ANTENNA TV SA, 20-F/A, 1999-08-23

ANTENNA TV SA
20-F/A, 1999-08-23
TELEVISION BROADCASTING STATIONS

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As filed with the Securities and Exchange Commission on August 23, 1999

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

FORM 20-F/A

(Mark One)

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

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

Commission file number 000-25471

ANTENNA TV AN[OMEGA]NYMOE ETAIPEIA
(Exact name of Registrant as specified in its charter)

ANTENNA TV S.A.
(Translation of Registrant's name into English)

PREFECTURE OF ATHENS ATTICA, HELLENIC REPUBLIC
(Jurisdiction of incorporation or organization)

KIFISSIAS AVENUE 10-12, MAROUSSI 151
25, ATHENS, GREECE
(Address of principal executive offices)

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

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

Shares of capital stock, nominal value GRD 100 per share
--------------------------------------------------------

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 March 30, 1999.

Title of class
- --------------

Shares of capital stock........................................19,849,440

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed 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.

Yes |X| No |_|

Indicate by check mark which financial statement item the registrant has elected
to follow.

Item 17 |_| Item 18 |X|

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<PAGE>

TABLE OF CONTENTS

Page
----

PART I

Item 8. Selected Financial Data.......................................... 3
Item 9. Management's Discussion and Analysis of Financial
Condition and Results of Operations.............................. 5

PART IV

Item 17. Consolidated Financial Statements................................ 15
Item 18. Consolidated Financial Statements................................ 15
Item 19. Consolidated Financial Statements and Exhibits................... 16

i
<PAGE>

INTRODUCTION

As used herein, except as the context otherwise requires, the term
"Company" or "Antenna" refers to Antenna TV S.A. and its subsidiaries and the
term "directors" refers to the Company's Board of Directors.

The Company publishes its financial statements in Greek drachmae
("drachmae" or "GRD"). This Annual Report on Form 20-F/A presents translations
into United States dollars ("U.S. dollars," "dollars" or "$") of certain drachma
amounts at the noon buying rate in New York City for cable transfers in foreign
currencies, as certified for customs purposes by the Federal Reserve Bank of New
York (the "Noon Buying Rate") on December 31, 1998, of $1.00 = GRD 279.90
(0.3573 cents per drachma). On August 18, 1999, the Noon Buying Rate was $1.00 =
GRD 310.65 (0.3219 cents per drachma). No representation is made that drachmae
have been, could have been or could be converted into dollars at the rates
indicated or any other rate. For information regarding rates of exchange between
GRD and US dollars from 1994 to the present, see "Item 8. Selected Financial
Data--Exchange Rates."

The Company's financial statements have been prepared in accordance
with U.S. generally accepted accounting principles ("U.S. GAAP"). The Company
maintains its accounting records and publishes its statutory financial
statements in accordance with Greek tax and corporate regulations. For purposes
of preparing the financial statements for inclusion in this Annual Report on
Form 20- F/A, certain adjustments have been made to these records to prepare the
financial statements and other financial information herein in accordance with
U.S. GAAP. In 1995, the Company changed its fiscal year-end from June 30 to
December 31.

On February 12, 1999, the Company filed with the United States
Securities and Exchange Commission (the "Commission") a registration statement
on Form F-1 (Registration No. 333-72247) under the Securities Act of 1933, as
amended, with respect to the initial public offering (the "Offering") of
3,850,000 shares of its capital stock, nominal value GRD 100 per share (the
"Shares"), in the form of American Depositary Shares ("ADSs"), each ADS
representing one half of one Share. On March 9, 1999, the Company completed the
Offering. The ADSs were issued pursuant to a Deposit Agreement (the "Deposit
Agreement"), dated as of March 9, 1999, by and between the Company, The Bank of
New York, as depositary (the "Depositary"), and the owners of American
Depositary Receipts ("ADRs") representing the ADSs and holders from time to time
of ADRs issued thereunder.

In May 1999, the Company utilized a portion of the net proceeds
received by it from the Offering to complete the acquisition of interests in
Antenna R.T. Enterprises, Antenna Spoudastiki Ltd., Pacific Broadcast
Distribution Ltd. and Audiotex S.A. See Note 2 of Notes to Consolidated
Financial Statements. These business combinations were among companies under
common control and have been accounted for "as if" a pooling of interest had
occurred for periods subsequent to September 1, 1998, the date that the
companies came under common control for accounting purposes. Accordingly, the
balance sheet as at December 31, 1998 and the consolidated statements of
operations, cash flows and shareholders' equity for the year ended December 31,
1998 have been restated. The restated financial statements are set forth in this
Annual Report on Form 20-F/A for the year ended December 31, 1998. As used
herein, the term "Consolidated Financial Statements" refers to the Company's
Consolidated Financial Statements as so restated.

The Company hereby amends Items 8, 9, 17, 18 and 19 of its Annual
Report on Form 20-F for the fiscal year ended December 31, 1998 to read in their
entirety as set forth below and such Items supersede the information contained
in the Annual Report on Form 20-F which was filed on
<PAGE>

March 30, 1999. References to all other Items contained herein shall be deemed
to be references to Items in the Annual Report on Form 20-F for the fiscal year
ended December 31,1998, as filed with the Commission on March 30, 1999.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

In connection with the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 (the "Reform Act"), the Company is
hereby providing cautionary statements identifying important factors that could
cause the Company's actual results to differ materially from those projected in
forward-looking statements (as such term is defined in the Reform Act) made in
this Annual Report on Form 20-F/A. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives, assumptions or
future events or performance (often, but not always, through the use of the
words or phrases such as "will likely result," "are expected to," "will
continue," "is anticipated," "estimated," "intends," "plans," "projection" and
"outlook") are not historical facts and may be forward-looking and, accordingly,
such statements involve estimates, assumptions and uncertainties which could
cause actual results to differ materially from those expressed in the
forward-looking statements. Accordingly, any such statements are qualified in
their entirety by reference to, and are accompanied by, the factors discussed
throughout this Annual Report on Form 20-F/A. Among the key factors that have a
direct bearing on the Company's results of operations are the ability of the
Company to successfully implement its growth and operating strategies; changes
in economic cycles; competition from other broadcast companies and media;
fluctuation of exchange rates; and changes in the laws and government
regulations applicable to the Company or the interpretation or enforcement
thereof. These and other factors are discussed herein under "Item 1. Business,"
"Item 9. Management's Discussion and Analysis of Financial Condition and Results
of Operations" and elsewhere in this Annual Report.

The Company's principal corporate offices are located at Kifissias
Avenue 10-12, Maroussi 151 25, Athens, Greece and its telephone number is (30-1)
688-6100.

2
<PAGE>

ITEM 8. SELECTED FINANCIAL DATA.

The following selected statement of operations and balance sheet data
of the Company as of December 31, 1995, 1996, 1997 and 1998 and for the 18
months ended December 31, 1995 and the fiscal years ended December 31, 1996,
1997 and 1998 have been derived from the Company's audited financial statements.
The financial statements as of December 31, 1997 and 1998 and the fiscal years
ended December 31, 1996, 1997 and 1998 are included elsewhere in this Annual
Report and have been audited by KPMG Peat Marwick Kyriacou, independent
auditors, as stated in their report included herein. This selected statement of
operations and balance sheet data should be read in conjunction with the
Consolidated Financial Statements and the Notes thereto included elsewhere in
this Annual Report. The selected statement of operations and balance sheet data
of the Company as of June 30, 1994 and December 31, 1994 and for the fiscal
years ended June 30, 1994, the six months ended December 31, 1994 and the 12
months ended December 31, 1995 have been derived without material adjustment
from unaudited financial statements of the Company. In the opinion of
management, the unaudited financial statements of the Company have been prepared
on the same basis as the audited financial statements included herein and
include all adjustments necessary for the fair presentation of financial
position and results of operations at these dates and for these periods, which
adjustments are only of a normal recurring nature. The 1998 financial statements
have been rotated to reflect the acquisition of certain businesses under common
control. See Note 2 of Notes to Consolidated Financial Statements.

<TABLE>
<CAPTION>
EIGHTEEN MONTHS ENDED
DECEMBER 31, 1995(1)
SIX MONTHS TWELVE
ENDED MONTHS ENDED FISCAL YEAR ENDED
DECEMBER 31, DECEMBER-31, DECEMBER 31,
------------ ------------ -------------------------------------
1994 1994 1995 TOTAL 1996 1997 1998 1998
------- ------- ------- ------- ------- ------- ------- -----
(GRD) (GRD) (GRD) (GRD) (GRD) (GRD) (GRD) ($)(2)
------- ------- ------- ------- ------- ------- ------- -----
(CONSOLIDATED)
(IN MILLIONS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA

Advertising revenue 20,922 9,060 19,097 28,157 22,086 23,242 29,288 104.6
Related party revenue 161 94 400 494 3,139 2,317 2,613 9.3
Other revenue 80 64 123 187 141 192 422 1.5
------- ------- ------- ------- ------- ------- ------- -----
Total net revenue 21,163 9,218 19,620 28,838 25,366 25,751 32,323 115.4
Cost of sales 7,047 3,514 7,244 10,758 7,562 5,394 5,392 19.3
Selling, general and administrative
expenses 2,489 1,423 2,177 3,600 3,117 3,717 4,027 14.4
Amortization of programming costs 7,773 2,895 6,823 9,718 11,565 12,434 12,383 44.2
Depreciation 378 227 455 682 467 495 628 2.2
------- ------- ------- ------- ------- ------- ------- -----
Operating income 3,476 1,159 2,921 4,080 2,655 3,713 9,894 35.3
Interest expense, net 1,581 1,527 2,188 3,715 2,049 2,532 (2,858) (10.2)
Foreign exchange (losses) gains and
other, net(3) (680) (28) (192) (220) 297 (698) (4,024) (14.3)

Equity in net income of unconsolidated
entity -- -- -- -- -- -- 21 0.1
Related party commission income -- -- -- -- -- -- 143 0.5
Income (loss) before income taxes 1,215 (396) 541 145 903 501 3,186 11.4
Provision (benefit) for income taxes(3) 494 (128) 193 65 431 248 2,085 7.5
------- ------- ------- ------- ------- ------- ------- -----
Net income (loss) 721 (268) 348 80 472 253 1,101 3.9
======= ======= ======= ======= ======= ======= ======= =====
Basic and diluted (loss) earnings per
share(4) -- (16.0) 20.8 4.8 28.1 15.1 65.6 0.2
======= ======= ======= ======= ======= ======= ======= =====

BALANCE SHEET DATA (AT PERIOD END)

Total assets 26,941 32,932 37,084 37,084 35,504 52,081 60,240 215.2
Long-term obligations 207 509 3,068 3,068 2,001 32,718 32,963 117.8
Total debt(5) 12,660 16,769 19,243 19,243 14,780 32,790 33,070 118.2
Shareholders' equity 4,579 4,311 4,659 4,659 5,131 5,385 6,484 23.2

3
<PAGE>

OTHER DATA

<S> <C> <C> <C> <C> <C> <C> <C> <C>
EBITD(6) -- 1,386 3,376 4,762 3,122 4,207 10,522 37.6
Net cash (used in) provided by operating
activities -- (3,068) (1,021) (4,088) 1,857 (4,785) 2,684 9.6
Net cash used in investing activities . -- (351) (279) (630) (226) (240) (365) (1.3)
Net cash provided by (used in) financing
activities -- 4,568 2,015 6,583 (4,463) 16,609 (2,500) (8.9)
Cash dividends per share -- -- -- -- -- -- 59.6 0.2
</TABLE>

(1) During 1995, the Company changed its fiscal year-end to December 31.

(2) Translation of drachmae into dollars has been made at the rate of $1.00
= GRD 279.90 (the Noon Buying Rate on December 31, 1998). Such
translation is provided solely for the convenience of the reader. On
August 18, 1999, the Noon Buying Rate was $1.00 = GRD 310.65. See
"--Exchange Rates."

(3) During Fiscal 1998, the drachma appreciated against the U.S. dollar,
which resulted in a foreign exchange loss on a forward contract for
which no tax benefit has been recognized due to the uncertainty of the
ultimate ability to realize such tax benefit. See "Item 9A.
Quantitative and Qualitative Disclosures About Market Risk."

(4) Earnings per share for Fiscal 1994 are not presented, as such amounts
are not significant.

(5) Total debt includes bank overdrafts and short-term borrowings,
long-term indebtedness (including the current portion thereof) and
long-term obligations under capital leases (including the current
portion thereof).

(6) EBITD represents earnings before interest expense, income taxes and
depreciation. It is calculated after amortization of programming costs.
Management believes that EBITD is a useful measure of operating
performance because it is industry practice to evaluate operations
based on operating income before interest and depreciation, which is
generally equivalent to EBITD and EBITD is unaffected by the debt and
equity structure of a company. EBITD does not represent cash flow from
operations as defined by U.S. GAAP, is not necessarily indicative of
cash available to fund all cash flow needs and should not be considered
as an alternative to net income under U.S. GAAP for purposes of
evaluating the Company's results of operations.

EXCHANGE RATES

The table below sets forth, for the periods and dates indicated,
certain information concerning the exchange rate for the drachma against the
dollar based on the Noon Buying Rate.

YEAR ENDED DECEMBER 31,
---------------------------------------
1994 1995 1996 1997 1998(2)
------ ------ ------ ------ -------
(DRACHMAE PER DOLLAR)

High...................... 253.34 242.47 247.80 287.25 323.13
Low....................... 230.02 221.80 234.58 257.55 276.60
Average(1)................ 241.59 231.27 240.82 274.47 295.70
Rate at end of period..... 240.47 237.10 246.96 284.02 279.90

- --------------
(1) The average of the Noon Buying Rate on the last day of each month
during the applicable period.

(2) The drachma was devalued in March 1998. See "Item 9A. Quantitative and
Qualitative Disclosures About Market Risk."

4
<PAGE>

ITEM 9. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ TOGETHER WITH
THE CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, AND THE
OTHER FINANCIAL INFORMATION INCLUDED ELSEWHERE IN THIS ANNUAL REPORT. THE
COMPANY MAINTAINS ITS ACCOUNTING RECORDS AND PUBLISHES ITS STATUTORY FINANCIAL
STATEMENTS IN ACCORDANCE WITH GREEK TAX AND CORPORATE REGULATIONS. CERTAIN
ADJUSTMENTS HAVE BEEN MADE TO THESE RECORDS TO PREPARE THE CONSOLIDATED
FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION IN THIS ANNUAL REPORT IN
ACCORDANCE WITH U.S. GAAP. THIS ANNUAL REPORT CONTAINS CERTAIN FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF THE FEDERAL SECURITIES LAWS. ACTUAL RESULTS AND
THE TIMING OF CERTAIN EVENTS COULD DIFFER MATERIALLY FROM THOSE PROJECTED IN THE
FORWARD-LOOKING STATEMENTS DUE TO A NUMBER OF FACTORS, INCLUDING THOSE SET FORTH
ELSEWHERE IN THIS ANNUAL REPORT. SEE "SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS."

GENERAL

Antenna was formed as a SOCIETE ANONYME and began operations at the
end of 1989, shortly after the introduction of private commercial television in
Greece. The Company derives a substantial portion of its revenue from the sale
of television advertising time (90.6% of total net revenue in Fiscal 1998, 90.3%
in Fiscal 1997 and 87.1% in Fiscal 1996). Advertising is sold in time increments
and is priced primarily on the basis of the program's popularity, as
demonstrated by its ratings, within the demographic group that an advertiser
desires to reach. In addition, advertising rates are affected by the number of
advertisers competing for the available time and the availability of alternative
advertising media. The Company seeks to maximize its advertising revenue by
broadcasting programming that appeals to a variety of audience segments
representing a broad cross-section of the Greek population. Antenna places
particular emphasis on attracting viewers from demographic groups that are most
attractive to advertisers and offering advertisers creative and flexible
marketing opportunities.

Substantially all of the Company's advertising revenue is generated
from national advertising arrangements and contracts with the local affiliates
of international advertising agencies, representing both multinational
advertisers such as Procter & Gamble, Unilever, Estee Lauder, Coca-Cola Hellas
and Colgate-Palmolive, and national advertisers such as OTE, Telestet, Panafon
(Greek telecommunications companies) and Fage and Delta (Greek dairy companies).
See "Item 1. Business--Television Advertising." The Company currently uses its
own sales force to sell advertising time. Arrangements for advertising are
reached during the first quarter of each year, at which time estimates of annual
revenue are determined. Advertising time generally is reserved on a monthly
basis, with a small proportion booked on a spot basis. Advertising revenue is
recorded when the advertisement is aired. As is common in the industry, the
Company provides certain advertising agencies with an incentive rebate (up to a
maximum of 9.9% of the cost of the airtime purchased, as permitted by law), and
at the end of each year the rebates are calculated and the advertising agencies
entitled thereto invoice the Company for airtime credit for the following year
reflecting the rebates. Such rebates are estimated and accrued on a quarterly
basis as the related revenues are earned. Revenue is recorded net of the
rebates. While most advertising arrangements tend to be reviewed on an

5
<PAGE>

annual basis, and typically are renewed, the Company seeks to develop and
maintain long-term relationships with the agencies and advertisers.

Regulatory changes effective January 1, 1996 had the effect of
greatly reducing discounts and free airtime offered to advertisers, requiring
advertisers to pay the full cost (and taxes based on such full cost) set forth
in the broadcaster's price list for a particular time slot, as filed with the
Greek tax authorities. A joint directive of the Greek Ministry of Press and Mass
Media and Ministry of Finance, for the purpose of clarifying the term
"advertising" under Greek tax law, broadened the definition beyond spots aired
in return for cash payments to cover all publicity aired. The directive also
clarified a number of procedures relating to collection of taxes in respect of
advertising. See "Item 1.

Business--Regulation."

While the Company sells a significant portion of its available
advertising time, it does not sell all of it. The Company sold approximately 84%
of total available advertising time during prime time broadcasts and
approximately 63% of total available advertising time (including dead time
allocated to audiotext, infomercials and home shopping) during Fiscal 1998. See
"Item 1. Business--Television Advertising--General." The Company uses a variety
of means to utilize unsold advertising time in all time periods (commonly
referred to as "dead time") to improve its operating results and cash flows.
Such other sources include audiotext and infomercials. The Company derives
revenue from its majority-owned subsidiary, Audiotex S.A. ("Audiotex"), which
generates audiotext revenue, and from an affiliated entity, Epikinonia Ltd,
which produces infomercials and pays Antenna for production and technical
support. See "Item 13. Interest of Management in Certain Transactions."

The Company also derives revenue from royalties received from
syndicating its own programming. Such programming sales are made to a variety of
users, including a television network in Cyprus (operated by Antenna TV Ltd.
(Cyprus), a company in which the General Manager of the Company is General
Manager), and broadcasters targeting Greek-speaking viewers in the United
States, Canada and Australia. Sales of programming to Greek-speaking viewers are
made in the United States and Canada through an affiliated entity, Antenna
Satellite TV (USA) Inc., and in Australia through the Company's wholly-owned
subsidiary, Pacific Broadcast Distribution Ltd. ("Pacific Broadcast"). Revenue
derived from Antenna Satellite TV (USA) Inc., Antenna TV Ltd. (Cyprus) and
Pacific Broadcast represented revenue from sources outside Greece. See Note 24
of Notes to Consolidated Financial Statements. In addition, selected news
footage is sold to other news broadcasters around the world. The Company also
expects to derive revenue from various other sources in the future. See "Item 1.
Business--The Company--Business Strategy" and "--Other Sources of Revenue."

The Company's revenue fluctuates throughout the year, with
advertising revenue at its lowest level during the Company's third fiscal
quarter (approximately 11.0% of total net revenue in Fiscal 1998), and at its
highest level during the fourth fiscal quarter (approximately 37.3% of total net
revenue in Fiscal 1998).

Cost of sales includes the costs of acquiring foreign programming and
Greek features and the cost of gathering, producing and broadcasting news.
Selling, general and administrative expenses ("SG&A") includes payroll costs and
sales, marketing and promotion

6
<PAGE>

costs, the broadcast license fee and other operating and administrative
expenses. In September 1996, the Company began accruing, for the first time, the
broadcast license fee payable pursuant to the Media Law. See "Item 1.
Business--Regulation." This fee currently is calculated on the basis of 2% of
gross advertising revenue.

Programming costs generally either are expensed as cost of sales in
the year incurred or capitalized and amortized over a period of three to four
years. Programs that are expensed in the current period include news programs
and a portion of acquired programming (principally Greek features). For such
programming, substantially all of the value is realized upon the initial
broadcast, either because of the topical nature of the programming or, in the
case of acquired programming, contractual limitations on subsequent broadcasts.
Acquired foreign programs, which have contracts limiting the Company to a
specific number of broadcasts during their term (usually two broadcasts during a
two- or three-year period), are expensed in equal portions each time the program
is broadcast. The costs of other programming, such as series, soap operas,
shows, and made-for-television movies, where substantial value can be realized
through multiple broadcasts or syndication, are capitalized as an asset and
amortized, unless the Company determines during the current period that a
program is unlikely to generate revenue in future periods, in which case the
associated costs are expensed in the current period.

The Company follows U.S. Financial Accounting Standards Board
Statement No. 53 FINANCIAL REPORTING BY PRODUCERS AND DISTRIBUTORS OF MOTION
PICTURE FILMS ("SFAS 53") regarding the amortization of programming production
and acquisition costs. Consequently, all direct and certain indirect production
costs (other than in respect of news and similar programming) are capitalized as
investment in programs. These costs are stated at the lower of unamortized cost
or estimated net realizable value. Under SFAS 53, estimated total production
costs for an individual program or series are amortized in the proportion that
the revenue realized relates to management's estimate of the total future
revenue expected to be generated from such program or series based upon past
experience. Estimates of future revenues are reviewed periodically in relation
to historical revenue trends and the amortization of programming costs is
adjusted accordingly. To the extent such estimates differ from the actual
results, such amortization periods will be adjusted. Such adjustments could have
a material adverse effect on the Company's financial condition and results of
operations.

An important component of the Company's strategy for maximizing
operating performance and long-term profitability is to continue making
investments in programming to build up its own programming library. It has
implemented this strategy over the past few years by significantly increasing
its programming expenditures. The Company retains all rights to the programming
in its library and believes that such rights may represent values in excess of
net book value. Such value is demonstrated by the advertising revenue that the
Company generates from rebroadcasting programming produced in prior years and
from programming syndicated to other networks, including, in each case,
programming for which the production costs have been fully amortized. In certain
cases, advertising revenue has

7
<PAGE>

exceeded the advertising revenue generated from the initial broadcast. The
Company expects to continue to expand its programming library and to exploit the
library through the airing of reruns and the distribution and syndication of
broadcast rights to third parties. Programming from the library is broadcast to
Greeks abroad through third parties and in the future will also be broadcast
directly. Management will continue to evaluate the total estimated revenues as
new markets are entered and revenues are realized.

In March 1999, the Company raised net proceeds of $86.5 million in
the Offering. On May 6, 1999, the Company utilized a portion of the net proceeds
it received from the Offering to acquire the following interests (the
"Acquisitions"): a 51% interest in Audiotex (for a purchase price of $7.25
million); a 99.97% interest in Antenna R.T. Enterprises ("Antenna Radio"), which
owns Antenna FM (97.1 FM), a combination news/talk and music radio station
serving the greater Athens area (for a purchase price of $16.25 million plus the
assumption of approximately $5.2 million of indebtedness); a 100% interest in
Antenna Spoudastiki Ltd. ("Antenna Spoudastiki"), which operates a training
center for journalists and other media personnel (for a purchase price of $6.0
million); and a 100% interest in Pacific Broadcast, which rebroadcasts the
Company's programming in Australia through a joint venture (for a purchase price
of $3.5 million). Each of the companies whose interests were acquired was
previously affiliated with or controlled by members of the family of Mr. Minos
Kyriakou, the Company's Chairman and Chief Executive Officer. See Note 2 of
Notes to Consolidated Financial Statements.

These business combinations were among companies under common control
and have been accounted for "as if" a pooling of interest had occurred for
periods subsequent to September 1, 1998, the date that the companies came under
common control for accounting purposes (the "Consolidation Date"). Accordingly,
the balance sheet as at December 31, 1998 and the consolidated statements of
operations, cash flows and shareholders' equity for the year ended December 31,
1998 have been restated. Because the business combinations were among companies
under common control they have been consolidated based upon their book value and
historical results of operations, respectively. The cash amounts paid for the
companies acquired, in excess of their book values, have been treated as a
dividend to the selling shareholders.

The Consolidated Financial Statements of the Company include all of
its significant majority-owned subsidiaries. Affiliated companies in which the
Company does not own a controlling interest or for which the minority
shareholders have significant veto rights over operating decisions
(participating rights requiring unanimous shareholder approval, including:
transactions in excess of GRD 20 million, operating budgets, senior management
positions, borrowing and amendments to contractual obligations) are accounted
for using the equity method.

8
<PAGE>

RESULTS OF OPERATIONS

FISCAL YEAR ENDED DECEMBER 31, 1998
COMPARED TO FISCAL YEAR ENDED DECEMBER 31, 1997

Net revenue increased GRD 6,572 million ($23.5 million), or 25.5%,
from GRD 25,751 million ($92.0 million) in Fiscal 1997 to GRD 32,323 million
($115.5 million) in Fiscal 1998. This increase was attributable primarily to an
underlying increase in advertising revenue and, to a lesser extent, related
party revenue (for the period prior to the Consolidation Date).

Advertising revenue, which comprised 90.6% of total net revenues for
Fiscal 1998 (90.3% in the prior period), increased GRD 6,046 million ($21.6
million), or 26.0%, from GRD 23,242 million ($83.0 million) in Fiscal 1997 to
GRD 29,288 million ($104.6 million) in Fiscal 1998, reflecting increases
principally in volume (reflecting the sale of more advertising between the hours
7:00 a.m. and 1:00 a.m., higher ratings and audience share, and growth in the
television advertising market generally) and to a lesser extent rates (which
increased on average by approximately 6.0%). The total increase in advertising
revenue also reflected the addition of GRD 602 million ($2.2 million) of
advertising revenue from Antenna Radio, for the period following the
Consolidation Date. Rebates granted to advertisers in Fiscal 1998 totaled GRD
2,177 million ($7.8 million) compared to GRD 1,856 million ($6.6 million) in
Fiscal 1997.

Related party revenue increased GRD 296 million ($1.0 million), or
12.8%, from GRD 2,317 million ($8.3 million) in Fiscal 1997 to GRD 2,613 million
($9.3 million) in Fiscal 1998, which increase was attributable principally to
revenue from Pacific Broadcast (reflecting programming revenue earned for the
period prior to the Consolidation Date) and Antenna Satellite TV (USA) Inc.
(reflecting an increased license fee for the full year in 1998 as compared to
six months in 1997), partially offset by a decrease of GRD 131 million ($0.5
million) reflecting the elimination upon consolidation and reclassification of
related party revenue for the period following the Consolidation Date.

Other revenue, representing revenue from program sales, Visa(R) card
fees and commissions, and revenue from the provision of technical services and
from infomercials, increased GRD 230 million ($0.8 million), or 120%, from GRD
192 million ($0.7 million) in Fiscal 1997 to GRD 422 million ($1.5 million) in
Fiscal 1998, principally as a result of the addition of GRD 202 million ($0.7
million) of other revenue from Pacific Broadcast and Antenna Spoudastiki for the
period following the Consolidation Date (representing revenue from subscriptions
and tuition). The balance of the increase was attributable to an underlying
increase in revenues from Antenna's branded credit card and sales of programming
to third parties.

Cost of sales decreased GRD 2 million ($0.01 million), or 0.04%, from
GRD 5,394 million ($19.3 million) in Fiscal 1997 to GRD 5,392 million ($19.3
million) in Fiscal 1998, in spite of the increase in net revenue in Fiscal 1998.
This decrease was attributable significantly to a decrease of GRD 252 million
($0.9 million) in costs associated with the acquisition of foreign programming
(reflecting lower volumes, because the Company broadcast a higher ratio of Greek
features to foreign films than it had in the past, and lower prices, because
Greek features are generally less expensive than foreign films) and the
production of news (reflecting in large part coverage of municipal elections and
other events). This decrease was partially offset by an increase in cost of
sales resulting from the addition of GRD 250 million ($8.9 million) of cost of
sales from Antenna Radio, Antenna Spoudastiki and Pacific Broadcast (for the
period following the Consolidation Date).

9
<PAGE>

SG&A increased GRD 310 million ($1.1 million), or 8.3%, from GRD
3,717 million ($13.3 million) in Fiscal 1997 to GRD 4,027 million ($14.4
million) in Fiscal 1998. This increase was attributable principally to the
addition of GRD 265 million ($1.0 million) of SG&A from Antenna Radio, Antenna
Spoudastiki and Pacific Broadcast (for the period following the Consolidation
Date). The balance of the increase was due to higher underlying broadcast
license fees (because of increased revenue and assessments in respect of prior
frequency fee accruals), higher underlying market research expenses (associated
with the Company's strategy of producing high quality, innovative programming
that appeals to audiences attractive to advertisers), higher underlying legal
and accounting expenses (associated with the Company's obligations as a
reporting company under the United States Securities Exchange Act of 1934 (the
"Exchange Act")) and a higher underlying payroll (due to salary increases).

Amortization of programming costs decreased GRD 51 million ($0.2
million), or 0.4%, from GRD 12,434 million ($44.4 million) in Fiscal 1997 to GRD
12,383 million ($44.2 million) in Fiscal 1998. In September 1998, the contract
to broadcast basketball games of a National Greek Championship league terminated
and was not renewed. Such games will be broadcast exclusively by the pay
television network and, accordingly, the decision not to renew such contract is
not expected to impact the Company's advertising share. Such decision resulted
principally in lower programming costs, which in turn resulted in lower
amortization.

Depreciation increased GRD 133 million ($0.5 million), or 27.0%, from
GRD 495 million ($1.8 million) in Fiscal 1997 to GRD 628 million ($2.3 million)
in Fiscal 1998. Of the increase in depreciation, GRD 28 million ($0.1 million)
was attributable to the addition of depreciation from Antenna Radio, Pacific
Broadcast and Antenna Spoudastiki (for the period following the Consolidation
Date).

Operating income increased GRD 6,181 million ($22.1 million), or
166%, from GRD 3,713 million ($13.3 million) in Fiscal 1997 to 9,894 million
($35.4 million) in Fiscal 1998, principally reflecting an underlying increase in
total net revenue during the period, partially offset by an increase in SG&A.

Interest expense, net increased GRD 326 million ($1.1 million), or
12.9%, from GRD 2,532 million ($9.1 million) in Fiscal 1997 to GRD 2,858 million
($10.2 million) in Fiscal 1998, reflecting an increase in gross interest expense
resulting from the issuance of the Senior Notes and a decrease in interest
income primarily as a result of lower interest rates during Fiscal 1998. See
"--Liquidity and Capital Resources." Of the increase in interest expense, net,
GRD 12 million ($0.04 million) was attributable to the addition of gross
interest expense from Antenna Radio and Pacific Broadcast (for the period
following the Consolidation Date).

Foreign exchange losses and other, net increased GRD 3,326 million
($11.9 million) from GRD 698 million ($2.4 million) in Fiscal 1997 to GRD 4,024
million ($14.3 million) in Fiscal 1998, primarily due to the amortization of the
premium on the foreign exchange contract of GRD 1,305 million ($4.7 million),
the loss on the foreign exchange contract of GRD 2,464 million ($8.8 million),
the loss on a foreign currency option of GRD 254 million ($0.9 million) and the
addition of GRD 17 million ($0.06 million) of foreign exchange losses from
Antenna Radio. The exchange rate for converting drachmae to dollars ranged from
276.60 to 323.13, reflecting in part a 14% devaluation of the drachma in March
1998, with the drachma appreciating to 279.90 at period-end. See "Item 9A.
Quantitative and Qualitative Disclosures About Market Risk."

10
<PAGE>

Equity in net income of unconsolidated entity increased from zero in
Fiscal 1997 to GRD 21 million ($0.1 million) in Fiscal 1998, as a result of
accounting for Audiotex, using the equity method following the Consolidation
Date.

Related party commission income increased from zero in Fiscal 1997 to
GRD 143 million ($0.5 million) in Fiscal 1998, as a result of the
reclassification as related party commission income of revenue of GRD 131
million ($0.5 million) earned from Audiotex, for the period following the
Consolidation Date, and revenue of GRD 12 million ($0.04 million) earned from
Antenna Satellite Radio, for the period following the Consolidation Date.

Provision for income taxes increased GRD 1,837 million ($6.6 million)
from GRD 248 million ($0.9 million) in Fiscal 1997 to GRD 2,085 million ($7.5
million) in Fiscal 1998 due principally to higher income before taxes, and an
increase in the valuation allowance taken on deferred tax assets (arising from
tax losses in 1999, primarily due to the foreign exchange loss incurred on the
forward contract which will not fully reverse before its expiration). Of the
increase in provision for income taxes, GRD 6.5 million ($0.02 million) was
attributable to the addition of provision for income taxes for Antenna Radio and
Antenna Spoudastiki, for the period following the Consolidation Date.

Net income increased GRD 848 million ($3.0 million) from GRD 253
million ($0.9 million) in Fiscal 1997 to GRD 1,101 million ($3.9 million) in
Fiscal 1998. As a percentage of total net revenue, net income increased 1.0% to
3.4%.

FISCAL YEAR ENDED DECEMBER 31, 1997
COMPARED TO FISCAL YEAR ENDED DECEMBER 31, 1996

Net revenue increased GRD 385 million ($1.4 million), or 1.5%, from
GRD 25,366 million ($90.6 million) in Fiscal 1996 to GRD 25,751 million ($92.0
million) in Fiscal 1997. This increase was attributable primarily to an increase
in advertising revenue, which comprised 90.3% of total net revenue in Fiscal
1997, partially offset by a decrease in related party revenues. Advertising
revenue increased GRD 1,156 million ($4.1 million), or 5.2%, in Fiscal 1997 over
Fiscal 1996, which increase was attributable principally to a reduction in dead
time and an increase in volume of advertising as a result of refinements by the
Company in its programming mix to better reach the target audiences of its
advertisers, including through the use of sponsored one- to two-minute fillers.
Rebates granted to advertisers in Fiscal 1997 totaled GRD 1,856 million ($6.6
million) compared to GRD 1,633 million ($5.8 million) in Fiscal 1996.

Related party revenue decreased GRD 822 million ($2.9 million), or
26.2%, from GRD 3,139 million ($11.2 million) in Fiscal 1996 to GRD 2,317
million ($8.3 million) in Fiscal 1997, as a result of a non-recurring
distribution license fee in Fiscal 1996 from Antenna Satellite TV (USA) Inc. of
GRD 1,354 million ($4.8 million), partially offset by increased revenues from
Epikinonia Ltd. (reflecting increased use among advertisers of infomercials),
Audiotex (reflecting an expanded range of services provided to Audiotex),
Antenna TV Ltd. (Cyprus) (reflecting increased program sales) and Antenna Radio
(representing interest on a credit facility). See "Item 13. Interest of
Management in Certain Transactions." The decrease in revenue from related
parties was also partially offset by revenue from two affiliated companies which
began operations in 1997: Catalogue Auctions (GRD 34 million ($0.1 million)) and
Pacific Broadcast (GRD 259 million ($0.9 million)). See "Item 13. Interest of
Management in Certain Transactions."

11
<PAGE>

Other revenue increased 36.2% from GRD 141 million ($0.5 million) in
Fiscal 1996 to GRD 192 million ($0.7 million) in Fiscal 1997, as a result of
increased revenue from the provision of technical services (principally to local
networks) and revenue from distribution agreements and Visa card fees and
commissions, partially offset by a decrease in telemarketing revenue.

Cost of sales decreased GRD 2,168 million ($7.7 million), or 28.7%,
from GRD 7,562 million ($27.0 million) in Fiscal 1996 to GRD 5,394 million
($19.3 million) in Fiscal 1997. This decrease was attributable primarily to a
decrease of GRD 1,789 million ($6.4 million) in costs associated with the
acquisition of foreign programming and Greek features (reflecting lower average
prices and lower volume) as the Company made greater use of its library, and a
decrease in costs associated with the production of news (reflecting the impact
of the Company's cost containment efforts commenced in Fiscal 1996).

SG&A increased GRD 600 million ($2.2 million), or 19.2%, from GRD
3,117 million ($11.1 million) in Fiscal 1996 to GRD 3,717 million ($13.3
million) in Fiscal 1997. This increase was attributable principally to the
impact of broadcast license fees for a full year, which increased GRD 342
million ($1.2 million), and higher advertising, market research and sales
promotion expenses (principally costs associated with testing of audience
response to programming), which increased GRD 160 million ($0.6 million), and
the accrual of auditing and consulting fees in connection with the issuance of
the Senior Notes.

Amortization of programming costs increased GRD 869 million ($3.1
million), or 7.5%, from GRD 11,565 million ($41.3 million) in Fiscal 1996 to GRD
12,434 million ($44.4 million) in Fiscal 1997, which reflected the cumulative
effect of amortizing programming costs from increased programming expenditures
in current and prior years.

Depreciation and other amortization increased GRD 27 million ($0.1
million), or 5.8%, from GRD 468 million ($1.7 million) in Fiscal 1996 to GRD 495
million ($1.8 million) in Fiscal 1997.

Operating income increased GRD 1,058 million ($3.8 million), or
39.8%, from GRD 2,655 million ($9.5 million) in Fiscal 1996 to GRD 3,713 million
($13.3 million) in Fiscal 1997, principally reflecting a decrease in costs of
sales and an increase in total net revenue, partially offset by an increase in
SG&A.

Interest expense, net increased GRD 483 million ($1.7 million), or
23.6%, from GRD 2,049 million ($7.3 million) in Fiscal 1996 to GRD 2,532 million
($9.0 million) in Fiscal 1997, reflecting higher levels of long term debt
(including the Senior Notes), partially offset by an increase in interest income
as a result of higher levels of cash on hand.

12
<PAGE>

Foreign exchange (losses) gains and other, net increased GRD 976
million ($3.5 million) from a gain of GRD 297 million ($1.1 million) in Fiscal
1996 to a loss of GRD 679 million ($2.4 million), reflecting a foreign exchange
loss in 1997 due to depreciation of the drachma, compared to a gain in 1996,
offset in part by an increase in other income.

Provision for income taxes decreased GRD 183 million ($0.6 million)
from GRD 431 million ($1.5 million) in Fiscal 1996 to GRD 248 million ($0.9
million) in Fiscal 1997. The statutory rate during these periods was 35%. The
effective tax rate was slightly higher during Fiscal 1997 primarily reflecting
higher levels of non-deductible expenses during that period. Subsequent to
year-end 1997, the statutory tax rate was increased from 35% to 40%.

Net income decreased GRD 219 million ($0.8 million) to GRD 253
million ($0.9 million). As a percentage of total net revenue, net income
decreased from 1.9% to 1.0%.

LIQUIDITY AND CAPITAL RESOURCES

The Company historically has funded its operations, expenditures for
programming, working capital requirements and capital expenditures principally
through a combination of indebtedness and cash flow from operations. As of
December 31, 1998, the Company had approximately GRD 32,963 million ($117.8
million) of total long-term debt (principally the Senior Notes, as well as
long-term obligations under capital leases).

The Company's principal uses of funds are payments for programming
(which includes cash expenditures for programming aired during the period plus
cash expenditures for programming to be aired in the future), which expenditures
totaled GRD 13,468 million ($48.1 million) in Fiscal 1997 and GRD 14,401 million
($51.4 million) in Fiscal 1998. Antenna intends to use (or, in certain
instances, has already used) approximately $25.2 million of the net proceeds
from the Offering, together with available cash of GRD 11,285 million ($40.3
million) as of December 31, 1998, to fund the Acquisitions, its investment in
digital production, news gathering and transmission equipment, the acquisition
of new offices and production facilities and the distribution of programming in
Europe and South Africa. The balance of the proceeds (approximately $61.3
million) will be used to fund the Company's investment in a DTH venture, if an
appropriate opportunity presents itself, to develop DTH programming and
channels, and for working capital and general corporate purposes (including,
without limitation, the reduction of the Company's indebtedness from time to
time). See "Item 16. Changes in Securities, Changes in Security for Registered
Securities and Use of Proceeds." In connection with its acquisition of Antenna
Radio, the Company assumed approximately $5.2 million of indebtedness (which it
intends to repay over time with operating cash from Antenna Radio), which is
reflected on the balance sheet as of the Consolidation Date. Based on its
current analysis of operations, management believes that the balance of the
proceeds together with cash flow from operations will be sufficient to meet its
cash flow needs for the current fiscal year. Factors beyond the Company's
control may cause its anticipated cash flow needs to vary in the future. See
"Special Note Regarding Forward-Looking Statements."

13
<PAGE>

OPERATING ACTIVITIES. Net cash used in operating activities was GRD
4,785 million ($17.1 million) in Fiscal 1997 compared to net cash provided of
GRD 2,684 million ($9.6 million) in Fiscal 1998, reflecting an increase in
income from operations and an increase in accrued expenses. Net cash provided by
operating activities was GRD 1,857 million ($6.6 million) in Fiscal 1996.

INVESTING ACTIVITIES. Net cash used in investing activities was GRD
240 million ($0.9 million) in Fiscal 1997 and GRD 365 million ($1.3 million) in
Fiscal 1998, reflecting increased purchases of fixed assets such as technical,
computer and office equipment. Net cash used in investing activities was GRD 226
million ($0.8 million) in Fiscal 1996.

FINANCING ACTIVITIES. Net cash provided by financing activities was
GRD 16,609 million ($59.3 million) in Fiscal 1997 compared to net cash used of
GRD 2,500 million ($8.9 million) in Fiscal 1998. In Fiscal 1997, the Company
raised the proceeds from the Senior Notes which, together with available cash,
were used to fund operating activities. In Fiscal 1998, the Company used cash
provided by operating activities to fund the payment of dividends and other
financial expenses. Net cash used in financing activities was GRD 4,463 million
($15.9 million) in Fiscal 1996.

DISTRIBUTABLE RESERVES. The Company had distributable reserves in its
Greek statutory accounts of approximately GRD 1,626 million ($5.8 million), and,
subject to the provisions of an indenture, dated as of August 12, 1997 (the
"Indenture"), between the Company and The Bank of New York, as trustee,
distributed GRD 1,000 million ($3.6 million) of such reserves in August 1998 as
a dividend, which was declared in June 1998. Other than the foregoing, the
Company does not intend to pay dividends for the foreseeable future. The
declaration of future dividends will be subject to the requirements of Greek
corporate law and the terms of the Indenture. See Note 21 of Notes to
Consolidated Financial Statements.

OTHER LONG-TERM LIABILITY. The Company has an outstanding liability
to the Pension Fund for Athens and Thessaloniki Newspaper Employees for
advertiser contributions. It is expected that the repayment terms will be
structured over approximately three years. An installment of approximately GRD
322 million ($1.2 million) was paid during Fiscal 1997 and approximately GRD
1,001 million ($3.6 million) was paid during Fiscal 1998.

YEAR 2000 AND EURO CONVERSION

The Company is aware of the issues associated with the programming
code in existing computer systems as the millennium (Year 2000) approaches. The
"Year 2000 problem" is pervasive and complex as virtually every computer
operation will be affected in some way by the rollover of the two digit year
value to 00. The issue is whether computer systems will properly recognize date
sensitive information when the year changes to 2000. Systems that do not
properly recognize such information could generate erroneous data or cause a
system to fail.

The Company is in the process of upgrading its management information
system under the direction of the Information Technology Department. The
principal areas affected by the Year 2000 problem are its computer network,
customer billing system and business systems (accounting, finance, advertising,
marketing, human resources, journalist support and transmission systems). The
hardware related to its computer network is Year 2000- compliant, while the
operating systems related to the computer network are expected to be year
2000-compliant by September 1999. During 1998, the Company spent GRD 52 million
($0.2 million) upgrading its computer network. The software applications related
to its business systems are expected to be Year 2000-compliant by October 1999.
The cost of upgrading the Company's accounting and finance systems is estimated
to be GRD 50 million ($0.2 million). The balance of the necessary upgrades will
be completed by the end of 1999, at a cost of approximately GRD 92 million ($0.3
million).

14
<PAGE>

The Company is continuing to evaluate the extent to which
non-information technology systems may be impacted by the Year 2000 and the
types of contingency plans that may be necessary if its management information
systems and/or non-information technology systems were to be non-Year 2000
compliant. Such an evaluation is expected to be completed within the fourth
quarter of 1999. The Company is also continuing to evaluate the extent to which
failure of third parties with which the Company interacts to be Year
2000-compliant could have a material adverse effect on the Company's financial
condition or results of operations. Such third parties could include, among
others, advertisers, providers of satellite transmission facilities, production
companies and suppliers of foreign programming. Any Year 2000 compliance problem
of the Company, any of its vendors and any other company with which it interacts
or otherwise does business could have a material adverse effect on the Company's
financial condition or results of operations. The Company will develop
contingency plans that address its failure to be Year 2000-compliant or the
failure of third parties with which the Company deals to be Year 2000-compliant
if the final testing of its applications for Year 2000 compliance fails.

The Company's revenues and expenses are denominated in drachmae and
dollars. Greece is not among the eleven members of the European Union whose
currencies became subject to conversion to the euro commencing January 1, 1999.
The Company is not party to any material contracts in which payment is expected
to be made in a currency which is scheduled to be converted to the euro. The
Company's upgraded management information system is expected to be capable of
handling conversion to the euro.

INFLATION

Although the Greek economy has long been subject to both high levels
of inflation and the effects of the Greek government's measures to curb
inflation such as high real interest rates, the Company does not believe
inflation has had a material effect on its results of operations or financial
condition for the periods presented. Greece experienced average annual rates of
inflation of 10.9%, 8.9%, 8.2%, 5.6% and 4.8% in the years 1994 through 1998,
respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

DERIVATIVE INSTRUMENTS

In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting
for Derivative Instruments and Hedging Activities." This statement establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts (collectively referred to as
derivatives), and for hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. This statement is
effective for all fiscal quarters of fiscal years beginning after June 15, 1999.
Management has not determined the effect of the adoption of SFAS 133.

15
<PAGE>

ACCOUNTING FOR COMPUTER SOFTWARE

In January 1998, the American Institute of Certified Public
Accountants ("AICPA") issued Statement of Position 98-1, "Accounting for the
costs of Computer Software Developed or Obtained for Internal Use" ("SOP 98-1").
SOP 98-1 becomes effective for all fiscal years beginning after December 15,
1998. The Company does not expect the adoption of SOP 98-1 to have a material
impact on the Company's financial statements.

REPORTING ON THE COSTS OF START-UP ACTIVITIES

The AICPA issued Statement of Position 98-5, "Reporting on the Costs
of Start-up Activities" ("SOP 98-5") in April 1998 and is effective for fiscal
periods beginning after December 15, 1998. SOP 98-5 provides guidance on the
financial reporting of start-up costs and organization costs. It requires costs
of start-up activities and organization costs to be expensed as incurred. The
Company is evaluating the effect of the pronouncement.

16
<PAGE>

PART IV

ITEM 17. CONSOLIDATED FINANCIAL STATEMENTS.

The Company has elected to provide financial statements for Fiscal
1998 and the related information pursuant to Item 18.

ITEM 18. CONSOLIDATED FINANCIAL STATEMENTS.

See pages F-2 through F-30 herein.

17
<PAGE>

ITEM 19. CONSOLIDATED FINANCIAL STATEMENTS AND EXHIBITS.

(a) The following audited consolidated financial statements and
schedule, together with the report of KPMG Peat Marwick Kyriacou thereon, are
filed as part of this Annual Report.

Page
----

Independent Auditors' Report.................................................F-1

Consolidated Statements of Operations for the years ended
December 31, 1996, 1997 and 1998..........................................F-2

Consolidated Balance Sheets as of December 31, 1997 and 1998.................F-3

Consolidated Statements of Shareholders' Equity for the
years ended December 31, 1996, 1997 and 1998..............................F-5

Consolidated Statements of Cash Flows for the years ended
December 31, 1996, 1997 and 1998..........................................F-6

Notes to Consolidated Financial Statements ..................................F-7

(b) Exhibits: the following exhibits are filed as part of this
Annual Report:

2.1 Form of Deposit Agreement among the Company, The Bank of
New York and the holders from time to time of American
Depositary Shares, including Form of American Depositary
Receipt*

- ---------------
* Incorporated by reference to the Company's Registration Statement on
Form F-6 (Registration No. 333-10018), filed with the Commission on
February 12, 1999.

18
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
Antenna TV S.A.

We have audited the accompanying consolidated balance sheets of
Antenna TV S.A. and its subsidiaries as of December 31, 1997 and 1998, and the
related consolidated statements of operations, changes in shareholders' equity,
and cash flows for each of the years in the three-year period ended December 31,
1998. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

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

In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Antenna
TV S.A. and its subsidiaries as of December 31, 1997 and 1998, and the
consolidated results of its operations and its cash flows for each of the years
in the three-year period ended December 31, 1998, in conformity with generally
accepted accounting principles in the United States.

KPMG PEAT MARWICK KYRIACOU

Athens, Greece
January 20, 1999

F-1
<PAGE>

ANTENNA TV S.A.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1996,
1997 AND 1998 (IN THOUSANDS OF DRACHMAE AND US
DOLLARS, EXCEPT EARNINGS PER SHARE)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
NOTES 1996 1997 1998
-------- ----------- ----------- ----------- -----------
(GRD) (GRD) (GRD) ($)
<S> <C> <C> <C> <C> <C>
Advertising revenue ......................... 2,24 22,085,816 23,242,456 29,287,940 104,637
RELATED PARTY REVENUE ....................... 2,6 3,139,433 2,317,041 2,612,974 9,335
OTHER REVENUE ............................... 140,796 191,826 422,008 1,508
----------- ----------- ----------- -----------
TOTAL NET REVENUE ........................... 25,366,045 25,751,323 32,322,922 115,480
COST OF SALES ............................... 7,561,750 5,393,829 5,391,548 19,262
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 3,116,886 3,716,711 4,026,577 14,386
AMORTIZATION OF PROGRAMMING COSTS ........... 2,8 11,564,673 12,433,721 12,383,100 44,241
DEPRECIATION ................................ 2,9,10 467,613 494,559 628,072 2,244
----------- ----------- ----------- -----------
OPERATING INCOME ............................ 2,655,123 3,712,503 9,893,625 35,347
INTEREST INCOME ............................. 169,220 645,342 518,097 1,851
INTEREST EXPENSE ............................ 12,13,14 (2,218,603) (3,177,818) (3,376,428) (12,063)
FOREIGN EXCHANGE GAINS (LOSSES), NET ........ 2 276,142 (697,737) (4,023,784) (14,376)
EQUITY IN NET INCOME OF UNCONSOLIDATED ENTITY 7 -- -- 20,986 75
RELATED PARTY COMMISSION INCOME ............. 6 -- -- 143,459 513
OTHER INCOME ................................ 20,852 19,206 9,851 35
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES .................. 902,734 501,496 3,185,806 11,382
PROVISION FOR INCOME TAXES .................. 2,16 430,691 248,383 2,084,916 7,449
----------- ----------- ----------- -----------
NET INCOME .................................. 472,043 253,113 1,100,890 3,933
=========== =========== =========== ===========
BASIC AND DILUTED EARNINGS PER SHARE ........ 28.1 15.1 65.6 0.2
=========== =========== =========== ===========
</TABLE>

EXCHANGE RATE USED FOR THE CONVENIENCE TRANSLATION OF THE 1998 AMOUNTS
IS GRD 279.90 TO $1.00.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.

F-2
<PAGE>

ANTENNA TV S.A.

CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1997 AND 1998
(IN THOUSANDS OF DRACHMAE AND US DOLLARS)

ASSETS

<TABLE>
<CAPTION>
December 31,
--------------------------------------------
Notes 1997 1998 1998
----- ---------- ---------- ----------
(GRD) (GRD) ($)
CURRENT ASSETS:
<S> <C> <C> <C> <C>
Cash and cash equivalents ................. 2,4 11,533,274 11,300,087 40,372
ACCOUNTS RECEIVABLE, LESS ALLOWANCE FOR
DOUBTFUL ACCOUNTS OF GRD 769,626
IN 1997 AND GRD 1,161,396 IN 1998 ...... 5 10,989,070 17,155,755 61,292
DUE FROM RELATED PARTIES .................. 6 2,527,592 2,499,479 8,930
PROGRAMMING COSTS ......................... 2,8 10,954,828 11,795,427 42,142
ADVANCES TO RELATED PARTIES ............... 6 863,262 141,710 506
ADVANCES TO THIRD PARTIES ................. 2 577,293 549,786 1,964
PREPAID EXPENSES .......................... 21,628 42,738 153
OTHER CURRENT ASSETS ...................... 10,481 87,059 311
UNAMORTIZED PREMIUM ....................... 2 -- 1,224,719 4,376
DEFERRED TAX ASSETS ....................... 2,16 128,126 -- --
INCOME AND WITHHOLDING TAX ADVANCES ....... 476,964 578,826 2,068
---------- ---------- ----------
TOTAL CURRENT ASSETS ......................... 38,082,518 45,375,586 162,114
INVESTMENT IN UNCONSOLIDATED ENTITY .......... 7 -- 84,785 303
PROPERTY AND EQUIPMENT, NET .................. 2,9 1,600,945 1,675,469 5,986
BROADCAST AND TRANSMISSION EQUIPMENT UNDER
CAPITAL LEASES, NET ....................... 2,10 822,454 1,073,600 3,836
DEFERRED CHARGES, NET ........................ 2,077,850 1,959,622 7,001
PROGRAMMING COSTS, EXCLUDING CURRENT PORTION . 2,8 5,910,644 7,087,570 25,322
OTHER RECEIVABLE LESS ALLOWANCE FOR DOUBTFUL
ACCOUNTS AND FAIR VALUE OF 360,000 IN 1997
AND 440,000 IN 1998 ....................... 11 427,498 329,498 1,177
DUE FROM RELATED PARTY ....................... 6 1,787,276 2,021,798 7,223
ADVANCES TO RELATED PARTIES .................. 6 305,746 165,137 590
DEFERRED TAX ASSETS .......................... 2,16 958,296 345,242 1,233
OTHER ASSETS ................................. 107,853 121,990 436
---------- ---------- ----------
TOTAL ASSETS ................................. 52,081,080 60,240,297 215,221
========== ========== ==========
</TABLE>

EXCHANGE RATE USED FOR THE CONVENIENCE TRANSLATION OF THE DECEMBER 31, 1998
BALANCES IS GRD 279.90 TO $1.00.

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.

F-3
<PAGE>

ANTENNA TV S.A.

CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1997 AND 1998
(IN THOUSANDS OF DRACHMAE AND US DOLLARS, EXCEPT SHARE DATA)

LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------
Notes 1997 1998 1998
----- ---------- ----------- -------
(GRD) (GRD) ($)
<S> <C> <C> <C> <C>
CURRENT LIABILITIES:
Bank overdrafts and short-term borrowings .... 12 -- 1,468,155 5,245
CURRENT PORTION OF OBLIGATIONS UNDER CAPITAL
LEASES ....................................... 14 71,494 107,585 385
TRADE ACCOUNTS, NOTES AND CHECKS PAYABLE ..... 4,384,190 4,268,500 15,250
PROGRAM LICENSE PAYABLE ...................... 2,390,076 2,607,320 9,315
CUSTOMER ADVANCES ............................ 123,373 271,865 971
ACCRUED INTEREST ............................. 1,229,160 1,246,685 4,454
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES 15 2,058,234 9,418,064 33,648
DEFERRED TAX LIABILITY ....................... 2,16 -- 1,165,531 4,164
DIVIDENDS PAYABLE ............................ 2 -- 10,040,283 35,871
CURRENT PORTION OF OTHER LONG-TERM LIABILITY . 17 855,850 929,362 3,320
---------- ----------- -------
TOTAL CURRENT LIABILITIES .......... 11,112,377 31,523,350 112,623
---------- ----------- -------
LONG-TERM LIABILITIES:
LONG-TERM DEBT ............................... 13 32,597,670 32,545,000 116,274
LONG-TERM OBLIGATIONS UNDER CAPITAL LEASES ... 14 120,823 417,940 1,493
OTHER LONG-TERM LIABILITY .................... 17 2,407,776 1,546,397 5,525
EMPLOYEE RETIREMENT BENEFITS ................. 2,18 332,000 436,982 1,561
LONG-TERM PROVISIONS ......................... 23 125,831 254,525 910
---------- ----------- -------
TOTAL LIABILITIES .................. 46,696,477 66,724,194 238,386
---------- ----------- -------
SHAREHOLDERS' EQUITY:
SHARE CAPITAL (16,769,440 COMMON SHARES
AUTHORIZED AND ISSUED, GRD 100 PAR VALUE) .... 19 1,676,944 1,676,944 5,991
ADDITIONAL PAID-IN CAPITAL ................... 19 3,752,500 3,752,500 13,407
ACCUMULATED (DEFICIT) ........................ (44,841) (11,913,341) (42,563)
---------- ----------- -------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) 5,384,603 (6,483,897) (23,165)
---------- ----------- -------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY .................................... 52,081,080 60,240,297 215,221
</TABLE>

Exchange rate used for the convenience translation of the December 31, 1998
balances is GRD 279.90 to $1.00.

The accompanying notes are an integral part of the financial statements.

F-4
<PAGE>

ANTENNA TV S.A.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
(IN THOUSANDS OF DRACHMAE)

<TABLE>
<CAPTION>
ACCUMULATED (DEFICIT) RETAINED EARNINGS
---------------------------------------
LEGAL, TAX ACCUMULATED
ADDITIONAL FREE AND (DEFICIT)
SHARE PAID-IN OTHER RETAINED GRAND
CAPITAL CAPITAL RESERVES EARNINGS TOTAL TOTAL
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1995 ................ 1,676,944 3,752,500 2,401,489 (3,171,486) (769,997) 4,659,447
NET INCOME FOR THE YEAR ................ -- -- -- 472,043 472,043 472,043
TRANSFER OF STATUTORY EARNINGS TO LEGAL,
TAX FREE AND OTHER RESERVES ......... -- -- 143,726 (143,726) -- --
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, DECEMBER 31, 1996 ................ 1,676,944 3,752,500 2,545,215 (2,843,169) (297,954) 5,131,490
NET INCOME FOR THE YEAR ................ -- -- -- 253,113 253,113 253,113
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, DECEMBER 31, 1997 ................ 1,676,944 3,752,500 2,545,215 (2,590,056) (44,841) 5,384,603
NET INCOME FOR THE YEAR ................ -- -- -- 1,100,890 1,100,890 1,100,890
TRANSFER OF STATUTORY EARNINGS TO LEGAL,
TAX FREE AND OTHER RESERVES ......... -- -- 78,972 (78,972) -- --
DIVIDENDS DECLARED ..................... -- -- -- (1,000,000) (1,000,000) (1,000,000)
EXCESS OF PURCHASE PRICE OVER NET BOOK
VALUE OF ACQUIRED ENTITIES .......... -- -- -- (11,969,390) (11,969,390) (11,969,390)
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, DECEMBER 31, 1998 ................ 1,676,944 3,752,500 2,624,187 (14,537,528) (11,913,341) (6,483,897)
=========== =========== =========== =========== =========== ===========
</TABLE>

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.

F-5
<PAGE>

ANTENNA TV S.A.

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998
(IN THOUSANDS OF DRACHMAE AND US DOLLARS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1996 1997 1998 1998
----------- ----------- ----------- -------
(GRD) (GRD) (GRD) ($)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ............................................................ 472,043 253,113 1,100,890 3,933
Adjustments to reconcile net income to net cash
Deferred income taxes ............................................ 209,618 168,384 1,906,380 6,811
Equity in net income of unconsolidated entity .................... -- -- (20,986) (75)
Amortization of debt issuance costs .............................. -- 80,955 226,731 810
Amortization of premium on foreign exchange contract and
loss on option ................................................... -- -- 1,558,597 5,568
Depreciation of property and equipment and capital leases and
amortization of programming costs ................................ 12,032,286 12,928,280 13,011,172 46,485
Provision for other long-term liabilities ........................ 7,500 -- 49,435 177
Provision for employee retirement benefits ....................... 30,000 57,000 54,692 195
Change in current assets and liabilities
(Increase) in accounts and other receivable ................. (24,186) (1,130,222) (5,032,459) (17,979)
(Increase) in due from related parties ...................... (2,520,253) (2,048,427) (1,399,255) (4,999)
(Increase) in programming costs ............................. (12,222,888) (13,156,060) (13,078,150) (46,724)
Decrease (increase) in prepaid licensed programming cost .... 1,214,267 (312,228) (1,322,475) (4,725)
Increase (decrease) in trade accounts, notes and checks
payable .................................................. 1,783,660 (1,792,365) (496,354) (1,773)
(Decrease) increase in licensed program payable ............. (293,316) 63,726 217,244 776
Increase (decrease) in customer advances .................... 938,411 (1,248,417) 130,728 467
(Decrease) increase in accrued expenses and other liabilities (154,217) 1,464,197 5,824,444 20,809
Increase (decrease) in income taxes payable ................. 86,285 (86,285) -- --
Other, net .................................................. 297,999 (26,667) (46,468) (166)
----------- ----------- ----------- -------
Total adjustments ...................................... 1,385,166 (5,038,129) 1,583,276 5,657
----------- ----------- ----------- -------
Net cash provided (used) by operating activities ....... 1,857,209 (4,785,016) 2,684,166 9,590
----------- ----------- ----------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets ......................................... (192,716) (242,085) (396,556) (1,417)
Disposal of fixed assets ......................................... 22,477 150,849 -- --
Purchases of assets under capital leases ......................... (55,668) (148,825) -- --
Cash balances from acquired entities ............................. -- -- 31,631 113
----------- ----------- ----------- -------
Net cash (used) by investing activities ................ (225,907) (240,061) (364,925) (1,304)
----------- ----------- ----------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
(Decrease) increase in bank overdrafts and ....................... (3,785,666) (11,634,300) 1,468,155 5,246
short-term borrowings, net
Proceeds from Senior Notes ....................................... -- 33,355,397 -- --
Debt issuance costs of Senior Notes .............................. -- (2,158,805) (108,503) (388)
Dividends paid ................................................... -- -- (1,000,000) (3,573)
Repayment of long-term debt ...................................... (586,368) (2,969,065) -- --
Premium on foreign exchange contract ............................. -- -- (2,088,000) (7,460)
Purchase of foreign currency option .............................. -- -- (695,316) (2,484)
Increase in capital lease obligations ............................ 72,105 163,412 -- --
Repayments of capital lease obligations .......................... (163,299) (147,383) (76,094) (272)
----------- ----------- ----------- -------
Net cash (used) provided by financing activities ....... (4,463,228) 16,609,256 (2,499,758) (8,931)
----------- ----------- ----------- -------
Effect of exchange rate changes on cash ..................................... -- (757,727) (52,670) (188)
(Decrease) increase in cash ................................................. (2,831,926) 10,826,452 (233,187) (833)
Cash and cash equivalents at beginning of year .............................. 3,538,748 706,822 11,533,274 41,205
----------- ----------- ----------- -------
Cash and cash equivalents at end of year .................................... 706,822 11,533,274 11,300,087 40,372
=========== =========== =========== =======
Supplemental disclosure of cash flows information:
Cash paid for interest ........................................... 1,850,460 1,462,930 3,083,545 11,017
Cash paid for income taxes ....................................... 34,514 86,285 -- --
</TABLE>

Exchange rate used for the convenience translation of the December 31, 1998
balances is GRD 279.90 to $1.00.
The accompanying notes are an integral part of the financial statements.

F-6
<PAGE>

ANTENNA TV S.A.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS OF DRACHMAE AND U.S. DOLLARS, EXCEPT SHARE DATA AND
EXCHANGE RATES)

1. OPERATIONS OF THE COMPANY

Antenna TV S.A. ("Antenna"), a Greek societe anonyme, was founded by
Mr. Minos Kyriakou, the Chairman and Chief Executive Officer of the Company. The
Company began operations at the end of 1989 after the introduction of private
commercial television in Greece. The principal activity of Antenna and its
operating subsidiaries (the "Company") is the sale of advertising spots on
television and radio. These activities are primarily conducted through
subsidiaries in Greece.

Until September 1, 1998, the principal activities included sale of
advertising spots on television (see below).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF FINANCIAL STATEMENTS

The Company primarily maintains its accounting records and publishes
its statutory financial statements in accordance with Greek tax and corporate
regulations and has made certain adjustments to these records to present the
accompanying financial statements in accordance with U.S. generally accepted
accounting principles. The amounts are in thousands of drachmae and U.S.
dollars, except share data and exchange rates.

ACQUISITIONS

On May 6, 1999, the Company acquired the following interests (the
"Acquisitions"): a 51% interest in Audiotex S.A. ("Audiotex"), a company that
generates revenue from the sale of audiotext (for a purchase price of $7.25
million); a 99.97% interest in Antenna R.T. Enterprises ("Antenna Radio"), which
owns Antenna FM (97.1 FM), a combination news/talk and music radio station
serving the greater Athens area (for a purchase price of $16.25 million plus the
assumption of approximately $5.2 million of indebtedness); a 100% interest in
Antenna Spoudastiki Ltd. ("Antenna Spoudastiki"), which operates a training
center for journalists and other media personnel (for a purchase price of $6.0
million); and a 100% interest in Pacific Broadcast Distribution Ltd. ("Pacific
Broadcast"), which rebroadcasts the Company's programming in Australia through a
joint venture (for a purchase price of $3.5 million). Each of the companies
whose interests were acquired was previously affiliated with or controlled by
members of the family of Mr. Minos Kyriakou, the Company's Chairman and Chief
Executive Officer.

F-7
<PAGE>

common control they have been consolidated based upon their book value and
historical results of operations, respectively. The cash amounts paid for the
companies acquired, in excess of their book values, have been treated as a
dividend to the selling shareholders.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

The total purchase price of all the businesses amounted to $38.2
million, comprised of cash consideration of $33.0 million and the assumption of
$5.2 million of debt. The total cash purchase price of GRD 10,040 million
exceeded the book value of the acquired companies by GRD 11,969 million ($37.9
million), resulting in a deemed dividend to the shareholders. The cash purchase
price as at December 31, 1998 is reflected as a dividend payable.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements of the Company include all of
its significant majority-owned subsidiaries. Affiliated companies in which the
Company does not own a controlling interest or for which the minority
shareholders have significant veto rights over operating decisions
(participating rights requiring unanimous shareholder approval, including:
transactions in excess of GRD 20 million, operating budgets, senior management
positions, borrowing and amendments to contractual obligations) are accounted
for using the equity method.

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity
with U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
consolidated financial statements and the reported amounts of revenues and
expenses during the reporting period. Significant estimates and assumptions are
used in the amounts reflected as allowance for doubtful accounts, amortization
of programming costs, ultimate recoverability of other receivables,
contingencies, including tax contingencies, and deferred tax assets. Actual
results could differ from those estimates.

The Company refers receivable balances that exceed their credit terms
to a lawyer for collection. Management, in conjunction with input from their
lawyer, provides an allowance for the estimated amount of all doubtful accounts
at the balance sheet date in accordance with SFAS 5. Periodically, the Company
writes-off balances that are deemed to be uncollectible.

The other receivable described in Note 11 is an amount due from a
political party which has experienced financial difficulties. Therefore, it is
possible that the allowance for doubtful accounts may change. Management cannot
estimate the amount of such a change at this time.

FOREIGN CURRENCY TRANSLATION

The Company's functional currency is the drachma. Transactions
involving other currencies are converted into drachmae using the exchange rates
which are in effect at the time of the transactions. Monetary assets and
liabilities which are denominated in other currencies are stated at the Greek
drachma equivalent prevailing at year-end. Gains and losses resulting from

F-8
<PAGE>

foreign currency remeasurements are reflected in the accompanying consolidated
statements of operations.

FOREIGN EXCHANGE CONTRACTS

Antenna enters into foreign exchange contracts to manage its
exposures to foreign currency exchange and interest rate risks. Financial
instruments are recorded in the balance sheets at their fair values unless they
meet, for accounting purposes, the following hedging criteria.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

A foreign exchange contract is considered a hedge of an identifiable
foreign currency commitment if (i) the contract is designated as, and is
effective as, a hedge of foreign currency commitment and (ii) the foreign
currency commitment is firm. Gains and losses on foreign exchange contracts
meeting these hedge accounting criteria are deferred and included in the
measurement of the related foreign currency transaction. Losses are not deferred
if, however, it is estimated that the deferral would lead to recognition of
losses in later periods.

Antenna has entered into an $87,000 forward contract with the Royal
Bank of Scotland, to hedge its currency exposure on a portion of the principal
and interest payable of its U.S. dollar denominated debt. The term of the
contract covers the period from May 15, 1998 to May 15, 1999. The forward rate
is 334 drachmae to the dollar and the spot rate on the contract's effective date
was 310 drachmae to the dollar. The premium (representing the difference between
the spot rate on the contract's effective date and the forward rate),
aggregating GRD 2,088 million, is being amortized over the term of the contract.
Of this amount, GRD 1,305 million was recognized for the year ended December 31,
1998, with the balance to be recognized over the life of the contract. In
addition, foreign exchange gains or losses on the Company's non-drachma
denominated indebtedness (currently, the Senior Notes) will be partially offset
by corresponding losses or gains on the forward contract's notional amount. The
fair value of the foreign exchange contract (the amount payable to settle) as of
December 31, 1998 was GRD 533,310.

OPTIONS

Antenna has entered into an option agreement with the Royal Bank of
Scotland to sell $103,902 at a rate of 280 drachmae to the dollar. The option
has a maturity date that coincides with the maturity of the foreign exchange
contract described above. The option has been recorded in the balance sheet at
its market value and will be marked to market each accounting period with the
resulting gain or loss being reflected in the statement of operations.

REVENUE

The Company's primary source of revenue is the sale of advertising
time. Advertising revenue is recognized in the period that the spots are aired.

Revenue from licensing and distribution agreements is recognized when
all of the following conditions are met: the license period begins, the license
fee for each program is

F-9
<PAGE>

known, the cost of each program is known, each program becomes available for
broadcast and has been accepted by the licensee, and collectibility of the full
license fee is reasonably assured.

Revenue earned under distribution and licensing agreements with
payment terms in excess of one year is discounted to its present value.

Revenue from commissions and royalties earned on third (including
related) parties' annual revenue or advertising revenue is recognized when such
parties air the program or advertising.

Revenue from barter transactions whereby goods, services or assets
are exchanged for television advertising time is recognized when the advertising
spots have been aired.

F-10
<PAGE>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

DEFERRED CHARGES

The expenses incurred in connection with the issuance and
distribution of the Senior Notes issued on August 12, 1997 (see Note 13) were
capitalized and are amortized on a straight line basis over the term of the
Senior Notes. Amortization for the years ended December 31, 1997 and 1998
totaled GRD 80,955 and GRD 226,731, respectively, and is included in interest
expense in the accompanying consolidated statements of operations.

PROGRAMMING COSTS

Programming costs include produced programming and programming
produced under contract with third-party production companies, licensed program
rights and rights to sporting events. Programming costs are stated at the lower
of cost less accumulated amortization or estimated net realizable value in
accordance with SFAS 53.

Produced programming includes talk shows, dramas, situation comedies,
soap operas, sporting events and game shows. The related produced programming
costs consist of direct production costs and production overhead.

Licensed program rights represent amounts paid or payable to program
suppliers for the right to broadcast the supplier's programs. Such rights are
limited to a contract period or a specific number of showings. The portion of
licensed program rights available for use at year-end that are expected to be
amortized within one year are classified as current assets.

Rights of sporting events represent amounts paid or payable to
suppliers for the right to broadcast sporting events. Rights for sporting events
expected to be amortized within one year are classified as current assets.

Prepaid licensed program and sports rights represent licensed program
and sports rights for which payments have been made prior to their availability.
As these programs become available for use they are reclassified to licensed
program rights or rights for sporting events.

Distribution expenses are charged to expense when incurred.

Programming produced for radio broadcast is charged to cost of goods
sold when incurred.

The amortization of programming costs, excluding licensed program
rights, are charged to operations using the ratio of current period's gross
revenue to estimated gross revenue to be derived from all sources. The
amortization rates used for periods after actual gross revenue have been
received are based on estimates and are reviewed periodically and revised when
necessary to reflect historical patterns.

Unamortized production and exploitation costs are compared with net
realizable value each reporting period on a film-by-film basis. If estimated
future gross revenues from a film are not sufficient

F-11
<PAGE>

to recover unamortized film costs, other direct distribution expenses and
participations, the unamortized film costs are written down to net realizable
value.

Licensed program rights are amortized to expense based on broadcasts.

F-12
<PAGE>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

CASH AND CASH EQUIVALENTS

The Company considers cash or cash equivalents to be highly liquid
investments such as cash, time deposits and certificates with original
maturities of three months or less.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, less accumulated
depreciation. Major renewals and improvements that extend the useful life of an
asset are capitalized. Maintenance and repairs which do not improve or extend
the lives of the respective assets are expensed when incurred.

Depreciation of property and equipment are calculated on the
straight-line basis over the estimated useful lives of the assets (see Note 9).

BROADCASTING AND TRANSMISSION EQUIPMENT UNDER CAPITAL LEASES

Broadcasting and transmission equipment under capital leases is
stated at the present value of the future minimum lease payment at the inception
of the lease, less accumulated depreciation.

Equipment under capital leases is depreciated over its estimated
useful life (see Note 10).

ADVANCES TO THIRD PARTIES

The Company makes payments to artists, producers and script writers
for services in connection with future programs. Such payments are included in
production costs when services have been rendered.

EMPLOYEE RETIREMENT BENEFITS

As more fully discussed in Note 18, employee retirement benefits are
provided for on an accrual basis.

INCOME TAXES

Income taxes have been accounted for using the asset and liability
method in accordance with Statement of Financial Accounting Standards ("SFAS")
No. 109. Deferred tax assets and liabilities are recorded for the expected
future tax consequences of temporary differences between the carrying amounts
and tax basis of assets and liabilities. Deferred taxes are measured using
currently applicable tax rates.

BARTER TRANSACTIONS

Barter transactions represent non-cash transactions in which the
Company sells advertising time to a third party in return for goods, services or
assets (including rights to sporting events). These transactions are accounted
for on the basis of the fair market value of the goods, services or assets.
During the years ended December 31, 1996, 1997 and 1998, net revenue derived
from barter transactions amounted to GRD 1,928,503, GRD 366,472 and GRD 381,183,
respectively.

F-13
<PAGE>

The Company's major source of revenue is derived in Greece (see Note
24).

Concentration of credit risks with respect to current trade accounts
are managed as the Company obtains letters of guarantee from banks, checks and
notes receivable to support receivable balances. At December 31, 1997 and 1998,
the Company had obtained letters of guarantee, checks and notes receivable in
respect of approximately 54% and 10.6% of receivables, respectively.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

CONCENTRATION OF CREDIT RISK

The Company earned 12.4% (GRD 3,139,433), 9% (GRD 2,317,041) and 8.1%
(GRD 2,612,974), of net revenues from related companies for the years ended
December 31, 1996, 1997 and 1998, respectively. Accounts receivable relating to
this revenue as of December 31, 1997 and 1998 represented 17.7% and 10.1% of
accounts receivable, respectively. Related party revenue denominated in foreign
currency amounted to GRD 2,789,934, GRD 1,611,705 and GRD 1,862,120 for the
years ended December 31, 1996, 1997 and 1998, respectively. The related
receivables are subject to foreign currency risk.

Advances to related parties represents 67% and 32.3% of total
advances at December 31, 1997 and 1998, respectively.

No one supplier accounts for more than 10% of purchases.

The Company's significant source of revenue is generated from selling
advertising spots to local advertisers. In the years ended December 31, 1996,
1997 and 1998, no one advertiser accounted for 10% or more of total net revenue.
Prior to 1996, it was common practice in the Greek market for certain
advertising agencies to act in concert (so called "media shops") for the purpose
of negotiating more favorable terms. In 1996, this practice of acting in concert
was restricted by law and consequently, the "media shops" no longer constitute a
concentration of credit risk.

IMPAIRMENT OF LONG-LIVED ASSETS

In March 1995, the U.S. Financial Accounting Standards Board ("FASB")
issued SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of" which requires that long-lived assets and
certain identifiable intangibles held and used by an entity be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of the asset may not be recoverable. The Company adopted this
standard in 1996. Adoption of this standard did not have a material impact on
its result of operations or financial position.

FINANCIAL INSTRUMENTS

The estimated fair values of cash, short-term accounts receivable,
advances and payables approximate their carrying value because of the short-term
maturity of these instruments.

F-14
<PAGE>

The carrying value of receivables with maturities greater than one
year have been discounted using a rate of 9%, which approximates the fair value.

The Company's Senior Notes include a fixed interest rate of 9%; the
fair value at December 31, 1998 has been calculated based upon bank-quoted
market rates. The market rate at December 31, 1998 was $97,750, as compared to
the carrying value at December 31, 1998 of $115,000.

EARNINGS PER SHARE

The earnings per common share is computed by dividing net income
applicable to common stock by the weighted average number of issued shares of
common stock for the years ended December 31, 1996, 1997 and 1998. Basic
earnings per share and diluted earnings per share are equal as the Company does
not have any dilutive securities outstanding.

F-15
<PAGE>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

RECENT AND NEW ACCOUNTING PRONOUNCEMENTS

TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENTS OF
LIABILITIES

In June 1996, the FASB issued SFAS No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities." SFAS No.
125 is effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after December 31, 1996 and is to be
applied prospectively. This statement provides accounting and reporting
standards for transfers and servicing of financial assets and extinguishments of
liabilities based on consistent application of a financial components approach
that focuses on control. It distinguishes transfers of financial assets that are
sales from transfers that are secured borrowings. The Company has adopted the
provisions of SFAS No. 125 in 1997. Adoption of this statement did not have a
material effect on the Company's financial position or results of operations.

CAPITAL STRUCTURE

In February 1997, the FASB issued SFAS No. 128, "Earnings per Share"
and SFAS No. 129, "Disclosure of Information about Capital Structure."

SFAS No. 129 "Disclosure of Information about Capital Structure" was
issued in February 1997 and is effective for financial statements for periods
ending after December 15, 1997. It contains no changes in disclosure
requirements for entities that were previously subject to the requirements of
APB Opinions No. 10 "Omnibus Opinion-1966" and No. 15 "Earnings Per Share" and
SFAS No. 47 "Disclosure of Long-Term Obligations."

The Company has adopted the disclosure requirements at December 31,
1997.

COMPREHENSIVE INCOME

SFAS No. 130 "Reporting Comprehensive Income" was issued in June 1997
and is effective for fiscal years beginning after December 15, 1997.
Reclassification of financial statements for earlier periods provided for
comparative purposes is required. It requires that all items that are required
to be recognized under accounting standards as components of comprehensive
income be reported in a financial statement that is displayed with the same
prominence as other financial statements. It requires that an enterprise (a)
classify items of other comprehensive income by their nature in a financial
statement and (b) display the accumulated balance of other comprehensive income
separately from retained earnings and additional paid-in capital in the equity
section of a statement of financial position.

The Company has no comprehensive income.

SEGMENT INFORMATION

SFAS No. 131 "Disclosures about Segments of an Enterprise and Related
Information" was issued in June 1997 and is effective for fiscal years beginning
after December 15, 1997. In the initial year of application comparative
information for earlier years is to be restated.

F-16
<PAGE>

It requires that companies disclose segment data based on how
management makes decisions about allocating resources to segments and measuring
their performance. It also requires entity-wide disclosures about the products
and services an entity provides, the material countries in which it holds assets
and reports revenues, and its major customers.

F-17
<PAGE>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D.)

The Company has reviewed the likely impact on the level of disclosure
currently provided in its financial statements and has concluded that it has
only one reportable segment and will, therefore, require no additional
disclosure.

DERIVATIVE INSTRUMENTS

ACCOUNTING FOR COMPUTER SOFTWARE

During January 1998, the American Institute of Certified Public
Accountants (AICPA) issued Statement of Position 98-1, "Accounting for the costs
of Computer Software Developed or Obtained for Internal Use" ("SOP 98-1"). SOP
98-1 becomes effective for all fiscal years beginning after December 15, 1998.
The Company does not expect the adoption of SOP 98-1 to have a material impact
on Company's financial statements.

REPORTING ON THE COSTS OF START-UP ACTIVITIES

3. TRANSLATIONS OF DRACHMAE INTO US DOLLARS

The consolidated financial statements are stated in drachmae. The
translations of drachmae into U.S. Dollars are included solely for the
convenience of the reader, using the noon buying rate in New York on December
31, 1998, which was 279.90 to $1.00. The convenience translations are unaudited
and should not be construed as representations that the drachma amounts have
been, could have been, or could in the future be, converted into U.S. Dollars at
this or any other rate of exchange.

4. CASH AND CASH EQUIVALENTS

As of December 31, 1998, time deposits of GRD 5,867,462 are included
in cash and cash equivalents.

F-18
<PAGE>

5. ACCOUNTS RECEIVABLE

Accounts receivable are analyzed as follows:

December 31,
--------------------------
1997 1998
----------- -----------
Trade ............................... 11,278,409 18,032,903
LESS: ALLOWANCE FOR DOUBTFUL ACCOUNTS (769,626) (1,161,396)
----------- -----------
10,508,783 16,871,507
----------- -----------
OTHER:
VALUE ADDED TAX ............... 230,411 --
EMPLOYEE ADVANCES ............. 249,876 284,248
----------- -----------
480,287 284,248
----------- -----------
10,989,070 17,155,755
----------- -----------
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
BEGINNING BALANCE ............. 645,854 1,213,905
WRITE OFFS .................... -- (35,460)
RECOVERIES .................... -- (51,955)
PROVISION FOR BAD DEBTS ....... 123,772 34,906
----------- -----------
ENDING BALANCE ................ 769,626 1,161,396
----------- -----------

6. DUE FROM (TO) RELATED PARTIES

The Company sells advertising spots, licensing and distribution
rights to certain related parties in the ordinary course of business.
Furthermore, the Company also derives revenue from related parties by charging
fees for the use of the Company's production facilities and technical and
administrative services for the production of infomercials. Such related parties
consist of companies which have common ownership and/or management with the
Company. The Company believes that, in each case, the terms of such transactions
are no less favorable than those that would be attainable by the Company in the
ordinary course from unaffiliated third parties under similar circumstances.

As a result of the Acquisitions, Antenna R.T. Enterprises, Pacific
Broadcast Distribution Ltd. and Antenna Spoudastiki Ltd came under common
control with Antenna (for accounting purposes) as of September 1, 1998. The
related party revenue from these entities was eliminated upon consolidation or
reclassified.

F-19
<PAGE>

6. DUE FROM (TO) RELATED PARTIES (CONT'D.)

Balances from related companies are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1997 1998
------------------------
<S> <C> <C>
ACCOUNTS RECEIVABLE
CURRENT:
ANTENNA SATELLITE TV (USA) INC ............. 1,480,000 1,633,511
AUDIOTEX S.A ............................... 111,217 76,197
EPIKINONIA LTD ............................. 72,586 48,203
ANTENNA TV LTD. (CYPRUS) ................... 564,130 686,901
PACIFIC BROADCAST DISTRIBUTION LTD ......... 259,220 --
CATALOGUE AUCTIONS HELLAS S.A .............. 40,439 40,439
ANTENNA SATELLITE RADIO .................... -- 14,228
---------- ----------
2,527,592 2,499,479
LONG-TERM:
ANTENNA SATELLITE TV (USA) INC ............. 2,123,634 2,438,156
LESS: ALLOWANCE FOR FAIR VALUE ............. (336,358) (416,358)
---------- ----------
1,787,276 2,021,798
ADVANCES
CURRENT:
ANTENNA R.T. ENTERPRISES S.A 863,262 --
CATALOGUE AUCTIONS HELLAS S.A -- 141,710
---------- ----------
863,262 141,710
LONG-TERM:
Epikinonia Ltd. ............. -- 44,158
Antenna TV Ltd. (Cyprus) .... 305,746 120,979
---------- ----------
305,746 165,137
========== ==========
</TABLE>

Antenna has entered into two agreements (licensing and distribution)
with Antenna Satellite TV (USA) Inc., a company in which the Chairman and Chief
Executive Officer of the Company is a director. The programming agreement
provides that a daily license fee of $8.20 for the year ended December 31, 1996
and for the six months ended June 30, 1997 and $9.02 for the six months ended
December 31, 1997 and $9.02 for the year ended December 31, 1998 for a 10 hour
television program will be paid to the Company. The distribution agreement
provides that a license fee (flat fee) of $5,500 is payable to the Company. This
license fee is payable in eight quarterly installments commencing on March 31,
1998. In 1996, the Company recognized GRD 1,108,699 and GRD 1,354,535 of license
and distribution fees, respectively. In 1997 and 1998, Antenna recognized GRD
899,546 and GRD 927,514 of license fees, respectively. Both these accounts
receivable have been guaranteed personally by Mr. Minos Kyriakou.

F-20
<PAGE>

6. DUE FROM (TO) RELATED PARTIES (CONT'D.)

Antenna has entered into an agreement with Audiotex S.A., a company
of which 51% was indirectly owned by Mr. Minos Kyriakou prior to September 1,
1998 and which has a common director with the Company (Mr. George Xanthopoulos),
to provide dead time pursuant to which the Company receives a commission of 7.8%
on Audiotex's revenue for the period July 1, 1995 through November 30, 1995,
December 1, 1995 to June 30, 1998 a commission of 15%, July 1, 1998 to August
31, 1998 a commission of 30%, September 1, 1998 to December 31, 1998 a
commission of 40% and from January 1, 1999 to January 1, 2005 a commission of
50%. Antenna has also entered into an agreement to provide management consulting
and production services to Audiotex related to sales and promotions in media
other than Antenna in return for a royalty of 7.8% of the gross annual revenue
arising from such activities payable from July 1, 1995 through January 1, 2005.
Antenna also subleases its office and studio space to Audiotex for a monthly
rental fee of GRD 695 for the period January 1, 1997 to December 31, 1998, and
leases studio equipment and other machinery to Audiotex for a fee of GRD 270 per
hour for the same period.

The Company provides production facilities and technical and
administrative services to Epikinonia Ltd., a company where one of the
shareholders (Mr. Sotirios Papadopoulos) of the Company was a shareholder and
director through August 1998, for a fee of up to 75% of Epikinonia Ltd. revenue
commencing January 11, 1996.

The Company provided advances to Antenna R.T. Enterprises (also known
as Antenna Radio or Antenna FM), a company where various directors of the
Company are shareholders and directors. Interest is charged at a variable rate.
During 1998, the majority of the loan was repaid, and the balances are
eliminated upon consolidation.

The Company has entered into an agreement with Antenna R.T. Services
Ltd. (now known as Antenna TV Ltd. (Cyprus)), a company to which the General
Manager of the Company is a General Manager, pursuant to which the Company
earned royalties of 9% up to August 31, 1994 and commencing September 1, 1994
11% for the next three years and 12% thereafter on the advertising revenues of
Antenna TV Ltd. (Cyprus). In addition, the Company has given advances to this
company for future programming.

The Company, in July 1997, entered into a program agreement with
Pacific Broadcast Distribution Ltd., a company in which the President of the
Company is a shareholder and member of the Board of Directors. The programming
agreement provides that a daily license fee of $5.00 for a 9 hour television
program will be paid to the Company. The license fee is subject to negotiated
increases after July 15, 1999 of at least 10%. Effective September 1, 1998, the
account balances are eliminated upon consolidation.

During 1997, the Company acquired a 50% share in a newly formed
company called Catalogue Auctions Hellas S.A. ("Catalogue Auctions"). The main
operations of this company are to sell to the public via the participation of
the public in the auctioning of various products. Catalogue Auctions uses the
Antenna TV logo and Antenna air time in connection with its auctions. In return,
Antenna receives a royalty of 12% of Catalogue Auctions' gross revenues if they
do not exceed GRD 1,000,000. The percentage increases to 15% of gross revenues
if

F-21
<PAGE>

they do exceed GRD 1,000,000. In no event will the Company receive less than GRD
10,000 per month. During 1998, the Company advanced GRD 141,710 to this company.

F-22
<PAGE>

6. DUE FROM (TO) RELATED PARTIES (CONT'D.)

A summary of transactions with related companies for 1996, 1997 and
1998 are analyzed as follows:

<TABLE>
<CAPTION>
Purchases
from related parties Revenue from related parties
------------------------- ---------------------------------
Year Ended December 31 Year Ended December 31,
------------------------- ---------------------------------
1996 1997 1998 1996 1997 1998
----- ----- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Epikinonia Ltd. (Production facilities and technical
and administrative services) .................... -- -- -- 82,151 296,626 378,000
ANTENNA SATELLITE TV (USA) INC. (LICENSE FEES) ..... -- -- -- 1,108,699 899,546 927,514
ANTENNA SATELLITE TV (USA) INC .....................
(DISTRIBUTION FEES) ............................. -- -- -- 1,354,535 -- --
PACIFIC BROADCAST DISTRIBUTION LTD ................. -- -- -- -- 259,221 392,526
ANTENNA TV LTD. (CYPRUS)(ROYALTIES) ................ -- -- -- 326,700 452,938 542,080
AUDIOTEX S.A. (COMMISSION AND OTHER) ............... -- -- -- 263,743 290,440 231,507
CATALOGUE AUCTIONS HELLAS S.A ...................... -- -- -- -- 34,270 --

ANTENNA R.T. ENTERPRISES S.A. (OTHER) .............. 2,788 -- -- 3,605 84,000 141,347
----- ----- --------- --------- --------- ---------
2,788 -- -- 3,139,433 2,612,974 2,317,041
----- ----- --------- --------- --------- ---------
Related party commission income:
AUDIOTEX S.A. (COMMISSION INCOME) ............... -- -- -- -- -- 131,194
ANTENNA SATELLITE RADIO (LICENSE FEES) .......... -- -- -- -- -- 12,265
----- ----- --------- --------- --------- ---------
-- -- -- -- -- 143,459
===== ===== ========= ========= ========= =========
</TABLE>

7. INVESTMENT IN UNCONSOLIDATED ENTITY

DECEMBER 31,
--------------
1997 1998
----- ------
Investment in Audiotex S.A..................... -- 84,785
----- ------

Summarized below is the balance sheet and statement of operations for
Audiotex S.A. as derived from its financial statements:

SEPTEMBER 1,
1998 THROUGH
DECEMBER 31,

CONDENSED STATEMENT OF OPERATIONS 1998
- --------------------------------- -------
Net sales ................................... 268,239
Gross profit ................................ 224,136
Operating income ............................ 45,465
Income before income taxes .................. 66,637
Net income .................................. 41,149

DECEMBER 31,
CONDENSED BALANCE SHEET 1998
- --------------------------------- -------
Current assets .............................. 412,199
Non-current assets .......................... 54,585
-------
Total assets ............................. 466,784
-------

Current liabilities ......................... 296,788
Non-current liabilities ..................... 3,750
Shareholders' equity ........................ 166,246
-------
Total liabilities and shareholders' equity 466,784
-------

F-23
<PAGE>

8. PROGRAMMING COSTS

The following table sets forth the components of the programming
costs, net of amortization:

DECEMBER 31,
--------------------------
1997 1998
----------- -----------
Produced programming ......... 10,420,339 11,448,729
Purchased sports rights ...... 3,566,980 3,233,640
Licensed program rights ...... 1,335,799 1,875,691
Prepaid license program rights 1,031,397 1,546,851
Prepaid produced programs .... 445,957 778,086
65,000 --
----------- -----------
Prepaid sports rights ........ -- --
16,865,472 18,882,997
(10,954,828) (11,795,427)
----------- -----------
Less: current portion ........ -- --
5,910,644 7,087,570
=========== ===========

On the basis of the Company's amortization rates 100% of produced
programming, licensed program rights and purchased sports rights at December 31,
1998 will be amortized within a three-year period of time, whereas, 95% of
prepaid amounts will be amortized within three years.

9. PROPERTY AND EQUIPMENT

Property and equipment is summarized as follows:

December 31,
---------------------
1997 1998
--------- ---------
COST
LAND .................................. 300 1,020
LEASEHOLD IMPROVEMENTS ................ 557,583 573,164
MACHINERY AND EQUIPMENT ............... 1,221,199 1,671,668
BROADCASTING AND TRANSMISSION EQUIPMENT 878,472 934,773
FURNITURE AND FIXTURES ................ 943,393 1,197,537
Motor vehicles ........................ 208,979 254,623
--------- ---------
3,809,926 4,632,785
========= =========
NET BOOK VALUE
LAND .................................. 300 1,020
LEASEHOLD IMPROVEMENTS ................ 232,509 201,474
MACHINERY AND EQUIPMENT ............... 553,501 652,430
BROADCASTING AND TRANSMISSION EQUIPMENT 415,257 378,382
FURNITURE AND FIXTURES ................ 341,960 367,641
Motor vehicles ........................ 57,418 74,522
--------- ---------
1,600,945 1,675,469
========= =========

F-24
<PAGE>

9. PROPERTY AND EQUIPMENT

Depreciation is computed based on the straight-line method using
rates which are substantially equivalent to average economic useful life rates.
The depreciation expense for the years ended December 31, 1996, 1997 and 1998,
was GRD 383,002, GRD 358,493 and GRD 480,372, respectively. The useful lives of
property and equipment are as follows:

Classification Useful lives
- -------------- ------------
Leasehold improvements......................................... 10 YEARS
MACHINERY AND EQUIPMENT........................................ 5 TO 7 YEARS
BROADCASTING AND TRANSMISSION EQUIPMENT........................ 10 TO 12 YEARS
FURNITURE AND FIXTURES......................................... 3 TO 5 YEARS
MOTOR VEHICLES................................................. 5 TO 7 YEARS

10. BROADCASTING AND TRANSMISSION EQUIPMENT UNDER CAPITAL

LEASES

DECEMBER 31,
------------------------
1997 1998
---------- ----------
Cost ......................... 1,359,482 1,779,603
Less: accumulated depreciation (537,028) (706,003)
---------- ----------
822,454 1,073,600
========== ==========

Depreciation is computed based on the straight-line method using
rates which are substantially equivalent to average economic useful lives for
broadcasting and transmission equipment (10%). The depreciation expense for the
years ended December 31, 1996, 1997 and 1998 was GRD 84,611, GRD 136,066 and GRD
147,700.

11. OTHER RECEIVABLE

Other long-term receivable includes a balance receivable from a
political party (New Democracy) amounting to GRD 787,498 and GRD 769,498 as of
December 31, 1997 and 1998, respectively. An allowance for doubtful debts and
fair value of GRD 360,000 as of December 31, 1997 and GRD 440,000 as of December
31, 1998 has been recorded.

The receivable arose from advertising relating to New Democracy's
political campaign for the October 1993 and June 1994 elections in Greece.
Management believes that the net amount receivable is fully recoverable.

F-25
<PAGE>

12. BANK OVERDRAFTS AND SHORT-TERM BORROWINGS

Short-term borrowings are primarily draw-downs under various lines of
credit maintained by the Company with several banks. The aggregate amount of
available lines of credit were GRD 5,300,000 at December 31, 1997 and GRD
7,550,000 at December 31, 1998.

Bank overdrafts and short-term borrowings are secured by the personal
guarantee of the Company's Chairman and Chief Executive Officer and assignments
of advertisers' post-dated checks, notes receivable from advertisers and letters
of guarantee of obligations of advertisers. In the year ended December 31, 1997,
no such security existed because the bank overdrafts and short term borrowings
had been repaid. In addition, the Indenture with respect to the issue of Senior
Notes restricts such transactions.

Such borrowings, based on their currency denominations, were as
follows:

DECEMBER 31,
-----------------------------------------------------------
1996 1997 1998
--------------------- --------------- ---------------------
IN FOREIGN IN FOREIGN IN FOREIGN
GRD CURRENCY GRD CURRENCY GRD CURRENCY
--------- --------- --- ---------- --------- ----------
Denominated in:
Drachmae ... 4,655,893 -- -- -- 1,050,312 --
US$ ........ 182,413 736 -- -- -- --
Japanese Yen 4,107,593 1,927,841 -- -- 417,843 168,056
ECU ........ 2,688,401 8,736 -- -- -- --
CHF ........ -- -- -- -- -- --
DEM ........ -- -- -- -- -- --
---------- ---------
11,634,300 1,468,155
========== =========

The weighted average interest rates on short-term borrowings in each
of the years ended December 31, 1996, 1997 and 1998 were as follows:

AT DECEMBER 31,
--------------------------
1996 1997 1998
------ ------ ------

Currency:

Drachmae ... 23.5% 16.0% 13.1%
US$ ........ 8.0% 8.1% --
Japanese Yen 3.5% 3.2% 2.8%
ECU ........ 7.8% 6.5% --
CHF ........ -- 3.5% --
DEM ........ -- 5.5% --

Interest on short-term borrowings for 1996 and 1997, totaled GRD
1,454,473 and GRD 1,294,246, respectively. There was no interest in 1998 as the
short term borrowings were obtained close to year end.

F-26
<PAGE>

13. LONG-TERM DEBT

Long-term debt consists of:

AT DECEMBER 31,
-----------------------
1997 1998
---------- ----------

Senior Notes due 2007 (the "Senior
Notes") issued on August 12, 1997
Interest on the Senior Notes is paid
semi-annually in February and August,
commencing February 1, 1998, at a rate
of 9% per annum. The Senior Notes are
redeemable, in whole or in part, at the
option of the Company at any time on or
after August 1, 2002 .................. 32,597,670 32,545,000
---------- ----------
32,597,670 32,545,000
Less: Current portion ........... -- --
---------- ----------
32,597,670 32,545,000
========== ==========

In August 1997, Antenna completed the issuance of debt securities
(the "Senior Notes") in the United States. The net proceeds of the offering were
used to repay short-term and long-term borrowings.

The Senior Notes issued at an aggregate face amount of US$ 115,000
with maturity date on August 1, 2007, bear interest at a rate of 9% per annum,
payable semi-annually on February 1 and August 1 each year, commencing on
February 1, 1998.

Interest expense for the period from August 12, 1997 to December 31,
1997 totaled GRD 1,124,620 and for the year ended December 31, 1998 totaled GRD
3,045,398 and is included in interest expense in the accompanying 1997 and 1998
statements of operations.

The indebtedness evidenced by the Senior Notes constitutes general
unsecured senior obligation of Antenna and rank pari passu in right of payment
with all other senior indebtedness and rank senior in right of payment to all
subordinated indebtedness of Antenna.

The Senior Notes Indenture contains certain covenants and
restrictions that, among other things, limit the type and amount of additional
indebtedness that may be incurred by Antenna and imposes certain limitations on
investments, loans and advances, sales or transfers of assets, liens, dividends
and other payments, the ability of the Company to enter into sale-leaseback
transactions, certain transactions with affiliates and certain mergers. Antenna
is in compliance with the terms of the Indenture at December 31, 1997 and 1998.

Bank loan interest expense for the years ended December 31, 1996 and
1997 totaled GRD 562,975 and GRD 236,345. There was no bank loan interest
expense for the year ended December 31, 1998.

14. CAPITAL LEASE OBLIGATIONS

The Company leases mainly broadcasting and transmission equipment
under capital leases which bear interest at average interest rates of 14.5% and
8.6%. Interest expense from capital leases was GRD 73,743, GRD 34,765 and GRD
19,584 in the years ended December 31, 1996, 1997 and 1998, respectively. Future
obligations from the above leases are as follows:

F-27
<PAGE>

14. CAPITAL LEASE OBLIGATIONS (CONT'D.)

TOTAL
--------
1999 ...................................... 141,595
2000 ...................................... 100,058
2001 ...................................... 54,970
2002 ...................................... 54,000
2003 AND THEREAFTER ....................... 243,000
--------
593,623
LESS: AMOUNT REPRESENTING INTEREST .. (68,098)
--------
525,525
========

The capital lease obligation is reflected on the consolidated balance sheets as
of December 31, 1998, as follows:

CURRENT PORTION ........................... 107,585
LONG-TERM PORTION ......................... 417,940
--------
525,525
========

15. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

The amount reflected in the accompanying consolidated balance sheets
is analyzed as follows:

1997 1998
--------- ---------
Value added tax ................. -- 1,136,448
--------- ---------
TAXES WITHHELD:
PAYROLL ................... 75,435 67,855
THIRD PARTIES ............. 34,478 64,212
OTHER ..................... 25,467 12,353
--------- ---------
135,380 144,420
BROADCAST LICENSE FEE ........... 576,215 1,195,215
DEFERRED REVENUE ................ 107,624 100,624
OTHER PAYABLES .................. 22,141 118,957
SOCIAL SECURITY FUNDS PAYABLE ... 187,426 234,037
RADIO AND TELEVISION COUNCIL FINE 95,000 4,975
FOREIGN EXCHANGE CONTRACT ....... -- 4,605,000
PROGRAMMING ..................... -- 320,196
OTHER ACCRUALS .................. 934,448 1,558,192
--------- ---------
2,058,234 9,418,064
========= =========

The accrual for the foreign exchange contract represents the
difference between the forward contract rate and the balance sheet translation
rate (see Note 2).

F-28
<PAGE>

16. INCOME TAXES

The provision for income taxes reflected in the accompanying
consolidated statements of operations is analyzed as follows:

December 31,
1996 1997 1998
--------- --------- ---------
Current .................. 221,073 79,999 178,536
DEFERRED INCOME TAXES .... 209,618 168,384 1,906,380
--------- --------- ---------
PROVISION FOR INCOME TAXES 430,691 248,383 2,084,916
========= ========= =========

The reconciliation of the provision for income taxes to the amount
determined by the application of the Greek statutory tax rate of 35% in 1996 and
1997, and 40% in 1998 to pre-tax income is summarized as follows:

DECEMBER 31,
--------------------------------------
1996 1997 1998
---------- ---------- ----------
TAX PROVISION AT THE STATUTORY RATE 315,958 175,524 1,274,322
EFFECT OF CHANGE IN TAX RATE ...... -- -- (103,810)
INTEREST INCOME ................... (47,193) (93,924) (124,560)
DISALLOWED PRIOR PERIOD EXPENSES .. 64,000 80,000 141,097
LOSS NOT SUBJECT TO INCOME TAX .... -- -- 29,600
INCOME NOT SUBJECT TO TAX ......... -- -- (8,394)
NON-DEDUCTIBLE GENERAL EXPENSES ... 97,926 86,783 185,084
CHANGE IN VALUATION ALLOWANCE ..... -- -- 691,577
---------- ---------- ----------
PROVISION FOR INCOME TAXES ........ 430,691 248,383 2,084,916
========== ========== ==========

Interest income is taxed at a lower rate (15%) than operating income.
Disallowed prior period expenses relate to invoices for goods or services that
were not received prior to the preparation of the tax returns and that relate to
prior year expenses (i.e., invoices received in February that relate to services
rendered in december of prior year). Non-deductible general expenses relate
primarily to certain car and meals and entertainment expenses.

In Greece the amounts reported to the tax authorities are provisional
until such time as the books and records of an entity are inspected by the tax
authorities. Greek tax laws and related regulations are subject to
interpretations by the tax authorities. The Group has been audited by the tax
authorities up to 1992. Management of the Company believes that the amounts
accrued will be sufficient to meet its tax obligations.

The ultimate outcome of additional tax assessments may vary from the
amounts accrued, however management of the Company believes that any additional
tax liability over and above the amount accrued would not have a material
adverse impact on the Company's results of operations or financial position.

The entities acquired in the acquisitions have tax loss
carry-forwards of approximately grd 348,000 expiring in years 1999 through 2001.

The deferred income taxes relate to the temporary differences between
the book values and the tax bases of assets and liabilities. Significant
components of the Company's deferred tax liabilities and assets in 1997 and 1998
are summarized below:

F-29
<PAGE>

16. INCOME TAXES (CONT'D.)

December 31,
-----------------------
1997 1998
-----------------------

Deferred tax liabilities
PREMIUMS UNAMORTIZED .................... -- 176,688
PROGRAMMING COSTS ....................... -- 1,793,679
RESERVES (NOTE 20) ...................... 430,348 430,348
RESERVES TAXED IN A SPECIAL WAY ......... 182,229 233,826
DEFERRED CHARGES ........................ 122,782 231,015
LEASED ASSETS ........................... 287,859 274,335
DEFERRED INTEREST ON FINANCE LEASES ..... 8,863 5,936
CUSTOMER ADVANCES ....................... 435,168 502,700
ACCRUED EXPENSES AND OTHER LIABILITIES 10,150 53,191
---------- ----------
GROSS DEFERRED TAX LIABILITIES ................ 1,477,399 3,701,718
---------- ----------
DEFERRED TAX ASSETS
PROPERTY AND EQUIPMENT .................. 23,576 32,942
PROGRAMMING COSTS ....................... 479,333 --
LONG-TERM LIABILITY ..................... -- 17,600
LONG-TERM LEASE LIABILITY ............... 42,288 22,051
SHORT-TERM LEASE LIABILITY .............. 25,023 26,278
LONG-TERM RECEIVABLES ................... 1,175,389 1,193,308
DEFERRED REVENUE ........................ 9,275 6,825
ACCOUNTS RECEIVABLE ..................... 184,450 356,388
EMPLOYEE RETIREMENT BENEFITS ............ 116,200 172,793
OTHER ASSETS ............................ 306,397 409,202
OTHER PROVISIONS ........................ 153,590 195,531
ACCRUED EXPENSES ........................ 48,300 1,615,315
Net operating losses .................... -- 139,484
---------- ----------
GROSS DEFERRED TAX ASSETS ................... 2,563,821 4,187,717
---------- ----------
LESS: VALUATION ALLOWANCE ................... -- (1,306,288)
---------- ----------
NET DEFERRED TAX ASSETS (LIABILITY) ......... 1,086,422 (820,289)
========== ==========

Long-term receivables give rise to a tax asset principally due to
certain long-term agreements that have not satisfied all of the revenue
recognition criteria of SFAS No.53. Such agreements, however, are taxable by the
local Greek authorities.

A valuation allowance has been provided on deferred tax assets
arising principally from the foreign exchange loss incurred on the forward
contract which is not expected to fully reverse before its expiration. In
addition, the entities acquired in the Acquisitions have recorded a valuation
allowance on deferred tax assets because management estimates that it is more
likely than not that deferred tax assets will not be realized (due to the
historical operating losses and timing limits on the tax loss carry forwards
that arose on net losses). Management believes that it is more likely than not
that the results of future operations, together with the valuation allowance,
will generate sufficient taxable income to realize the net deferred tax assets.

The classification of deferred income taxes in the accompanying
balance sheets is as follows:

December 31,
--------------------
1997 1998
------- ----------
Net current deferred tax asset (liability) 128,126 (1,165,531)
======= ==========
NET NON-CURRENT DEFERRED TAX ASSET ....... 958,296 345,242
======= ==========

F-30
<PAGE>

17. OTHER LONG-TERM LIABILITY

Other long-term liability is analyzed as follows:

December 31,
------------------------
1997 1998
---------- ----------
Other long-term liability 3,263,626 2,475,759
LESS: CURRENT PORTION ... (855,850) (929,362)
---------- ----------
2,407,776 1,546,397
========== ==========

The Company has an outstanding balance due to the Pension Fund for
Athens and Thessaloniki Newspaper Employees for advertiser contributions. It is
expected that the repayment terms will be structured over approximately three
years.

18. EMPLOYMENT RETIREMENT BENEFITS

STATE PENSION

The Company's employees are covered by one of several Greek State
sponsored pension funds. Each employee is required to contribute a portion of
their monthly salary to the fund, with the Company also contributing a portion.
Upon retirement, the pension fund is responsible for paying the employees'
retirement benefits. The Company's contributions to the pension fund in the
years ended December 31, 1996, 1997 and 1998, have been recorded as expenses and
were GRD 695,930, GRD 744,617 and GRD 921,692, respectively.

EMPLOYEE RETIREMENT BENEFITS

In accordance with Greek law, a lump sum payment is payable to
employees upon their retirement or involuntary termination. The amount of
compensation payable for involuntary termination is based on the number of years
of service and the amount of remuneration at the date of termination. If the
employees remain in the employment of the Company until normal retirement age,
they are entitled to receive a lump sum payment which is equal to a minimum of
40% of the involuntary termination benefit, as defined above. As the Company has
no plans to terminate a portion of its workforce, the accrual reflects the
minimum amount payable on retirement. The amount charged to expense in the years
ended December 31, 1996, 1997 and 1998 was GRD 30,000, GRD 57,000 and GRD
54,692, respectively.

19. SHARE CAPITAL

The Company's share capital at December 31, 1998 consisted of
16,769,440 common shares of GRD 0.1 par value. The Company's shareholders are:

Percentage of Share
SHAREHOLDERS Capital
------------ -------
Holnest Investments Ltd............................. 25.0%
Globecast Holdings Limited.......................... 22.4%
Altavista Global Holdings Limited................... 22.4%
Praxis Global Investment Limited.................... 22.4%
Socrates Eliades.................................... 6.8%
Efstathios Gourdomichalis........................... 1.0%
------
Total..................................... 100.0%
======

F-31
<PAGE>

19. SHARE CAPITAL (CONT'D)

Effective September 1, 1998, three of the five shareholders of
Antenna, Messrs. Sotirios Papadopoulos, George Xanthopoulos and Socrates
Eliades, holding, in the aggregate, 12,409,386 shares of the Company
(representing 74% of the outstanding capital stock of the Company) transferred
11,256,486 shares in the aggregate to three corporations--Globecast Holdings
Limited ("Globecast"), Altavista Global Holdings Limited ("Altavista") and
Praxis Global Investments Limited ("Praxis"). Each such corporation was
established to hold such shares and acquired 3,752,162 shares of the Company
(22.4% of the outstanding capital stock of the Company). The outstanding shares
of capital stock of Globecast are beneficially owned by Theodore Kyriakou, the
Executive Vice President and Chief Operating Officer of the Company and a son of
Minos Kyriakou, the Chairman and Chief Executive Officer of the Company. The
outstanding shares of capital stock of Altavista and of Praxis are owned by two
other members of the Kyriakou family, Xenophon Kyriakou and Athina Kyriakou. As
a result of the foregoing, for accounting purposes, Antenna is controlled by a
group of related shareholders. (See Note 2.)

The transfers of shares were effected on the basis of a general
understanding that they would be reciprocated by the transferee corporations at
some unspecified time in the future. No written agreement was entered into in
connection with the transfer, no valuation was placed on the shares and there is
no obligation on the part of the transferee corporations or their owners, and no
right on the part of the transferors to cause the transferees or their owners,
to transfer the shares back to the transferors or to any other person.

Mr. Minos Kyriakou owns 99.9% of the share capital of Holnest
Investments Limited.

Additional paid-in capital of GRD 3,752,500 arose during the year
ended June 30, 1994 as a result of the issuance of 1,975,000 common shares
issued at GRD 2.0 each. The excess over par value amounted to GRD 1.9 per share.

20. STATUTORY, TAX FREE AND OTHER RESERVES

Statutory, tax free and other reserves are as follows:

DECEMBER 31,
---------------------
1997 1998
--------- ---------
Statutory reserve ........................ 262,793 281,356
Tax free reserves--Law 1828/1989 (Art. 22) 1,229,567 1,229,567
Reserves for income taxed at lower rates . 878,313 938,022
Reserve for non-taxable income ........... 80,785 81,485
Special reserve .......................... 93,757 93,757
--------- ---------
2,545,215 2,624,187
========= =========

STATUTORY RESERVE

Under Greek corporate law, corporations are required to transfer a
minimum of 5% of their annual net profit as reflected in their statutory books
to a statutory reserve, until such reserve equals one-third of the outstanding
share capital. The above reserve cannot be distributed during the existence of
the Company, but can be used to eliminate a deficit.

F-32
<PAGE>

20. STATUTORY, TAX FREE AND OTHER RESERVES (CONT'D)

TAX FREE AND OTHER RESERVES

a) Under the provisions of Law 1828/1989 (Art. 22), corporations are
allowed to set up a tax free reserve for which they are obliged to make
productive investments of an amount equal to one hundred and thirty percent of
the reserve within the three years (at least one third during the first year)
following the year the respective reserve has been established. This reserve can
be converted to share capital after the three-year period mentioned above.
According to Greek tax regulations, no tax is due at the specified time this
reserve is capitalized. In the case where the productive investments are not
made within the time frame, the reserve is taxed at 35% plus penalties of 2.5%
per month. The Company has not made the investment and has accrued for taxes and
penalties amounting to GRD 793,348, GRD 890,348 and GRD 998,348 as of December
31, 1996, 1997 and 1998, respectively. The amount of taxes accrued of GRD
430,348 is included in deferred income taxes. The amount of penalties included
in selling, general and administrative expenses is GRD 112,000 for 1996, GRD
97,000 for 1997 and GRD 108,000 for 1998. If upon completion of a tax audit such
non-taxable reserves are disallowed, a reclassification would be required to
remove such amounts from tax free reserves.

b) Reserves for income taxed at lower rates represent interest income
taxed at 15%. Upon distribution, these reserves will be taxed at the applicable
current tax rate, with 15% credit given. Therefore, deferred taxation has been
computed on these reserves.

c) Reserve for non-taxable income represents interest earned on Greek
Government bonds which were not taxable. Upon distribution, such reserve will be
taxed at the applicable current tax rate.

d) Special reserves represent a portion of the reserve as stated in
(a) above, for which tax has been paid.

21. DIVIDENDS

Under Greek corporate law, companies are required each year to
declare from their profits, dividends of at least 35% of after-tax profit, after
allowing for statutory reserve, or a minimum of 6% of the paid-in share capital,
whichever is greater. However, the Company can waive such dividend with the
unanimous consent of its shareholders.

Furthermore, Greek corporate law requires certain conditions to be
met before dividends can be distributed which are as follows:

a) No dividends can be distributed to the shareholders as long as the
Company's net equity, as reflected in the statutory financial statements, is, or
after such distribution will be, less than the share capital plus
non-distributable reserves.

F-33
<PAGE>

b) No dividends can be distributed to the shareholders as long as the
unamortized balance of "Pre-Operating Expenses," as reflected in the statutory
financial statements, exceeds the aggregate of distributable reserves plus
retained earnings.

No dividends have been declared during 1996 and 1997. During 1998,
dividends of GRD 1,000,000 were declared and paid.

F-34
<PAGE>

22. COMMITMENTS

In addition to long-term operating lease commitments for office and
studio space, the Company has entered into extended commitments integral to its
operations.

Amounts payable for commitments as of December 31, 1998 discussed
below are:

OFFICE AND
STUDIO SPACE
------------
1999 ..... 1,004,053
2000 ..... 1,042,735
2001 ..... 1,169,489
2002 ..... 1,239,656
2003 ..... 1,352,080
---------
TOTAL 5,808,013
=========

The rental expense relating to long-term operating lease commitments
for office and studio space amounted to GRD 838,692, GRD 741,238 and GRD 850,810
in the years ended December 31, 1996, 1997 and 1998.

At December 31, 1998, the Company was obligated to make further
payments under sports rights not currently available for use, and therefore, not
included in the Balance Sheet.

The Company has signed letters of guarantee for purchased licensed
film and sports rights amounting to GRD 3,287,967 and GRD 1,411,451 as of
December 31, 1997 and 1998, respectively.

23. CONTINGENCIES

The Company is involved in various litigation in the normal course of
business, with claims totaling approximately GRD 3,738,379. The Company accrued
GRD 125,831 in 1997 and GRD 254,525 in 1998, representing management's best
estimate of the Company's probable liability in respect of such claims. The
Company believes that none of these actions, individually or in the aggregate,
will have a material adverse effect on the Company's results of operations or
financial position.

The Company is involved in a litigation claim for the non-payment of
advertiser contributions payable to the Pension Fund for Athens and Thessaloniki
Newspaper Employees amounting to GRD 1,314,512. The contribution is payable on
invoices issued to advertisers. However, the relevant authorities, in
determining the contributions not paid, did not take into consideration
discounts given to advertisers through the issuance of credit notes at a later
date, which therefore would create a lower advertising contribution liability.
In the opinions of the Company's management and legal advisor the Company will
not be liable for such amounts and therefore an accrual has not been made.

F-35
<PAGE>

23. CONTINGENCIES (CONT'D)

The Company is continuing to evaluate the extent to which
non-information technology systems may be impacted by the Year 2000 and the
types of contingency plans that may be necessary if its management information
systems and/or non-information technology systems were to be non-Year 2000
compliant. Such an evaluation is expected to be completed within the fourth
quarter of 1999. The Company is also continuing to evaluate the extent to which
failure of third parties with which the Company interacts to be Year
2000-compliant could have a material adverse effect on the Company's financial
condition or results of operations. Such third parties could include, among
others, advertisers, providers of satellite transmission facilities, production
companies and suppliers of foreign programming. Any Year 2000 compliance problem
of the Company, any of its vendors and any other company with which it interacts
or otherwise does business could have a material adverse effect on the Company's
financial condition or results of operations. The Company's Year 2000 upgrade is
expected to be completed within the fourth quarter of 1999. The Company has not
yet developed contingency plans that address its failure to be Year
2000-compliant or the failure of third parties with which the Company deals to
be Year 2000-compliant. Such contingency plans will be developed if the final
testing of its applications for Year 2000 compliance fails.

24. SEGMENT AND GEOGRAPHIC INFORMATION

The Company's reportable segments are the television and radio
businesses. The following table sets forth certain information regarding the
Company's segments by service, company and geographic region:

<TABLE>
<CAPTION>
PAY JOURNALISM
TELEVISION RADIO TELEVISION SCHOOL ELIMINATION OF
ANTENNA ANTENNA PACIFIC ANTENNA RELATED-PARTY
TV RADIO BROADCAST SPOUDASTIKI REVENUE/EXPENSES/ TOTAL
(GREECE) (GREECE) (AUSTRALIA) (GREECE) ASSETS CONSOLIDATED
-------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Sales external......................... 28,905,110 602,462 55,024 147,352 -- 29,709,948
Related party sales.................... 2,898,777 -- -- -- (285,803) 2,612,974
Results:
Operating income....................... 9,916,590 224,755 (85,788) 7,072 (169,004) 9,893,625
Depreciation and amortization.......... 600,265 13,262 11,635 2,910 -- 628,072
Amortization of programming costs...... 12,383,100 -- -- -- -- 12,383,100
Equity in net income of
unconsolidated entity............... 20,986 -- -- -- -- 20,986
Net income(loss) before tax........... 3,084,759 103,806 (74,000) 71,241 -- 3,185,806
Net income (loss)...................... 1,006,386 99,263 (74,000) 69,241 -- 1,100,890
Segment assets:
Total assets (December 31, 1998)....... 58,964,240 1,615,650 472,821 124,114 (936,528) 60,240,297
Total assets (December 31, 1997)....... 52,081,080 -- -- -- -- 52,081,080
</TABLE>

Related party sales denominated in foreign currency amounted to GRD 1,862,120.

25. SUBSEQUENT EVENTS (UNAUDITED)

On March 9, 1999, the Company completed the initial public offering
(the "IPO") of 7,700,000 American Depositary Shares, representing 3,850,000
shares of its capital stock, nominal value GRD 100 per share, raising gross
proceeds of $115.5 million. The Company used a portion of the net proceeds it
received from the IPO to acquire a 51% interest in Audiotex, a 100% interest in
Pacific Broadcast, a 99.97% interest in Antenna Radio and a 100% interest in
Antenna Spoudastiki.

F-36
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant certifies that it meets all of the requirements for
filing on Form 20-F and has duly caused this Annual Report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the city of Athens,
Hellenic Republic on the 23rd day of August, 1999.

ANTENNA TV S.A.

By: /s/ Theodore Kyriakou
-------------------------------------
Name: Theodore Kyriakou
Title: Executive Vice President and
Chief Operating Officer