SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                  Form 10-K SB/A-1

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

                   For the Fiscal Year Ended December 31, 1995
                          Commission File No. 33-60612

                          ELEPHANT & CASTLE GROUP INC.
                         (Name of Small Business Issuer)


Province of British Columbia                               Not Applicable
--------------------------------------------------------------------------------
(State or other jurisdiction                            (IRS Employer
 of incorporation)                                      Identification Number)

   
856 Homer Street
Vancouver, B.C. CANADA                                         V6B 2W5
--------------------------------------------------------------------------------
(Address of principal executive officers)                     (Zip Code)
    

Registrant's telephone number including area code:       (604) 684-6451

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 13 months (or for such  shorter  period that the  registrant  was
required to file such reports),  and (2) has been subject to filing requirements
for the past 90 days. YES [X] NO [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference in Part III of this Form 10-K SB or any  amendment to
this Form 10-K SB.[ ] 
<PAGE>
Twelve Months Ended December 31, 1995 vs. December 31, 1994
   
Net Income

For the year ended  December 31, 1995, the Company's net loss was CDN $1,581,955
compared to net income of CDN $213,166 for the corresponding period in 1994. The
1995  figure  includes  a reserve  of CDN  $900,000  for the  closing  costs and
anticipated  legal disputes related to the closure of three locations during the
year.  Loss per share was CDN ($0.63),  (CDN  ($0.27)  excluding  the  reserve),
compared to income per share of CDN $0.09 per share in 1994. See  reconciliation
for differences between Canadian and United States Generally Accepted Accounting
Principles.
    
Sales

Sales  increased  1.4% during the twelve  months ended  December 31, 1995 to CDN
$25,764,339 from CDN $25,414,275 for the comparable  period in 1994. The Company
opened three new  locations  during 1995,  at the 445 room Holiday Inn Select in
Philadelphia,  Pennsylvania (opened February 28, 1995), at the 275 room Rosedale
on Robson All Suite Hotel in Vancouver,  B.C. (opened August 8, 1995) and on the
campus of the  18,000  student  British  Columbia  Institute  of  Technology  in
Burnaby,  B.C.  (opened  September  23,  1995).  The Company  also closed  three
locations  during  1995,  the 240 seat  Elephant  & Castle in  Toronto,  Ontario
(closed July 1, 1995) and two  non-branded  operations  located at Shilo Inns in
Yuma,  Arizona (closed March 29, 1995) and Pomona,  California  (closed June 20,
1995).  During 1994, the Company opened one new  pub/restaurant  in the 400 room
Crowne Plaza Downtown in Winnipeg, Manitoba (opened May 18, 1994). There were no
closings in 1994.

For the eleven Canadian  operations open throughout both periods,  sales for the
twelve months ended December 31, 1995 totaled CDN  $17,214,303  and were up 1.2%
compared to the corresponding period for 1994, reflecting continued cautiousness
on the part of the Canadian customers as related to the economy.

For the one U.S.  operation open throughout  both periods,  sales for the twelve
months ended  December 31, 1995 totaled US $914,693  (CDN  $1,253,619)  and were
down 6.1% compared to the  corresponding  period for 1994.  This location relies
heavily on cross-border shopping by Canadians and the sales decline reflects the
relative low value of the Canadian  dollar  versus the U.S.  dollar and also the
continued cautiousness on the part of Canadian consumers.

For the new Winnipeg  Holiday Inn Location,  1995 sales  totaled CDN  $2,423,542
which far exceeds the average sales of CDN $1,342,500 for mall-based  locations,
and continue to grow.  The new  Philadelphia  location's  sales  annualize at US
$2,400,000  (CDN  $3,288,000),  which  is in  line  with  expectations.  The new
Rosedale location's sales were CDN $961,728 for less than five month's activity,
and  continue to meet  expectations.  The Burnaby  location  operates on limited
hours to reflect student demands, and sales are in line with expectations.

Costs and Expenses

         Food and Beverage Costs

Overall, food and beverage costs, as a percentage of sales, increased marginally
to 29.6% for the twelve months ended December 31, 1995 compared to 29.4% for the
corresponding period in 1994. The reluctance in consumer spending added pressure
to  margins  during  1995.  The  Company  continues  to  review  all  purchasing
procedures,  recipes  and  menus in order to  bring  down the  overall  food and
beverage cost percentage.
<PAGE>
         Labour and Benefit Expenses

Labour  costs  increased  from  31.6% of sales in 1994 to 33.0% for the  current
period.  The increase in the percentage was attributable to increases in minimum
wages (up to CDN $7.00 per hour) in most Canadian locations, plus the difficulty
in reducing labour relative to sales decreases at locations already operating at
minimal staff levels. The Company is reviewing staff scheduling  procedures with
the goal to bring 1996 labour percentages to below those of 1994.

         Occupancy and Other Operating Expenses

Occupancy  and other  expenses  decreased as a percentage of sales from 28.9% in
1994 to 26.1% for the current period. This decrease is primarily attributable to
two factors.  Firstly,  the lease  arrangements  and higher than  average  sales
volumes  (compared  to  other  operations)  at the  new  locations  allow  these
locations to operate at lower than average expense  percentages.  Secondly,  the
continued  expansion  of  video  lottery  terminals  at  several  locations  has
generated  income that is  recorded  for  presentation  purposes as an offset to
other  expenses.  1995 is the second  consecutive  year the  Occupancy and Other
Operating  Expenses  percentage has dropped,  reflecting the positive results of
the Company's switch in focus away from mall-based locations.

         Depreciation and Amortization

Depreciation and  amortization  costs increased to 4.8% of sales for the current
period from 2.7% last year. The increase is  attributable to depreciation on the
new locations plus the  amortization of pre-opening  costs at the new locations.
Amortization  of  pre-opening  costs was CDN  $344,289 in 1995,  compared to CDN
$70,928 in 1994.

         General and Administrative

General and administrative expenses increased from 6.4% of sales in 1994 to 8.9%
in 1995.  The  increase  is  attributable  to  numerous  factors  including  the
write-off of CDN $141,722 in expenses  related to development of a restaurant in
San  Francisco  which was  terminated  in  February,  1996;  increases in legal,
travel,  meeting and promotional costs; plus a major increase in occupancy costs
for the Company's head office. All such costs are under review, with the goal to
bring  the  General  and  Administrative  expense  percentage  back to  industry
standards.  With this in mind, the Company anticipates  relocating its corporate
headquarters in 1996 to a location with lower occupancy costs.

         Interest on Long Term Debt

During the 1994 period, the Company had virtually no long term debt and had cash
reserves  invested  in  interest  bearing  accounts.  During  1995,  the Company
incurred  CDN  $1,100,000  in long  term  debt in  order  to  construct  its new
locations, and in December, 1995 completed a financing with a U.S. based limited
GEIPPP II. GEIPPP II acquired US $3,000,000  (CDN  $4,110,000)  in  subordinated
convertible  notes to the  Company's  long term debt in December  of 1995.  As a
result,  interest  on long term debt  increased  from CDN $66,516 in 1994 to CDN
84,691 in 1995 and will be  significantly  higher  in 1996.  Cash  balances  not
immediately required are invested in premium grade money market instruments.
<PAGE>
(Loss) Income Before Taxes

The  Company  incurred  a loss from  operations,  before  income  taxes,  of CDN
($681,955)  for the 1995 period  compared to income of CDN $213,166 for the 1994
period.  As discussed  above,  increased food,  beverage and labour costs,  plus
amortization  of  pre-opening  costs for new  operations  (up CDN $273,361  over
1994),  combined  with  decreased  same store  sales,  had a negative  impact on
earnings.  Management  is reviewing  all areas of operations to reverse the cost
increases and the sales decreases.

Income Taxes

The Company  incurred a loss in 1995 and  therefore  has no tax  liability.  The
Company's  effective tax rate for 1994 was also zero,  due to the  deductibility
for tax  purposes  of a portion  of the costs  associated  with its 1993  public
offering.  The Company's  effective tax rate will continue to be reduced for the
next two years for this reason.  The impact of this reduction as a percentage of
sales is dependent upon earnings and cannot be predicted in advance.

Provision for Closing Costs

During 1995, the Company  closed three  locations.  A one-time  provision of CDN
$900,000  was  taken  during  1995 to  provide  for the costs of  closing  these
locations,  and to provide for possible disputes arising from these closings. To
date, the costs of the closings total approximately CDN $375,000.  The remaining
CDN $525,000 is a provision against future costs and disputes.
   
Differences between Canadian and United States Generally Accepted
Accounting Principles (Canadian GAAP and U.S. GAAP)

The Company prepares its financial  statements in accordance with Canadian GAAP.
(The reader is referred to Note 15 of the Consolidated  Financial Statements for
the year ended  December 31, 1995 for  additional  explanation.)  The  financial
statements,  if prepared in  accordance  with U.S.  GAAP would have  differed as
follows:

         1) Net loss for the year  ended  December  31,  1995  would  have  been
increased by CDN $2,557,760 (US $1,890,157) comprised of:

A one-time interest expense of CDN $2,435,760  (US$1,800,000) resulting from the
beneficial conversion feature of convertible subordinated debentures at the time
of issue.

Amortization  expense of CDN $122,000 (US $90,157)  resulting  from exclusion of
the first option period in calculating  the  amortization  of certain  leasehold
improvements.

The impact of these  adjustments  would have been to  increase  the net loss per
common   share   from   (CDN   $0.63)(US   $0.47)   under   Canadian   GAAP   to
(CDN$1.65)(US$1.22) under US GAAP.

Net income for the year ended December 31, 1994 would have been decreased by CDN
$240,417  (US  $178,087)  due to the net  effect of  amortization  of  leasehold
improvement  costs and a reassessment  of prior years' income taxes.  Income per
share of CDN $0.09 (US 0.07)  under  Canadian  GAAP  would  have been a loss per
share of (CDN$0.01) (US$0.01) under US GAAP.
    
<PAGE>
   
         2)  Shareholders'  Equity at December 31, 1995 under US GAAP would have
been CDN  $6,451,921  (US$4,779,201)  compared to  CDN$7,087,138  (US$5,249,732)
under Canadian GAAP, due to the cumulative effect of reconciliation adjustments.

         Shareholders' Equity at December 31, 1994 under US GAAP would have been
CDN $6,832,688 (US $5,061,250),  compared to CDN $7,345,905 (US$5,441,441) under
Canadian GAAP.
    

Twelve Months ended December 31, 1994 vs. December 31, 1993

Net Income

         For the year ended  December 31, 1994, the Company's Net Income was CDN
$213,166 or CDN $70,000 higher than the CDN $163,789 Net Income reported for the
corresponding period in 1993. Income per share remained constant at CDN $.09 per
share,  due to a higher  average  number of shares  outstanding  during the 1994
period.

Sales

         Sales increased 13.2% during the twelve months ended December 31, 1994,
to CDN $25,414,275  from CDN $22,445,883 for the comparable  period in 1993. The
Company  operated one new  location  during  1994,  at the 400-room  Holiday Inn
Crowne  Plaza in  Winnipeg,  Manitoba  (opened  May 18,  1994).  During 1993 the
Company opened one new location in Pomona, California (opened July 1, 1993).

         For the twelve Canadian operations open throughout both periods,  sales
for the twelve  months  ended  December  31,  1994 were up 1.9%  compared to the
corresponding period for 1993.

         For the two U.S.  operations  which were open  throughout both periods,
sales for the twelve  months  ended  December  31,  1994 were down 16.0 from the
corresponding  period.  For the six months the Pomona  location was open in both
periods, sales were down by 18.3% in the 1994 period. The negative impact on net
income for the twelve months ended December 31, 1994 was U.S.  $141,334 compared
to the comparable  period in 1993. Two of the locations are operated under lease
arrangements with the Shilo Inns and discussions with Shilo management to find a
solution  satisfactory to both parties have been unsuccessful.  At the third U.S
location,  a minor  renovation has been completed and "pull-tab"  lotteries have
recently been introduced in order to increase customer counts. Early indications
are that these  steps have  slowed  the  earnings  decrease  and  management  is
confident these efforts will be successful in the long run.

         For the Winnipeg Holiday Inn location, sales totaled CDN $1,641,829 and
exceeded  expectations.  The  restaurant  has been  profitable  each month since
opening.

         The Company  opened a new location in the 445-room City Center  Holiday
Inn at 18th and Market in  Philadelphia,  PA in February  1995. The location was
originally  scheduled to open in September  1994. The delayed opening related to
negotiations with third parties and resulted in deferred revenues, and increased
pre-opening  expenses.  The Company also has plans for a number of other Holiday
Inn sites, tentatively scheduled to open in 1995 and later.
<PAGE>
Costs and Expenses

         Food and Beverage Costs

Overall,  food and beverage costs, as a percentage of sales,  increased to 29.4%
for the  twelve  months  ended  December  31,  1994,  compared  to 28.7% for the
corresponding period in 1993. In the opinion of management, this increase is not
significant.  Menu  pricing  has  been  adjusted  slightly  to  counteract  this
increase.

         Labour and Benefit Costs

         Labour  costs  increased  from  30.9% of sales in 1993 to 31.6% for the
current  period.  The increase in the percentage was mainly  attributable to the
decline in U.S. sales,  with labor  expenditures for U.S.  locations  increasing
from 38.9% in 1993 to 39.9% in 1994. Labor  percentages for Canadian  operations
open throughout both periods were stable, and labor at the Winnipeg location was
slightly higher than the Canadian  average due to the normal learning curve at a
new locations.

         Occupancy and Other Operating Expenses

         Occupancy  and other  expenses  decreased as a percentage of sales from
30.0% in 1993 to 28.9%  for the  current  period.  This  decrease  is  primarily
attributable   to   two   factors.   Firstly,   the   lease   arrangements   and
higher-than-average sales volumes (compared to other Canadian operations) at the
new  Winnipeg  location  allow  it  to  operate  at  lower-than-average  expense
percentages.  As and  if  the  Company  expands  its  Holiday  Inn  and  related
hotel-site  locations on a similar basis as current  units,  occupancy and other
expenses are expected to continue to decrease as percentage of sales.  Secondly,
the introduction of video lottery  terminals at several  locations has generated
income  that is  recorded  for  presentation  purposes  as an  offset  to  other
expenses.

         Depreciation and Amortization

         Depreciation and amortization  costs increased to 2.7% of sales for the
current  period  from  2.4% last  year.  The  increase  is  attributable  to the
amortization of pre-opening costs at the Winnipeg location.

         General and Administrative

         General and  administrative  expenses  increased  slightly from 6.7% of
sales in 1993 to 6.9% in 1994.  The  Company is seeking  to  continue  to reduce
general and administrative  expense percentages by opening new locations without
adding proportionate administrative costs.

         Interest on Long Term Debt

         During the 1994 period, the Company had virtually no long-term debt and
had cash reserves invested in interest-bearing  accounts.  Interest on long term
debt and capital leases  amounted to CDN $66,516 for the current period compared
to expense of CDN $135,189 for the corresponding period in 1993.
<PAGE>
         Income Before Taxes

         Income  increased from CDN $163,789 for the 1993 period to CDN $213,166
for the 1994 period.  As discussed above,  increased losses  attributable to the
U.S.  operations,  located at the Shilo Inn sites in Yuma, Arizona,  and Pomona,
California,  and, to a lesser  extent,  at the Elephant & Castle  restaurant  in
Bellis Fair,  Washington,  have significantly  masked improvements made at other
locations.  Results from these three U.S.  locations  have offset  contributions
from the new Winnipeg,  Manitoba location,  improvements at a number of Canadian
locations  and  reductions  in interest  expenses.  Management  is reviewing the
status  of the  Yuma  and  Pomona  locations,  with  the  goal  of  reducing  or
eliminating their negative impact on earnings.

         Income Taxes

         The Company's  effective tax rate for 1994 and 1993 is zero, due to the
deductibility  for tax  purposes of a portion of the costs  associated  with its
1993 public  offering.  The  Company's  effective  tax rate will  continue to be
reduced  for the next  three  years  for the same  reason.  The  impact  of this
reduction as a  percentage  of sales is  dependent  upon  earnings and cannot be
predicted in advance.

         Liquidity and Capital Resources

         The  Company's  cash  balances  at the end of the 1995  period were CDN
$5,031,078.  This compares to a cash balance of CDN $1,695,652 at the end of the
1994 period.

         Capital  expenditures  were  approximately  CDN $3,216,000 for the 1995
period, primarily for construction of the new Philadelphia, Rosedale and British
Columbia Institute of Technology locations.

         Changes in non-cash  working  capital items resulted in a net source of
funds of CDN $272,288 in the twelve months ended December 31, 1995 compared to a
net source of CDN $84,148 in the comparable period for 1994. The principal usage
in 1995 was in accounts receivable, offset by an increase in accounts payable.

         During the year the Company  completed two financings.  The first,  for
CDN$1,100,000  with the  Toronto  Dominion  Bank of Canada  was used for the new
locations in the Rosedale on Robson Hotel in Vancouver and the British  Columbia
Institute of Technology in Burnaby,  British Columbia.  The second financing was
completed  in  December  1995 with a major U.S.  based  pension  money  manager,
GEIPPP,  II.  It was  for  U.S.  $1,000,000  in  equity  and  U.S.$3,000,000  in
Convertible  subordinated  Notes,  with up to  U.S.$6,000,000  additional  notes
available, subject to certain conditions.

         The Company  plans to open new locations in the 600 room Holiday Inn on
the  Embarcadero  in  San  Diego,  California  and  in a  heritage  site  in the
entertainment region of Toronto, Ontario in the first half of 1996. A portion of
the Company's cash reserves will be utilized to complete these locations.

         The Company has plans to open  additional  new units during  1996.  The
Company has sufficient funds available to complete these openings.  As discussed
above, additional financing is available, subject to certain conditions.
<PAGE>
ITEM 7            FINANCIAL STATEMENTS

          
ELEPHANT & CASTLE GROUP INC.


Consolidated Financial Statements
December 31, 1995
(Canadian Dollars)






         INDEX

         Auditors' Report to the Shareholders                 

         Consolidated Financial Statements

         Consolidated Balance Sheets                          

         Consolidated Statements of Income                    

         Consolidated Statements of Shareholders' Equity      

         Consolidated Statements of Cash Flows                

         Notes to Consolidated Financial Statements           




<PAGE>

AUDITORS' REPORT TO THE SHAREHOLDERS

We have audited the consolidated  balance sheets of Elephant & Castle Group Inc.
as at December  31,  1995 and 1994 and the  consolidated  statements  of income,
shareholders'  equity and cash flows for the years ended December 31, 1995, 1994
and 1993.  These 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 Canada which do not differ in any material  respects from auditing  standards
generally  accepted in the United States.  Those standards  require that we plan
and  perform  an audit to obtain  reasonable  assurance  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.

In our opinion,  these consolidated  financial statements present fairly, in all
material respects, the financial position of the Company as at December 31, 1995
and 1994 and the  results  of its  operations  and its cash  flows for the years
ended December 31, 1995,  1994 and 1993 in accordance  with  generally  accepted
accounting  principles  in Canada  applied  on a  consistent  basis.  Accounting
principles  generally accepted in Canada differ in certain significant  respects
from  accounting  principles  generally  accepted  in the United  States and are
discussed in Note 15 to the consolidated financial statements.


"Pannell Kerr Forster"

Chartered Accountants

Vancouver, Canada
April 9, 1996, except for notes 15(b), (d) and (e) as
  to which the date is January 16, 1998

COMMENTS BY AUDITORS FOR U.S. READERS
ON CANADA-U.S. REPORTING CONFLICT

In the United States,  reporting  standards for auditors require the addition of
an explanatory  paragraph  following the opinion paragraph when the consolidated
financial  statements  are affected by  significant  uncertainties  such as that
referred to in the attached  balance sheets as at December 31, 1995 and 1994 and
as described in Note 9 of the consolidated  financial statements.  Our report to
the  shareholders  dated April 9, 1996 is expressed in accordance  with Canadian
reporting standards which do not permit a reference to such uncertainties in the
auditors'  report  when  the  uncertainties  are  adequately  disclosed  in  the
consolidated financial statements.


"Pannell Kerr Forster"

Chartered Accountants

Vancouver, Canada
April 9, 1996, except for notes 15(b), (d) and (e) as
  to which the date is January 16, 1998
<PAGE>
<TABLE>
<CAPTION>
ELEPHANT & CASTLE GROUP INC.
Consolidated Balance Sheets
December 31
(Canadian Dollars)


                                                                               1995           1994
----------------------------------------------------------------------------------------------------- 
Assets (note 7)
<S>                                                                        <C>            <C>
Current
                                                                            
  Cash and term deposits                                                   $ 5,031,758    $ 1,695,652
  Accounts receivable                                                          540,749        377,855
  Inventory                                                                    501,699        508,016
  Deposits and prepaid expenses                                                509,543        500,559
-----------------------------------------------------------------------------------------------------
                                                                             6,583,749      3,082,082
Fixed (notes 3 and 6)                                                        8,798,738      6,741,200
Other (note 4)                                                                 505,613        505,699
-----------------------------------------------------------------------------------------------------

                                                                           $15,888,100    $10,328,981
=====================================================================================================
Liabilities

Current
  Accounts payable and accrued liabilities (note 5)                        $ 3,090,167$     2,316,623
  Current portion of obligation under capital leases (note 6)                   71,382         53,594
  Current portion of long-term debt (note 7)                                   451,173         54,548
-----------------------------------------------------------------------------------------------------
                                                                             3,612,722      2,424,765
Obligation Under Capital Leases (note 6)                                        23,899         81,240
Long-Term Debt (note 7)                                                      4,933,341        146,071
Deferred Income Tax                                                            231,000        331,000
-----------------------------------------------------------------------------------------------------
                                                                             8,800,962      2,983,076
-----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ELEPHANT & CASTLE GROUP INC.
Consolidated Balance Sheets
December 31 (continued)
(Canadian Dollars)


                                                                               1995           1994
-----------------------------------------------------------------------------------------------------  
<S>                                                                        <C>            <C>
Shareholders' Equity

Capital Stock (note 8)
  Authorized
      10,000,000  Common shares without par value
  Issued
       2,604,611  (1994 - 2,493,500) Common shares                           8,092,065      6,772,665
Retained Earnings (Deficit)                                                   (996,067)       585,888
Foreign Exchange Translation Adjustment                                         (8,860)       (12,648)
-----------------------------------------------------------------------------------------------------
                                                                             7,087,138      7,345,905
-----------------------------------------------------------------------------------------------------

                                                                           $15,888,100    $10,328,981
=====================================================================================================
Contingencies and Commitments (notes 9 and 10)
</TABLE>
Approved on behalf of the Board:


/s/J.M. Barnett  Director                              /s/P.J. Barnett  Director
---------------                                        ---------------
J.M. Barnett                                           P.J. Barnett

See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
ELEPHANT & CASTLE GROUP INC.
Consolidated Statements of Income
Years Ended December 31
(Canadian Dollars)


                                                               1995            1994             1993
------------------------------------------------------------------------------------------------------- 
<S>                                                       <C>             <C>             <C>
Sales                                                     $ 25,764,339    $ 25,414,275    $  22,445,883
-------------------------------------------------------------------------------------------------------

Restaurant Expenses
  Food and beverage                                          7,622,183       7,470,248        6,429,822
  Operating
         Labour                                              8,511,442       8,042,819        6,934,122
         Occupancy and other                                 6,716,129       7,334,993        6,743,502
  Restaurant closing costs                                     900,000               0                0
  Depreciation and amortization                              1,223,934         673,756          545,962
-------------------------------------------------------------------------------------------------------

                                                            24,973,688      23,521,816       20,653,408
-------------------------------------------------------------------------------------------------------

Income from Restaurant
  Operations                                                   790,651       1,892,459        1,792,475
-------------------------------------------------------------------------------------------------------

General and Administrative Expenses                          2,287,915       1,612,777        1,493,497
Interest on Long-Term Debt                                      84,691          66,516          135,189
-------------------------------------------------------------------------------------------------------

                                                             2,372,606       1,679,293        1,628,686
-------------------------------------------------------------------------------------------------------

Income (Loss) Before Income Tax                             (1,581,955)        213,166          163,789
-------------------------------------------------------------------------------------------------------

Income Tax
  Current                                                            0          54,000                0
  Income tax reduction arising from utilization of
      loss carry forwards                                            0         (54,000)               0
-------------------------------------------------------------------------------------------------------

                                                                     0               0                0
-------------------------------------------------------------------------------------------------------

Net Income (Loss) For Year                                $ (1,581,955    $    213,166    $     163,789
=======================================================================================================

Earnings (Loss) Per Common Shares                         $      (0.63)   $       0.09    $        0.09
-------------------------------------------------------------------------------------------------------

Weighted Average Number of Shares Outstanding                2,502,759       2,440,583        1,865,000
=======================================================================================================
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
ELEPHANT & CASTLE GROUP INC.
Consolidated Statements of Shareholders' Equity
Years Ended December 31
(Canadian Dollars)


                                                                                                 Foreign           Total
                                                                                Retained         Exchange      Shareholders'
                                                    Common Shares               Earnings        Translation        Equity
                                               Number           Amount          (Deficit)        Adjustment       (Deficit)
---------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>           <C>               <C>               <C>             <C>
Balance,
  December 31, 1992                          1,300,000     $       4,237     $     208,933     $     1,383     $    214,553
      Shares of  subsidiaries                        0            (4,237)                0               0           (4,237)
      Issue of shares, net                   1,130,000         6,770,686                 0               0        6,770,686
      Net income                                     0                 0           163,789               0          163,789
      Loss for year on translation                   0                 0                 0          (4,972)          (4,972)
---------------------------------------------------------------------------------------------------------------------------

Balance,
  December 31, 1993                          2,430,000         6,770,686           372,722          (3,589)       7,139,819
      Issue of shares                           63,500           412,979                 0               0          412,979
      Less:  Unpaid shares                           0          (411,000)                0               0         (411,000)
      Net income                                     0                 0           213,166               0          213,166
      Loss for year on translation                   0                 0                 0          (9,059)          (9,059)
---------------------------------------------------------------------------------------------------------------------------

Balance,
  December 31, 1994                          2,493,500         6,772,665           585,888         (12,648)       7,345,905
      Issue of shares, net                     111,111         1,319,400                 0               0        1,319,400
      Net loss                                       0                 0        (1,581,955)              0       (1,581,955)
      Gain for year on translation                   0                 0                 0           3,788            3,788
---------------------------------------------------------------------------------------------------------------------------

Balance,
  December 31, 1995                          2,604,611     $   8,092,065     $    (996,067     $    (8,860     $  7,087,138
===========================================================================================================================

</TABLE>



See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
ELEPHANT & CASTLE GROUP INC.
Consolidated Statements of Cash Flows
Years Ended December 31
(Canadian Dollars)
                                                                1995             1994             1993
---------------------------------------------------------------------------------------------------------  
<S>                                                       <C>               <C>              <C>
Cash Provided By Operating Activities
  Net income (loss)                                       $  (1,581,955     $    213,166     $    163,789
  Items not involving cash
      Depreciation and amortization                           1,223,934          673,756          545,962
      Deferred income tax                                      (100,000)               0                0
      Loss on disposal of fixed assets                          282,391           10,352            7,312
---------------------------------------------------------------------------------------------------------
                                                               (175,630)         897,274          717,063
---------------------------------------------------------------------------------------------------------

Changes in Non-Cash Working Capital
  Accounts receivable                                          (162,895)          23,545         (212,507)
  Inventory                                                       6,317          (37,565)         (79,842)
  Deposits and prepaid expenses                                  (8,985)        (118,524)        (249,458)
  Accounts payable and accrued liabilities                      773,544          216,692          279,646
  Other                                                               0                0          (30,000)
---------------------------------------------------------------------------------------------------------
                                                                607,981           84,148         (292,161)
---------------------------------------------------------------------------------------------------------
                                                                432,351          981,422          424,902
---------------------------------------------------------------------------------------------------------

Investing Activities
  Acquisition of fixed assets                                (3,216,156)      (1,382,219)        (229,763)
  Acquisition of other assets                                  (385,769)        (423,324)               0
  Cash surrender value of life insurance                         45,000           45,000           45,000
  Acquisition of trademark                                       (6,850)               0          (93,313)
---------------------------------------------------------------------------------------------------------
                                                             (3,563,775)      (1,760,543)        (278,076)
---------------------------------------------------------------------------------------------------------

Financing Activities
  Proceeds from long-term debt                                5,233,992                0                0
  Repayment of long-term debt                                   (50,097)         (52,556)      (1,548,963)
  Issuance of shares, net                                     1,319,400            1,979        6,770,686
  Obligation under capital leases                               (39,553)         (46,447)         (40,391)
  Repayment of shareholders' loans                                    0                0       (2,848,563)
---------------------------------------------------------------------------------------------------------
                                                              6,463,742          (97,024)       2,332,769
---------------------------------------------------------------------------------------------------------

Effect of Exchange Rate Changes on Cash                           3,788           (9,059)          (4,972)
---------------------------------------------------------------------------------------------------------

Increase (Decrease) in Cash                                   3,336,106         (885,204)       2,474,623
Cash and Term Deposits, Beginning of Year                     1,695,652        2,580,856          106,233
---------------------------------------------------------------------------------------------------------
Cash and Term Deposits, End of Year                       $   5,031,758     $  1,695,652     $  2,580,856
=========================================================================================================
</TABLE>
See notes to consolidated financial statements.
<PAGE>
ELEPHANT & CASTLE GROUP INC.
Notes to Consolidated Financial Statements
Years Ended December 31
(Canadian Dollars)

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

1.       BASIS OF PRESENTATION

         These  financial  statements  include the accounts of Elephant & Castle
         Group Inc. and its wholly- owned subsidiaries

         (a)      The Elephant & Castle Canada Inc. ("the Canadian  subsidiary")
                  which  owns and  operates  English  style  restaurants  across
                  Canada under the name "The  Elephant & Castle  Restaurant  and
                  Pub",  an upscale  coffee bar under the name "E & C  Express",
                  and a New York style deli under the name "Rosie's".

         (b)      Elephant & Castle Inc. ("the U.S. subsidiary"  incorporated in
                  Texas) which owns and operates  English style  restaurants  in
                  Washington and Pennsylvania.

         All significant inter-company balances and transactions are eliminated.

         The consolidated  financial  statements are prepared in accordance with
         Canadian generally accepted  accounting  principles and all figures are
         in  Canadian  dollars  unless  otherwise  stated.   Canadian  generally
         accepted   accounting   principles  differ  in  certain  respects  from
         accounting  principles  generally  accepted in the United  States.  The
         significant  differences  and the  approximate  related  effect  on the
         consolidated financial statements are set forth in Note 15.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

         (a)      Inventory

                  Inventory  consists of food and  beverages  and is recorded at
                  the  lower of cost or  market.  Cost is  determined  using the
                  first-in, first-out method.

         (b)      Fixed assets

                  Fixed assets are recorded at cost and are depreciated annually
                  as follows:

                  Furniture and fixtures    -        10% straight-line method
                  Point of sale hardware    -        10% straight-line method
                  Computer software         -        20% straight-line method
                  Automobile                -        20% straight-line method

                  Improvements  to leased  premises and property  under  capital
                  leases are being  amortized on the  straight-line  method over
                  the term of the  lease  plus the  first  renewal  option.  For
                  locations   opened   subsequent  to  January  1,  1993,   such
                  improvements are being amortized on a straight-line basis over
                  the term of the lease.

                  China,   glassware  and  cutlery  are  not   depreciated   and
                  replacements are charged directly to operations.
<PAGE>
ELEPHANT & CASTLE GROUP INC.
Notes to Consolidated Financial Statements
Years Ended December 31
(Canadian Dollars)

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

2.       SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (Continued)

         (c)      Foreign currency translation

                  Amounts  recorded  in foreign  currency  are  translated  into
                  Canadian dollars as follows

                  (i)      Monetary  assets  and  liabilities  at  the  rate  of
                           exchange in effect at the balance sheet date;

                  (ii)     Non-monetary  assets and  liabilities at the exchange
                           rates  prevailing at the time of the  acquisition  of
                           the assets or assumption of the liabilities; and,

                  (iii)    Revenues and  expenses  (excluding  depreciation  and
                           amortization which are translated at the same rate as
                           the related  asset),  at the average rate of exchange
                           for the year.

                  Gain and losses arising from  translation of foreign  currency
                  are  deferred   and  included  as  a  separate   component  of
                  shareholders' equity.

         (d)      Earnings per share

                  Earnings  per share  computations  are  based on the  weighted
                  average number of common shares  outstanding  during the year.
                  There is no  dilutive  effect  on  earnings  per share in 1995
                  after the assumed exercise of stock options.

         (e)      Deferred Income Taxes

                  Deferred  income  taxes  arose in prior  years  from  claiming
                  depreciation for income tax purposes in excess of depreciation
                  recorded for accounting purposes.
<PAGE>
ELEPHANT & CASTLE GROUP INC.
Notes to Consolidated Financial Statements
Years Ended December 31
(Canadian Dollars)

--------------------------------------------------------------------------------
3.       FIXED ASSETS

<TABLE>
<CAPTION>
                                                                   1995
------------------------------------------------------------------------------------------ 
                                                                Accumulated
                                                               Depreciation
                                                                   and
                                                   Cost        Amortization       Net
------------------------------------------------------------------------------------------ 
<S>                                           <C>             <C>             <C>
Furniture and fixtures                        $  5,818,990    $  2,805,708    $  3,013,282
Computer software                                   70,652          60,719           9,933
Automobile                                          28,298          24,843           3,455
Leasehold improvements                           8,069,310       2,652,604       5,416,706
China, glassware and cutlery                       355,362               0         355,362
------------------------------------------------------------------------------------------

                                              $ 14,342,612    $  5,543,874    $  8,798,738
==========================================================================================
 
<CAPTION>
                                                                   1994
------------------------------------------------------------------------------------------ 
                                                                Accumulated
                                                               Depreciation
                                                                   and
                                                   Cost        Amortization        Net
------------------------------------------------------------------------------------------ 
<S>                                           <C>             <C>             <C>
Furniture and fixtures                        $  4,736,364    $  2,558,880    $  2,177,484
Computer software                                   69,560          47,362          22,198
Automobile                                          28,298          22,427           5,871
Leasehold improvements                           6,905,270       2,651,408       4,253,862
China, glassware and cutlery                       281,785               0         281,785
------------------------------------------------------------------------------------------

                                              $ 12,021,277    $  5,280,077    $  6,741,200
==========================================================================================
</TABLE>
<PAGE>
ELEPHANT & CASTLE GROUP INC.
Notes to Consolidated Financial Statements
Years Ended December 31
(Canadian Dollars)

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

4.       OTHER ASSETS
<TABLE>
<CAPTION>
                                                                       1995           1994
--------------------------------------------------------------------------------------------- 
<S>                                                                <C>            <C>
Accumulated fund value of life insurance                           $   63,139     $  108,139
Less:  Amount required to fund subsequent year's
        premium                                                        45,000         45,000
--------------------------------------------------------------------------------------------
                                                                       18,139         63,139
Trademark                                                              99,592         93,313
Pre-opening costs                                                     171,584        182,796
Other                                                                 216,298        166,451
--------------------------------------------------------------------------------------------

                                                                   $  505,613     $  505,699
============================================================================================
</TABLE>


5.      ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
<TABLE>
<CAPTION>

                                                                      1995             1994
---------------------------------------------------------------------------------------------- 
<S>                                                              <C>              <C>
Trade payables                                                   $  1,088,615     $  1,097,447
Occupancy costs                                                       311,702          209,555
Accrued salaries, wages and related tax                               371,731          348,922
Sales tax                                                             198,545          298,146
Other                                                               1,119,574          362,553
----------------------------------------------------------------------------------------------

                                                                 $  3,090,167     $  2,316,623
==============================================================================================
</TABLE>
<PAGE>
ELEPHANT & CASTLE GROUP INC.
Notes to Consolidated Financial Statements
Years Ended December 31
(Canadian Dollars)

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


6.      OBLIGATION UNDER CAPITAL LEASES

         The  following is a schedule of future  minimum  lease  payments  under
         capital leases
<TABLE>
<CAPTION>

                                                                     1995           1994
------------------------------------------------------------------------------------------- 
<S>                                                              <C>            <C>
1995                                                             $        0     $   72,907
1996                                                                 80,109         72,907
1997                                                                 20,100         12,898
1998                                                                  3,601              0
------------------------------------------------------------------------------------------

Total minimum lease payments                                        103,810        158,712
Less:  Amount representing interest and
        executory costs                                               8,529         23,878
------------------------------------------------------------------------------------------

                                                                     95,281        134,834
Less:  Current portion                                               71,382         53,594
------------------------------------------------------------------------------------------

Obligation under capital leases                                  $   23,899     $   81,240
==========================================================================================
</TABLE>

        Assets under capital leases consist of certain equipment,  point of sale
        hardware and computer software.
<PAGE>
ELEPHANT & CASTLE GROUP INC.
Notes to Consolidated Financial Statements
Years Ended December 31
(Canadian Dollars)

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

7.      LONG-TERM DEBT
<TABLE>
<CAPTION>
                                                              1995            1994
----------------------------------------------------------------------------------- 
<S>                                                       <C>            <C>
GE Investment  Private Placement Partners II, a limited
partnership,  $3,000,000 U.S. convertible  subordinated
debentures,  interest  only at 4% per annum to November
1996,  5% per annum to November  1997,  6% per annum to
November 1998, 7% per annum to November 1999 and 8% per
annum   thereafter,   repayable  in  equal  semi-annual
instalments  of  one  eighth  of the  principal  amount
outstanding  commencing November 2001. In consideration
for the below  market  interest  rates,  the  agreement
provides  for the  issuance  to the  lender  of  70,555
common  shares in 1996 and 15,000 common shares in each
of 1997,  1998 and 1999.  The lender may  exercise  its
conversion  privilege  at any time on the  basis of one
share for each $8 U.S. of principal                       $ 4,110,000    $        0

Toronto-Dominion  Bank term loans  repayable in monthly
instalments of $23,611 including interest at prime plus
0.75% and  $10,000  plus  interest at prime plus 0.75%,
beginning May 1996, due May 1999,  secured by a general
security  agreement  with a first  fixed  and  floating
charge over all the Canadian  subsidiary's  assets,  an
assignment  of  the  Canadian   subsidiary's   accounts
receivable,    inventory    and    certain    leasehold
improvements                                                1,123,992             0

Camdev   Properties   Inc.  -   repayable   in  monthly
instalments  of $3,002  including  interest at 13%, due
August  1,  1999,   secured  by  a  charge  on  certain
leasehold improvements                                        104,389       125,221

Viking Rideau Corporation - without interest, repayable
in monthly  instalments of $1,000,  due October,  1998,
secured by a charge on certain  leasehold  improvements
34,000 46,000

Oxford  Development  Group Inc. - repayable  in monthly
instalments  of $1,943  including  interest  at 8%, due
April, 1996 12,133 29,398

----------------------------------------------------------------------------------- 
                                                            5,384,514       200,619
Less:  Current portion                                        451,173        54,548
-----------------------------------------------------------------------------------
                                                          $ 4,933,341     $ 146,071
===================================================================================
</TABLE>
<PAGE>
ELEPHANT & CASTLE GROUP INC.
Notes to Consolidated Financial Statements
Years Ended December 31
(Canadian Dollars)

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

7.      LONG-TERM DEBT (Continued)

         Long-term debt principal  repayments due in each of the next five years
         are approximately as follows



                            1996               $  451,000
                            1997                  349,000
                            1998                  351,000
                            1999                  123,000
                            2000                        0
                      Thereafter                4,110,000
                                               ==========

8.      CAPITAL STOCK

        (a)       During 1995,  111,111  shares were issued at $9 U.S. per share
                  in conjunction  with the  convertible  subordinated  debenture
                  financing (note 7).

        (b)       During 1994,  63,500 shares were issued to a director at $4.75
                  U.S. per share.  At December 31, 1995,  $300,000 U.S. of these
                  proceeds were unpaid.  The Company holds security in excess of
                  the unpaid amount.

        (c) During 1993, stock option plans were adopted as follows:

                  (i)      Founders  were  granted  options  to  acquire  up  to
                           100,000  common shares at $6.60 U.S. per share on the
                           5th through 9th  anniversary  date of granting of the
                           options. Exercising of the options may be accelerated
                           if defined net income levels are achieved.

                  (ii)     100,000   common  shares  have  been  set  aside  for
                           granting  of options to key  personnel.  All  options
                           expire on the fifth  anniversary  date of the  grant.
                           Options have been granted for 63,000 common shares.

                  (iii)    20,000 common shares have been set aside for granting
                           of options to  independent  directors of the Company.
                           During 1993,  options to purchase an aggregate 10,000
                           shares at $6.00 U.S.  per share  were  granted to two
                           directors.

                  None of the options have been exercised to date.

        (d)       During 1995, the Company  issued  warrants  entitling  holders
                  thereof to purchase a total of 295,000 common shares at prices
                  ranging from $4.75 U.S. to $6.00 U.S. per share.  The warrants
                  expire from June 30,  1998 to  November  1, 2000.  None of the
                  warrants have been exercised to date.
<PAGE>
ELEPHANT & CASTLE GROUP INC.
Notes to Consolidated Financial Statements
Years Ended December 31
(Canadian Dollars)

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


9.      CONTINGENCIES

         (a)      The Company was a party to two ten year lease  agreements with
                  Shilo Hotels ("Shilo") relating to facilities located at Yuma,
                  Arizona  and  Pomona,  California  respectively.  The  Company
                  asserted  certain  claims against Shilo by reason of the lease
                  agreements.  Shilo,  in  turn,  asserted  claims  against  the
                  Company,  and  commenced  litigation,  still  pending,  in the
                  Superior  Court,  State of  Arizona,  County  of Yuma.  In the
                  action,  Shilo seeks general and special damages  amounting to
                  approximately  $2,560,000 U.S. for alleged breach of the lease
                  agreements at Yuma and Pomona.  In management's  opinion,  the
                  Company has potential  valid defenses and mitigation of damage
                  claims against Shilo,  as well as potential  counterclaims.  A
                  provision of $646,979 Cdn. has been made for potential damages
                  from this action along with legal and closing costs (note 11).
                  Should any recovery or further loss result from the resolution
                  of this claim,  such loss or recovery will be accounted for in
                  that period.

        (b)       In 1989 and 1990, the Canadian  subsidiary received Notices of
                  Reassessment  from Revenue Canada and the Ontario  Ministry of
                  Revenue  regarding a construction  allowance  received in 1984
                  from the landlord for its former Sarnia, Ontario location. The
                  reassessment  has been under appeal since 1989.  The amount of
                  tax  reassessed  was  $209,000.   Including  interest  accrued
                  retroactively   since  1984,  the  total  amount  disputed  at
                  December 31, 1995 approximates $640,000.

                  Legal counsel is of the opinion Revenue Canada's position will
                  not likely be upheld by the courts.

                  When the outcome of the appeal is resolved, the tax liability,
                  if any,  will be  recorded  as an  element  of the  income tax
                  expense for the year it is settled.

        (c)       The Canadian  subsidiary  is  guarantor  on a lease  agreement
                  covering  the  former  Sarnia,  Ontario  restaurant  location.
                  Monthly  rentals  approximate  $9,000  each  to the end of the
                  lease in 1998.
<PAGE>
ELEPHANT & CASTLE GROUP INC.
Notes to Consolidated Financial Statements
Years Ended December 31
(Canadian Dollars)

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

10.     COMMITMENTS

        The  subsidiaries  are committed to leases on their  sixteen  restaurant
        locations  extending  into the 2007 fiscal year.  Minimum annual rentals
        for the restaurants  excluding realty taxes, common area maintenance and
        other charges are as follows:


                      1996                                    $ 1,872,517
                      1997                                      1,781,455
                      1998                                      1,455,830
                      1999                                      1,381,030
                      2000                                      1,408,566
                      2001 to 2007 inclusive                    5,846,269
                                                              -----------

                                                              $13,745,667
                                                              ===========

        Each of the aforementioned  leases provide for the payment of additional
        rent based on  percentages  of gross annual revenue in excess of minimum
        rents, or other graduated formulae derived from gross revenue as defined
        in the particular  lease  agreements.  The percentages  range from 6% to
        11%.

11.     OTHER ITEMS
<TABLE>
<CAPTION>
                                                             1995            1994           1993
------------------------------------------------------------------------------------------------- 
<S>                                                       <C>            <C>             <C>
Abandonment of assets and demolition costs                                                 
relating to restaurant lease not renewed                  $  353,021     $        0      $      0
Less:  Deferred income tax effect                           (100,000)             0             0
-------------------------------------------------------------------------------------------------

                                                             253,021              0             0
Provision for potential damages, abandonment of
assets, legal and other costs relating to restaurant
leases in dispute (note 9)                                   646,979              0             0
-------------------------------------------------------------------------------------------------

                                                          $  900,000     $        0      $      0
=================================================================================================
</TABLE>
<PAGE>
ELEPHANT & CASTLE GROUP INC.
Notes to Consolidated Financial Statements
Years Ended December 31
(Canadian Dollars)

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

12.     INCOME TAX

        (a)

<TABLE>
<CAPTION>

                                                       1995           1994         1993
-------------------------------------------------------------------------------------------
<S>                                                 <C>           <C>            <C>
Statutory rates                                           43%             43%           43%
Income tax at statutory rates                       $      0      $  216,000     $ 135,000
Income tax effect related to the following                 0
  Amortization of share issue costs                        0        (164,000)     (112,000)
  Amortization of construction
     allowances                                            0         (30,000)      (30,000)
  Non-deductible items                                     0          32,000         7,000
  Benefit of loss carry-forward application                0         (54,000)            0
-------------------------------------------------------------------------------------------

Effective Rate of Income Tax                               0%              0%            0%
===========================================================================================
</TABLE>

        (b)       The  Company  has the  following  available  tax  losses,  the
                  benefits of which have not been  recorded  in these  finanical
                  statements

                    (i)    Non-capital  losses of  approximately  $260,000 which
                           can be applied against future income for Canadian tax
                           purposes up to and including 2002.

                   (ii)    Net capital  losses of  approximately  $270,000 which
                           can be applied  against  future  capital gains income
                           for Canadian tax purposes indefinitely.

                  (iii)    Operating  losses of  approximately  $1,300,000  U.S.
                           which may be carried  forward to apply against future
                           years'  income for United  States income tax purposes
                           expiring in 1998, 1999, 2003 and 2004.
<PAGE>
ELEPHANT & CASTLE GROUP INC.
Notes to Consolidated Financial Statements
Years Ended December 31
(Canadian Dollars)

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

13.     RELATED PARTY TRANSACTIONS

        (a)       Three  officers  of  the  Company  utilize   personal  service
                  corporations to receive the income from their  employment with
                  the Company.  Payments to these corporations totalled $264,000
                  (1994 -  $248,000).  In  addition,  direct  payments  to these
                  officers totalled $79,000 (1994 - $80,000).

        (b)       A  director  of the  Company  provides  legal  and  consulting
                  services  to the  Company.  Fees for these  services  totalled
                  $61,000 (1994 - $39,440).

        (c)       Accounts  receivable include $50,000 (1994 - $51,000) due from
                  directors  of the  Company.  An  additional  $60,000  (1994  -
                  $40,000) of accounts  receivable is due from a Company that is
                  related to a director and which shares  office  premises  with
                  the Company.

        (d)       Other assets  include  $115,000  (1994 - $115,000)  receivable
                  from  an  entity  in  which  a  director  of the  Company  has
                  significant influence.

14.     GEOGRAPHIC SEGMENTED DATA
<TABLE>
<CAPTION>
                                                    1995             1994              1993
----------------------------------------------------------------------------------------------
<S>                                           <C>              <C>               <C>
Sales to unaffiliated customers
  Canada                                      $  19,776,365    $  19,612,304     $  17,567,178
  United States                                   5,987,974        5,801,971         4,878,705
----------------------------------------------------------------------------------------------

                                              $  25,764,339    $  25,414,275     $  22,445,883
==============================================================================================

Income before income tax and other items
  Canada                                      $    (149,458)   $     503,427     $     312,716
  United States                                    (532,497)        (290,261)         (148,927)
----------------------------------------------------------------------------------------------

                                              $    (681,955)   $     213,166     $     163,789
==============================================================================================

Identifiable assets 
  Canada                                      $  12,948,148    $   8,229,799     $   8,608,819
  United States                                   2,939,952        2,099,182         1,396,387
----------------------------------------------------------------------------------------------

                                              $  15,888,100    $  10,328,981     $  10,005,206
==============================================================================================
</TABLE>
<PAGE>
ELEPHANT & CASTLE GROUP INC.
Notes to Consolidated Financial Statements
Years Ended December 31
(Canadian Dollars)

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

15.     DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
        ACCOUNTING PRINCIPLES (CANADIAN GAAP AND U.S. GAAP)

        (a)       Income tax

                  The Financial  Accounting  Standards  Board ("FASB")  issued a
                  revised  statement on  "Accounting  for Income Tax",  SFAS No.
                  109, which requires  companies to recognize current changes in
                  tax rates in recording  their deferred  income tax liabilities
                  effective for fiscal years  beginning after December 15, 1992.
                  The effect of applying this statement is not significant.

         (b)      Reconciliation   of  earnings   reported  in  accordance  with
                  Canadian GAAP and U.S. GAAP

<TABLE>
<CAPTION>
                                             1995                 1994               1993
------------------------------------------------------------------------------------------- 
<S>                                      <C>              <C>                  <C>
Net Income (loss) - Canadian
  GAAP                                   $  (1,581,95     $       213,16       $    163,789
Adjustments to net income
  (loss)
Cost of beneficial conversion
  feature of convertible
  subordinated debentures
  (note 7)                                 (2,435,760)                  0                 0
  Prior years' income tax
      reassessment                                  0            (167,417)                0
  Amortization of leasehold
      improvement costs                      (122,000)           (128,000)         (128,000)
  Income tax effect of
      adjustments                                   0              55,000            55,000
-------------------------------------------------------------------------------------------
Net income (loss) U.S. GAAP             $  (4,139,715)     $      (27,251)     $     90,789
===========================================================================================
Net income (loss) per common share
                                      
  Canadian GAAP                         $       (0.63)    $         0.09       $       0.09
===========================================================================================
  U.S. GAAP                             $       (1.65)    $        (0.01)      $       0.05
===========================================================================================
Average number of shares
  outstanding                               2,502,759           2,440,583         1,865,000
===========================================================================================
</TABLE>
         The beneficial conversion feature of convertible subordinated debenture
         is  accounted  for as an  interest  expense at the date of issue of the
         security. This policy conforms to the accounting for these transactions
         announced by the SEC staff in March, 1997.
<PAGE>
ELEPHANT & CASTLE GROUP INC.
Notes to Consolidated Financial Statements
Years Ended December 31
(Canadian Dollars)

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

         The fiscal 1995  differences  between  earnings under Canadian and U.S.
         GAAP have been  adjusted  to comply  with the SEC  staff's  position of
         retroactive  application  of this  accounting  practice.  As a  result,
         fiscal 1995 U.S. GAAP net loss per common share has been increased from
         ($0.68) to ($1.65).

15.   DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
      ACCOUNTING PRINCIPLES (CANADIAN GAAP AND U.S. GAAP) (Continued)

         The reconciliation of stockholders'  equity reported in accordance with
         Canadian  GAAP and U.S.  GAAP has been  adjusted by CDN  $2,435,760  to
         reflect this charge to income and increase in capital in 1995.

         Under U.S. GAAP,  amortization of leasehold  improvement costs would be
         restricted to the term of the lease.

         Under U.S.  GAAP,  interest  expense would be imputed with respect to a
         non-interest  bearing  loan $34,000  (1994 - $46,000)  received in 1983
         from a landlord  to assist in  financing  leasehold  improvements.  The
         effect on net income of not  recording  imputed  interest  and  related
         income tax is  negligible.  If the imputed  interest had been  recorded
         when the loan  originated,  the effect on the balance sheet at December
         31, 1995 would have been to decrease fixed assets and long-term debt by
         approximately $26,000 (1994 - $31,000).

      (c)         Statements of Cash Flows

         The  Statements  of Cash Flows have been  prepared in  accordance  with
         Canadian GAAP.

         Under  Canadian  GAAP,  Cash and  Equivalents is defined as cash net of
         short-term  borrowings.  Under U.S.  GAAP,  short-term  borrowings  are
         considered a financing activity.

         Under U.S. GAAP,  financing and investing activities that do not result
         in cash  flow  would be  excluded  from  the  statement  and  disclosed
         separately.  The  following  items  included in the  Statements of Cash
         Flows would be disclosed separately under U.S. GAAP
<TABLE>
<CAPTION>

                                         1995          1994            1993
------------------------------------------------------------------------------
<S>                                  <C>            <C>            <C>
Cash surrender value of life
  insurance                          $   45,000     $   45,000     $    45,000
Acquisition of fixed assets             (20,000)             0               0
Obligation under capital
  leases                                  1,800              0               0
==============================================================================
</TABLE>
         Under U.S.  GAAP,  the following  supplemental  disclosure of cash flow
         information would be made
<PAGE>
ELEPHANT & CASTLE GROUP INC.
Notes to Consolidated Financial Statements
Years Ended December 31
(Canadian Dollars)

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                        1995            1994            1993
------------------------------------------------------------------------------
<S>                                  <C>             <C>            <C>
      Interest                       $  78,570       $ 45,237       $  135,189
      Income tax                        75,000         92,417           32,003
==============================================================================
</TABLE>
15.   DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
      ACCOUNTING PRINCIPLES (CANADIAN GAAP AND U.S. GAAP) (Continued)

         (d)      Reconciliation of stockholders'  equity reported in accordance
                  with Canadian GAAP and U.S. GAAP
<TABLE>
<CAPTION>
                                               1995             1994             1993
----------------------------------------------------------------------------------------- 
<S>                                       <C>              <C>              <C>
Stockholders' equity, December 31,
  under Canadian GAAP                     $  7,087,138     $  7,345,905     $  7,139,819
Cumulative adjustments reducing
  net income reported under
  Canadian GAAP to net income
  under U.S. GAAP                           (3,070,977)        (513,217)        (272,800)
Beneficial conversion feature of
  convertible subordinated
  debentures (note 8 and 17(b)(i)            2,435,760                0                0
----------------------------------------------------------------------------------------

Stockholders' equity, U.S. GAAP           $  6,451,921     $  6,832,688     $  6,867,019
========================================================================================
</TABLE>
         (e)      Stock option plans

         The Company  adopted an employee,  a founder's  and a director's  stock
         option  plan in  1993.  Stock  option  activity  under  these  plans is
         summarized as follows
<TABLE>
<CAPTION>
                                                Number                Exercise Price
                                              of Shares          (U.S.$)           (Cdn.$)
------------------------------------------------------------------------------------------ 
<S>                                             <C>             <C>                <C>
Granted 1993 (inception)                        160,000         $ 6.19*            $ 8.48
1995
-  Granted                                       18,000           4.75               6.51
-  Cancelled                                     (4,200)          5.40               7.40
----------------------------------------------------------------------------------------- 

Outstanding December 31, 1995                   173,800         $ 6.06*            $ 8.30
========================================================================================= 
</TABLE>
         *        Weighted average exercise price.
<PAGE>
ELEPHANT & CASTLE GROUP INC.
Notes to Consolidated Financial Statements
Years Ended December 31
(Canadian Dollars)

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

         In 1995 the  FASB  issued  SFAS No.  123  "Accounting  for  Stock-Based
         Compensation",  which  contains a fair  value-based  method for valuing
         stock-based   compensation   that   entities  may  use.  This  measures
         compensation  cost at the  grant  date  based on the fair  value of the
         award.  Compensation is then recognized over the service period,  which
         is usually  the  vesting  period  for U.S.  GAAP  purposes.  Management
         accounts  for  options  under APB  opinion  No. 25. As option  exercise
         prices approximated market price on the dates of grants no compensation
         expense  has been  recognized.  If the  alternative  accounting-related
         provisions  of SFAS No.  123 had been  adopted as of the  beginning  of
         1995,  the effect on 1996 and 1995 U.S.  GAAP net loss per share  would
         have been immaterial.
<PAGE>



                                   SIGNATURES


         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
Registrant caused this 10-KSB/A-1 for the fiscal year ended December 31, 1995 to
be signed on its behalf by the undersigned, thereunto duly authorized.


(Registrant)  Elephant & Castle Group, Inc.


                                    By:  /s/Daniel DeBou
                                         ---------------
                                         Daniel DeBou, 
                                         Vice President/Chief Accounting Officer

Date:  January 28, 1998