                                                                                  Ps
                                                                                                                                                  175,537
                                                                                                                                                  
                                                                                                                                                  Ps
                                                                                                                                                  93,054
 
 The accompanying notes are an integral
part of these consolidated financial statements.
  F-6
 
 GRUPO RADIO CENTRO, S.A. B.
DE C.V. AND SUBSIDIARY COMPANIES
 CONSOLIDATED STATEMENT OF
CHANGES IN FINANCIAL POSITION
 FOR THE YEAR ENDED DECEMBER
31, 2007
 
 (The
figures that contain the symbol "Ps" are expressed in thousands of Mexican pesos
and
 the
figures that contain the symbol "US$" are expressed in thousands of U.S.
dollars)
 
 2007OPERATIONS:Net
      income for the year
                                                                                        
                                                                                        Ps
                                                                                        91,119Charges
      (credits) to results no requiring (provided)the outlay of
      cash:Depreciation
      and amortization
                                                                                        
                                                                                        
                                                                                        33,687Deferred
      income tax
                                                                                        
                                                                                        
                                                                                        (4,259
                                                                                        )Labor
      obligations
                                                                                        
                                                                                        
                                                                                        3,302Effect
      from the valuation of properties
                                                                                        
                                                                                        
                                                                                        881124,730Net
      change in accounts receivable, accounts payable,and other
      assets
                                                                                        
                                                                                        
                                                                                        28,759Resources
      provided by operations
                                                                                        
                                                                                        
                                                                                        153,489FINANCING:Dividends
      paid
                                                                                        
                                                                                        
                                                                                        (71,942
                                                                                        )Resources
      used in financing activities
                                                                                        
                                                                                        
                                                                                        (71,942
                                                                                        )INVESTMENT:Goodwill
                                                                                        
                                                                                        
                                                                                        (129
                                                                                        )Deferred
      charges
                                                                                        
                                                                                        
                                                                                        (1,978
                                                                                        )Excluding
      the recognition of the effects from inflation:Equipment
                                                                                        
                                                                                        
                                                                                        (14,341
                                                                                        )Investment
      security deposits
                                                                                        
                                                                                        
                                                                                        171Resources
      used in investment activities
                                                                                        
                                                                                        
                                                                                        (16,277
                                                                                        )Increase
      in cash and temporary investments
                                                                                        
                                                                                        
                                                                                        65,270Cash
      and equivalents at the beginning of the year
                                                                                        
                                                                                        
                                                                                        101,741Cash
      and equivalents at the end of the year
                                                                                        
                                                                                        
                                                                                        167,011
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  F-7
  GRUPO RADIO CENTRO, S.A.B.
DE C.V. AND SUBSIDIARY COMPANIES
 NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2009 AND
2008
 AND FOR THE YEARS
ENDED
 DECEMBER 31, 2009, 2008 AND
2007
 (The  amounts
with the symbol “Ps” are expressed in thousands of Mexican pesos and
the
 amounts
with the symbol “US$” are expressed
 in
thousands of U.S. dollars.)
  NOTE 1 - LINE OF BUSINESS
AND COMPOSITION OF THE COMPANIES:
  Grupo
Radio Centro, S.A.B. de C.V. was incorporated on June 8, 1971.  Grupo
Radio Centro, S.A.B. de C.V. and its subsidiary companies are collectively
referred to in the notes to the financial statements as “Grupo Radio Centro” or
“the Company”.
  Grupo
Radio Centro is a Mexican commercial broadcasting company whose 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 under the trade name OIR (Organización
Impulsora de Radio).
  Grupo
Radio Centro owns approximately 99.9% of most of its subsidiaries, which
comprise the following companies held during the years indicated
below:
  Companies:
                    
                    2009
                    
                    2008
                    
                    2007Radio
      stations:XEQR,
      S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XXERC,
      S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XXEEST,
      S.A. de C.V. (a)
                    
                    X
                    
                    X
                    
                    XXEQR-FM,
      S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XXERC-FM,
      S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XXEJP-FM,
      S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XXEDKR-AM,
      S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XXESTN
      – AM
                    
                    X
                    
                    X
                    
                    XRadio
      Red, S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XRadio
      Red-FM, S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XEstación
      Alfa, S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XEmisora
      1150, S.A. de C.V. (formerly XECMQ)
                    
                    X
                    
                    X
                    
                    XRadio
      Sistema Mexicano, S.A.
                    
                    X
                    
                    X
                    
                    XGrupo
      Radio Centro LA, LLC (b)
                    
                    X
                    
                    -
                    
                    -
  F-8
  Companies:
                    
                    2009
                    
                    2008
                    
                    2007Marketing
      companies:Grupo
      Radio Centro, S.A.B. de C.V.
                    
                    X
                    
                    X
                    
                    XGRC
      Radiodifusión, S.A. (formerly Aerocer, S.A.)
                    
                    X
                    
                    X
                    
                    XGRC
      Publicidad, S.A. de C.V. (c)
                    
                    -
                    
                    X
                    
                    XGRC
      Comunicaciones, S.A. de C.V. (d)
                    
                    X
                    
                    XGRC
      Medios, S.A. de C.V. (c)
                    
                    -
                    
                    X
                    
                    XRadio
      Centro Publicidad, S.A. de C.V. (c)
                    
                    -
                    
                    X
                    
                    XService
      companies:Promotora
      Técnica de Servicios
                      Profesionales,
      S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XPublicidad
      y Promociones Internacionales, S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XPromo
      Red, S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XTo2
      México, S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XReal
      estate companies:Universal
      de Muebles e Inmuebles, S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XInmobiliaria
      Radio Centro S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XSub-holding
      companies:Desarrollos
      Empresariales, S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XRadiodifusión
      Red, S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XEnlaces
      Troncales, S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XNon-operating
      companies:Música,
      Música, Música, S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XPromotora
      de Éxitos, S.A. de C.V.
                    
                    X
                    
                    X
                    
                    XProducciones
      Artísticas Internacionales,S.A.
      de C.V.
                    
                    X
                    
                    X
                    
                    X
  a)
              Radio
      station managed and operated by Comercializadora Siete de México, S.A. de
      C.V.
  F-9
  b)
              Grupo
      Radio Centro LA, LLC
  Grupo
Radio Centro LA, LLC, a wholly-owned subsidiary of the Company, was incorporated
on March 13, 2009 (“GRC-LA”) in accordance with the laws of the state of
Delaware in the United States of America formed to provide
programming  on KXOS-FM radio pursuant to the local marketing
agreement with Emmis Communications Corporation. The main activity of GRC-LA is
the operation of the radio station with the call letters KXOS-FM (formerly,
KMVN-FM) that operates on a frequency of 93.9 FM in Los Angeles, California (see
Note 10).
  As of
December 31, 2009, GRC owned 51% of GRC-LA and the remaining 49% belonged to the
Aguirre family, the majority shareholder of the Company.  On February
26, 2010, the Company acquired the equity interest owned by the Aguirre family
pursuant to a capital reduction and is the sole shareholder of GRC-LA. See
Note 26 for further explanation.
  c)
              Merger
      between subsidiary companies
  At the
April 22, 2009 General Shareholders’ Meeting, the shareholders approved the
merger of GRC Medios, S.A. de C.V., Radio Centro Publicidad, S.A. de C.V. and
GRC Publicidad, S.A. de C.V. into GRC Comunicaciones, S.A. de C.V., the
surviving company.  This merger went into effect as of March 31,
2009.
  d)
              Subsidiary
      as of January 9, 2007
  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 will expire in
December 2012, nine in July 2016, one in October 2015, one in November 2015 and
one in December 2019.
  The
marketing companies of Grupo Radio Centro are responsible for the programming
and sale of commercial airtime for broadcast by the Company’s radio stations in
Mexico City, the metropolitan area, and the interior of the
country.
  The
Company’s service companies provide commercial, technical and administrative
services to the companies comprising Grupo Radio Centro.
  The
Company’s real estate companies 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 headquarter offices and
studios of Grupo Radio Centro are located.
  F-10
  The
Company’s non-operating companies were incorporated for the purpose of
developing new investment projects.
  NOTE 2    BASIS OF CONSOLIDATION
  The
consolidated financial statements include the financial information of the
companies mentioned in Note 1.  The consolidated financial statements
have been prepared to present the financial position as of December 31, 2009 and
2008 and the consolidated statements of income and the consolidated changes in
shareholders’ equity for the years ended December 31, 2009, 2008 and 2007, the
consolidated statement of cash flows for the years ended December 31, 2009 and
2008, and the consolidated changes in financial position for the year ended
December 31, 2007 of the companies of Grupo Radio Centro and its subsidiary
companies. All intercompany balances and transactions have been eliminated in
consolidation.
  The US
dollar amounts (denoted by the symbol “US$”) shown in the 2009 financial
statements have been included solely for the convenience of the reader and were
translated at the rate of Ps13.0576/US$ 1.00, the buying rate of Mexican pesos
on December 31, 2009, as published by the Federal Reserve Bank of New York. This
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.
  NOTE 3    SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
  The
accompanying financial statements have been prepared in accordance with Mexican
Financial Reporting Standards (MFRS). MFRS require Company management, by
applying professional judgment, to make certain estimates and to use certain
assumptions in order to determine the valuation of some of the items included in
its financial statements. Even though the estimates and assumptions used may
differ from the final result, Company management considers that the estimates
and assumptions used are adequate under the circumstances and as of the date of
issue of these financial statements.
  The
principal accounting policies followed by Grupo Radio Centro in the preparation
of its financial statements, which are in compliance with MFRS, are summarized
below:
  a.
                Basis
      of presentation and
disclosure:
  1.
              Recognition
      of the effects of inflation on the consolidated financial
      statements:
  Upon
adoption of MFRS B-10, which became effective on January 1, 2008, the Company
ceased to recognize the effects of inflation in its financial information
because it currently operates in a “non-inflationary economic
environment”.  Although the economic environment in 2007 qualified as
being non-inflationary, the previous Bulletin B-10 was still
effective.
  F-11
  We have
not restated financial statements for prior periods; therefore, financial
information for dates and periods prior to 2008 continue to be expressed in
constant pesos as of December 31, 2007.
  2.
              Translation
      of the financial statements of the foreign subsidiary
    company:
  The
financial statements of GRC-LA, which is located and operated in the United
States, were translated to Mexican pesos by applying the guidelines of MFRS
B-15.
  All the
assets and liabilities of GRC-LA are translated to Mexican pesos at the
prevailing exchange rate at year-end. Shareholders’ equity accounts are
translated at the prevailing exchange rate at the time capital contributions
were made and earnings were generated. Revenues, costs and expenses are
translated at the average weighted exchange rate for the month in which the
corresponding operations were conducted.
  3.
              Classification
      of expenses by function:
  Expenses
are presented based on function, which allows a distinction between operating
broadcast expenses and corporate general and administrative
expenses.
  4.
              Operating
      income:
  Operating
income is calculated by deducting operational and broadcasting expenses, general
corporate and administrative expenses, and depreciation and amortization from
broadcasting revenues.
  5.
              Comprehensive
      income:
  For the
year ended December 31, 2007, the comprehensive income presented in the
consolidated statement of changes in shareholders’ equity is the result of the
Company’s total performance during the period and is represented by the year’s
net profit plus the adjustment of the additional liability from retirement
payments, which in compliance with MFRS, is charged directly to shareholders’
equity.
  b.
                Adoption
      of new MFRS:
  Following
is a discussion of the new MFRS accounting pronouncements adopted by the Company
that became effective on January 1, 2009:
  1.
              MFRS
      B-7, Business
      acquisitions. This MFRS requires the method of
      purchase  accounting to be used in the acquisition of businesses
      and stipulates concepts such as the definition of an acquirer and
      guidelines to determine if an acquired entity  is classified as
      a business. Moreover, it provides guidelines on the fair value recognition
      of assets and liabilities, the accounting treatment of goodwill, and the
      proper financial statement disclosures. The adoption of this MFRS had no
      impact on the consolidated financial statements for the year ended
      December 31, 2009.
  F-12
  2.
              MFRS
      B-8, Consolidated and combined financial statements. This MFRS substitutes
      Bulletin B-8. It includes certain stipulations on investment and control
      concepts and permits the non-consolidation of sub-holding companies. The
      adoption of this MFRS had no impact on the Company’s consolidated
      financial statements for the year ended December 31,
  2009.
  3.
              MFRS
      C-7, Investments in associated companies and other permanent investments.
      This MFRS establishes the accounting treatment applicable to permanent
      investments in associated companies and other permanent investments. Among
      other things, it establishes that the recognition of losses are expensed
      up to the amount of the original investment, except when the holding
      company has incurred labor obligations on behalf of the associated
      company, in which case the respective liability will be recognized. The
      adoption of this MFRS had no impact on the Company’s consolidated
      financial statements for the year ended December 31,
  2009.
  4.
              MFRS
      C-8, Intangible assets. This MFRS substitutes Bulletin C-8. It a)
      eliminates the requirement to specify how intangible assets are used for
      the production or supplying of goods or the rendering of services or for
      administrative purposes; and eliminates the assumption that the useful
      life of an intangible asset may not exceed a period of twenty years; b)
      recognizes non-monetary assets as intangible assets; subsequent
      reimbursements on a research and development project in the process of
      being acquired, are recognized i) as an expenditure when they are accrued
      if they are a part of the research stage; or ii) as an intangible asset if
      they meet criteria to be recognized as such when research expenses are
      accrued c) It is specified that the expected economic profits coming from
      an intangible asset may be present in the income on sales of products or
      rendered services, cost savings or profits as a result of using the asset
      by the entity, such as a growth in the productivity, and d) completes the
      treatment must been given to the provisions of intangible assets, both by
      selling, retirement or exchange The adoption of this MFRS had no impact on
      the Company’s consolidated financial statements for the year ended
      December 31, 2009.
  c.
              Recognition
      of the effects from inflation:
  As a
result of the adoption of the MFRS B-10, the Company ceased to recognize the
effects from inflation on its financial information as of January 1, 2008.
Through December 31, 2007, the Company recognized the effects of inflation
according to then-applicable accounting guidelines.  This recognition
resulted mainly in earnings or losses from inflation on non-monetary and
monetary items.
  F-13
  The
percentages of inflation for the years ended December 31, 2009 and 2008 were
3.57% and 6.52%, respectively.
  d.
              Investments
      available on demand:
  Investments
available on demand are valued at cost plus accrued yields, which do not exceed
market value.
  e.
              Property
      and equipment:
  Property
and equipment are booked at acquisition cost. Balances from acquisitions made
through December 31, 2007 are adjusted for the effects of inflation and restated
by applying National Consumer Price Index (NCPI) factors up to that date.
Depreciation is calculated by applying the straight-line method based on the
remaining useful lives of assets, determined by the Company, using the
depreciation rates mentioned in Note 12.
  During
2009, 2008 and 2007, the Company recognized an increase (decrease) in the
realizable value of temporarily idle properties in the amount of Ps. 504, Ps.
901 and (Ps. 881), respectively, whose effect was applied to the year’s results
(see Note 21).
  f.
              Excess
      cost over the net book value of
subsidiaries:
  The
excess of the cost over the net value of a subsidiary (goodwill) represented the
excess of the purchase price of the acquired subsidiary companies over the
reasonable value of its net assets. Through 2007, the remainder balance of the
goodwill was restated by using factors from the NCPI. This account is subject to
impairment tests. As of December 31, 2009, 2008, and 2007, there was no
indication of impairment.
  g.
              Installation
      expenses, licenses and patents:
  Installation
expenses are booked at acquisition cost. Balances from sales made up to December
31, 2007 are restated by applying factors from the NCPI. Amortization is
calculated on the straight-line method at a 5% annual rate (Note 13). Software
licenses are recorded at acquisition cost and amortized according to their
duration.
  h.
              Tax
      on earnings:
  Income
tax (ISR) and the flat rate business tax (IETU) are booked in the year’s results
from operations in which they are  incurred. Deferred tax
assets  are determined based on financial projections, on which it is
established whether the Company will  incur ISR or IETU by recognizing
the deferred tax that corresponds to the tax that it will pay. The deferred tax
is recognized by applying the respective tax rate to timing differences that
result from the comparison made between book and tax balances of the assets and
liabilities and, if necessary, the benefits from tax loss carryforwards and tax
credits are included. The deferred tax asset is recorded only when there is a
high probability it will be recovered.
  F-14
  i.
              Employee
      profit sharing (PTU):
  The PTU
is booked in the results from operations in the year in which it is incurred and
is classified in “other income and expenses” in the accompanying consolidated
statements of income. The deferred PTU is determined from timing differences
that result in 2009 from the comparison of book and tax balances of assets and
liabilities and, in 2008 from the comparison from book income and taxable income
that is recognized only when the liquidation of a liability or the generation of
a benefit is probable and when there is no indication that the situation is
going to change in a way that the liability or the benefit will not be
realized.
  j.
              Advances
      from clients:
  Advances
from clients correspond to deposits for future broadcasting services and are
recognized as income when the corresponding airtime is broadcast. The advances
are considered income for tax purposes as of the date on which they are
received.
  k.
              Labor
      liabilities:
  Labor
liabilities are divided into three types of employee benefits: direct short and
long-term benefits, termination benefits, and retirement benefits. They are
analyzed as follows:
  Direct short- and long-term benefits- These benefits are valued in proportion with services rendered, by
considering current wages. These benefits are recognized as a liability as they
are incurred and include mainly PTU payable, paid absences, such as vacations
and vacation premiums, and incentives.
  Termination benefits -The
liability from seniority premiums, post-retirement benefits, and severance
payments from termination of employment are recorded as incurred, which is
calculated by independent actuaries based on the projected individual credit
method by using nominal interest rates in 2009 and 2008 and real interest rates
in 2007. Therefore, the liability is being recognized at current value and it is
estimated it will cover the obligations of these benefits as of the estimated
retirement date of all employees that work at the Company (see actuarial
estimates in Note 18).
  F-15
  Retirement benefits -Payments, based on seniority to which employees may be entitled in the
event of retirement from the Company or death, are recorded in results of the
year when they are due, according to the Mexican Federal Labor Law.
  l.
              Earnings
      per share:
  Basic
earnings per common share are calculated by dividing the net consolidated income
by the weighted average number of common shares outstanding during the period.
Diluted earnings per share is determined by adjusting the net consolidated
income and common shares under the assumption that the entities commitments will
be realized in order to issue or exchange its own shares. For the years ended
December 31, 2009, 2008 and 2007, there were no diluted earnings per
share.
  m.
              Comprehensive
      result of financing (Resultado Integral de Financiamiento -
      RIF):
  Comprehensive
result of financing included interest and foreign exchange differences. It also
included the effects of inflation through December 31, 2007. The RIF that
resulted directly from qualifying assets must be capitalized by forming part of
the investment cost of the assets. The elements that make up the compoundable
RIF from funding directly affect the amount invested in the acquisition of
qualifying assets and, accordingly, form part of the acquisition cost of the
assets.
  n.
              Transactions
      in foreign currency:
  Transactions
in foreign currency are booked at the foreign exchange rate prevailing as of the
date they are incurred. Assets and liabilities are restated at the exchange rate
as of the balance sheet date. The resulting exchange differences from foreign
exchange fluctuations between the date the transactions are incurred and the
settlement or valuation date are recorded in results of operations (see Note
4).
  o.
              Revenue
      recognition:
  Income is
recognized when the corresponding airtime is broadcast.
  p.
              Barter
      transactions:
  Grupo
Radio Centro, from time to time, receives products and services in exchange for
advertising airtime. Advertising airtime is recognized when the advertising is
aired and the cost when the goods and services are used. Company management
estimates that the value of these transactions does not exceed market
value.
  q.
              Provisions:
  Liabilities
from provisions are recognized when (i) there is a current obligation (legal or
assumed) that results from a past event, (ii) the use of economic resources is
probable for the settlement of the obligation, and (iii) the obligation may be
estimated.
  F-16
  Provisions
from contingent liabilities are recognized only when the use of resources is
probable for their discharge. Further, the commitments may only be recognized
when a loss is generated.
  r.
              Concentration
      of risk – Broadcasting revenue:
  The
Company’s principal source of revenue is generated by broadcasting advertising
and promotions for its customers. Although the Company has several large
customer accounts, none comprised more than 10% of the Company’s total
broadcasting revenue in 2009, 2008, and 2007 or of the trade receivable balance
as of December 31, 2009 and 2008.
  s.
              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 strengthen the offer and demand of its shares in the stock market.
Shares temporarily acquired by the Company that are withdrawn from the market
are considered treasury shares. Should these shares not be offered anew to the
investing public within one year, they must be canceled, thus resulting in a
reduction of capital stock.
  t.
              Impairment
      of long-lived assets:
  The
Company tests the value of its goodwill in order to recognize a reduction in its
book value when events or changes indicate that the recorded book value of these
assets might not be recovered. To test for impairment, the Company compares the
cash flows discounted to present value that it estimates that the asset could
generate in the future, against book value. If the Company determines that the
value of the asset has been impaired, the reduction in the value is recognized
in the year’s results from operations.
  u.
              Reclassifications:
  In compliance with MFRS, certain amounts in the 2007
consolidated financial statements originally issued have been reclassified to
conform with the presentation of the 2009 and 2008 consolidated financial
statements.
  v.
              New
      accounting pronouncement – Subsequent
event:
  The
guidelines contained in the following MFRS, issued by the CINIF, become
effective January 1, 2010  The Company considers that the adoption of
these MFRS will not have significant effects on the financial information
presented in the consolidated financial statements and their respective notes.
The most relevant changes are as follows:
  F-17
  As of
January 1, 2010, the following MFRS take effect:
  1.
              MFRS
      C-1, Cash– This
      MFRS was issued to replace Bulletin C-1.  The purpose of this
      MFRS is to establish guidelines for the valuation, presentation and
      disclosure of items comprising the cash and cash equivalents caption in
      the statement of financial position.  MFRS C-1 establishes that
      restricted cash is to be presented in the cash and cash equivalents
      caption in the statement of financial position (under the former Bulletin
      C-1 it was shown separately) and substitutes the term “short-term demand
      investments” for “liquid demand
      investments”, which, among other characteristics, must be readily
      convertible to cash and have maturities of no more than three months. MFRS
      C-1 also defines the following terms: acquisition costs, cash equivalents,
      restricted cash and cash equivalents, liquid demand investments, net
      realization value, nominal value and fair
value.
  As of
January 1, 2011, the following MFRS become effective:
  2.
              MFRS
      B-5, Financial
      information from segments –MFRS B-5 will replace
      Bulletin B-5.  It establishes the criteria for identifying the
      segments to be reported by an entity, as well as the standards for
      disclosing the financial information of such segments.  The
      standard also contains the requirements applicable to the disclosure of
      certain information related to the entity as a whole.  The
      principal changes that MFRS B-5 establishes compared to Bulletin B-5 are:
      a) the Company must disclose information used for the performance
      evaluation of operating segments and not the economic segments from
      geographic areas or from similar client groups; b) MFRS B-5 does not
      require different areas of the business to be subject to different risks
      to qualify as an operating segment; c) the business areas in the
      preoperative stage may be categorized as operational segments; d) MFRS B-5
      requires the separate disclosure of revenues and expenses or net interest
      revenues; e) MFRS B-5 requires the disclosure of the amounts of the
      liabilities; f) the Company must disclose its information as a whole on
      products or services, geographic areas, and principal customers, provided
      that this is not included in the segment disclosure and is only required
      for entities that trade on the stock market or are in the process of
      trading. For all other entities, this disclosure is
    optional.
  3.
              MFRS
      B-9, Financial
      information at interim dates – The financial information at interim
      dates must contain condensed statements of: a) financial position; b)
      income  from  operations; c) if applicable, changes in
      shareholders’ equity; d) cash flows; and e) the notes to the financial
      statements with selected disclosures. The information must be compared to
      the same information from the immediately prior year. Additionally, in the
      case of financial position, the information presented must correspond to
      the close of the immediately preceding
year.
  F-18
  NOTE 4    ASSETS AND LIABILITIES IN U.S.
DOLLARS
  The
consolidated balance sheets as of December 31, 2009 and 2008 include the
following assets and liabilities in thousands of US dollars, valued at the
closing year-end foreign exchange rates of Ps13.0576/US$1.00 and
Ps13.8320/US$1.00, respectively:
  2009
                                      
                                      
                                      2008Cash
                                      
                                      US$
                                      562
                                      
                                      
                                      US$
                                      162Liabilities
                                      
                                      
                                      (31
                                      )
                                      
                                      
                                      (30
                                      )Net
      asset (liability) position
                                      
                                      US$
                                      531
                                      
                                      
                                      US$
                                      132
  As of
February 19, 2010, the foreign exchange rate was Ps
12.8442/US$1.00.
  The net
book value of the Company’s property and equipment denominated in U.S. dollars
as of December 31, 2009 and 2008 was as follows:
  2009
                                  
                                  
                                  2008Plant
      equipment
                                  
                                  US$
                                  1,731
                                  
                                  
                                  US$
                                  1,565Studio
      equipment
                                  
                                  
                                  1,391
                                  
                                  
                                  
                                  1,386Helicopters
                                  
                                  
                                  504
                                  
                                  
                                  
                                  504Others
                                  
                                  
                                  455
                                  
                                  
                                  
                                  455US$
                                  4,081
                                  
                                  
                                  US$
                                  3,910
  NOTE 5 CASH AND CASH EQUIVALENTS
AND LIQUID DEMAND INVESTMENTS
  As of
December 31, this  caption was as follows:
  2009
                    
                    
                    2008Cash
      and cash equivalents
                    
                    Ps
                    29,248
                    
                    
                    Ps
                    6,081Liquid
      demand investments
                    
                    
                    146,289
                    
                    
                    
                    86,973Ps
                    175,537
                    
                    
                    Ps
                    93,054
 
  The
available investments payable on demand as of December 31, 2009 and 2008
consisted primarily of fixed rate deposits with maturity dates of less than 90
days. The Company invests its temporary excess cash in these types of
deposits.
  NOTE 6    RELATED PARTIES
  In the
normal course of business, the Company purchases from, and sells broadcast time
or programming services to, various other companies that are related parties.
These purchases and sales are recorded at rates not materially different from
those charged to non-related entities for these types of services.
  F-19
  The
Company also purchases assets or services from these related parties. The
Company believes that the costs of such assets or services do not exceed the
prices that could be obtained from unrelated 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 activities with such related parties.
The Company believes that the terms of such leasing 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, 2009, 2008, and 2007, the Company conducted the
following transactions with related parties:
  2009
                            
                            
                            2008
                            
                            
                            2007Income:Sale
      of airtime and services
                            
                            
                            78
                            
                            
                            
                            50
                            
                            
                            
                            43Sale
      of equipment
                            
                            
                            1,606
                            
                            
                            
                            668
                            
                            
                            
                            554Sundry
      income from shareholders(a)
                            
                            
                            3,466
                            
                            
                            
                            3,083
                            
                            
                            
                            1,659Expenses:Purchase
      of airtime and services received
                            
                            
                            (814
                            )
                            
                            
                            (1,597
                            )
                            
                            
                            (869
                            )Commissions
      paid and other services (b)
                            
                            
                            (13,702
                            )
                            
                            
                            (8,347
                            )
                            
                            
                            (13,755
                            )
 (a)
              During
      the years ended 2009, 2008, and 2007, Company shareholders made personal
      use of goods and services that the Company acquired in barter transactions
      and for which they paid the Company Ps 3,466, Ps3,083, and Ps1,659,
      respectively.
  (b)
              On
      January 5, 2000, the Company entered into a contract with an entity owned
      by Francisco Aguirre Gómez, the president and a shareholder of the
      Company. This entity provides promotional services to the Company. As of
      December 31, 2009, 2008, and 2007, the Company incurred expenses for the
      services under this contract totaling Ps4,009, Ps3,330 and Ps3,604,
      respectively.
  In
addition to their ownership interest in the Company, as of December 31, 2009 and
2008, members of the Aguirre family owned or controlled 11 of the 108 affiliated
companies in the network serviced by OIR. In the years ended December 31, 2009,
2008, and 2007, the stations owned or controlled by members of the Aguirre
family accounted for approximately 9%, 12%, and 13.7% of OIR revenue
(approximately 0.3%, 0.3% and 0.4%, respectively,of the Company’s total
broadcasting revenue), 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 airtime to
related parties, on terms that are more favorable than those provided to
unrelated parties. The Company does not believe that such transactions have been
material.
  F-20
  NOTE 7OTHER
RECEIVABLES
  At
December 31, the balances in other receivables consisted of the
following:
  2009
                        
                        
                        2008Officers
      and employees
                        
                        Ps
                        3,189
                        
                        
                        Ps
                        1,929Others
      (1)
                        
                        
                        3,674
                        
                        
                        
                        4,296Ps
                        6,863
                        
                        
                        Ps
                        6,225
  (1)
                As
      of December 31, 2009 and 2008, this amount includes Ps2,441 and Ps2,271
      respectively for accounts receivable from shareholders for the use of the
      Company’s goods and services (see Note
6a).
  NOTE 8ADVANCE
PAYMENTS
  As of
December 31, this balance  consisted of the follows:
  2009
                        
                        
                        2008Advance
      short-term lease payments(see
      Note 10)
                        
                        Ps
                        91,617
                        
                        
                        Ps
                        -Committee
      fees
                        
                        
                        21,715
                        
                        
                        
                        22,231Insurance
      to be amortized
                        
                        
                        4,076
                        
                        
                        
                        8,685Others
                        
                        
                        588
                        
                        
                        
                        7,500Ps
                        117,996
                        
                        
                        Ps
                        38,179Advance
      lease-term lease payments(see
      Note 10)
                        
                        Ps
                        26,662
                        
                        
                        Ps
                        -
  F-21
  NOTE 9SERVICE
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 into a Service Agreement on October 2, 1995 (the “Agreement”) with the
Station and with Comercializadora Siete de México, S.A. de C.V.
(“Comercializadora”).  Under the terms of the Agreement, DESA was
granted the right to sell the Station’s airtime in exchange for providing
operating and administrative services to Comercializadora and to the
Station.
  On
December 30, 1998, a rights-ceding contract was signed in which the Company
replaced DESA, in order to continue the operation of the Station. Beginning in
January 1999, various amendments were entered into, the last of which was
entered into on September 7, 2004 and effective on January 3, 2005 for a term of
48 months expiring on January 2, 2009. Under the amendment, the Company is
entitled to a monthly fee equal to the income minus US$ 284 during the period of
the agreement. Additionally, guarantee deposits made pursuant to the original
contract and the amendments were eliminated.  For the years ended
December 31, 2009, 2008 and 2007 the charge to the income statement amounted to
Ps 46,475, Ps. 43,766 and Ps 39,961, respectively.
  On
October 16, 2008, a fourth amendment was signed that will be in effect from
January 3, 2009 to January 2, 2014.
  NOTE 10AGREEMENT WITH EMMIS
COMMUNICATIONS CORPORATION
  The
following agreements were  entered into on April 3, 2009:
  a)
                In
      connection with the Company’s investment in a 51% of GRC-LA, as described
      in Note 1.b, the Company entered into a local programming and marketing
      agreement (LMA), which includes the right to use the broadcasting license
      and equipment, with certain subsidiaries of Emmis Communications
      Corporation, a U.S. radio broadcasting company.  Under the LMA,
      the Company has agreed to provide programming to and sell advertising time
      on, KXOS-FM, a radio broadcasting station in Los Angeles, California, for
      up to seven years.  The Company will pay Emmis U.S.$ 7 million
      per year, plus expenses incurred by Emmis with respect to the
      station.  On April 7, 2009, the Company advanced U.S.$14 million
      (approximately Ps.200 million) as prepayment for the first two years of
      fees under the local marketing agreement. The unamortized balance of the
      prepayment at December 31, 2009 of $9,000 (Ps117,528) is classified in
      Advanced Payments in the accompanying balance
  sheet.
  The
Company financed the prepayment with a bank loan in an aggregate principal
amount of Ps. 200 million. The bank loan accrued interest at an annual rate of
13% through March 18, 2010 and now accrues interest at an annual rate of 9.5%.
The Company is required to repay the outstanding principal amount of the loan
over five years in 20 quarterly installments beginning June 1, 2009 and make
quarterly interest payments.  The final payment date is March 1,
2014.
  F-22
  b)
              As
      part the LMA agreement the Company entered into a seven-year call and put
      option agreement (Option Agreement) with Emmis to purchase the assets of
      KXOS-FM.  Pursuant to the Option Agreement, the Company is
      entitled to exercise its call option to purchase the KXOS-FM station
      assets at any time during its seven-year term, and Emmis is entitled to
      require the Company to purchase the station’s assets during the seventh
      year of the term.  If, at the time of the exercise of the call
      or put, the Company is not qualified under U.S. law to own a U.S. radio
      station, the Company must assign the Option Agreement to a qualified third
      party.  The purchase price under the Option Agreement is U.S.
      $110 million.
  c)
              In
      connection with the two agreements mentioned in paragraphs (a) and (b)
      above, a Pledge Agreement and a Security Agreement were signed by Emmis in
      favor of the Company and GRC-LA. These agreements grant guarantees and
      collateral pledges of all the fixed assets of Emmis that are
      used or held for use in the operation of the station, for compliance with
      the aforementioned agreements.
  NOTE 11INFORED PRODUCTION
CONTRACT
  On
December 23, 1998, in order to continue collaborating in the production of radio
shows and to establish two new joint ventures, the Company signed a new contract
with INFORED, the producer at that time of the Monitor news and talk-show, and
Mr. Gutiérrez Vivó, Monitor’s host at that time. Pursuant to the contract, Mr.
Gutiérrez Vivó and INFORED would provide the Company with production services
news and special-event radio shows until June 30, 2015. The Company committed to
air these programs on XERED-AM and XHRED-FM and affiliated radio
stations.
  The
Production Contract, in addition to requiring the Company to continue paying
INFORED for the cost of producing its shows, required the Company to pay INFORED
an aggregate amount of approximately US$ 15,400 and Ps 4,003 (historical
amount). Of this amount, US$ 4,400 and Ps 4,003 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 in equal monthly amounts
through June 2015. The Company also transferred to Mr. Gutiérrez Vivó two AM
radio stations, XEFAJ-AM, S.A. de C.V. and Emisora 1320, S.A. de C.V., at book
value.
  On May 7,
2002, Mr. Gutiérrez Vivó 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 and
damages for alleged breach of contract, reimbursement of expenses and costs of
the litigation.
  F-23
  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. Gutiérrez Vivó. By a majority vote of two of the three
arbitrators, the ICC panel held that the Company had breached the agreement with
INFORED and Mr. Gutiérrez Vivó. As a result, the agreement was rescinded and
INFORED and Mr. Gutiérrez Vivó together were awarded Ps277,112 (US$21,797), in
damages , which represented the amount that the Company would have been required
to pay under the contract, after taking into account prepayments made by the
Company. Accordingly, the Company recorded a contingent liability for Ps 277,112
and the prepayment amount under the agreement, which as of December 31, 2003 was
Ps 122,719 (Ps 104,572 historical amount), was written off. The total amount of
the award amounted to Ps 399,831, which was recorded in the consolidated
statement of income for the year ended December 31, 2003 as an extraordinary
item.
  The
Company has discontinued the production of the news program produced by INFORED
and conducted by Mr. Gutiérrez Vivó and has produced the program Monitor on its
own.
  On August
6, 2004, the Company challenged the validity of the arbitration award before the
Mexican courts and brought a proceeding to nullify the arbitration award. On
November 10, 2004, a Mexican judge set aside the arbitration award issued by the
ICC.
  On
December 3, 2004, Mr. Gutiérrez Vivó and INFORED initiated an amparo proceeding to contest
this ruling. An amparo
is a type of proceeding used to challenge the legality of a decision under
Mexican law. The court ruled in favor of INFORED and Mr. Gutiérrez Vivó on
August 10, 2005. GRUPO RADIO CENTRO filed an appeal for review of this decision,
which was suspended on February 15, 2006 since INFORED and Mr. Gutiérrez Vivó
requested the National Supreme Court to exercise its right to appeal from a
majority of votes against the decision. The official publication of the ruling
is expected so that it is returned to the Thirteenth Associate Civil Court of
the First Circuit and the ruling of appeal filed by GRUPO RADIO CENTRO is
issued.
  On June
8, 2006, a Mexican court nullified and rejected the international arbitration
award in Mexico. As a result, the Company wrote off the provision of Ps 263,523
it had booked through December 31, 2005 and recorded the resulting gain as a
special item in the statement of income for the year ended December 31, 2006.
However, in compliance with the MFRS B-3, this item is presented as an
extraordinary item. INFORED and Mr. Gutiérrez Vivó filed an appeal against this
ruling.
  On
January 30, 2007, the Mexican Supreme Court, in a resolution of 5-4 votes based
on the arguments of the proceedings, reversed the decision of the Thirteenth
Associate Civil Court of the First Circuit, which ratified the decision of a
lower court to not consider the arbitration finding. The Mexican Supreme Court
submitted the case to the court for further examination under distinct rules,
which will require the court review the case.
  F-24
  On March
22, 2007, INFORED and Mr. Gutiérrez Vivó filed an appeal to have the case
removed from the Thirteenth Associate Civil Court of the First Circuit to
another court whose judges had no knowledge of the case. The Fourth Associate
Civil Court of the First Circuit determined that one of the three judges had a
possible bias in the case and order the judge be replaced specifically for that
reason. On June 20, 2007, the case we returned to the Thirteenth Associated
Civil Court of the First Circuit for a final ruling.
  On June
12, 2008, the Thirteenth Circuit Court reversed its prior decision, granted the
amparo of Infored and
Mr. Gutiérrez Vivó, denied the amparo of the Company, and
remanded the case to Civil Judge 63 of the Federal District Superior Tribunal of
Justice.  On July 11, 2008, Civil Judge 63 of the Federal District
Superior Tribunal of Justice ruled that the decision that set aside the
arbitration award was invalid.  The July 2008 decision of the Civil
Judge 63 of the Federal District Superior Tribunal of Justice did not constitute
an order to pay the arbitration award, the enforcement of which remains subject
to lower court review.
  In August
2008, the Company challenged the arbitration award as unconstitutional in an
amparo filed with
District Judge 6 of Civil Matters.  District Judge 6 dismissed the
amparobased on
procedural grounds.  The Company challenged this action before the
Thirteenth Circuit Court, and in February 2009, that court ruled the Company’s
amparo was admissible
and remanded it to District Judge 6 of Civil Matters.  In April 2009,
District Judge 6 of Civil Matters granted the Company’s amparo, in part, but
dismissed the amparo with respect to the Company’s challenge of the
constitutionality of certain provisions of the Mexican commercial
code.  The Company then appealed this dismissal to the Thirteenth
Circuit Court, in July 2009, which in turn referred the constitutional question
to the Mexican Supreme Court.  The Mexican Supreme Court accepted the
constitutional matter for review in October 2009, and their decision regarding
the constitutional question is pending.
  The
Company plans to continue to challenge the validity of the arbitration award in
the Mexican courts.  If the Company is ultimately unsuccessful in
challenging the enforcement of the arbitration award in Mexico, it will be
required to finance any amounts due.
  In
addition, in 2008, Mr. Gutiérrez Vivó and Infored initiated additional claims
against the Company for alleged violations of labor law in connection with the
Infored Agreement.  In 2009, Mr. Gutiérrez Vivó and Infored initiated
a civil law suit against the Company and individual members of the Aguirre
family, seeking consequential damages in an amount of approximately Ps. 9.46
billion arising out of the Company’s alleged wrongful failure to pay the
arbitration award.  The Company’s management believes that these
claims will be resolved in favor of the Company.
  F-25
  NOTE 12PROPERTY AND
EQUIPMENT
  At
December 31, the balances in property and equipment consisted of the
following:
  2009
                      
                      
                      2008
                      
                      
                      Annual depreciation
                        rateBuildings
                      
                      Ps
                      345,710
                      
                      
                      Ps
                      345,693
                      
                      
                      
                      2.22
                      %Broadcasting
      equipment
                      
                      
                      139,495
                      
                      
                      
                      137,141
                      
                      
                      
                      11.87
                      %Studio
      equipment
                      
                      
                      141,238
                      
                      
                      
                      139,824
                      
                      
                      
                      15.94
                      %Office
      furniture and computer equipment
                      
                      
                      41,958
                      
                      
                      
                      41,055
                      
                      
                      
                      16.48
                      %Computer
      equipment
                      
                      
                      56,767
                      
                      
                      
                      55,451
                      
                      
                      
                      32.22
                      %Transportation
      equipment
                      
                      
                      31,537
                      
                      
                      
                      35,599
                      
                      
                      
                      28.30
                      %Helicopters
                      
                      
                      21,317
                      
                      
                      
                      15,979
                      
                      
                      
                      18.18
                      %Leasehold
      improvements
                      
                      
                      23,608
                      
                      
                      
                      17,107
                      
                      
                      
                      5.00
                      %801,630
                      
                      
                      
                      787,849Minus
      – accumulated depreciation
                      
                      
                      (529,763
                      )
                      
                      
                      (513,895
                      )Subtotal
                      
                      
                      271,867
                      
                      
                      
                      273,954Buildings
      held for sale net
                      
                      
                      34,815
                      
                      
                      
                      35,132Land
                      
                      
                      149,333
                      
                      
                      
                      149,333Equipment-in-transit
                      
                      
                      3,926
                      
                      
                      
                      6,615Ps
                      459,941
                      
                      
                      Ps
                      465,034
  Inmobiliaria
Radio Centro, S.A. de C.V. is the owner of the building in which the main
executive offices and studios of the Company are located. It also leases a part
of the building. Rental income from Maxcom, S.A. de C.V. for 2009, 2008, and
2007, amounted to Ps280, Ps261 and Ps254, respectively.
  During
2009, 2008, and 2007, the Company reviewed the net realizable value of
temporarily unoccupied buildings and determined an increase (decrease) in their
book values for Ps504, Ps901, and (Ps881), respectively.
  NOTE 13DEFERRED
CHARGES
  At
December 31,  deferred charges consisted of the
following:
  2009
                  
                  
                  2008Installation
      expenses
                  
                  Ps
                  10,307
                  
                  
                  Ps
                  10,307Licenses
      and patents
                  
                  
                  6,213
                  
                  
                  
                  6,21316,520
                  
                  
                  
                  16,520Less
      accumulated amortization
                  
                  
                  (13,481
                  )
                  
                  
                  (11,670
                  )Ps
                  3,039
                  
                  
                  Ps
                  4,850
  F-26
  NOTE 14 EXCESS COST OVER NET BOOK
VALUE OF NET ASSETS OF SUBSIDIARIES
  On May
12, 1995 and January 9, 1996, the Company acquired 33% and 67%, respectively, of
the outstanding shares of RADIODIFUSION RED. The acquisition resulted in an
excess of cost over book value amounting to Ps498,874 (Ps146,308 historical
amount) and Ps872,947 (Ps313,101 historical amount), respectively. On September
30, 2001, the Company sold these shares to DESA, one of its
subsidiaries.
  On
December 31, 2001, the Company acquired Radio Sistema Mexicano, S.A. de C.V.,
which resulted in an excess cost over book value amounting to Ps.
58,742.
  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
México, S.A. de C.V. On October 1, 2001, these companies were merged with
Enlaces Troncales, S.A. de C.V. On October 2, 2001, Servicios Corporativos
Palco, S.A. de C.V. merged with Promo Red, S.A. de C.V. This acquisition
generated an excess cost over book value amounting to Ps. 51,737 (Ps38,715
historical amount).
  On
November, 30, 2005 the Company acquired a 100% holding of GRC Radiodifusión,
S.A. de C.V. (formerly Aerocer, S.A.), whose business activity is leasing air
and ground equipment to GRUPO RADIO CENTRO. This acquisition generated an excess
cost of 100% of the entity acquired over the net value of the assets acquired
and debt assumed from Aerocer, S.A. amounting to Ps8,349.
  Through
December 31, 2004, the excess cost of the determined net book value in the above
mentioned acquisitions, was amortized over 20 years as of the acquisition date.
As of January 1, 2005, the excess cost is subject to annual impairment testing
in compliance with the MFRS Bulletin C-15.
  As of
December 31, 2009 and 2008, goodwill recorded in the amount of Ps828,863
presented no impairment and consisted of the following:
  Resulting from the acquisition
      of:
                              
                              AmountRadiodifusión
      Red
                              
                              Ps
                              744,869Radio
      Sistema Mexicano, S.A.
                              
                              
                              37,927Enlaces
      Troncales, S.A. de C.V.
                              
                              
                              35,321GRC
      Radiodifusión, S.A. (formerly Aerocer, S.A.)
                              
                              
                              8,350Others
                              
                              
                              2,396Total
                              
                              Ps
                              828,863
  F-27
  NOTE
15NOTES
PAYABLE
  At
December 31, 2009, notes payable consisted of the following:
  2009On
      May 16, 2006, the Company signed a bank loan agreement for US$21,000. On
      March 26, 2009, the Company drew down on the loan in the amount of Ps
      200,000 (US$ 14,000) to finance the prepayment of fees under the LMA
      described in Note 10.  The Company signed a promissory note in
      Mexican pesos that accrued interest on the unpaid balance of the loan at
      an annual interest rate of 13% through March 18, 2010 and now accrues
      interest at an annual rate of 9.5% for each interest period. The Company
      is required to repay the outstanding principal amount of the loan over
      five years in 20 quarterly installments beginning June 1, 2009 and make
      quarterly interest payments.  The final payment date is March 1,
      2014. Radio Centro Publicidad, S.A. de C.V., GRC Publicidad, S.A. de C.V.,
      GRC Medios, S.A. de C.V., and GRC Comunicaciones S.A. de C.V. are jointly
      and severally liable for this loan. The affiliated companies Desarrollos
      Empresariales S.A. de C.V., Radiodifusión Red S.A. de C.V., Inmobiliaria
      Radio Centro, S.A. de C.V., and Universal de Bienes Muebles e Inmuebles,
      S.A. de C.V. secured this loan.  See (a) and (b)
      below.
                  
                  Ps
                  170,000Accrued
      interest payable
                  
                  
                  1,903Total
      debt
                  
                  
                  171,903Less
      short-term payments
                  
                  
                  (41,903
                  )Long-term
      payments payable, excluding short-term payments
                  
                  Ps
                  130,000
  (a)
              Any
      obligations of Grupo Radio Centro S.A.B. de C.V. under the loan agreement
      are currently secured as follows: (1) a mortgage on the office building
      that is owned by Inmobiliaria Radio Centro S.A. de C.V. and (2) a mortgage
      on the following properties that are owned by Universal de Muebles e
      Inmuebles S.A. de C.V. - one home and four properties in different
      locations in the Federal District and the State of
  Mexico.
  (b)
              The
      credit facility contains restrictive covenants and covenants requiring us
      to maintain quarterly financial ratios (using terms defined in the credit
      facility).  The financial covenants include an interest coverage
      ratio of at least 2.5 to 1, a total debt to EBITDA ratio of no more than 3
      to 1, a fixed charges coverage ratio of at least 1.75 to 1, a cash balance
      of at least U.S.$ 1.75 million, and shareholders’ equity of at least
      Ps. 850 million. As of December 31, 2009, all covenants were complied
      with.
  F-28
  As
mentioned in Note 26b, in the first quarter of 2010, a default on the covenant
regarding fixed charges occurred. The bank granted the waiver on the
event.
  The
annual payments of the long-term portion of the loan are as
follows:
  Year
                  
                  Amount2010
                  
                  Ps
                  40,0002011
                  
                  
                  40,0002012
                  
                  
                  40,0002013
                  
                  
                  40,0002014
                  
                  
                  10,000Total
                  
                  Ps
                  170,
      000
  NOTE 16SUPPLIERS AND OTHER ACCOUNTS
PAYABLE
  At
December 31, this  caption consisted of the following:
  2009
                  
                  
                  2008Media
      and service providers
                  
                  Ps
                  76,342
                  
                  
                  Ps
                  56,867Salaries
      and fees payable
                  
                  
                  3,754
                  
                  
                  
                  8,197Employee
      profit sharing payable
                  
                  
                  -
                  
                  
                  
                  2,156Others
                  
                  
                  4,134
                  
                  
                  
                  168Total
                  
                  Ps
                  84,230
                  
                  
                  Ps
                  67,388
  NOTE 17INCOME TAXES AND OTHER TAXES
PAYABLE
  At
December 31, this  caption consisted of the following:
  2009
                    
                    
                    2008Taxes
      on wages and salaries
                    
                    Ps
                    5,901
                    
                    
                    Ps
                    6,017Value-added
      tax
                    
                    
                    24,349
                    
                    
                    
                    11,123Income
      tax
                    
                    
                    24,689
                    
                    
                    
                    -Other
      withholdings
                    
                    
                    1,556
                    
                    
                    
                    1,719Ps
                    56,495
                    
                    
                    Ps
                    18,859
  NOTE 18SENIORITY PREMIUMS AND
PENSIONS
  Through
December 31, 2004, the Company maintained a reserve to cover seniority premiums
and pension plan liabilities. On December 31, 2005, the Company also began
maintaining a reserve to cover, under certain circumstances, severance payments
to cover employee termination. The amount of the reserves is 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-29
  The
actuarial calculations as of December 31, 2009 and 2008 are summarized
below:
  2009Seniority
                            premium
                          
                          
                          Pension
                            plan
                          
                          
                          Severance
                            payments
                          
                          
                          Total
                          
                          
                          2008Changes
      in projected benefit liabilities
                          
                          Ps
                          40,833
                          
                          
                          Ps
                          921
                          
                          
                          Ps
                          18,471
                          
                          
                          Ps
                          60,225
                          
                          
                          Ps
                          57,558Service
      cost
                          
                          
                          2,027
                          
                          
                          
                          134
                          
                          
                          
                          683
                          
                          
                          
                          2,844
                          
                          
                          
                          2,610Interest
      cost
                          
                          
                          2,549
                          
                          
                          
                          188
                          
                          
                          
                          852
                          
                          
                          
                          3,589
                          
                          
                          
                          3,118Actuarial
      gain
                          
                          
                          (257
                          )
                          
                          
                          97
                          
                          
                          
                          (148
                          )
                          
                          
                          (308
                          )
                          
                          
                          (2,485
                          )Benefits
      paid
                          
                          
                          (43
                          )
                          
                          
                          (91
                          )
                          
                          
                          (345
                          )
                          
                          
                          (479
                          )
                          
                          
                          (525
                          )Net
      projected liability
                          
                          Ps
                          45,109
                          
                          
                          Ps
                          1,249
                          
                          
                          Ps
                          19,513
                          
                          
                          Ps
                          65,871
                          
                          
                          Ps
                          60,276Obligations
      from actual benefits
                          
                          Ps
                          32,430
                          
                          
                          Ps
                          2,641
                          
                          
                          Ps
                          11,195
                          
                          
                          Ps
                          46,266
                          
                          
                          Ps
                          53,114Total
      labor liability
                          
                          Ps
                          45,109
                          
                          
                          Ps
                          1,249
                          
                          
                          Ps
                          19,513
                          
                          
                          Ps
                          65,871
                          
                          
                          Ps
                          60,276
  Weighted
average assumptions as of December 31,
  2009Seniority
                                          premium
                                        
                                        
                                        Pension
                                          plan
                                        
                                        
                                        Severance
                                          payments
                                        
                                        
                                        2008Discount
      rate (real rates)
                                        
                                        
                                        8
                                        %
                                        
                                        
                                        8
                                        %
                                        
                                        
                                        8
                                        %
                                        
                                        
                                        8
                                        %Increase
      in compensation rates (real rates)
                                        
                                        
                                        5.5
                                        %
                                        
                                        
                                        5.5
                                        %
                                        
                                        
                                        5.5
                                        %
                                        
                                        
                                        0.80
                                        %Amortization
      period of the transition liability
                                        
                                        8.53 & 13.6 years
                                        
                                        
                                        8.53 & 13.6 years
                                        
                                        
                                        8.53 & 13.6 years
                                        
                                        
                                        6.96 & 12.99 years
  Components
of net cost of benefits for the year
  2009Seniority
                      premium
                    
                    
                    Pension plan
                    
                    
                    Severance
                      payments
                    
                    
                    Total
                    
                    
                    2008Labor
      cost
                    
                    Ps
                    2,027
                    
                    
                    Ps
                    134
                    
                    
                    Ps
                    683
                    
                    
                    Ps
                    2,844
                    
                    
                    Ps
                    2,609Financing
      cost
                    
                    
                    2,549
                    
                    
                    
                    188
                    
                    
                    
                    852
                    
                    
                    
                    3,589
                    
                    
                    
                    3,118Amortization
      of prior year service cost
                    
                    
                    (257
                    )
                    
                    
                    97
                    
                    
                    
                    (148
                    )
                    
                    
                    (308
                    )
                    
                    
                    (2,484
                    )Net
      cost for the year
                    
                    Ps
                    4,319
                    
                    
                    Ps
                    419
                    
                    
                    Ps
                    1,387
                    
                    
                    Ps
                    6,125
                    
                    
                    Ps
                    3,243
  F-30
  NOTE 19SHAREHOLDERS’
EQUITY
  The
shareholders of the Company approved the following changes in the Company’s
capital structure.
  During
2009:
  a)
              Payment
      of dividends for Ps100,000.
  b)
              On
      December 16, 2009, the Company’s bylaws were amended to increase the Fixed
      authorized capital stock by Ps551,659, for a total of Ps1,611,621 of
      which Ps1,059,962 is Fixed capital stock, subscribed and paid, resulting
      in a total of 247,414,768 authorized common shares, representing the
      minimum fixed capital with no withdrawal rights, of which 162,724,561
      shares were outstanding and fully paid for and 84,690,207 shares were
      treasury shares. Shares of stock may be owned only by Mexican
      investors.
  During
2008:
  c)
              Payment
      of dividends for Ps100,000.
  During
2007:
  d)
              Payment
      of dividends for Ps100,000.
  During
2006:
  e)
              Repurchase
      on the open market of 918,800 shares, which represent 0.564% of
      outstanding shares, for Ps9,117.
  f)
              Sale
      on the open market of 918,800 shares, which represent 0.564% of
      outstanding shares, for Ps0.459.
  g)
              Capital
      reimbursement of Ps120,096 (historical amount), with no cancellation of
      the respective shares.
  h)
              Increase
      of fixed capital stock with no new stock issues through the capitalization
      of restatement effects of the capital stock for
  Ps337,060.
  After the
aforementioned changes, as of December 31, 2009, Capital stock is represented by
shares with no par value as follows:
  F-31
  Number of
                    sharesAuthorized
      capital stock
                  
                  
                  247,414,768Treasury
      shares
                  
                  
                  (84,690,207
                  )Total
      outstanding capital stock
                  
                  
                  162,724,561Fixed
      capital stock, subscribed and paid
                  
                  Ps
                  1,059,962Increase
      from restatement to express in Mexican pesos
                    with
      purchasing power as of December 31, 2007
                  
                  
                  70,448Ps
                  1,130,410
  As of
December 31, 2009 and 2008, the number of outstanding shares was as
follows:
  Shares
      outstanding at the beginning of the year
                  
                  
                  162,724,561Shares
      outstanding at the end of the year
                  
                  
                  162,724,561Capital
      stock at the end of the year expressed in Mexican pesos with purchasing
      power as of December 31, 2007
                  
                  Ps 1,130,410
  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, 2009 and 2008 was Ps57,620 and Ps53,284, 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 in Note 20).
  NOTE 20TAX ON
EARNINGS
  In
accordance with tax legislation prevailing through 2007, companies were required
to pay the greater of income tax (ISR) and taxes on assets (IMPAC). The ISR
rate was 28%. The IMPAC rate was 1.25% on restated assets with no
deductions.
  In
accordance with current tax legislation prevailing as of 2008, companies must
pay the greater of ISR and flat rate business tax (IETU). The ISR rate is 28%
for 2008 and 2009. The IETU rate was 16.5% for 2008, 17% for 2009, and is
17.5% for 2010 and thereafter.
  a)
                Income
      tax and tax on assets
  The
Company has authorization to consolidate its financial statements with its
subsidiaries for tax purposes. Therefore, taxable income is determined on a
consolidated basis in compliance with guidelines set forth in Mexico’s Income
Tax Law.
  Book
income differs from taxable income due to the effect of permanent differences
primarily from items included in the income statement to reflect the effects of
inflation and timing differences affecting accounting and taxable income in
difference periods.
  F-32
  Through
December 31, 2007, accrued IMPAC in excess of the year’s ISR may be recovered in
any one of the ten years following their generation, restated from inflation,
provided that during any one of those years ISR exceeds IMPAC. During the year
ended December 31, 2007, the Company accrued IMPAC of Ps28,286  that
was completely offset by ISR accrued in excess of the year’s IMPAC.
  The tax
expense (benefit) from the gain (loss) was different from that which would
result by applying the 28% ISR rate to the gain (loss) before the tax on
earnings, as a result of the items mentioned below:
  2009
                  
                  
                  2008
                  
                  
                  2007Income
      before taxes (1)
                  
                  Ps
                  42,785
                  
                  
                  Ps
                  172,016
                  
                  
                  Ps
                  132,673ISR
      rate
                  
                  
                  28
                  %
                  
                  
                  28
                  %
                  
                  
                  28
                  %Expected
      expense
                  
                  Ps
                  11,980
                  
                  
                  Ps
                  48,165
                  
                  
                  
                  37,148Increase
      (decrease) resulting from:Effect
      from inflation, net
                  
                  
                  (5,735
                  )
                  
                  
                  (1,221
                  )
                  
                  
                  1,354Non-deductible
      expenses
                  
                  
                  6,922
                  
                  
                  
                  1,860
                  
                  
                  
                  1,848Valuation
      allowance on tax loss carryforward of U.S. subsidiary
    (1)
                  
                  
                  30,834
                  
                  
                  
                  -
                  
                  
                  
                  -Others,
      net
                  
                  
                  (5,659
                  )
                  
                  
                  (3,553
                  )
                  
                  
                  1,204ISR
      expense
                  
                  Ps
                  38,342
                  
                  
                  Ps
                  45,251
                  
                  
                  Ps
                  41,554Effective
      tax rate
                  
                  
                  89.61
                  %
                  
                  
                  26.32
                  %
                  
                  
                  31.32
                  %
 
 (1)
                      The
      2009 income before tax reflects the Ps110,120 accounting loss from the
      Company’s subsidiary GRC-LA, which resulted in a tax loss of Ps30,834. The
      Company decided to record a valuation reserve to offset the deferred tax
      asset related to this tax loss due to the uncertainty related to start up
      operations and future income of
GRC-LA.
 The tax
effects from timing differences that result in deferred taxes as of December 31,
2009 are adjust at the expected rate of 30% and 2008 are as
follows:
  2009
                              
                              
                              2008Deferred
      assets:Advances
      from customers
                              
                              Ps
                              52,650
                              
                              
                              Ps
                              39,912Liability
      from pension plan
                              
                              
                              19,761
                              
                              
                              
                              17,827Liability
      provisions
                              
                              
                              4,128
                              
                              
                              
                              149Tax
      loss carryforward
                              
                              
                              30,834
                              
                              
                              
                              -Deferred
      assets
                              
                              
                              107,373
                              
                              
                              
                              57,888Valuation
      allowance on tax-loss carryforward of U.S. subsidiary
                              
                              
                              (30,834
                              )
                              
                              
                              -Total
      deferred assets
                              
                              
                              76,539
                              
                              
                              
                              57,888Deferred
      liabilities:Cumulative
      effect from the differences in book and  tax
    basis:Depreciation
      rates
                              
                              
                              (79,793
                              )
                              
                              
                              (73,493
                              )Advance
      payments
                              
                              
                              (3,021
                              )
                              
                              
                              (6,177
                              )Recognition  of
      the effects on the reduction of benefits of loss carryforwards of
      subsidiaries  (1)
                              
                              
                              (10,200
                              )
                              
                              
                              -Total
      deferred liabilities
                              
                              
                              (93,014
                              )
                              
                              
                              (79,670
                              )Deferred
      liability, net
                              
                              Ps
                              (16,475
                              )
                              
                              Ps
                              (21,782
                              )
  F-33
  (1)
              Recognition
      of the effect of the 2010 tax reform act  affecting
      consolidated tax  returns which places limits on the amount of
      tax loss carryforwards of subsidiaries generated from 1982 to 1998 that
      can be used to offset taxable income on a consolidated basis. This amount
      represents the Company’s estimate of the loss of tax benefits resulting
      from such limitations imposed by the new tax
  law.
  The net
fiscal profit account (the “CUFIN”) represents the amount of retained earnings
that may be distributed without additional corporate tax charge to the Company.
As of December 31, 2009, this account amounted to Ps304,431.
  As of
December 31, 2009, capital stock, restated for tax purposes, which constituted
the paid-in account, amounted to Ps1,414,252.
  The
provisions of  current and deferred income tax  for the
years ended December 31, 2009 and 2008 are as follows:
  2009
                                          
                                          
                                          2008
                                          
                                          
                                          2007Current
      income taxesFederal
                                          
                                          Ps
                                          43,649
                                          
                                          
                                          Ps
                                          33,204
                                          
                                          
                                          Ps
                                          45,813Foreign
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -Total
      current
                                          
                                          
                                          43,649
                                          
                                          
                                          
                                          33,204
                                          
                                          
                                          
                                          45,813Deferred
      income taxFederal
                                          
                                          
                                          (5,307
                                          )
                                          
                                          
                                          12,047
                                          
                                          
                                          
                                          (4,259
                                          )Foreign
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -Total
      deferred
                                          
                                          
                                          (5,307
                                          )
                                          
                                          
                                          12,047
                                          
                                          
                                          
                                          (4,259
                                          )Total
      income tax provision
                                          
                                          Ps
                                          38,342
                                          
                                          
                                          Ps
                                          45,251
                                          
                                          
                                          Ps
                                          41,554
  F-34
  b)
                Flat
      rate business tax
  On
October 1, 2007, new laws were published, a number of tax laws were revised, and
additionally a presidential decree was issued on November 5, 2007. Effective on
January 1, 2008, the new tax legislation: (i) repealed the Asset Tax Law, and
(ii) established a new tax (IETU), which is based on cash flows and certain
restrictions for authorized deductions in addition to the granting of tax
credits mainly in connection with inventories, salaries taxed for income tax
purposes, social security contributions, tax losses arising from accelerated
deductions, recoverable asset tax, and deductions related to fixed asset
investments, deferred charges and expenses.
  Accordingly,
beginning in 2008, companies were required to pay the greater of IETU and
ISR.  In case IETU is incurred, the payment will be regarded as final, not
subject to recovery in subsequent years.
  Based on
Company estimates, the tax payable in upcoming years will be income tax
(ISR).
  c)
                On
      April 15, 2008, Company management recovered the IMPAC credit balance of
      Ps5,628 (including Ps90 from the restatement effect) from
      2004.
  NOTE 21OTHER EXPENSES,
NET
  During
the years ended December 31, 2009, 2008, and 2007 the principle transactions
that generated other revenues and expenses are as follows:
  2009
                                                        
                                                        
                                                        2008
                                                        
                                                        
                                                        2007Income:Sale
      of supplies and recovery of expenses
                                                        
                                                        
                                                        Ps
                                                        2,177
                                                        
                                                        
                                                        Ps
                                                        3,747
                                                        
                                                        
                                                        Ps
                                                        2,197Leasing
      and maintenance of properties
                                                        
                                                        
                                                        
                                                        280
                                                        
                                                        
                                                        
                                                        264
                                                        
                                                        
                                                        
                                                        255Recovery
      of other taxes
                                                        
                                                        
                                                        
                                                        291
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -Gain
      from sale of fixed assets
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        1,704
                                                        
                                                        
                                                        
                                                        641Net
      realization value effect on real estate (Note 12)
                                                        
                                                        
                                                        
                                                        504
                                                        
                                                        
                                                        
                                                        901
                                                        
                                                        
                                                        
                                                        -Others
                                                        
                                                        
                                                        
                                                        966
                                                        
                                                        
                                                        
                                                        1,565
                                                        
                                                        
                                                        
                                                        2,324Total
      other income
                                                        
                                                        
                                                        Ps
                                                        4,218
                                                        
                                                        
                                                        Ps
                                                        8,181
                                                        
                                                        
                                                        Ps
                                                        5,417Expenses:Fees
      to the Executive Committee
                                                        
                                                        
                                                        Ps
                                                        (22,681
                                                        )
                                                        
                                                        Ps
                                                        (18,865
                                                        )
                                                        
                                                        Ps
                                                        (17,308
                                                        )Maintenance
      and leasing cost
                                                        
                                                        
                                                        
                                                        (11,222
                                                        )
                                                        
                                                        
                                                        (12,506
                                                        )
                                                        
                                                        
                                                        (9,509
                                                        )GRC-LA
      organization, constitution and start-up costs
                                                        
                                                        
                                                        
                                                        (10,812
                                                        )
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -Litigation
      expenses
                                                        (a)
                                                        
                                                        
                                                        (5,392
                                                        )
                                                        
                                                        
                                                        (15,286
                                                        )
                                                        
                                                        
                                                        (5,598
                                                        )Compliance
      with securities regulations and corporate restructuring
      expenses
                                                        
                                                        
                                                        
                                                        (7,144
                                                        )
                                                        
                                                        
                                                        (7,536
                                                        )
                                                        
                                                        
                                                        (6,887
                                                        )Others
                                                        
                                                        
                                                        
                                                        (4,892
                                                        )
                                                        
                                                        
                                                        (3,189
                                                        )
                                                        
                                                        
                                                        (6,338
                                                        )Charity
      event costs
                                                        
                                                        
                                                        
                                                        (2,436
                                                        )
                                                        
                                                        
                                                        (1,264
                                                        )
                                                        
                                                        
                                                        -Officers’
      civil liability coverage
                                                        
                                                        
                                                        
                                                        (1,632
                                                        )
                                                        
                                                        
                                                        (1,894
                                                        )
                                                        
                                                        
                                                        -Internet
      subscription
                                                        
                                                        
                                                        
                                                        (1,561
                                                        )
                                                        
                                                        
                                                        (2,391
                                                        )
                                                        
                                                        
                                                        (3,599
                                                        )Loss
      on sale of fixed asset
                                                        
                                                        
                                                        
                                                        (1,296
                                                        )
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -Effect
      of valuing properties at net realizable value (see Note
12)
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        -
                                                        
                                                        
                                                        
                                                        (881
                                                        )
 Employee
      profit sharing
                                                            
                                                            
                                                            
                                                            (1,645
                                                            )
                                                            
                                                            
                                                            (2,130
                                                            )
                                                            
                                                            
                                                            (1,103
                                                            )Total
      other expenses
                                                            
                                                            
                                                            
                                                            (70,713
                                                            )
                                                            
                                                            
                                                            (65,061
                                                            )
                                                            
                                                            
                                                            (51,223
                                                            )Other
      expenses, net
                                                            
                                                            
                                                            Ps
                                                            (66,495
                                                            )
                                                            
                                                            Ps
                                                            (56,880
                                                            )
                                                            
                                                            Ps
                                                            (45,806
                                                            )
 F-35
 
 a)
              In
      2009, 2008 and 2007, the Company paid legal fees in connection with the
      arbitration proceedings commenced by Infored and Mr. Gutiérrez Vivó in May
      2002.
  NOTE 22CONTINGENCIES
  a)
                As
      of December 31, 2009, Grupo Radio Centro, S.A.B de C.V. is involved in
      various legal proceedings related to labor claims initiated between 2000
      and 2004, which are still in process. In the event there is a ruling
      against the Company, its approximate responsibility would be Ps49,666. The
      Company has not recorded a provision for these claims as the Company’s
      management believes that these cases will be resolved in favor of the
      Company.
  b)
                See
      Note 11 for a description of the legal proceedings related to an
      arbitration proceeding commenced against the Company by Infored and Mr.
      Gutierrez Vivó in 2002.
  c)
                The
      Company decided to seek protection against the 2010 Tax Reform that
      changes the process of the fiscal consolidation and establishes that ISR
      payments related with the obtained from the fiscal consolidation as of
      1999 must be covered in partial payments between the sixth and the tenth
      year after that in which the benefits were used. The Company has not
      recorded a reserve since its management considers that this amparowill be ruled in
      favor of the Company.
  NOTE 23SIGNIFICANT DIFFERENCES
BETWEEN MEXICAN AND U.S. GAAP
  The
accompanying financial statements of the Company are presented on the basis of
MFRS.
  MFRS are,
in general terms, similar to generally accepted accounting principles in the
United States (“U.S. GAAP”). However, there are some areas in which MFRS differs
from the requirements of U.S. GAAP.
  The major
differences between MFRS and U.S. GAAP are as follows:
  F-36
  Recognition
of the effects of inflation on financial information:
  The
provisions of the MFRS B-10 (see Note 3c.) relating to the recognition of the
effects of inflation on financial information have no counterpart under U.S.
GAAP. However, even though the financial statements prepared under MFRS include
the restatement effects recognized through December 31, 2007, 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:
  Under
MFRS the Company is required to recognize the income tax effects of the
differences in bases of assets and liabilities for financial accounting and
accounting for tax reporting purposes, similar to U.S. GAAP.
  MFRS
requires that all deferred taxes be classified as long-term on the balance
sheet; however, under U.S. 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 purposes. An analysis of the balance of
deferred taxes in accordance with U.S. GAAP, as of December 31, 2009 and 2008,
is as follows:
 
 2009
                                      
                                      
                                      2008Current
      deferred tax:Advances
      from  customers
                                      
                                      US$
                                      4,032
                                      
                                      
                                      Ps
                                      52,650
                                      
                                      
                                      US$
                                      2,885
                                      
                                      
                                      Ps
                                      39,912Advance
      payments and liability provisions, net
                                      
                                      
                                      85
                                      
                                      
                                      
                                      1,107
                                      
                                      
                                      
                                      (435
                                      )
                                      
                                      
                                      (6,028
                                      )Net
      current deferred tax
                                      
                                      US$
                                      4,117
                                      
                                      
                                      Ps
                                      53,757
                                      
                                      
                                      US$
                                      2,450
                                      
                                      
                                      Ps
                                      33,884Non-current
      deferred tax:Liability
      from pension plan
                                      
                                      
                                      1,513
                                      
                                      
                                      
                                      19,761
                                      
                                      
                                      
                                      1,289
                                      
                                      
                                      
                                      17,827Depreciation
      rates
                                      
                                      
                                      (6,111
                                      )
                                      
                                      
                                      (79,793
                                      )
                                      
                                      
                                      (5,314
                                      )
                                      
                                      
                                      (73,493
                                      )Tax
      loss carryforward of U.S. subsidiary
                                      
                                      
                                      2,361
                                      
                                      
                                      
                                      30,834
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -Recognition  of
      the effects of the 2010 tax reform act
                                      
                                      
                                      (781
                                      )
                                      
                                      
                                      (10,200
                                      )
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -Valuation
      allowance for tax-loss carryforward
                                      
                                      
                                      (2,361
                                      )
                                      
                                      
                                      (30,834
                                      )
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -Net
      Non-current deferred tax
                                      
                                      US$
                                      (5,379
                                      )
                                      
                                      Ps
                                      (70,232
                                      )
                                      
                                      US$
                                      (4,025
                                      )
                                      
                                      Ps
                                      (55,666
                                      )
  Statement
of cash flows:
  As
described in Note 3b, the Company adopted MFRS B-2 Statement of Cash Flowson
January 1, 2008.  The cash flow statement as prepared under MFRS for
the years ended December 31, 2009 and 2008, complies with IAS 7, as issued by
the International Accounting Standards Board.
  F-37
  Under
MFRS, the Company presents statements of changes in financial position for the
year ended December 31, 2007 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 for the year ended
December 31, 2007 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 MFRS, the reduction in current and long-term debt for the year
ended December 31, 2007 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 U.S. GAAP,
however, does not provide guidance with respect to inflation-adjusted financial
statements. If the gain from the restatement of current and long-term debt and
net monetary position for the year ended December 31, 2007 were treated as a
component of financing activities for U.S. GAAP purposes, funds (applied)
provided by operating and financing activities would be the same since there
were no gains or losses on monetary position during 2007.
 The cash
flow reconciliation presented below for the years ended December 31, 2009 and
2008 reflects the difference in reclassification between MFRS and U.S. GAAP of
an item affecting operating and financing activities.
 Years ended
      December 31,2009
                                                    
                                                    
                                                    2008Operating
      activities:Net
      cash used in operating activities, per MFRS
                                                    
                                                    Ps
                                                    35,925
                                                    
                                                    
                                                    Ps
                                                    69,618Interest
      paid
                                                    
                                                    
                                                    (21,624
                                                    )
                                                    
                                                    
                                                    (8,376
                                                    )Net
      cash used in operating activities, per U.S. GAAP
                                                    
                                                    Ps
                                                    14,301
                                                    
                                                    
                                                    
                                                    61,242Financing
      activities:Net
      cash provided by (used in) financing activities per MFRS
                                                    
                                                    Ps
                                                    48,376
                                                    
                                                    
                                                    Ps
                                                    (108,376
                                                    )Interest
      paid
                                                    
                                                    
                                                    21,624
                                                    
                                                    
                                                    
                                                    8,376Net
      cash provided by (used in) financing activities per U.S.
    GAAP
                                                    
                                                    Ps
                                                    70,000
                                                    
                                                    
                                                    Ps
                                                    (100,000
                                                    )
 
 For U.S.
GAAP purposes, the following supplemental cash-flow information  is
required to be presented.
  2009
                              
                              
                              2008
                              
                              
                              2007Interest
      paid
                              
                              Ps
                              21,624
                              
                              
                              Ps
                              8,376
                              
                              
                              Ps
                              1,517Taxes
      paid
                              
                              Ps
                              43,649
                              
                              
                              Ps
                              33,204
                              
                              
                              Ps
                              63,412
 Supplemental schedule of noncash investing and
                    financing activities:
                  
                  2009
                  
                  
                  2008a)
      Acquisition of transportation equipment by barter transactions (see Note
      3p)
                  
                  Ps
                  9,673
                  
                  
                  Ps
                  666
  Personnel
compensation and seniority premiums:
  Under
MFRS, vacation expense is recognized when taken rather than in the period it is
earned by the employee, as is required under U.S. GAAP.
  The
Company is required under the Mexican Labor Law to pay seniority premiums and,
when applicable severance payments, to certain employees upon termination of
employment. Additionally, the Company has 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 U.S. GAAP
criteria of SFAS 87, “Employee Accounting for Pensions” and SFAS 158 “Employers’
Accounting for Defined Benefit Pension and Other
Postretirement”.
  F-38
  Goodwill:
  Under
MFRS and U.S. GAAP, the excess of cost over net fair value of the net assets in
subsidiaries acquired is recognized as an intangible asset (“goodwill”). In
addition, under MFRS and U.S. GAAP, goodwill is tested for impairment at least
annually. However, under MFRS, goodwill is also subject to a subsequent
reversals of  any impairment losses. No reversals have
occurred.
  The
Company performed an analysis for impairment of its goodwill as of December 31,
2009, 2008 and 2007. There was no impairment charge required under MFRS or U.S.
GAAP at December 31, 2009, 2008 and 2007.
  Book
value of buildings held for sale:
  Under the
MFRS, the Company reviews the net realizable value of the temporarily unoccupied
buildings and records an impairment or to revert the impairment if the
conditions which generated it disappear. MFRS also does not require to classify
this assets under a different caption of property plant and equipment. Under
U.S. GAAP, impairments on long-lived assets must be recorded and any increases
in the value of such assets may not be recorded. Such assets also need to be
classified separately on the balance sheet.
  Other
expenses, net:
  Under
MFRS, certain other (income) expenses, net are classified as non-operating on
the Company’s consolidated statement of income. Under U.S. GAAP, most of these
net expenses are classified as operating expenses.
  Uncontrolled
interest:
  For the
year ended December 31, 2009, no U.S. GAAP adjustment to uncontrolled
interest was required because the Company adopted ASC 810 “Consolidation”
(formerly SFAS No. 160) which clarifies that an uncontrolled interest in a
subsidiary is an ownership interest in the consolidated entity that should be
reported as shareholders’ equity in the consolidated financial
statements.  For the years ended December 31, 2008 and 2007 the
difference between net income under MFRS and U.S. GAAP was due to the treatment
under U.S. GAAP of a minority interest in subsidiaries of the Company as a
liability.
  Convenience
statements:
  The 2009
US dollar amounts (denoted by the symbol “US$”) shown in the accompanying
consolidated financial statements have been included solely for the convenience
of the reader and were translated at the rate of Ps 13.0576/US$ 1.00, the noon
buying rate of Mexican pesos on December 31, 2009, as published by the Federal
Reserve. 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 and
shareholders’ equity that would have been required had the Company applied U.S.
GAAP instead of MFRS:
  F-39
  2009
                    
                    
                    2008
                    
                    
                    2007Net
      income reported under MFRS
                    
                    US$
                    340
                    
                    
                    Ps
                    4,443
                    
                    
                    Ps
                    126,765
                    
                    
                    Ps
                    91,119U.S.
      GAAP adjustments:Uncontrolled
      interest
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (45
                    )
                    
                    
                    (21
                    )Net
      income under U.S. GAAP
                    
                    US$
                    340
                    
                    
                    Ps
                    4,443
                    
                    
                    Ps
                    126,720
                    
                    
                    Ps
                    91,098Net
      income per share (basic and diluted) under U.S. GAAP
                    
                    US$
                    0.0275
                    
                    
                    Ps
                    0.3588
                    
                    
                    Ps
                    0.77
                    
                    
                    Ps
                    0.55Average
      common shares outstanding (000’s)
                    
                    
                    162,724
                    
                    
                    
                    162,724
                    
                    
                    
                    162,724
                    
                    
                    
                    162,724
 
 2009
                    
                    
                    2008
                    
                    
                    2007Shareholders’
      equity reported under MFRS
                    
                    US$
                    103,884
                    
                    
                    Ps
                    1,356,479
                    
                    
                    Ps
                    1,432,790
                    
                    
                    Ps
                    1,406,025U.S.
      GAAP adjustments:Reversal
      of previously adjusted impairment on buildings held for sale (Note 12)
                    
                    US$
                    (778
                    )
                    
                    
                    (10,165
                    )
                    
                    
                    (9,661
                    )
                    
                    
                    (8,760
                    )Uncontrolled
      interest
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (725
                    )
                    
                    
                    (680
                    )US$
                    (778
                    )
                    
                    Ps
                    (10,165
                    )
                    
                    Ps
                    (10,386
                    )
                    
                    Ps
                    (9,440
                    )Shareholders’
      equity under U.S. GAAP
                    
                    US$
                    103,106
                    
                    
                    Ps
                    1,346,314
                    
                    
                    Ps
                    1,422,404
                    
                    
                    Ps
                    1,396,585
  In the
income statement certain other (income) expenses, net are classified as
non-operating under MFRS. Under U.S. GAAP, these items should be included or
excluded as a component of operating expenses, as applicable.
  The
following is a reconciliation of operating income:
  F-40
  2009
                                            
                                            
                                            2008
                                            
                                            
                                            2007Operating
      income reported under MFRS
                                            
                                            US$
                                            11,480
                                            
                                            
                                            Ps
                                            149,895
                                            
                                            
                                            Ps
                                            236,574
                                            
                                            
                                            Ps
                                            184,329Other
      expenses, net
                                            
                                            
                                            (5,092
                                            )
                                            
                                            
                                            (66,495
                                            )
                                            
                                            
                                            (56,880
                                            )
                                            
                                            
                                            (45,806
                                            )Operating
      income under U.S. GAAP
                                            
                                            US$
                                            6,388
                                            
                                            
                                            Ps
                                            83,400
                                            
                                            
                                            Ps
                                            179,694
                                            
                                            
                                            Ps
                                            138,523
  Under
MFRS and U.S. GAAP, the basic net income per common share is computed by
dividing the net income available to common shareholders by the weighted average
number of common shares outstanding. Diluted net income per common share is
computed by dividing the net 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, 2009, 2008 and 2007, there were no outstanding
potential dilutive securities of the Company.
  Recognition
of tax uncertainties
  Under U.S. GAAP, FIN No. 48 requires a
company to recognize the financial statement impact of a tax position when it is
more likely than not that the position will be sustained upon examination. If
the tax position meets the more-likely-than-not recognition threshold, the tax
effect is recognized at the largest amount of the benefit that is greater than
50% likely of being realized upon ultimate settlement. Any difference between
the tax position taken in the tax return and the tax position recognized in the
financial statements using the criteria above results in the recognition of a
liability in the financial statements for the unrecognized benefit. MFRS does
not have any equivalent rule. Under FIN 48, there was no impact on the
consolidated financial statements of the Company.
  Effect
of recently issued U.S. Accounting Standards:
  New
accounting standards have been issued under U.S. GAAP, the application of which
is required as indicated.
  In
June 2009, the Financial Accounting Standards Board (“FASB”) issued
Accounting Standards Codification (“ASC”) 810, Consolidation, (formerly SFAS
No. 167, Amendments to FASB Interpretation No. 46(R)) regarding the
consolidation of variable interest entities.  ASC 810 is intended to
improve financial reporting by providing additional guidance to companies
involved with variable interest entities and by requiring additional disclosures
about a company’s involvement in variable interest entities. This standard is
effective for interim and annual periods ending after November 15, 2009,
which did not have a material impact on our consolidated financial
statements.
  F-41
  In June
2009, the FASB issued ASC 860, Transfers and Servicing (formerly SFAS
No. 166, Accounting for Transfers of Financial Assets). ASC 860 requires
more information about transfers of financial assets and where companies have
continuing exposure to the risk related to transferred financial
assets.  ASC 860 eliminates the concept of a qualifying special
purpose entity, changes the requirements for derecognizing financial assets and
requires additional disclosure. This standard is effective for interim and
annual periods ending after November 15, 2009, which did not have a
material impact on our consolidated financial statements.
  In June
2009, the FASB issued ASC 105, Generally Accepted Accounting Principles
(formerly SFAS No. 168, The “FASB Accounting Standards Codification”TM and
the Hierarchy of Generally Accepted Accounting Principles – a replacement of
FASB Statement No. 162). ASC 105 establishes the FASB ASC as the single source
of authoritative nongovernmental U.S. GAAP, except for SEC rules and
interpretive releases, which are sources of authoritative GAAP for SEC
registrants. The standard is effective for interim and annual periods ending
after September 15, 2009. The Company adopted the provisions of the
standard, which did not have a material impact on its consolidated financial
statements.
  In
May 2009, the FASB issued ASC 855, Subsequent Events (formerly SFAS
No. 165, Subsequent Events). ASC 855 establishes general accounting
standards and disclosure of events that occur after the balance sheet date but
before consolidated financial statements are issued or are available to be
issued. ASC 855 sets forth the period after the balance sheet date during which
management of a reporting entity should evaluate events or transactions that may
occur for potential recognition or disclosure in the consolidated financial
statements, the circumstances under which an entity should recognize events or
transactions occurring after the balance sheet date in its consolidated
financial statements, and the disclosures that an entity should make about
events or transactions that occurred after the balance sheet date.  ASC 855
is effective for fiscal years and interim periods ended after June 15,
2009.  The Company adopted the provisions of the standard, which had no
effect on its consolidated financial statements and subsequent events through
the date of this filing. The Company evaluated subsequent events to the
date the Company issued its consolidated financial statements.
  In
April 2009, the FASB issued ASC 825, Financial Instruments (formerly
Financial Staff Position (“FSP”) No. 107-1 and Accounting Principles Board
(“APB”) 28-1 (FSP No. 107-1 and APB 28-1), Interim Disclosures about Fair Value
of Financial Instruments). ASC 825 requires disclosures of fair value for any
financial instruments not currently reflected at fair value on the balance sheet
for all interim periods. ASC 825 enhances consistency in financial reporting by
increasing the frequency of fair value disclosures and is effective for interim
and annual periods ending after June 15, 2009, and is to be applied
prospectively. The Company adopted the provisions of the standard, which did not
have an effect on its consolidated financial statements.
  F-42
  In March
2008, the FASB issued ASC 815, Derivatives and Hedging (formerly SFAS No. 161,
Disclosures about Derivative Instruments and Hedging Activities, an amendment of
FASB Statement No. 133).  ASC815 requires enhanced disclosures about
an entity’s derivative and hedging activities including how and why an
entity uses, how an entity accounts for derivative instruments; and related
hedged items and how derivative instruments and related hedged items affect an
entity’s financial position, financial performance and cash flows. ASC 805 is
effective beginning January 1, 2009. The Company adopted the provisions of
the standard, which did not have an effect on its consolidated financial
statements.
  In
February 2008, the FASB issued ASC 820, Fair Value Measurements and Disclosures
(formerly FSP Financial Accounting Standard (“FAS”) No. 157-2, Effective Date of
FASB Statement No. 157) which delayed the effective date for nonfinancial assets
and nonfinancial liabilities until January 1, 2009.  The Company
adopted the provisions of the standard as of January 1, 2009, which did not have
an effect on its consolidated financial statements.
  NOTE 24FINANCIAL INFORMATION PER
SEGMENTS
  As of
March 13, 2009, the Company operates in two geographic regions: in Mexico, which
is the Company's country of origin and where it conducts its main operations
(see Note 1), and in the United States of America through its 51% owned
subsidiary, GRC-LA. This subsidiary's main line of business is the operation of
the radio station KXOS-FM that broadcasts at 93.9 FM in Los Angeles, California
and whose revenues are from broadcast advertising (see Note 1b and Note
10).
  The
financial statements amounts corresponding to each segment, including the
amounts representing 100% of GRC-LA financial statements, are analyzed as
follows:
  Geographical areas:U.S. dollars
                      
                      
                      Mexican pesosTotal
      assets 2009Mexico
                      
                      US$
                      136,824
                      
                      
                      Ps
                      1,786,744United
      States
                      
                      
                      10,737
                      
                      
                      
                      140,211Total
      segments
                      
                      US$
                      147,561
                      
                      
                      
                      1,926,955Eliminations
      of inter-segments
                      
                      
                      -
                      
                      
                      
                      -Total
                      
                      US$
                      147,561
                      
                      
                      Ps
                      1,926,955The
      investment in 2009 productive assets.Mexico
                      
                      US$
                      35,220
                      
                      
                      Ps
                      459,941United
      States
                      
                      
                      -
                      
                      
                      
                      -Total
                      
                      US$
                      35,220
                      
                      
                      Ps
                      459,941Depreciation  and
      amortization 2009Mexico
                      
                      US$
                      1,993
                      
                      
                      Ps
                      26,024
  F-43
  Geographical areas:U.S. dollars
                
                
                Mexican pesosUnited
      States
                
                
                -
                
                
                
                -Total
                
                US$
                1,993
                
                
                Ps
                26,024Revenues  2009Mexico
                
                US$
                58,374
                
                
                Ps
                762,290United
      States
                
                
                1,806
                
                
                
                23,579Total
                
                US$
                60,180
                
                
                
                785,869Eliminations
      of inter-segments
                
                
                -
                
                
                
                -Consolidated
      total
                
                US$
                60,180
                
                
                Ps
                785,869Operating
      profit (loss)Mexico
                
                US$
                19,694
                
                
                Ps
                257,177United
      States
                
                
                (8,215
                )
                
                
                (107,282
                )Total
      segments
                
                US$
                11,479
                
                
                Ps
                149,895Eliminations
      of inter-segments
                
                
                -
                
                
                
                -Total
                
                US$
                11,479
                
                
                Ps
                149,895
  For the
year ended December 31, 2009, Grupo Radio Centro included in its results
Ps.56,344, relating to 51% of the net loss of GRC-LA.
  NOTE
25  AUTHORIZATION TO ISSUE THE FINANCIAL
STATEMENTS
  The
accompanying financial statements were issued with the authorization of Mr.
Pedro Beltrán Nasr, Chief Financial Officer, on February 19, 2010.
  NOTE 26 SUBSEQUENT
EVENT
  The
following are events that occurred subsequent to December 31, 2009 which had no
effect on the Company’s consolidated financial statements as of and for the year
ended December 31, 2009:
  a)
              On
      February 26, 2010, the Company undertook a capital reduction of GRC-LA by
      returning US$1,470,000 in capital contributions to certain members of the
      Aguirre family,  who are the majority shareholders of the
      Company. The return of capital to the Aguirre family reduced their 49%
      interest in GRC-LA to zero. As a result of the capital reduction, the
      Company  became the sole shareholder of
  GRC-LA.
  b)
              The
      Company was not in compliance with the fixed charges coverage ratio as of
      March 31, 2010.  The Company obtained a waiver from the lender
      of this non-compliance for the first quarter of 2010 as well as for the
      second quarter ending June 30, 2010.  There is significant
      uncertainty as to whether the Company will be able to comply with the
      fixed charges coverage ratio for the third quarter of 2010.  If
      the Company  fails to comply with this covenant or any other
      covenant under the credit facility, there can be no assurance that the
      Company will be able to obtain waivers of such failures or that the
      lender will not accelerate amounts due under the credit
      facility.  If the Company is unable to repay amounts due under
      the credit facility, the lender could proceed against the collateral
      securing the Company’s indebtedness.  Such
      events would have a material adverse effect on the Company’s
      business, financial condition and results of
      operations.
 F-44
  c)
              On
      June 1, 2010, the Company borrowed from the lender an additional Ps. 30
      million under the loan agreement for working capital
      purposes.  The Company is required to repay this amount on
      December 1, 2010 and make monthly interest payments at a variable interest
      rate Mexican Interbank Equilibrium Interest Rate (“Tasa de Interes
      Interbancaria de Equilibrio” or “TIIE”) plus
3%.
  F-45
  SIGNATURE
  The
registrant certifies that it meets all the requirements for filing on Form 20-F
and has duly caused and authorized the undersigned to sign this annual report on
its behalf.
  Date:  June
30, 2010
  GRUPO
      RADIO CENTRO, S.A.B. de C.V.By:
                  /s/ Pedro Beltrán NasrPedro
      Beltrán NasrChief
      Financial Officer