----

----

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

| OR |
|----|

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

| OR |
|----|

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

| OR |
|----|

| o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|---------------------------------------------------------------------------------------------|

----

| Large accelerated filer | o | Accelerated filer | o | Non-accelerated filer | þ |
|-------------------------|---|-------------------|---|-----------------------|--------|

----

----

----

| Part I   |                                                       |   | Page   |   |
|----------|------------------------------------------------------------|--------|--------|--------|
|     |                                                       |   |   |   |
| Item 1.  | Identity of Directors, Senior Management and Advisors      |   |   | 5      |   |
| Item 2.  | Offer Statistics and Expected Timetable                    |   |   | 6      |   |
| Item 3.  | Key Information                                            |   |   | 6      |   |
| Item 4.  | Information on the Company                                 |   |   | 24     |   |
| Item 5.  | Operating and Financial Review and Prospects               |   |   | 43     |   |
| Item 6.  | Directors, Senior Management and Employees                 |   |   | 55     |   |
| Item 7.  | Major Shareholders and Related Party Transactions          |   |   | 64     |   |
| Item 8.  | Financial Information                                      |   |   | 71     |   |
| Item 9.  | The Offer and Listing                                      |   |   | 73     |   |
| Item 10. | Additional Information                                     |   |   | 78     |   |
| Item 11. | Quantitative and Qualitative Disclosures About Market Risk |   |   | 87     |   |
| Item 12. | Description of Securities Other Than Equity Securities     |   |   | 87     |   |

| Part II   |                                                                         |   |   |   |
|-----------|------------------------------------------------------------------------------|--------|--------|--------|
|      |                                                                         |   |   |   |
| Item 13.  | Defaults, Dividend Arrearages and Delinquencies                              |   |   | 88     |   |
| Item 14.  | Material Modifications to the Rights of Security Holders and Use of Proceeds |   |   | 88     |   |
| Item 15.  | Controls and Procedures                                                      |   |   | 88     |   |
| Item 16.  | Reserved                                                                     |   |   | 90     |   |
| Item 16A. | Audit Committee Financial Expert                                             |   |   | 90     |   |
| Item 16B. | Code of Ethics                                                               |   |   | 90     |   |
| Item 16C. | Principal Accountant Fees and Services                                       |   |   | 90     |   |
| Item 16D. | Exemptions from the Listing Standards for Audit Committee                    |   |   | 91     |   |
| Item 16E. | Purchases of Equity Securities by Seven Arts                                 |   |   | 91     |   |
| Item 16F. | Changes in Seven Arts’ Certifying Accountant                           |   |   | 91     |   |
| Item 16G. | Corporate Governance                                                         |   |   | 91     |   |

| Part III     |                 |   |   |   |
|--------------|----------------------|--------|--------|--------|
|    |                 |   |   |   |
| Item 17.     | Financial Statements |   |   | 92     |   |
| Item 18.     | Financial Statements |   |   | 92     |   |
| Item 19.     | Exhibits             |   |   | 92     |   |

----

----

----

| Summary Profit and Loss Statements (1)               |   | FiscalYearEndedJune 30,2010 |    |   | FiscalYearEndedJune 30,2009 |   |    | FiscalYearEndedMarch 31,2008 |   |   | ThreeMonthsEndedJune 30,2008 |   |
|------------------------------------------------------|--------|-----------------------------|---------|--------|-----------------------------|--------|---------|------------------------------|--------|--------|------------------------------|--------|
|                                                 |   |                        |    |   |                        |   |    |                         |   |   |                         |   |
| Total Revenues (2)                                   |   | $                           | 6,417   |   |                        | $      | 10,232  |                         |   | $      | 3,266                        |   |   | $ | 2,793 |   |
|                                                 |   |                        |    |   |                        |   |    |                         |   |   |                         |   |   |   |   |   |
| Gross Profit/(Loss)                                  |   | $                           | 4,018   |   |                        | $      | 5,569   |                         |   | $      | (822                         | )      |   | $ | 1,491 |   |
|                                                 |   |                        |    |   |                        |   |    |                         |   |   |                         |   |   |   |   |   |
| Net Profit/(Loss)                                    |   | $                           | (476    | )      |                        | $      | 4,737   | (3)                          |   | $      | (4,557                       | )      |   | $ | 357 |   |
|  Basic  (in ,000’s)             |   |                        | 7,014.0 |   |                        |   | 6,051.5 |                         |   |   | 4,676.3                      |   |   |   | 4,870.8 |   |
| Diluted  (in ,000’s)                 |   |                        | 7,014.0 |   |                        |   | 8,146.9 |                         |   |   | 4,676.3                      |   |   |   | 8,255.9 |   |
|                                                 |   |                        |    |   |                        |   |    |                         |   |   |                         |   |   |   |   |   |
| Earnings (loss) Per Share – Basic              |   | $                           | (0.07   | )      |                        | $      | 0.78    |                         |   | $      | (0.97                        | )      |   | $ | 0.07 |   |
|  Earnings (loss) Per Share – Diluted |   | $                           | (0.07   | )      |                        | $      | 0.58    |                         |   | $      | (0.97                        | )      |   | $ | 0.04 |   |
|                                                 |   |                        |    |   |                        |   |    |                         |   |   |                         |   |   |   |   |   |
| Summary Balance Sheet                                |   |                        |    |   |                        |   |    |                         |   |   |                         |   |   |   |   |   |
|                                                 |   |                        |    |   |                        |   |    |                         |   |   |                         |   |   |   |   |   |
| Total Loans                                          |   | $                           | 18,301  |   |                        | $      | 17,828  |                         |   | $      | 261,656                      | (5)    |   | $ | 248,716 | (5) |
|                                                 |   |                        |    |   |                        |   |    |                         |   |   |                         |   |   |   |   |   |
| Total Assets                                         |   | $                           | 28,625  |   |                        | $      | 27,387  |                         |   | $      | 302,388                      | (5)    |   | $ | 400,853 | (5) |
|                                                 |   |                        |    |   |                        |   |    |                         |   |   |                         |   |   |   |   |   |
| Shareholders’ Equity (6,7)                     |   | $                           | 2,200   |   |                        | $      | 1,717   |                         |   | $      | 410                          |   |   | $ | 832 |   |

----

| Exchange Rate Table |            |    |   |      |   |   |      |   |   |        |   |   |      |
|---------------------|-----------------|---------|--------|-----------|--------|--------|-----------|--------|--------|-------------|--------|--------|-----------|
|                |            |    |   | Year to   |   |   | Year to   |   |   | 3 months to |   |   | Year to   |   |
|                |            |    |   | 6/30/2010 |   |   | 6/30/2009 |   |   | 6/30/2008   |   |   | 31/3/2008 |   |
|                |            |    |   |      |   |   |      |   |   |        |   |   |      |   |
| Profit & Loss   | Average rate    | USD/GBP |   |      | 1.5721 |   |      |   | 1.8224 |        |   |   | 1.9921    |   |   |   | 1.9808 |   |
|                |            |    |   |      |   |   |      |   |   |        |   |   |      |   |   |   |   |   |
|                |            |    |   |      |   |   |      |   |   |        |   |   |      |   |   |   |   |   |
| Balance sheet       | Period end rate | USD/GBP |   |      | 1.4962 |   |      |   | 1.6516 |        |   |   | 1.9944    |   |   |   | 1.9941 |   |

----

----

----

----

----

----

----

| ● | laws and policies affecting trade, investment and taxes, including laws and policies relating to the repatriation of funds and withholding taxes, and changes in these laws, |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | changes in local regulatory requirements, including restrictions on content, |
|---------|------------------------------------------------------------------------------|

| ● | differing cultural tastes and attitudes, |
|---------|------------------------------------------|

| ● | differing degrees of protection for intellectual property, |
|---------|------------------------------------------------------------|

| ● | financial instability and increased market concentration of buyers in foreign television markets, including in European pay television markets, |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | the instability of foreign economies and governments and |
|---------|----------------------------------------------------------|

| ● | war and acts of terrorism. |
|---------|----------------------------|

----

----

----

----

----

| ● | defamation, |
|---------|-------------|

| ● | invasion of privacy, |
|---------|----------------------|

| ● | negligence, |
|---------|-------------|

| ● | copyright or trademark infringement (as discussed above), and |
|---------|---------------------------------------------------------------|

| ● | other claims based on the nature and content of the materials distributed. |
|---------|----------------------------------------------------------------------------|

----

----

----

----

----

----

----

----

----

----

| Film Title              |   |   | Budget |   | Talent                                                                                              |
|-------------------------|--------|--------|--------|--------|-----------------------------------------------------------------------------------------------------|
| Johnny Mnemonic         |   | $      | 24.5M  |   | Cast: Keanu Reeves, Dolph Lundgren, Ice TDirector: Robert LongoWriter: William Gibson               |
| Never Talk To Strangers |   | $      | 11.7M  |   | Cast: Rebecca De Mornay, Antonio Banderas, Dennis MillerDirector: Sir Peter Hall               |
| 9 1/2 Weeks II          |   | $      | 12M    |   | Cast: Mickey Rourke, Angie EverhartDirector: Anne Goursaud                                     |
| Shattered Image         |   | $      | 7.25M  |   | Cast: Anne Parillaud, William BaldwinDirector: Raul RuizProducer: Barbet Schroeder, Lloyd Silverman |

----

| Film Title        |   |   | Budget |   | Talent                                                                                            |
|-------------------|--------|--------|--------|--------|---------------------------------------------------------------------------------------------------|
| Onegin            |   | $      | 15.0M  |   | Cast: Ralph Fiennes, Liv TylerDirector: Martha FiennesWriter: Michael Ignatieff, Peter Eitedgui   |
| The Believer (3)  |   | $      | 3.0M   |   | Cast: Ryan Gosling, Billy ZaneWriter/Director: Henry Bean                                    |
| American Rhapsody |   | $      | 3.5M   |   | Cast: Nastassja Kinski, Tony Goldwyn, Scarlett JohanssonWriter/Director: Eva Gardos          |
| Cletis Tout       |   | $      | 15.0M  |   | Cast: Christian Slater, Tim Allen, Portia DeRossi, Richard DreyfussDirector: Chris Ver Weil  |
| Interstate 60     |   | $      | 10.0M  |   | Cast: James Marsden, Kurt Russell, Amy Smart, Gary OldmanDirector: Bob GaleWriter: Chris Ver Weil |

----

| Film Title          |   |   | Budget |   | Talent                                                                                           |
|---------------------|--------|--------|--------|--------|--------------------------------------------------------------------------------------------------|
| Rules of Engagement |   | $      | 52.0M  |   | Cast: Tommy Lee Jones, Samuel JacksonDirector: William FriedkinWriter: Stephan Gagan, James Webb |
| Rat Race            |   | $      | 55.0M  |   | Cast: Cuba Gooding Jr., Rowan AtkinsonDirector: Jerry Zucker                                |
| Hardball            |   | $      | 47.0M  |   | Cast: Keanu ReevesWriter/Director: Brian Robbins                                            |

----

----

----

----

|                   |   | Year ended |      |   | Year ended |   |      | 3 months ended |   |   | Year ended |   |
|------------------------|--------|------------|-----------|--------|------------|--------|-----------|---------------------|--------|--------|------------|--------|
|                   |   | June 30,   |      |   | June 30,   |   |      | June 30,            |   |   | March 31,  |   |
|                   |   | 2010       |      |   | 2009       |   |      | 2008                |   |   | 2008       |   |
|                   |   |       |      |   |       |   |      |                |   |   |       |   |
| Europe                 |   | $          | 110,285   |   |       | $      | 563,753   |                |   | $      | 568,061    |   |   | $ | 1,726,841 |   |
| North America          |   |       | 1,714,271 |   |       |   | 2,278,490 |                |   |   | 2,086,902  |   |   |   | 884,936 |   |
| South America          |   |       | 24,000    |   |       |   | 173,536   |                |   |   | 0          |   |   |   | 222,673 |   |
| Africa and Middle East |   |       | 0         |   |       |   | 100,511   |                |   |   | 26,447     |   |   |   | 6,178 |   |
| Asia                   |   |       | 91,942    |   |       |   | 366,815   |                |   |   | 86,706     |   |   |   | 401,580 |   |
| Australia              |   |       | 34,018    |   |       |   | 734,804   |                |   |   | 24,720     |   |   |   | 23,600 |   |
|                   |   |       |      |   |       |   |      |                |   |   |       |   |   |   |   |   |
| Total                  |   | $          | 1,974,516 |   |       | $      | 4,217,909 |                |   | $      | 2,792,836  |   |   | $ | 3,265,808 |   |

| a.   | $2,650,794 of fee income derived from the Equicap transactions, a structured finance transaction with UK investors who invested in certain third party motion pictures distributed by the Group.  The fee items related to the Equicap transactions were contractually entered with Seven Arts Pictures Louisiana LLC (“SAPLA”), a related party or an affiliate who is acting on behalf of the Group but collected and recorded by the Group under the Group’s agreement with SAPLA as fee income. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Producer's fees of $637,397 resulting from excess tax credits received on Night of the Demons. This item was collected by SAPLA who then paid or will pay it over to the Group under the agreement between the Group and SAPLA. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Producer’s fees income of $1,154,728 resulting from excess tax credits received on American Summer (Pool Boys) and Autopsy. This item will be collected by SAPLA and will be paid over to the Group under the Group’s agreement. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| a.   | $5,085,679 of net fee income derived from the Zeus transaction, a structured finance transaction with UK investors who invested in certain of the Group’s motion picture and distribution activities. The Zeus transaction resulted in a net benefit to the Group of $16,002,766, of which $10,917,087 has been applied as a reduction in certain of the Group's motion picture costs and the balance has been recorded as fee income. The fee items related to the Zeus transaction were contractually entered with SAPLA, but collected and recorded by the Group under the Group’s agreement with SAPLA. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Tax credit revenues of $928,634 resulting from certain infrastructure expenditures relating to its post-production facilities in Louisiana made by the Group. This item was collected by SAPLA and paid over to the Group |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| Title                           |   | Talent           |   |                  |   | Delivery date |   | First US release |   | Date DistributionRights Terminate |
|---------------------------------|--------|------------------|--------|-----------------------|--------|---------------|--------|------------------|--------|-----------------------------------|
|                            |   |             |   |                  |   |          |   |             |   |                              |
| American Summer aka             |   | Director:        |   | J.B. Rogers           |   | 06/08         |   | Scheduled 3/11   |   | n/a                               |
| The Pool Boys (CR)              |   | Cast:            |   | Matthew Lillard       |   |          |   |             |   |                              |
| (All Territories)               |   |             |   | Efren Ramirez         |   |          |   |             |   |                              |
|                            |   |             |   |                  |   |          |   |             |   |                              |
| +Asylum (CR)                    |   | Writer:          |   | Patrick Marber        |   | 05/04         |   | 08/05            |   | n/a                               |
| (All Territories)               |   | Director:        |   | David MacKenzie       |   |          |   |             |   |                              |
|                            |   |             |   | Ian McKellan          |   |          |   |             |   |                              |
|                            |   | Cast:            |   | Natasha Richardson    |   |          |   |             |   |                              |
|                            |   |             |   |                  |   |          |   |             |   |                              |
| Autopsy (CR)                    |   | Director:        |   | Adam Gierasch         |   |          |   |             |   |                              |
| (All Territories)               |   | Cast:            |   | Robert Patrick        |   | 06/08         |   | 01/09            |   | n/a                               |
|                            |   |             |   |                  |   |          |   |             |   |                              |
| Back In The Day                 |   | Writer:          |   | Michael Raffanello    |   | 03/05         |   | 05/05            |   | 11/11/2019                        |
| (All International Territories) |   | Director:        |   | James Hunter          |   |          |   |             |   |                              |
|                            |   | Cast:            |   | Ving Rhames           |   |          |   |             |   |                              |
|                            |   |             |   | Ja Rule               |   |          |   |             |   |                              |
|                            |   |             |   |                  |   |          |   |             |   |                              |
| Boo (1)                         |   | Writer/Director: |   | Anthony C. Ferrante   |   | 03/05         |   | 10/05            |   | 5/14/2008                         |
| (All International Territories) |   | Cast:            |   | Trish Cohen           |   |          |   |             |   |                              |
|                            |   |             |   | Happy Mahaney         |   |          |   |             |   |                              |
|                            |   |             |   |                  |   |          |   |             |   |                              |
| A Broken Life                   |   | Writers:         |   | Neil Coombs, Anna Lee |   | 06/08         |   | 09/08            |   | 10/26/2026                        |
| (All International Territories) |   |             |   | & Grace Kosaka    |   |          |   |             |   |                              |
|                            |   | Director:        |   | Neil Coombs           |   |          |   |             |   |                              |
|                            |   | Cast:            |   | Tom Sizemore          |   |          |   |             |   |                              |
|                            |   |             |   | Ving Rhames           |   |          |   |             |   |                              |
|                            |   |             |   | Grace Kosaka          |   |          |   |             |   |                              |
|                            |   |             |   | Saul Rubinek          |   |          |   |             |   |                              |

----

| Captivity                                       |      | Writer:          |          | Larry Cohen                 |   | 03/06  |   | 07/07             |   | 05/10/2008 |
|-------------------------------------------------|-----------|------------------|---------------|-----------------------------|--------|--------|--------|-------------------|--------|------------|
| (All International Territories)                 |      | Director:        |          | Roland Joffe                |   |   |   |              |   |       |
|                                            |      | Cast:            |          | Elisha Cuthbert             |   |   |   |              |   |       |
|                                            |      |             |          |                        |   |   |   |              |   |       |
| Cemetery Gates (1)                              |      | Writer:          |          | Brian Patrick O’Tolle |   | 03/05  |   | 05/06             |   | 04/04/2020 |
| (All International Territories)                 |      | Director:        |          | Roy Knyrim                  |   |   |   |              |   |       |
|                                            |      | Cast:            |          | Reggie Bannister            |   |   |   |              |   |       |
|                                            |      |             |          |                        |   |   |   |              |   |       |
| Deal (CR)                                       |      | Writers:         |          | Gil Cates, Jr.         |   | 03/07  |   | 04/08             |   | n/a        |
| (All Territories)                               |      |             |          | & Marc Weinstock        |   |   |   |              |   |       |
|                                            |      | Director:        |          | Gil Cates, Jr.         |   |   |   |              |   |       |
|                                            |      | Cast:            |          | Burt Reynolds               |   |   |   |              |   |       |
|                                            |      |             |          | Bret Harrison               |   |   |   |              |   |       |
|                                            |      |             |          | Shannon Elizabeth           |   |   |   |              |   |       |
|                                            |      |             |          | Jennifer Tilly              |   |   |   |              |   |       |
|                                            |      |             |          |                        |   |   |   |              |   |       |
| Drunkboat                                       |      | Writers:         |          | Bob Meyer &             |   | 12/08  |   | not yet scheduled |   | 4/28/2011  |
| (All Territories)                               |      |             |          | Randy Buescher              |   |   |   |              |   |       |
|                                            |      | Director:        |          | Bob Meyer                   |   |   |   |              |   |       |
|                                            |      | Cast:            |          | John Malkovich              |   |   |   |              |   |       |
|                                            |      |             |          | John Goodman                |   |   |   |              |   |       |
|                                            |      |             |          | Dana Delaney                |   |   |   |              |   |       |
|                                            |      |             |          |                        |   |   |   |              |   |       |
| Gettin’ It                                |      | Writer/Director: |          | Nick Gaitatjis              |   | 12/06  |   | 08/07             |   | 04/04/2017 |
| (All Territories)                               |      | Cast:            |          | Jessica Canseco             |   |   |   |              |   |       |
|                                            |      |             |          | Patrick Censoplano          |   |   |   |              |   |       |
|                                            |      |             |          | Cheryl Dent                 |   |   |   |              |   |       |
|                                            |      |             |          | Sandra Staggs               |   |   |   |              |   |       |
|                                            |      |             |          |                        |   |   |   |              |   |       |
| Hades aka                                       |      | Director:        |          | Gabriel Bologna             |   | 05/09  |   | not yet scheduled |   | 10/26/2027 |
| The Black Waters of Echo Pond                   |      | Cast:            |          | Robert Patrick              |   |   |   |              |   |       |
| (All International Territories)                 |      |             |          | Danielle Harris             |   |   |   |              |   |       |
|                                            |      |             |          |                        |   |   |   |              |   |       |
| + The Hustle (CR)                               |      | Writers:         |          | David Howard                |   | 10/02  |   | 12/02             |   | n/a        |
| (All Territories except Germany and Canada)     |      |             |          | & Michael Capellupo     |   |   |   |              |   |       |
|                                            | Director: |             | Stuart Cooper |                        |   |   |   |              |   |
|                                            |      | Cast:            |          | Bobbie Phillips             |   |   |   |              |   |       |
|                                            |      |             |          | Robert Wagner               |   |   |   |              |   |       |
|                                            |      |             |          |                        |   |   |   |              |   |       |
| + I’ll Sleep When I’m Dead (CR) (1) |      | Writer:          |          | Trevor Preston              |   | 06/04  |   | 06/04             |   | n/a        |
|                                            | Director: |             | Mike Hodges   |                        |   |   |   |              |   |
| (All International Territories)                 |      | Cast:            |          | Clive Owen                  |   |   |   |              |   |       |
|                                            |      |             |          | Malcolm McDowell            |   |   |   |              |   |       |
|                                            |      |             |          | Jonathan Rhys Meyers        |   |   |   |              |   |       |
|                                            |      |             |          |                        |   |   |   |              |   |       |
| + Johnny Mnemonic (CR)                          |      | Writer:          |          | William Gibson              |   | 12/94  |   | 05/95             |   | n/a        |
| (All Territories)                               |      | Director:        |          | Robert Longo                |   |   |   |              |   |       |
|                                            |      | Cast:            |          | Keanu Reeves                |   |   |   |              |   |       |
|                                            |      |             |          | Dolph Lundgren              |   |   |   |              |   |       |

----

| Knife Edge                      |   | Director:        |   | Anthony Hickox         |   | 06/08             |   | 03/10             |   | 03/23/2031 |
|---------------------------------|--------|------------------|--------|------------------------|--------|-------------------|--------|-------------------|--------|------------|
| (All Territories)               |   | Cast:            |   | Joan Plowright         |   |              |   |              |   |       |
|                            |   |             |   | Natalie Press          |   |              |   |              |   |       |
|                            |   |             |   |                   |   |              |   |              |   |       |
| Men Don’t Lie             |   | Director:        |   | Jane Spencer           |   | not yet scheduled |   | not yet scheduled |   | n/a        |
| (All Territories)               |   | Cast:            |   | Michael Madsen         |   |              |   |              |   |
|                            |   |             |   | Jean-Hughes Anglade    |   |              |   |              |   |       |
|                            |   |             |   |                   |   |              |   |              |   |       |
| The Mesmerist                   |   | Writers:         |   | Ron Marasco            |   | 06/02             |   | 09/02             |   | n/a        |
| (All International Territories) |   |             |   | & Michael Goorjian |   |              |   |              |   |       |
|                            |   | Director:        |   | Gil Cates, Jr.    |   |              |   |              |   |       |
|                            |   | Cast:            |   | Neil Patrick Harris    |   |              |   |              |   |       |
|                            |   |             |   | Jessica Capshaw        |   |              |   |              |   |       |
|                            |   |             |   |                   |   |              |   |              |   |       |
| Mirror Wars                     |   | Writers:         |   | Alex Kustanovich       |   | 11/06             |   | 07/07             |   | 02/03/2011 |
| (All International Territories) |   |             |   | & Oleg Kapanets    |   |              |   |              |   |       |
|                            |   | Director:        |   | Vasily Chiginsky       |   |              |   |              |   |       |
|                            |   | Cast:            |   | Armand Assante         |   |              |   |              |   |       |
|                            |   |             |   | Malcolm McDowell       |   |              |   |              |   |       |
|                            |   |             |   | Rutger Hauer           |   |              |   |              |   |       |
|                            |   |             |   |                   |   |              |   |              |   |       |
| + Never Talk To Strangers       |   | Writers:         |   | Lewis A. Green         |   | 09/95             |   | 10/95             |   | n/a        |
| (CR) (1)                        |   |             |   | & Jordan Rush      |   |              |   |              |   |       |
| (All Territories)               |   | Director:        |   | Peter Hall             |   |              |   |              |   |       |
|                            |   | Cast:            |   | Antonio Banderas       |   |              |   |              |   |       |
|                            |   |             |   | Rebecca DeMornay       |   |              |   |              |   |       |
|                            |   |             |   |                   |   |              |   |              |   |       |
| Night of the Demons (CR)        |   | Director:        |   | Adam Gierasch          |   | 06/10             |   | not yet scheduled |   | n/a        |
| (All Territories)               |   | Cast:            |   | Shannon Elizabeth      |   |              |   |              |   |       |
|                            |   |             |   | Edward Furlong         |   |              |   |              |   |       |
|                            |   |             |   | Diora Baird            |   |              |   |              |   |       |
|                            |   |             |   |                   |   |              |   |              |   |       |
| Nine Miles Down (CR)            |   | Director:        |   | Anthony Waller         |   | 06/09             |   | not yet scheduled |   | n/a        |
| (All Territories)               |   | Cast:            |   | Adrian Paul            |   |              |   |              |   |       |
|                            |   |             |   | Kate Nauta             |   |              |   |              |   |       |
|                            |   |             |   |                   |   |              |   |              |   |       |
| Noise aka The Rectifier (CR)    |   | Writer/Director: |   | Henry Bean             |   | 03/07             |   | 05/08             |   | n/a        |
| (All Territories)               |   | Cast:            |   | Tim Robbins            |   |              |   |              |   |       |
|                            |   |             |   | William Hurt           |   |              |   |              |   |       |
|                            |   |             |   | Bridget Moynahan       |   |              |   |              |   |       |
|                            |   |             |   | William Baldwin        |   |              |   |              |   |       |
|                            |   |             |   |                   |   |              |   |              |   |       |
| + No Good Deed (CR)             |   | Writers:         |   | Christopher Canaan     |   | 05/02             |   | 09/03             |   | n/a        |
| (All Territories)               |   |             |   | & Steve Banancik   |   |              |   |              |   |       |
|                            |   | Director:        |   | Bob Rafelson           |   |              |   |              |   |       |
|                            |   | Cast:            |   | Samuel L. Jackson      |   |              |   |              |   |       |
|                            |   |             |   | Milla Jovovich         |   |              |   |              |   |       |

----

|  Pool Hall Prophets aka                                                                                                                                                                  |   | Writer/Director: |              | Keoni Waxman             |   | 09/05  |   | 12/05             |   | n/a        |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------|-------------------|--------------------------|--------|--------|--------|-------------------|--------|------------|
| Shooting Gallery (CR)                                                                                                                                                                         |   | Cast:            |              | Freddie Prinze, Jr. |   |   |   |              |   |       |
| (All Territories)                                                                                                                                                                             |   |             |              | Ving Rhames              |   |   |   |              |   |       |
|                                                                                                                                                                                          |   |             |              |                     |   |   |   |              |   |       |
|                                                                                                                                                                                          |   |             |              |                     |   |   |   |              |   |       |
| + Popstar                                                                                                                                                                                     |   | Writer:          |              | Timothy Barton           |   | 03/05  |   | 11/05             |   | 10/19/2014 |
| (All International Territories)                                                                                                                                                               |   | Director:        |              | Richard Gabai            |   |   |   |              |   |       |
|                                                                                                                                                                                          |   | Cast:            |              | Aaron Carter             |   |   |   |              |   |       |
|                                                                                                                                                                                          |   |             |              | Alana Austin             |   |   |   |              |   |       |
|                                                                                                                                                                                          |   |             |              |                     |   |   |   |              |   |       |
| Radio Free Albemuth                                                                                                                                                                           |   | Writer/Director: |              | John Alan Simon          |   | 06/10  |   | not yet scheduled |   | 01/06/2025 |
| (International Territories)                                                                                                                                                                   |   |  Cast:      |              |  Alanis Morissette  |   |   |   |              |   |       |
|                                                                                                                                                                                          |   |             |              |                     |   |   |   |              |   |       |
| + Red Riding Hood                                                                                                                                                                             |   | Writer:          |              | Timothy Dolan            |   | 03/06  |   | 06/06             |   | 05/02/2015 |
| (All International Territories excl Indonesia, Israel, Japan, Latin American Satellite TV, Mexico, Middle East, Pan Asian Satellite TV, Portugal, Russia, Slovenia/Croatia, Thailand, Turkey) |   | Director:        |              | Randall Kleiser          |   |   |   |              |   |       |
|                                                                                                                                                                                          | Cast:  |             | Lainie Kazan      |                     |   |   |   |              |   |
|                                                                                                                                                                                          |   |             |              |                     |   |   |   |              |   |
|                                                                                                                                                                                          |   |             |              |                     |   |   |   |              |   |
|                                                                                                                                                                                          |   |             |              |                     |   |   |   |              |   |       |
| + Shattered Image (CR) (1)                                                                                                                                                                    |   | Writer:          |              | Duane Poole              |   | 06/98  |   | 12/98             |   | n/a        |
| (All Territories)                                                                                                                                                                             |   | Director:        |              | Raul Ruiz                |   |   |   |              |   |       |
|                                                                                                                                                                                          |   | Cast:            |              | William Baldwin          |   |   |   |              |   |       |
|                                                                                                                                                                                          |   |             |              | Anne Parillaud           |   |   |   |              |   |       |
|                                                                                                                                                                                          |   |             |              |                     |   |   |   |              |   |       |
| + A Shot At Glory                                                                                                                                                                             |   | Writer:          |              | Denis O’Neill      |   | 01/02  |   | 05/02             |   | 09/30/2016 |
| (All International Territories)                                                                                                                                                               |   | Director:        |              | Michael Corrente         |   |   |   |              |   |       |
|                                                                                                                                                                                          |   | Cast:            |              | Robert Duvall            |   |   |   |              |   |       |
|                                                                                                                                                                                          |   |             |              | Michael Keaton           |   |   |   |              |   |       |
|                                                                                                                                                                                          |   |             |              |                     |   |   |   |              |   |       |
| + Stander (CR)                                                                                                                                                                                |   | Writer:          |              | Bima Stagg               |   | 10/03  |   | 08/04             |   | n/a        |
| (All Territories)                                                                                                                                                                             |   | Director:        |              | Bronwen Hughes           |   |   |   |              |   |       |
|                                                                                                                                                                                          |   | Cast:            |              | Thomas Jane              |   |   |   |              |   |       |
|                                                                                                                                                                                          |   |             |              | Deborah Unger            |   |   |   |              |   |       |
|                                                                                                                                                                                          |   |             |              |                     |   |   |   |              |   |       |
|  + Supercross                                                                                                                                                                            |   | Writer:          |              | Ken Solarz               |   | 08/05  |   | 08/05             |   | 05/25/2019 |
| (All International Territories)                                                                                                                                                               |   | Director:        |              | Steve Boyum              |   |   |   |              |   |       |
|                                                                                                                                                                                          |   | Cast:            |              | Sophia Bush              |   |   |   |              |   |       |
|                                                                                                                                                                                          |   |             |              | Steve Howey              |   |   |   |              |   |       |
|                                                                                                                                                                                          |   |             |              | Cameron Richardson       |   |   |   |              |   |       |
|                                                                                                                                                                                          |   |             |              |                     |   |   |   |              |   |       |
| The Wedding Chest                                                                                                                                                                             |   | Writer:          |              | Ekaterina Tirdatova      |   | 03/08  |   | not yet scheduled |   | 10/04/2021 |
| (All International Territories  excluding Russia, Germany and France)                                                                                                               |   | Director:        |              | Nurbek Egen              |   |   |   |              |   |       |
|                                                                                                                                                                                          | Cast:  |             | Natasha Regnier   |                     |   |   |   |              |   |
|                                                                                                                                                                                          |   |             | Bolot Tentimyshov |                     |   |   |   |              |   |

----

| (i)   | $2,650,794 in net fee income derived from a structured film and distribution cost financing with UK investors and  |
|-----------------|-------------------------------------------------------------------------------------------------------------------------|

| (ii)   | additional producer’s fees of $1,792,125 associated with several films produced in Louisiana whereas fee related revenues in the fiscal year ended June 30, 2009 derived from:  |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)   | $5,085,679 of net fee income which was the balance left over from $16,002,766 received from the Zeus transaction, a structured film and distribution cost financing with UK investors, the majority of which was applied as a reduction of the costs of the films in which they invested, and  |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | $928,634 of tax credit revenues deriving from our receipt of certain infrastructure tax credits from the State of Louisiana as a result of its construction of certain production and post-production facilities in that State. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

| ·   | Amortization and depreciation expense of $14,000, |
|--------------------|---------------------------------------------------|

| ·   | Amortization, write-off, and impairment of capitalized film costs of $2,015,000, |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | Reduction of EBT interest receivable of $179,000 |
|--------------------|--------------------------------------------------|

| ·   | Write-off of other receivables and prepayments of $573,000 |
|--------------------|------------------------------------------------------------|

| ·   | Ordinary shares issued in exchange for interest and fees of $257,000 |
|--------------------|----------------------------------------------------------------------|

| ·   | Bad debt expense of $319,000 |
|--------------------|------------------------------|

| ·   | Forgiveness of debt and interest by lenders of ($534,000), |
|--------------------|------------------------------------------------------------|

| ·   | Write off of previously accrued participation cost of ($215,000) |
|--------------------|------------------------------------------------------------------|

| ·   | Changes in the operating assets and liabilities of ($819,000). |
|--------------------|----------------------------------------------------------------|

----

|   |                                                  |   |   |       |   | Payments Due By Period |   |
|--------|-------------------------------------------------------|--------|--------|------------|--------|------------------------|--------|
|   |                                                  |   | Total  |       |   | Less Than1 Year        |   | 1-3Years |   | 3-5Years |   |   | More Than 5 Years |   |
| 1.     | Bank and Other Production Loans (1)                   |   | $      | 17,388,000 |   |                   | $      | 17,388,000 |   |   |   |   |   |   |   |   |
| 2.     | Post Production Facility Line of Credit + mortgage(2) |   | $      | 1,000,000  |   |                   | $      | 1,000,000 |   |   |   |   |   |   |   |   |
| 3.     | Armadillo Investments plc/EBT (3)                     |   | $      | 1,672,500  |   |                   | $      | 1,672,500 |   |   |   |   |   |   |   |   |
| 4.     | Trafalgar Capital Special Investment Fund (4)         |   | $      | 650,000    |   |                   | $      | 650,000 |   |   |   |   |   |   |   |   |
| 5.     | Lion House                                            |   | $      | 300,000    |   |                   |   | 300,000 |   |   |   |   |   |   |   |   |   |
| 6.     | Sums Due To Producers (5)                             |   | $      | 500,537    |   |                   | $      | 500,537 |   |   |   |   |   |   |   |   |   |
| 7.     | Langley Debenture (6)                                 |   | $      | 3,432,500  |   |                   |   |   |   |   |   | $ | 3,432,500 |   |   |   |   |   |
| 8.     | Convertible debentures                                |   | $      | 470,000    |   |                   | $      | 470,000 |   |   |   |   |   |   |   |   |   |   |
|   | Total                                                 |   | $      | 25,413,537 |   |                   | $      | 21,981,037 |   |   |   | $ | 3,432,500 |   |   |   |   |   |

| (1) | The current bank and production loans include (i) approximately $1,900,000of the ACG Loan described in “Liquidity and Capital Resources” above, (ii) approximately $11,000,000 in special purpose financing arranged for six motion pictures produced by us, and (iii) $4,500,000 owed to Palm Finance Inc,  for production of the motion picture Nine Miles Down.  The limited recourse Arrowhead Loan of $8,300,000 and all assets pledged to secure this Arrowhead loan have been removed from our consolidated balance sheet as of June 30, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Seven Arts Pictures Louisiana LLC (“SAPLA”), a subsidiary of SAP Inc. (one of our affiliates and a  company controlled by Peter Hoffman, our Chief Executive Officer), entered into a Credit Agreement with Advantage Capital Community Development Fund, L.L.C. (“Ad Cap”) dated October 11, 2007 for the acquisition and improvement of a production and post production facility located at 807 Esplanade Avenue in New Orleans, Louisiana.  The aggregate borrowing amount under this facility was $3,700,000, all of which was drawn down as of April 30, 2010.In November 2010 Palm Finance Inc (“Palm”) acquired this mortgage for $1,000,000 and agreed to extend a construction facility of $1,850,000 to complete the facility.  We expect this facility will be completed for a cost not to exceed $1,850,000 on or before May 31, 2011.  We have guaranteed the indebtedness to Palm for the $1,000,000 and ultimately the additional $1,850,000 and have not included it in our total indebtedness.  We do not anticipate the use of any material amount of our working capital to complete and operate this facility, and we expect to realize substantial film production, film infrastructure, historic rehabilitation and other state and federal tax credits and other tax incentives from the acquisition, renovation, and operation of this property as a post production facility.  Management believes that expenditures by SAPLA for this facility would generate approximately $4,000,000 in Louisiana Film Infrastructure tax credits, approximately $3,000,000 in Louisiana State Rehabilitation tax credits and $3,000,000 in Federal Historic Preservation tax credits. |
| (3) | We have guaranteed an additional £1,115,000 ($1,672,500) due from the EBT to Armadillo, including £115,000 of interest. This liability will be met by the EBT from the funds that we advance to it from the proceeds of a future offering.  The second and third payments to Armadillo were due in April and October 2009, and the EBT did not make those payments. In February 2,011 750,000 new shares were pledged to Armadillo in repayment for them extending the repayment date of the £1,000,000 to June 30, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (4) | A portion of the loan due to Trafalgar Capital Special Investment Fund was advanced by us to the Seven Arts Employee Benefit Trust (“EBT”) for the partial acquisition of the Preference Shares owned by Armadillo Investments plc (“Armadillo”).  The loan to Trafalgar came due on June 30, 2009 and we have made a partial payment of $1,000,000 on September 2, 2009.  On June 22, 2010 we entered into an amended agreement with Trafalgar for an extension of the due date of the convertible debentures to December 31, 2010 and the issuance of 340,000 shares in July 2010.  This agreement has been further extended, in January 2011, to March 31, 2011 for the issuance of another 425,000 shares against the loan principal.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (5) | Includes estimated amounts due to producers of motion pictures.  As of June 30, 2010 $480,000 had been provided for.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (6) | Langley’s remaining Debentures have a face value of £1,750,000 (approximately $3,432,500 at the exchange rate prevailing at the time of the financing) and are convertible into an aggregate of 700,000 ordinary shares.  There is no due date or required due date on our Debentures.  The Debentures rank junior to all our indebtedness and senior only to our ordinary or preference shares and they are included as a part of Shareholders’ Equity as there was no stated redemption date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

----

| a)   | To the extent such tax benefit proceeds would exceed the capitalized cost of the film or represent fee income not applied to production cost, such proceeds are accounted for as producers’ fees income where relevant producers contracts are in place. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | To the extent that the Group were to receive benefits from tax advantaged investments relating to |
|----------------|---------------------------------------------------------------------------------------------------|

| a.   | a picture that has not commenced production by a particular date and that investment is forfeited such that the Group has no further obligations to the investor. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | third party productions taken on by the Group as sales agent/distributor then such benefits are also recorded as producer fees income. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------|

----

| 1)   | Film revenues: earned from the exploitation of our new productions, back catalogue and third party productions taken on as sales agent. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------|

| 2)   | Fee-related revenugs: Producer‭s"fees income earned by the Group on productions controlled by the Group is earned when the Group is entitled"to recekve under a `indkng agreement a fixed sum irrespective of the distribution revenue from that picture. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a.   | Persuasive evidence of a sale or licensing arrangement with a customer exists. |
|----------------|--------------------------------------------------------------------------------|

| b.   | The film is complete and, in accordance with the terms of the arrangement, has been delivered or is available for immediate and unconditional delivery (i.e. the “notice of delivery”(NOD)) has been sent and there is a master negative available for the customer). |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | The license period of the arrangement has begun and the customer can begin its exploitation, exhibition, or sale. |
|----------------|-------------------------------------------------------------------------------------------------------------------|

| d.   | The arrangement fee is fixed or determinable. |
|----------------|-----------------------------------------------|

| e.   | Collection of the arrangement fee is reasonably assured. |
|----------------|----------------------------------------------------------|

| ● | Minimum guarantee revenue (i.e. non-refundable advances) is recognized as and when the film is available for delivery to the respective territories.  Cash deposits received on the signing of the contracts are recorded as deferred income until the film is available for delivery (as above) at which point the deposit revenue is recognized.  The Group does not recognize any revenues relating to minimum guarantee on any motion picture or amortization expenses on that picture until United States theatrical release if it has agreed with the licensees that delivery or payment of minimum guarantee will be delayed for any material period of time to permit such a theatrical release. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | Royalty revenue which equates to an agreed share of gross receipts of films is recognized as income as and when the Group is notified of the amounts by the customers through their royalty reports. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| a)   | the UK and several other European territories for their European productions |
|----------------|------------------------------------------------------------------------------|

| b)   | Canada for their Canadian productions |
|----------------|---------------------------------------|

| c)   | Louisiana for their US productions |
|----------------|------------------------------------|

| d)   | Tax preferred financing deals |
|----------------|-------------------------------|

| a)   | exceed the capitalized cost of the film or |
|----------------|--------------------------------------------|

| b)   | represent fee income not applied to production cost, such proceeds are accounted for as producers’ fees income where relevant producers contracts are in place. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a)   | a picture that has not commenced production by the investment agreement closing date that investment is forfeited such that the Group has no further obligations to the investor |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | third party productions taken on by the Group as sales agent/distributor then such benefits are also recorded as producer fees income |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| Name                 |   | Position                 |   | Age |   | Date First Electedor Appointed |   | Date of Expirationof Current Term (1) |
|----------------------|--------|--------------------------|--------|-----|--------|--------------------------------|--------|---------------------------------------|
| Hubert Gibbs         |   | Chairman, Director       |   | 51  |   | April 9, 2010                  |   | November 15, 2011                     |
| Peter Hoffman        |   | CEO,  Director      |   | 60  |   | September 2, 2004              |   | November 15, 2011                     |
| Michael Garstin      |   | President, CFO, Director |   | 62  |   | July 1  2008         |   | November 15, 2010                     |
| Kate Hoffman         |   | COO, Director            |   | 33  |   | February 26, 2008              |   | November 15, 2010                     |
| Anthony Hickox       |   | Director                 |   | 44  |   | October 15, 2007          |   | November 15, 2012                     |
| Elaine New           |   | Director                 |   | 50  |   | January 11, 2007               |   | November 15, 2012                     |
| Daniel Reardon       |   | Director                 |   | 50  |   | November 1, 2010               |   | November 15,2012                      |
| Simon Clement-Davies |   | Director                 |   | 50  |   | January 1,2011                 |   | November 15,2012                      |

----

----

|                       |   | Annual Compensation |                            |   | Long-Term Compensation |   |
|----------------------------|--------|---------------------|---------------------------------|--------|------------------------|--------|
|                       |   |                |                            |   |                   |   |   |   |   |   | Awards |   |   | Payouts |   |
| Name                       |   | Salary($)           |                            |   | Bonus($)               |   |   | OtherAnnualCompensation ($) |   |   | Securities UnderOption/SAR’s Granted(#) |   |   | Shares/UnitsSubject toResaleRestrictions($) |   |   | LTIPPayouts ($) |   |   | All OtherCompensation($) |   |
| Peter Hoffman              |   |                |     500,000 |   |                   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Elaine New (1)             |   |                |  247,500                   |   |                   |   |    -  |   |   |   | - |   |   |   | - |   |   |   |  - |   |   |   | - |   |   |   | - |   |
| Kate Hoffman               |   |                |  85,800                    |   |                   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Michael Garstin            |   |                |  200,000                   |   |                   |   | -  |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Other Directors as a Group |   |                |  94,625                    |   |                   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |

----

| Name                                             |   | Number of Options Granted |    |   | % Of Total Options Granted on Grant Date |   |   | Exercise Price per Share |   | Grant Date |   | Expiration Date |      | Mkt. Valueof SecuritiesUnderlyingOptions onDate of Grant |      |
|--------------------------------------------------|--------|---------------------------|---------|--------|------------------------------------------|--------|--------|--------------------------|--------|------------|--------|-----------------|-----------|----------------------------------------------------------|-----------|
| Michael Garstin                                  |   |                      | 100,000 |   |                                     |   | 100    | %                        |   | $          | 1.54   |            | 6/1/2008  |                                                     | 6/1/2011  |   | $ | 1.80 |   |
| Michael Arata(1)                                 |   |                      | 10,000  |   |                                     |   | 100    | %                        |   | $          | 1.54   |            | 6/1/2008  |                                                     | 6/1/2011  |   | $ | 1.80 |   |
| Tony Hickox(3)                                   |   |                      | 10,000  |   |                                     |   | 100    | %                        |   | $          | 2.29   |            | 2/7/2007  |                                                     | 2/7/2010  |   | $ | 2.29 |   |
| Julia Verdin(3)                                  |   |                      | 10,000  |   |                                     |   | 100    | %                        |   | $          | 2.29   |            | 2/7/2007  |                                                     | 2/7/2010  |   | $ | 2.29 |   |
| Elaine New(3)                                    |   |                      | 10,000  |   |                                     |   | 100    | %                        |   | $          | 2.29   |            | 2/7/2007  |                                                     | 2/7/2010  |   | $ | 2.29 |   |
| Chris Bialek(2)                                  |   |                      | 10,000  |   |                                     |   | 100    | %                        |   | $          | 2.29   |            | 2/7/2007  |                                                     | 2/7/2010  |   | $ | 2.29 |   |
| Philip Kendall                                   |   |                      | 20,000  |   |                                     |   | 100    | %                        |   | $          | 1.46   |            | 9/30/2008 |                                                     | 9/29/2011 |   | $ | 1.15 |   |
| Other Employees                                  |   |                      | 60,000  |   |                                     |   | 100    | %                        |   | $          | 1.55   |            | 11/7/08   |                                                     | 11/7/11   |   | $ | 1.75 |   |
| Total Granted                                    |   |                      | 230,000 |   |                                     |   |   |                     |   |       |   |            |      |                                                     |      |   |   |   |   |
| Exercised during fiscal Year ended June 30, 2009 |   |                      | (10,000 | )      |                                     |   |   |                     |   |       |   |            |      |                                                     |      |   |   |   |   |
| Exercised during fiscal Year ended June 30, 2010 |   |                      | (10,000 | )      |                                     |   |   |                     |   |       |   |            |      |                                                     |      |   |   |   |   |
| Cancelled during fiscal Year ended June 30, 2010 |   |                      | (30,000 | )      |                                     |   |   |                     |   |       |   |            |      |                                                     |      |   |   |   |   |
| Total Outstanding                                |   |                      | 180,000 |   |                                     |   |   |                     |   |       |   |            |      |                                                     |      |   |   |   |   |

----

| Name                                                 |   | Number ofOptions Granted |     |   | Exercise PricePer Share |   |   | Market Value ofSecurities onDate of Grant |   | GrantDate |   | ExpirationDate |
|------------------------------------------------------|--------|--------------------------|----------|--------|-------------------------|--------|--------|-------------------------------------------|--------|-----------|--------|----------------|
| Blue Rider Finance/Robert Oppenheim(1)               |   |                     | 50,000   |   |                    | $      | 1.125  |                                      |   | $         | 1.463  |           |  Jan. 22, 2008 |   | Jan. 23, 2011 |
| Trafalgar CapitalSpecialized Investment Fund(2)      |   |                     | 160,000  |   |                    | $      | 1.013  |                                      |   | $         | 1.463  |           | Jan. 31, 2008 |   | Jan. 30, 2013 |
| Trafalgar CapitalSpecialized Investment Fund(2)      |   |                     | 60,000   |   |                    | $      | 1.013  |                                      |   | $         | 1.988  |           |  Oct. 30, 2008 |   |   Oct. 30, 2013 |
| Total Granted                                        |   |                     | 270,000  |   |                    |   |   |                                      |   |      |   |           |   |   |   |
| Exercised during the fiscal year ended June 30, 2009 |   |                     | (12,500  | )      |                    |   |   |                                      |   |      |   |           |   |   |   |
| Cancelled during the fiscal year ended June 30, 2009 |   |                     | (220,000 | )      |                    |   |   |                                      |   |      |   |           |   |   |   |
| Total Outstanding                                    |   |                     | 37,500   |   |                    |   |   |                                      |   |      |   |           |   |   |   |

----

| 1.     | Compensation Committee will recommend amount of bonus pool each year, which will be 10% of pre-tax profits for the prior fiscal year.  The CEO and the Compensation Committee will decide recipients of project-related awards and amounts. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                  |
| 2.     | In future years, comparisons will be made to peer groups in the motion picture industry.                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                  |
| 3.     | There will be two types of annual bonuses:(a) Those related to the overall management of our Group(b) Those related to performance on specific projects                                                                                          |
|   |                                                                                                                                                                                                                                                  |
| 4.     | Managers in bonus pool:(a) Peter Hoffman (Chairman/CEO)(b) Michael Garstin (President/CFO)(c) Kate Hoffman (COO)(d) Elaine New                                                                                                                   |
| 5.     | Management bonuses as follows:                                                                                                                                                                                                                        |

|                  |   | CEO    |   |   | Management |   |   | Project Related |   |
|-----------------------|--------|--------|--------|--------|------------|--------|--------|-----------------|--------|
| Group Results         |   |   | 40     | %      |       |   | 25     | %               |   |   | 15 | % |
| Individual Objectives |   |   | 10     | %      |       |   | 30     | %               |   |   | 50 | % |
| Subjective            |   |   | 20     | %      |       |   | 20     | %               |   |   | 25 | % |
| Share Performance     |   |   | 30     | %      |       |   | 25     | %               |   |   | 10 | % |

| 6.     | Individual objects for Management will be agreed by the Board.    |   |
|--------|-------------------------------------------------------------------|--------|
|   |                                                              |   |
| 7.     | Criteria include individual contributions to our overall profits. |   |

----

| ● | the right to sole responsibility for creative and business decisions regarding motion pictures we develop and produce, |
|---------|------------------------------------------------------------------------------------------------------------------------|

| ● | a right of first refusal to produce remakes, sequels or prequels of motion pictures produced by Mr. Hoffman and acquired by us or any motion picture produced by us during his employment, |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | an annual salary of $500,000 per year plus bonuses, expenses and a signing option and |
|---------|---------------------------------------------------------------------------------------|

| ● | a right upon termination without cause to a lump sum payment of approximately $1,500,000, an assignment of all projects in development during the term of his employment and any amounts due upon such compensation as an excise tax. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| Name of Beneficial Owner (1)          |   | Address of Beneficial Owner                             |   | Amount ofBeneficialOwnership (1) |    |   | Percent of Class |   |
|---------------------------------------|--------|---------------------------------------------------------|--------|----------------------------------|---------|--------|------------------|--------|
| Seven Arts Pictures Inc.(2)           |   | 1801 Century Park East, Ste 1830, Los Angeles, CA 90067 |   |                             | 319,000 |   |             |   | 2.5 | % |
| Michael Garstin  (3)        |   | 1801 Century Park East, Ste 1830, Los Angeles, CA 90067 |   |                             | 100,000 |   |             |   | 0.8 | % |
| All Officers and Directors as a Group |   |                                                    |   |                             | 419,000 |   |             |   | 3.3 | %  |

| (1) | Beneficial ownership is determined in accordance with the Rule 13d-3(a) of the Exchange Act and generally includes voting or investment power with respect to securities and includes shares underlying convertible debentures, warrants and options that have been issued, granted and have vested and not been exercised and shares underlying options that will vest within the next 60 days only in respect to any person listed in the table.  Except as subject to community property laws, where applicable, the person named above has sole voting and investment power with respect to all ordinary shares shown as beneficially owned by him/her. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Peter Hoffman controls approximately 70% of the voting stock of SAP Inc., and is a beneficial owner of the Group’s ordinary shares held by Seven Arts Pictures Inc.  This total does not include 700,000 ordinary shares pledged to ApolloMedia and over which ApolloMedia has dispositive control , 750,000 shares issued to New Moon Pictures LLC over which Armadillo has disposive control and 119,000 shares pledged to an insurance company over which the insurance company has disposive control.                                                                                                                                             |
| (3) | Represents ordinary shares issuable underlying vested options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

----

|  Name of Beneficial Owner (2)              |   |  Address of Beneficial Owner                       |   | Amount ofBeneficialOwnership(2) |      |   | Percent ofClass |   |
|-------------------------------------------------|--------|---------------------------------------------------------|--------|---------------------------------|-----------|--------|-----------------|--------|
| Seven Arts Employee Benefit Trust(4)            |   | 38 Hertford Street, London, W1J 7SG                     |   |                            | 1,333,333 |   |            |   | 10.3 | % |
| Langley Park Investment Trust PLC(5)            |   | 30 Finsbury Square, London, EC2P 2YU                    |   |                            | 1,657,627 |   |            |   | 12.8 | % |
| New Moon Pictures LLC                           |   | 900 Royal Street New Orleans, Louisiana,USA             |   |                            | 750,000   |   |            |   | 5.8 | % |
| ApolloMedia GmbH & Co. Filmproduktion KG(6) |   | Candidplatz 11, 81543 Munich, Germany                   |   |                            | 700,000   |   |            |   | 5.4 | % |
| Trafalgar Capital Investment Fund (7)           |   | 8-10 Rue Mathias Hardt, BP 3023, Luxembourg L-1030      |   |                            | 650,000   |   |            |   | 5.0 | %  |
| Scarborough Ltd (10)                            |   | 1801 Century Park East, Ste 1820, Los Angeles, CA 90067 |   |                            | 650,000   |   |            |   | 6.2 | % |
| Seven Arts Pictures Inc.(3)                     |   | 1801 Century Park East, Ste 1820, Los Angeles, CA 90067 |   |                            | 319,000   |   |            |   | 2.5 | % |
| Michael Garstin(9)                              |   | 1801 Century Park East, Ste 1820, Los Angeles, CA 90067 |   |                            | 100,000   |   |            |   | 0.8 | % |
|  Other Employees (9)                       |   | 1801 Century Park East, Ste 1820, Los Angeles, CA 90067 |   |                            | 60,000    |   |            |   |   | (8)  |
| Total officers and directors as a group(10)     |   | 1801 Century Park East, Ste 1820, Los Angeles, CA 90067 |   |                            | 2,048,000 |   |            |   | 15.9 | %  |
|                                            |   |                                                    |   |                            |      |   |            |   |   | %  |

| (1)       | Total shareholding as at February 22, 2011 = 10,589,100                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (2)  | Beneficial ownership is determined in accordance with the Rule 13d-3(a) of the Exchange Act and generally includes voting or investment power with respect to securities and includes shares underlying convertible debentures, warrants and options that have been issued, granted and have vested and not been exercised and shares underlying options that will vest within the next 60 days only in respect to any person listed in the table.  Except as subject to community property laws, where applicable, the person named above has sole voting and investment power with respect to all ordinary shares shown as beneficially owned by him/her. Total shares issued as at February 22, 2011 was 10,589,100 with the balance of beneficial ownership in options and potential loan conversions. |

| (3)  | Peter Hoffman controls approximately 70% of the voting stock of SAP Inc., and is a beneficial owner of our ordinary shares held by Seven Arts Pictures Inc.  This total does not include 700,000 ordinary shares pledged to ApolloMedia and over which ApolloMedia has dispositive control nor 750,000 shares issued to New Moon Pictures LLC and pledged to Armadillo nor 119,000 shares issued to SAP Inc., and pledged to an insurance company.  We intend to use the proceeds from the offering to pay a settlement amount with ApolloMedia and Armadillo upon the occurrence of which these 1, 450,000 shares will be returned to us).  Mr. Hoffman has voting and dispositive powers with respect to these shares. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)  | Under the terms of the Trust Deed establishing the Seven Arts Employee Benefit Trust, EBT is to abstain from voting any of our shares that it holds unless we determine otherwise.  Ben Newman has voting and dispositive powers with respect to these shares. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Includes 1,400,000 ordinary shares underlying convertible redeemable debentures Rufus Pearl has voting and dispositive powers with respect to these shares. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (6) | Represents 700,000 ordinary shares pledged by SAP Inc. and over which ApolloMedia has dispositive control. We intend to use proceeds from this offering to pay a settlement amount to ApolloMedia upon which time SAP Inc. and ApolloMedia have agreed that such ordinary shares would be returned to us.  Joerg Westerkamp has dispositive powers with respect to these shares and Mr. Hoffman has voting powers with respect to these shares. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Represents up to 225,000 ordinary shares underlying the balance of a term loan plus 425,000 shares issued. Franklin Ramchandani has voting and dispositive powers with respect to these shares. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8) | Less than one percent. |
|-----|------------------------|

| (9) | Represents ordinary shares underlying vested options. |
|-----|-------------------------------------------------------|

| (10) | Represents 319,000 shares and $225,000 convertible debentures convertible at $0.80. Clive Dankin has voting and dispositive powers with respect to these shares. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (11) | This includes all pledged shares (700,000 pledged to  Apollo, 750,000pledged to Armadillo, 119,000 pledged to an insurance company ) plus SAP Inc’s shares ,Michael Garstin and other employees options. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  Purchaser                                                 |    | Date of Issuance                                                                  |    | Number of Securities           |    | Title of Securities                                                |    | Consideration                                        |
|-----------------------------------------------------------------|--------------|---------------------------------------------------------------------------------------------|--------------|------------------------------------------|--------------|------------------------------------------------------------------------------|--------------|------------------------------------------------------|
|                                                            |         |                                                                                        |         |                                     |         |                                                                         |         |                                                 |
| Seven Arts Employee Benefit Trust                               |         | November 2, 2008May 5, 2010                                                                 |         | 2,000,000400,000                         |         | Ordinary SharesOrdinary Shares                                               |         | (1)(1)                                               |
|                                                            |         |                                                                                        |         |                                     |         |                                                                         |         |                                                 |
| Langley Park Investment Trust PLC                               |         | March 15, 2007                                                                              |         | 1,000,000                                |         | Ordinary Shares                                                              |         | (2)                                                  |
|                                                            |         |                                                                                        |         |                                     |         |                                                                         |         |                                                 |
| Unique Fidelity Engineering Ltd.                                |         | June 28 2007August 15 2007                                                                  |         | 34,000500,000                            |         | Ordinary SharesOrdinary Shares                                               |         | $100,000$287,000                                     |
|                                                            |         |                                                                                        |         |                                     |         |                                                                         |         |                                                 |
| Michael Garstin                                                 |         | June 1, 2008                                                                                |         | 100,000                                  |         | Options                                                                      |         | (3)                                                  |
|                                                            |         |                                                                                        |         |                                     |         |                                                                         |         |                                                 |
| Chris Bialek                                                    |         | January 3, 2007                                                                             |         | 10,000                                   |         | Options now exercised                                                        |         | (3)                                                  |
|                                                            |         |                                                                                        |         |                                     |         |                                                                         |         |                                                 |
| Philip Kendall                                                  |         | September 30, 2008                                                                          |         | 20,000                                   |         | Options                                                                      |         | (3)                                                  |
|                                                            |         |                                                                                        |         |                                     |         |                                                                         |         |                                                 |
| Michael Arata                                                   |         | June 1, 2008                                                                                |         | 10,000                                   |         | Options now exercised                                                        |         | (3)                                                  |
|                                                            |         |                                                                                        |         |                                     |         |                                                                         |         |                                                 |
| Blue Rider Finance/Robert Oppenheim                             |         | January 22, 2008October 21, 2008                                                            |         | 37,50012,500                             |         | OptionsOrdinary Shares                                                       |         | (4)(6)                                               |
|                                                            |         |                                                                                        |         |                                     |         |                                                                         |         |                                                 |
| Trafalgar Capital Special Investment Fund                       |         | October 15, 2008January 31, 2008October 30, 2008May 22, 2009June 22, 2010 January 11 , 2011 |         | 350,000160,00060,00034,000340,000425,000 |         | Convertible NoteOptionsOptionsOrdinary SharesOrdinary Shares Ordinary Shares |         | (5) (7)(5) (7) (5) (7) (5) (7) (5)(5) |
|                                                            |         |                                                                                        |         |                                     |         |                                                                         |         |                                                 |
| Sendero Capital Inc, Agua Alta Inc, Scarborough Investment Inc. |         | August 30 2010 RevisedDecember 17 2010                                                      |         | 470,000                                  |         | Convertible debt                                                             |         | $470,000                                             |
|                                                            |         |                                                                                        |         |                                     |         |                                                                         |         |                                                 |
| Asher Enterprises                                               |         | May 26, 2010June 15, 2010December 31, 2010                                                  |         | 448,340                                  |         | Convertible DebtConvertible DebtOrdinary Shares                              |         | $150,000 (8)                                         |
|                                                            |         |                                                                                        |         |                                     |         |                                                                         |         |                                                 |
| DC Consulting LLC                                               |         | October 8, 2010                                                                             |         | 25,000                                   |         | Ordinary Shares                                                              |         | (4)                                                  |
|                                                            |         |                                                                                        |         |                                     |         |                                                                         |         |                                                 |
| National Financial Communications Corporation                   |         | October 8, 2010                                                                             |         | 30,000                                   |         | Ordinary Shares                                                              |         | (4)                                                  |
|                                                            |         |                                                                                        |         |                                     |         |                                                                         |         |                                                 |
| Isaacs Capital LLC                                              |         | December 17, 2010                                                                           |         | 350,000                                  |         | Ordinary Shares                                                              |         | (4)                                                  |
|                                                            |         | January 27, 2011                                                                            |         | 600,000                                  |         | Ordinary Shares                                                         |         |                                                 |
|                                                            |         |                                                                                        |         |                                     |         |                                                                         |         |                                                 |
| New Moon Pictures                                               |         | February 22, 2011                                                                           |         | 750,000                                  |         |  Ordinary Shares                                                        |         |  (9)                                            |

----

----

| ● | Upon acquisition of control of our Group by SAP Inc. in September 2004, we entered into an agreement with SAP Inc. under which SAP Inc. provided the services of Peter Hoffman for the amount of his contracted salary and the Los Angeles office and staff of SAP Inc. to us at cost.  Pursuant to two interGroup agreements, SAP Inc. also from time-to-time has and will own limited liability companies in the United States which distribute our motion pictures for a fee, with all profits ensuing to our benefit.  These companies may also provide other services to us at no fee other than Mr. Hoffman’s salary and the direct third-party costs of SAP Inc.’s Los Angeles office, all of which are reflected in our financial statements.  These other services may include accounting services, audits of distribution statements, collection of accounts receivable, supervision of production of motion pictures and similar day-to-day aspects of our business. SAP Inc. has assigned to us any proceeds arising from services performed by SAP Inc. on our behalf.  We have granted SAP Inc. the power and authority to enter into agreements on our behalf. SAP Inc. is not to take any actions on our behalf without our approval. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ● | Because we do not have a working capital line of credit for movie production, (although we do have a line of credit available to our affiliate, SAPLA, to finish the restoration of the post-production facility at 807, Esplanade, New Orleans), SAP Inc. directly or through various Louisiana limited liability companies of which it is managing member, have from time-to-time made non-interest bearing advances to us or our subsidiaries, when we have been unable to collect our receivables on a timely basis.  All advances have been for customary working capital purposes and total $3,021,184 as of June 30, 2010, $2,048,133 as of June 30, 2009, $2,794,727 as of June 30, 2008 and $2,049,405 as of March 31, 2008.  SAP Inc. has pledged an interest in its shares of the Group’s stock to secure certain SAP Inc.. indebtedness. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | Together with SAP Inc., we entered into a settlement agreement, dated September 30, 2006, with ApolloMedia GmbH & Co. Filmproduktion KG (“ApolloMedia”) related to a dispute regarding amounts ultimately payable to ApolloMedia from distribution of the motion picture Stander and one of our subsidiaries’ assumption of indebtedness of approximately $2,000,000 related to Stander upon acquisition of control of our Group by SAP Inc..  The Settlement Agreement fully releases us and our subsidiaries from any liability to ApolloMedia in exchange for a payment of $1,800,000 to be made by SAP Inc. (of which $175,000 has been paid).  In connection with the SAP Inc.’s payment obligation of the settlement amount to ApolloMedia, we issued 700,000 ordinary shares to SAP Inc. which SAP Inc. immediately pledged to ApolloMedia to secure SAP Inc.’s obligations under the settlement agreement. SAP Inc. has agreed that it will (1) return to us all ordinary shares in excess of 400,000 not necessary to satisfy SAP Inc.’s obligations to ApolloMedia and (2) deliver to us from SAP Inc.’s ordinary shares, any ordinary shares in excess of 400,000 in fact sold by SAP Inc. to satisfy the indebtedness to ApolloMedia under the settlement agreement.  The shares pledged to ApolloMedia will be sold by it as necessary for ApolloMedia to derive net proceeds of $1,625,000, and any pledged shares remaining after such sale will be returned to us. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | A guarantee that we provided to SAPLA to cover its indebtedness under a Credit Agreement that SAPLA entered into with Advantage Capital Community Development Fund, L.L.C. (“Ad Cap”), dated October 11, 2007, for the acquisition and improvement of a production and post production facility located at 807 Esplanade Avenue in New Orleans, Louisiana.  The aggregate borrowing amount under this facility was $3,700,000, all of which was drawn down as of April 30, 2010.  In November 2010 Palm Finance Inc (“Palm”) acquired this mortgage secured on the facility for $1,000,000 and agreed to extend a construction facility of $1,850,000 to complete the facility.  We have guaranteed the indebtedness to Palm and have not included it in our total indebtedness.  We expect this facility will be completed for a cost not to exceed $1,850,000 on or before May 31, 2011.  We do not anticipate the use of any material amount of our working capital to complete and operate this facility, and we expect to realize substantial film production, film infrastructure, historic rehabilitation and other state and federal tax credits and other tax incentives from the acquisition, renovation, and operation of this property as a post production facility.  In particular SAPLA has submitted audited expense reports which would generate approximately $4,000,000 in Louisiana Film Infrastructure tax credits $3,000,000 in Louisiana State Rehabilitation tax credits and $3,000,000 in Federal Historic Preservation tax credits. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | A distribution agreement that we entered into with SAPLA later assigned by SAPLA to Seven Arts Pictures Louisiana (Equicap) LLC (“SAPLA Equicap”) pursuant to which we granted SAPLA the right to distribute our motion pictures in return for a distribution fee of 20% of the revenues generated from these films, SAPLA and SAPLA Equicap is obligated under the interGroup agreements described above to pay and has permitted us to retain 100% of all such distribution fees. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Related Party Balances |   | Fiscal YearEnded3/31/08 |      |   | Fiscal YearEnded6/30/09 |   |      | Fiscal YearEnded6/30/10 |   |   | 7/1/2010 throughJanuary 31, 2011 |   |
|------------------------|--------|-------------------------|-----------|--------|-------------------------|--------|-----------|-------------------------|--------|--------|---------------------------------------|--------|
| Opening Balance        |   | $                       | (510,125  | )      |                    | $      | 2,049,405 |                    |   | $      | 2,048,132                             |   |   | $ | 3,021,183 |   |
| Movement in the period |   | $                       | 2,559,530 |   |                    | $      | (1272     | )                       |   | $      | 973,050                               |   |   | $ | 85,214 |   |
| Closing Balance        |   | $                       | 2,049,405 |   |                    | $      | 2048,132  |                    |   | $      | 3,021,183                             |   |   | $ | 3,106,397 |   |

| Transaction (1)                                 |   | Fiscal YearEnded3/31/08 |       |   | FiscalYear Ended6/30/09 |   |          | Fiscal YearEnded6/30/10 |   |   | 7/1/2010 throughJanuary 31, 2011 |   |
|-------------------------------------------------|--------|-------------------------|------------|--------|-------------------------|--------|---------------|-------------------------|--------|--------|---------------------------------------|--------|
| Payment of General and Administrative Costs (2) |   | $                       | (1,279,692 | )      |                    | $      | (922,654      | )                       |   | $      | (1,986,438                            | )      |   | $ | 158,606 |   |
| Payment of Film"Costs                           |   | $                       | (1,370     | )      |                    | $      | (26,500       | )                       |   | $      | (124,448                              | )      |   | $ | 46, 153 |   |
| Payment for Shares Pledged to Apollo            |   | $                       | 1,970,254  |   |                    | $      | (397,031      | )                       |   | $      | 185,438                               |   |   |   |   |   |
| Loans to Us                                     |   | $                       | 1,870,337  |   |                    | $      | 414,874       |                    |   | $      | 828,258                               |   |   | $ | (119,545 | ) |
| Equicap                                         |   |                    |       |   |                    |   |          |                    |   | $      | 1,358,155                             |   |   |   |   |   |
| Grant of Distribution Rights to SAPLA           |   |                    |       |   |                    |   | 930,039  |                    |   | $      | 712,086                               |   |   |   |   |   |
| Total Movement                                  |   | $                       | 2,559,530  |   |                    | $      | (1,272        | )                       |   | $      | 973,050                               |   |   | $ | 85,214 |   |

----

----

| ● | Fireworks Litigation |
|---------|----------------------|

| ● | Jones Film |
|---------|------------|

| ● | Arrowhead Target Fund |
|---------|-----------------------|

----

| ●   | Arrowhead Capital Partners – AGC Loan |
|---------------------|---------------------------------------------|

| ●   | Silverback – Hungarian co-producer |
|---------------------|------------------------------------------|

| ●   | Stonewood/Nine Miles Down |
|---------------------|---------------------------|

----

| ●   | Zeus VAT |
|---------------------|----------|

----

|   Period                                                 |   |  High(dollars) |   |   |  Low(dollars) |   |   | Price atPeriod End(dollars) |   |
|--------------------------------------------------------------------|--------|---------------------|--------|--------|--------------------|--------|--------|-----------------------------|--------|
|                                                               |   |                |   |   |               |   |   |                        |   |
| Month Ended                                                        |   |                |   |   |               |   |   |                        |   |
| January 31, 2011                                                   |   | $                   | 0.75   |   |               | $      | 0.75   |                        |   | $ | 0.70 |   |
| December 31, 2010                                                  |   | $                   | 1.07   |   |               | $      | 0.87   |                        |   | $ | 1.01 |   |
| November 30, 2010                                                  |   | $                   | 0.80   |   |               | $      | 0.48   |                        |   | $ | 0.69 |   |
| October 31, 2010                                                   |   | $                   | 0.91   |   |               | $      | 0.80   |                        |   | $ | 0.84 |   |
| September 30, 2010                                                 |   | $                   | 1.02   |   |               | $      | 0.84   |                        |   | $ | 0.92 |   |
| August 31, 2010                                                    |   | $                   | 1.27   |   |               | $      | 0.94   |                        |   | $ | 1.06 |   |
| July 31, 2010                                                      |   | $                   | 1.67   |   |               | $      | 1.22   |                        |   | $ | 1.35 |   |
| June 30, 2010                                                      |   | $                   | 1.98   |   |               | $      | 1.45   |                        |   | $ | 1.59 |   |
| May 31, 2010                                                       |   | $                   | 2.05   |   |               | $      | 1.70   |                        |   | $ | 1.75 |   |
| April 30, 2010                                                     |   | $                   | 3.00   |   |               | $      | 2.05   |                        |   | $ | 2.05 |   |
| March 31, 2010                                                     |   | $                   | 2.93   |   |               | $      | 1.95   |                        |   | $ | 2.93 |   |
| February 28, 2010                                                  |   | $                   | 2.75   |   |               | $      | 2.06   |                        |   | $ | 2.25 |   |
| January 31, 2010                                                   |   | $                   | 3.25   |   |               | $      | 2.50   |                        |   | $ | 2.70 |   |
| December 31, 2009                                                  |   | $                   | 3.24   |   |               | $      | 1.65   |                        |   | $ | 2.54 |   |
| November 30, 2009                                                  |   | $                   | 4.93   |   |               | $      | 3.03   |                        |   | $ | 3.03 |   |
| October 31, 2009                                                   |   | $                   | 5.20   |   |               | $      | 3.62   |                        |   | $ | 4.80 |   |
| September 30, 2009                                                 |   | $                   | 5.11   |   |               | $      | 3.25   |                        |   | $ | 5.11 |   |
| August 31, 2009                                                    |   | $                   | 4.29   |   |               | $      | 2.61   |                        |   | $ | 3.75 |   |
| July 31, 2009                                                      |   | $                   | 3.10   |   |               | $      | 2.60   |                        |   | $ | 2.61 |   |
| June 30, 2009                                                      |   | $                   | 5.97   |   |               | $      | 3.90   |                        |   | $ | 3.95 |   |
| May 31, 2009                                                       |   | $                   | 6.75   |   |               | $      | 5.00   |                        |   | $ | 6.00 |   |
| April 30, 2009                                                     |   | $                   | 7.00   |   |               | $      | 6.25   |                        |   | $ | 6.60 |   |
| March 31, 2009                                                     |   | $                   | 7.60   |   |               | $      | 5.25   |                        |   | $ | 6.90 |   |
| February 28, 2009 (1)                                              |   | $                   | 6.75   |   |               | $      | 5.05   |                        |   | $ | 5.60 |   |
| Fiscal Quarter Ended                                               |   |                |   |   |               |   |   |                        |   |   |   |   |
|         June 30, 2010           |   | $                   | 3.00   |   |               | $      | 1.45   |                        |   | $ | 1.59 |   |
|         March 31, 2010          |   | $                   | 3.25   |   |               | $      | 1.95   |                        |   | $ | 2.93 |   |
|         December 31, 2009       |   | $                   | 5.20   |   |               | $      | 1.65   |                        |   | $ | 2.54 |   |
|         September 30, 2009      |   | $                   | 5.11   |   |               | $      | 2.60   |                        |   | $ | 5.11 |   |
|         June 30, 2009           |   | $                   | 7.00   |   |               | $      | 3.90   |                        |   | $ | 3.95 |   |
|         March 31, 2009 (1) |   | $                   | 7.60   |   |               | $      | 5.05   |                        |   | $ | 6.90 |   |
| Fiscal Year Ended                                                  |   |                |   |   |               |   |   |                        |   |   |   |   |
|         June 30, 2010           |   | $                   | 5.11   |   |               | $      | 1.45   |                        |   | $ | 1.59 |   |
|         June 30, 2009           |   | $                   | 7.60   |   |               | $      | 3.90   |                        |   | $ | 3.95 |   |

----

| Period                      |   | High(£)   |   |   | Low(£)    |   |   | Price atPeriod End(£) |   |
|-----------------------------|--------|----------------|--------|--------|----------------|--------|--------|----------------------------|--------|
| Month Ended 2/28/07         |   |           | 1.48   |   |           |   | 1.43   |                       |   |   | 1.48 |   |
| Month Ended 3/31/07         |   |           | 1.75   |   |           |   | 1.43   |                       |   |   | 1.43 |   |
| Month Ended 12/31/06        |   |           | 1.58   |   |           |   | 1.53   |                       |   |   | 1.53 |   |
| Month Ended 11/30/06        |   |           | 2.28   |   |           |   | 1.55   |                       |   |   | 1.55 |   |
| Month Ended 10/31/06        |   |           | 2.48   |   |           |   | 1.28   |                       |   |   | 2.28 |   |
| Month Ended 9/30/06         |   |           | 2.08   |   |           |   | .50    |                       |   |   | 1.68 |   |
|                        |   |           |   |   |           |   |   |                       |   |   |   |   |
| Fiscal Year Ended 3/31/2006 |   |           | 1.00   |   |           |   | .75    |                       |   |   | .75 |   |
| Fiscal Year Ended 3/31/2005 |   |           | 1.75   |   |           |   | .95    |                       |   |   | .95 |   |
| Fiscal Year Ended 3/31/2004 |   |           | 3.38   |   |           |   | .88    |                       |   |   | 1.75 |   |
| Fiscal Year Ended 3/31/2003 |   | Not Applicable |   |   | Not Applicable |   |   | Not Applicable             |   |

|   Period                   |   |  High(pence) |   |   |  Low(pence) |   |   | Price atPeriod End(pence) |   |
|--------------------------------------|--------|-------------------|--------|--------|------------------|--------|--------|---------------------------|--------|
| Month ended 3/31/09 (to 3/24/09) (1) |   |              | 145    |   |             |   | 95     |                      |   |   | 145 |   |
| Month ended 2/28/09                  |   |              | 105    |   |             |   | 105    |                      |   |   | 105 |   |
| Month ended 1/31/09                  |   |              | 107.5  |   |             |   | 105    |                      |   |   | 105 |   |
| Month ended 12/31/08                 |   |              | 117.5  |   |             |   | 107.5  |                      |   |   | 107.5 |   |
| Month ended 11/30/08                 |   |              | 132.5  |   |             |   | 117.5  |                      |   |   | 117.5 |   |
| Month ended 10/31/08                 |   |              | 142.5  |   |             |   | 122.5  |                      |   |   | 132.5 |   |
| Month ended 9/30/08                  |   |              | 142.5  |   |             |   | 97.5   |                      |   |   | 129.3 |   |
| Month ended 8/31/08                  |   |              | 97.5   |   |             |   | 57.5   |                      |   |   | 67.25 |   |
|                                 |   |              |   |   |             |   |   |                      |   |   |   |   |
| Fiscal Quarter Ended                 |   |              |   |   |             |   |   |                      |   |   |   |   |
| December 31, 2008                    |   |              | 142.5  |   |             |   | 107.5  |                      |   |   | 107.5 |   |
| September 30, 2008                   |   |              | 142.5  |   |             |   | 57.5   |                      |   |   | 142.5 |   |
| Ended June 30, 2008                  |   |              | 107.5  |   |             |   | 102.5  |                      |   |   | 102.5 |   |
| Ended March 31, 2008                 |   |              | 97.5   |   |             |   | 92.5   |                      |   |   | 92.5 |   |
| Ended December 31, 2007              |   |              | 127.5  |   |             |   | 102.5  |                      |   |   | 102.5 |   |
| Ended September 30, 2007             |   |              | 122.5  |   |             |   | 112.5  |                      |   |   | 122.5 |   |
| Ended June 30, 2007                  |   |              | 127.5  |   |             |   | 147.5  |                      |   |   | 147.5 |   |
|                                 |   |              |   |   |             |   |   |                      |   |   |   |   |
| Fiscal Period Ended                  |   |              |   |   |             |   |   |                      |   |   |   |   |
| June 30, 2008                        |   |              | 127.5  |   |             |   | 57.5   |                      |   |   | 67.25 |   |

----

| Period                                |   | High   |   |   | Low    |   |   | Price atPeriod End |   |
|---------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------------------|--------|
| Month Ended 02/13/09 (see Table 13 A) |   | $      | 6.75   |   |   | $      | 5.25   |               |   | $ | 6.25 |   |
| Month Ended 01/31/09                  |   | $      | 12.50  |   |   | $      | 4.00   |               |   | $ | 6.50 |   |
| Month Ended 12/31/08                  |   | $      | 9.35   |   |   | $      | 7.25   |               |   | $ | 8.00 |   |
| Month Ended 11/30/08                  |   | $      | 9.60   |   |   | $      | 5.50   |               |   | $ | 9.60 |   |
| Month Ended 10/31/08                  |   | $      | 9.25   |   |   | $      | 5.80   |               |   | $ | 8.98 |   |
| Month Ended 9/30/08                   |   | $      | 5.75   |   |   | $      | 2.25   |               |   | $ | 5.75 |   |
| Month Ended 8/31/08                   |   | $      | 2.50   |   |   | $      | .55    |               |   | $ | 2.50 |   |
| Month Ended 7/31/08                   |   | $      | 2.00   |   |   | $      | .75    |               |   | $ | .75 |   |
| Month Ended 6/30/08                   |   | $      | 2.50   |   |   | $      | 1.80   |               |   | $ | 2.30 |   |
| Month Ended 5/31/09                   |   | $      | 2.30   |   |   | $      | 1.80   |               |   | $ | 1.80 |   |
| Month Ended 4/30/08                   |   | $      | 2.50   |   |   | $      | 1.80   |               |   | $ | 1.80 |   |
| Month Ended 3/31/08                   |   | $      | 2.10   |   |   | $      | 2.00   |               |   | $ | 2.10 |   |
|                                  |   |   |   |   |   |   |   |               |   |   |   |   |
| Fiscal Quarter Ended 9/30/08          |   | $      | 5.75   |   |   | $      | .55    |               |   | $ | 5.75 |   |
| Fiscal Quarter Ended 6/30/08          |   | $      | 2.50   |   |   | $      | 1.80   |               |   | $ | 2.30 |   |
| Fiscal Quarter Ended 3/30/08          |   | $      | 2.10   |   |   | $      | 2.00   |               |   | $ | 2.10 |   |

----

----

----

----

----

----

----

----

----

----

----

----

----

----

|                   |   | June 30, |    |
|------------------------|--------|----------|---------|
|                   |   | 2010     |    |   | 2009(e) |   |
| Audit Fees (a)         |   | $        | 228,558 |   |   | $ | - |   |
| Audit Related Fees (b) |   |     | -       |   |   |   | - |   |
| Tax Fees (c)           |   |     | -       |   |   |   | - |   |
| All Other Fees (d)     |   |     | -       |   |   |   | 465,288 |   |
| Total                  |   | $        | 228,558 |   |   | $ | 465,288 |   |

| (a)   | Audit fees consist of fees billed for professional services rendered during the fiscal year ended June 30, 2010 for the audit of the Group’s consolidated financial statements for the fiscal years ended June 30, 2009 and March 31, 2008 and for the three months ended June 30, 2008 as well as the review of the Group’s December 31, 2009’s interim unaudited consolidated financial statements and services that are normally provided in connection with statutory and regulatory filings or engagements.  We engaged our principal accountant, RBSM LLP in October 2009 and there was no professional services rendered prior to such date and hence no audit fees billed during the fiscal year ended June 30, 2009. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Audit related fees – The Group has not been billed by our principal accountant, RBSM LLP for audit related fees other than the audit fees disclosed in (a) since engaged in October 2009 through June 30, 2010. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Tax Fees - The Group has not been billed by our principal accountant, RBSM LLP for tax fees since engaged in October 2009 through June 20, 2010. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   |  All Other Fees - The Group has not been billed by our principal accountant, RBSM LLP for all other fees since engaged in October 2009 through June 30, 2010. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | The aggregated fees billed by Mazars LLP during the fiscal year ended June 30, 2009 for professional services rendered (audit-related work, SEC Filing, NASDAQ and AIM compliance work) to the Group in connection with audit related work of $141,584 and SEC filings, NASDAQ and AIM compliance work of $323,704, which totaled to $465,288. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| ExhibitNo. |       | Description                                                                                                                                                                                                                                                           |
|------------|--------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1.1        |                           | Form of Underwriting Agreement**                                                                                                                                                                                                                                      |
| 2.1        |                           | Asset Acquisition Agreement dated as of July 1, 2010 between Seven Arts Entertainment Inc. and Seven Arts Pictures Plc*                                                                                                                                               |
| 3.1        |                           | Articles of Association*                                                                                                                                                                                                                                              |
| 3.1.2      |                           | Articles of Incorporation of Seven Arts Entertainment Inc.*                                                                                                                                                                                                           |
| 3.2        |                           | By-Laws and Board Memorandum of Seven Arts (incorporated by reference to Exhibit 2 to Amendment No. 12 to our Registration Statement on Form 20-F filed on December 12, 2008)                                                                                         |
| 3.2.2      |                           | By-Laws of Seven Arts Entertainment Inc.*                                                                                                                                                                                                                             |
| 4.1        |                           | Specimen Ordinary Share Certificate*                                                                                                                                                                                                                                  |
| 4.2        |                           | Langley Debentures*                                                                                                                                                                                                                                                   |
| 10.1       |                           | Form of Lock-Up Agreement**                                                                                                                                                                                                                                           |
| 10.2       |                           | Employment Agreement for Peter Hoffman*                                                                                                                                                                                                                               |
| 10.2.2     |                           | Restated Employment Agreement for Peter Hoffman*                                                                                                                                                                                                                      |
| 10.2.3     |                           | Employment Agreement Amendment for Peter Hoffman*                                                                                                                                                                                                                     |
| 10.3       |                           | Employment Agreement for Michael Garstin*                                                                                                                                                                                                                             |
| 10.4       |                           | Subscription Agreement, dated 2004, between Seven Arts Pictures plc and Langley Park Investments plc*                                                                                                                                                                 |
| 10.5       |                           | Subscription Agreement, dated August 2004, between Cabouchon plc and Armadillo Investments plc*                                                                                                                                                                       |
| 10.6       |                           | Loan and Security Agreement, dated as of February 15, 2006, among Arrowhead Target Fund Ltd. Seven Arts Future Flows I, LLC, Seven Arts Filmed Entertainment Limited, and Seven Arts Pictures Inc.*                                                              |
| 10.7       |                           | Master Agreement, dated December 2006, among Cheyne Specialty Finance Fund L.P. and Arrowhead Consulting Group LLC and Seven Arts Pictures PLC, Seven Arts Filmed Entertainment, Ltd., Seven Arts Pictures, Inc., Seven Arts Future Flows I and affiliates* |
| 10.8       |                           | Subscription Agreement, dated March 6, 2007, between Seven Arts Pictures plc and Unique Fidelity Engineering Limited*                                                                                                                                                 |
| 10.9       |                           | Credit Agreement, dated October 11, 2007, between Seven Arts Louisiana, LLC and Advantage Capital Community Development Fund, L.L.C.*                                                                                                                                 |
| 10.10      |                           | Assignment Agreement, dated April 22, 2008, among Cheyne Specialty Finance Fund L.P., Seven Arts Filmed Entertainment Limited, Peter Hoffman, Seven Arts Pictures plc, Seven Arts Future Flows I LLC and other parties affiliated with Seven Arts Pictures plc.*      |
| 10.11      |                           | Stock Sale Agreement, dated October 2008, between Seven Arts Pictures plc, Smith & Williamson Trustees (Jersey) Limited and Armadillo Investments Ltd.*                                                                                                           |
| 10.12      |                           | Convertible Loan Agreement, dated October 15, 2008, between Seven Arts Pictures plc and Trafalgar Capital Specialized Investment*                                                                                                                                     |
| 10.13      |                           | Bridging Loan Agreement, dated January 31, 2008, between Seven Arts Pictures plc and Trafalgar Capital Specialized Investment*                                                                                                                                        |
| 10.14      |                           | Guarantee and Debenture, dated January 31, 2008, from Seven Arts Pictures plc and Seven Arts Filmed Entertainment Limited to Trafalgar Capital Specialized Investment*                                                                                                |
| 10.15      |                           | Intercompany Agreement, dated November 1, 2004, between Seven Arts Pictures plc and Seven Arts Pictures, Inc.*                                                                                                                                                        |
| 10.16      |                           | Letter Agreement, dated September 2, 2004, Regarding the Intercompany Agreement between Seven Arts Pictures plc and Seven Arts Filmed Entertainment Limited*                                                                                                          |
| 10.17      |                           | Distribution Agreement, between Seven Arts Filmed Entertainment Limited and Seven Arts Louisiana LLC*                                                                                                                                                                 |
| 10.18      |                           | Trust Deed, dated October 21, 2008, establishing The Seven Arts Pictures Employee Benefit Trust between Seven Arts Pictures plc and Smith & Williamson Trustees (Jersey) Limited*                                                                                 |
| 10.19      |                           | Loan Agreement, dated October 2008, relating to between The Seven Arts Pictures Employee Benefit Trust between Seven Arts Pictures plc and Smith & Williamson Trustees (Jersey) Limited*                                                                          |
| 10.20      |                           | Operating Agreement, dated November 21, 2008, relating to The Seven Arts Pictures Employee Benefit Trust between Seven Arts Pictures plc and Smith & Williamson Trustees (Jersey) Limited*                                                                        |
| 10.21      |                           | Loan Agreement, dated December 17, 2007, between Palm Finance Corporation and Gone to Hell Limited*                                                                                                                                                                   |
| 10.22      |                           | Loan Agreement, dated May 7, 2007 among Palm Finance Corporation and affiliates of Seven Arts Pictures plc*                                                                                                                                                           |
| 10.23      |                           | Restated Intercompany Agreement between Seven Arts Pictures Inc. and Seven Arts Entertainment Inc.*                                                                                                                                                                   |
| 10.24      |                           | Subscription Agreement, dated August 30, 2010 and revised December 17, 2010 and February 9, 2011, between Seven Arts Pictures plc and Agua Alta LTD (filed herewith)                                                                                                  |
| 10.25      |                           | Subscription Agreement, dated August 30, 2010 and revised December 17, 2010 and February 9, 2011, between Seven Arts Pictures plc and Scarborough Limited (filed herewith)                                                                                            |
| 10.26      |                           | Subscription Agreement, dated August 30, 2010 and revised December 17, 2010 and February 9, 2011, between Seven Arts Pictures plc and Sendero Capital Inc. (filed herewith)                                                                                           |
| 12.1       |                           | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)                                                                                                                                                                              |
| 13.1       |                           | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)                                                                                                                                                                              |
| 20.1       |                           | Notice of Extraordinary General Meeting of Shareholders of Seven Arts Pictures Plc.*                                                                                                                                                                                  |
| 21.1       |                           | List of Subsidiaries (incorporated by reference to the organizational chart of Seven Arts Pictures plc included in this Form 20-F on page 38)                                                                                                                         |

| *  | Filed as an exhibit to Amendment No. 4 to Registration Statement on Form F-1 on September 27, 2010 and incorporated herein by reference. |
|----|------------------------------------------------------------------------------------------------------------------------------------------|
| ** | To be filed at a future date.                                                                                                            |

----

|                    | Seven Arts Pictures plc |                                                           |
|-------------------------|-------------------------|----------------------------------------------------------------|
|                    |                    |                                                           |   |
|                    | By:                     | /s/ Peter Hoffman                                         |   |
|                    |                    | Name: Peter Hoffman                                            |   |
|                    |                    | Title: Chief Executive Officer and Principal Financial Officer |   |
| Date: February 28, 2011 |                    |                                                           |   |

----

----

| INDEX                                                                                                                                                                                                |   | F-2         |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|
|                                                                                                                                                                                                 |   |        |
| Report of Independent Registered Public Accounting Firm                                                                                                                                              |   | F-3         |
|                                                                                                                                                                                                 |   |        |
| Consolidated Statements of Operations and Other Comprehensive Income (Losses) for The Years Ended June 30, 2010, June 30, 2009 and March 31, 2008, and for The Three Months Ended June 30, 2008 |   | F-4         |
|                                                                                                                                                                                                 |   |        |
| Consolidated Balance Sheets as of June 30, 2010, 2009 and 2008, and March 31, 2008                                                                                                                   |   | F-5         |
|                                                                                                                                                                                                 |   |        |
| Consolidated Statements of Cash Flows for The Years Ended June 30, 2010, June 30, 2009 and March 31, 2008, and for The Three Months Ended June 30, 2008                                              |   | F-6         |
|                                                                                                                                                                                                 |   |        |
| Consolidated Statements of Stockholders’ Equity for The Years Ended June 30, 2010, June 30, 2009 and March 31, 2008, and for The Three Months Ended June 30, 2008                              |   | F-7 to F-8  |
|                                                                                                                                                                                                 |   |        |
|  Notes to Consolidated Financial Statements                                                                                                                                                     |   | F-9 to F-51 |
|                                                                                                                                                                                                 |   |        |

----

|   |  /s/ RBSM LLP |
|--------|--------------------|

----

| Seven Arts Pictures Plc                                                     |
|-----------------------------------------------------------------------------|
| Consolidated Statements of Operations and Other Comprehensive Income/(Loss) |   |

|                                        |   |   |   |   | Year ended |   |       | Year ended |   |   | Three months ended |   |   | Year ended |        |
|---------------------------------------------|--------|--------|--------|--------|------------|--------|------------|------------|--------|--------|--------------------|--------|--------|------------|-------------|
|                                        |   |   |   |   | June 30,   |   |       | June 30,   |   |   | June 30,           |   |   | March 31,  |        |
|                                        |   | Notes  |   |   | 2010       |   |       | 2009       |   |   | 2008               |   |   | 2008       |        |
| Revenue:                                    |   |   |   |   |       |   |       |       |   |   |               |   |   |       |        |
| Film revenues                               |   |   | 2      |   |       | $      | 1,974,516  |       |   | $      | 4,217,910          |   |   | $          | 2,792,836   |   |   | $ | 3,265,808 |   |
| Fee related revenues - related party        |   |   | 2      |   |       |   | 4,442,919  |       |   |   | 6,014,313          |   |   |       | -           |   |   |   | - |   |
| Total revenues                              |   |   | 2      |   |       |   | 6,417,435  |       |   |   | 10,232,223         |   |   |       | 2,792,836   |   |   |   | 3,265,808 |   |
| Cost of sales                               |   |   |   |   |       |   |       |       |   |   |               |   |   |       |        |   |   |   |   |   |
| Amortization and impairment of film costs   |   |   | 10     |   |       |   | (1,770,650 | )          |   |   | ( 2,559,932        | )      |   |       | ( 781,030   | ) |   |   | ( 490,239 | ) |
| Other cost of sales                         |   |   |   |   |       |   | (628,326   | )          |   |   | ( 2,103,391        | )      |   |       | ( 520,541   | ) |   |   | ( 3,597,469 | ) |
| Cost of sales                               |   |   |   |   |       |   | (2,398,976 | )          |   |   | ( 4,663,323        | )      |   |       | ( 1,301,571 | ) |   |   | ( 4,087,708 | ) |
|                                        |   |   |   |   |       |   |       |       |   |   |               |   |   |       |        |   |   |   |   |   |
| Gross profit                                |   |   |   |   |       |   | 4,018,459  |       |   |   | 5,568,900          |   |   |       | 1,491,265   |   |   |   | ( 821,900 | ) |
| Operating expenses                          |   |   |   |   |       |   |       |       |   |   |               |   |   |       |        |   |   |   |   |   |
| General & administrative Expenses       |   |   |   |   |       |   | (2,619,205 | )          |   |   | ( 3,582,348        | )      |   |       | ( 711,479   | ) |   |   | ( 4,015,533 | ) |
| Bad debt expense                            |   |   |   |   |       |   | (319,344   | )          |   |   | ( 542,811          | )      |   |       | -           |   |   |   | - |   |
| Total operating expenses               |   |   |   |   |       |   | (2,938,549 | )          |   |   | (4,125,159         | )      |   |       | (711,479    | ) |   |   | (4,015,533 | ) |
|                                        |   |   |   |   |       |   |       |       |   |   |               |   |   |       |        |   |   |   |   |   |
| Profit/(loss) before interest and taxes     |   |   |   |   |       |   | 1,079,910  |       |   |   | 1,443,741          |   |   |       | 779,786     |   |   |   | ( 4,837,433 | ) |
| Net interest (expense) income          |   |   |   |   |       |   |       |       |   |   |               |   |   |       |        |   |   |   |   |   |
| Interest expenses                           |   |   | 3      |   |       |   | (1,815,970 | )          |   |   | ( 10,907,555       | )      |   |       | ( 3,696,033 | ) |   |   | ( 672,973 | ) |
| Interest income                             |   |   | 3      |   |       |   | 110,409    |       |   |   | 8,599,096          |   |   |       | 3,272,868   |   |   |   | 466,887 |   |
| Net interest (expense)                      |   |   | 3      |   |       |   | (1,705,561 | )          |   |   | ( 2,308,459        | )      |   |       | ( 423,165   | ) |   |   | ( 206,086 | ) |
|                                        |   |   |   |   |       |   |       |       |   |   |               |   |   |       |        |   |   |   |   |   |
| Profit/(loss) before taxes and other income |   |   |   |   |       |   | (625,651   | )          |   |   | ( 864,718          | )      |   |       | 356,621     |   |   |   | ( 5,043,519 | ) |
| Other income                                |   |   | 4      |   |       |   | 150,000    |       |   |   | 5,601,683          |   |   |       | -           |   |   |   | - |   |
| Profit/(loss) before taxes                  |   |   |   |   |       |   | (475,651   | )          |   |   | 4,736,965          |   |   |       | 356,621     |   |   |   | (5,043,519 | ) |
|                                        |   |   |   |   |       |   |       |       |   |   |               |   |   |       |        |   |   |   |   |   |
| Provision for income tax (benefit)          |   |   | 5      |   |       |   | -          |       |   |   | -                  |   |   |       | -           |   |   |   | (485,634 | ) |
| Net Income (Loss)                           |   |   |   |   |       |   | (475,651   | )          |   |   | 4,736,965          |   |   |       | 356,621     |   |   |   | ( 4,557,885 | ) |
| Comprehensive Income(Loss):                 |   |   |   |   |       |   |       |       |   |   |               |   |   |       |        |   |   |   |   |   |

| Net Income (Loss)                             |   |   |   |   | $      | (475,651 | )      |   | $      | 4,736,965  |   |   | $      | 356,621 |   |   | $      | ( 4,557,885 | )      |
|-----------------------------------------------|--------|--------|--------|--------|--------|----------|--------|--------|--------|------------|--------|--------|--------|---------|--------|--------|--------|-------------|--------|
| Foreign exchange translation gain (loss) |   |   |   |   |   | 420,963  |   |   |   | (1,413,066 | )      |   |   | 5,249   |   |   |   | -           |   |
| Comprehensive Income (Loss)              |   |   |   |   | $      | (54,688  | )      |   | $      | 3,323,899  |   |   | $      | 361,870 |   |   | $      | (4,557,885  | )      |
|                                          |   |   |   |   |   |     |   |   |   |       |   |   |   |    |   |   |   |        |   |
| Basic profit/(loss) per share                 |   |   | 6      |   |   | $        | (0.07  | )      |   | $          | 0.78   |   |   | $       | 0.07   |   |   | $           | (0. 97 | ) |
| Diluted profit/(loss) per share               |   |   | 6      |   |   | $        | (0.07  | )      |   | $          | 0.58   |   |   | $       | 0.04   |   |   | $           | ( 0.97 | ) |

| Weighted average number of ordinary shares used in the profit (loss) per share calculation: |   |   |      |   |   |   |                                 |   |   |   |                                                |   |   |   |      |   |
|---------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|--------------------------------------|--------|--------|--------|-----------------------------------------------------|--------|--------|--------|-----------|--------|
| Basic                                                                                       |   |   | 7,013,601 |   |   |   |        6,051,453 |   |   |   |             4,870,800 |   |   |   | 4,676,301 |   |
| Diluted                                                                                     |   |   | 7,013,601 |   |   |   | 8,146,953                            |   |   |   | 8,255,855                                           |   |   |   | 4,676,301 |   |

----

| Seven Arts Pictures Plc     |
|-----------------------------|
| Consolidated Balance Sheets |   |

|                                             |   |   |   |   | June30, |   |        | June 30, |   |   | June 30,    |   |   | March 31, |        |
|--------------------------------------------------|--------|--------|--------|--------|---------|--------|-------------|----------|--------|--------|-------------|--------|--------|-----------|-------------|
|                                             |   | Notes  |   |   | 2010    |   |        | 2009     |   |   | 2008        |   |   | 2008      |        |
| Assets                                           |   |   |   |   |    |   |        |     |   |   |        |   |   |      |        |
| Cash and cash equivalents                        |   |   | 1.16   |   |    | $      | 26,818      |     |   | $      | 28,793      |   |   | $         | 1,172,593   |   |   | $ | 2,133,338 |   |
| Restricted cash and cash equivalents - Zeus      |   |   | 1.17   |   |    |   | -           |     |   |   | -           |   |   |      | 112,394,240 |   |   |   | 198,405,009 |   |
| Trade receivables                                |   |   | 7      |   |    |   | 1,478,400   |     |   |   | 1,579,086   |   |   |      | 4,273,337   |   |   |   | 8,302,975 |   |
| Trade receivables - Zeus                         |   |   | 7      |   |    |   | -           |     |   |   | -           |   |   |      | 247,322,586 |   |   |   | 53,601,395 |   |
| Due from related parties, net                    |   |   | 7      |   |    |   | 3,021,184   |     |   |   | 2,048,133   |   |   |      | 2,794,727   |   |   |   | 2,049,405 |   |
| Other receivables and prepayments                |   |   | 7      |   |    |   | 263,150     |     |   |   | 788,728     |   |   |      | 11,558,620  |   |   |   | 7,035,996 |   |
| Investments                                      |   |   | 9      |   |    |   | -           |     |   |   | -           |   |   |      | 1,595,520   |   |   |   | 1,595,280 |   |
| Film costs, net                                  |   |   | 10     |   |    |   | 23,808,869  |     |   |   | 22,902,513  |   |   |      | 19,704,379  |   |   |   | 29,221,441 |   |
| Property and equipment, net                      |   |   | 11     |   |    |   | 26,389      |     |   |   | 40,112      |   |   |      | 37,135      |   |   |   | 42,757 |   |
| Total assets                                     |   |   |   |   |    | $      | 28,624,810  |     |   | $      | 27,387,365  |   |   | $         | 400,853,137 |   |   | $ | 302,387,596 |   |
|                                             |   |   |   |   |    |   |        |     |   |   |        |   |   |      |        |   |   |   |   |   |
| Liabilities and shareholders equity              |   |   |   |   |    |   |        |     |   |   |        |   |   |      |        |   |   |   |   |   |
| Accounts payable and accrued liabilities         |   |   | 12     |   |    | $      | 4,718,972   |     |   | $      | 4,078,020   |   |   | $         | 7,067,303   |   |   | $ | 2,738,904 |   |
| Participation and residuals                      |   |   | 12     |   |    |   | 480,357     |     |   |   | 666,707     |   |   |      | 1,657,906   |   |   |   | 1,549,635 |   |
| Bank loans – Zeus                          |   |   | 13     |   |    |   | -           |     |   |   | -           |   |   |      | 225,478,399 |   |   |   | 225,444,481 |   |
| Other loans                                      |   |   | 13     |   |    |   | 1,534,591   |     |   |   | 2,507,531   |   |   |      | -           |   |   |   | 997,050 |   |
| Film & production loans                      |   |   | 13     |   |    |   | 16,766,689  |     |   |   | 15,320,650  |   |   |      | 23,237,878  |   |   |   | 35,214,793 |   |
| Deferred income                                  |   |   | 12     |   |    |   | 1,460,230   |     |   |   | 1,363,610   |   |   |      | 1,287,400   |   |   |   | 3,263,809 |   |
| Deferred income – Zeus                     |   |   | 12     |   |    |   | -           |     |   |   | -           |   |   |      | 118,067,801 |   |   |   | 27,247,893 |   |
|   VAT payable                          |   |   | 12     |   |    |   | 1,463,497   |     |   |   | 1,734,238   |   |   |      | 23,224,656  |   |   |   | 5,521,034 |   |
| Total liabilities                                |   |   |   |   |    |   | 26,424,336  |     |   |   | 25,670,756  |   |   |      | 400,021,343 |   |   |   | 301,977,599 |   |
|                                             |   |   |   |   |    |   |        |     |   |   |        |   |   |      |        |   |   |   |   |   |
|                                             |   |   |   |   |    |   |        |     |   |   |        |   |   |      |        |   |   |   |   |   |
| Shareholders’ equity                       |   |   |   |   |    |   |        |     |   |   |        |   |   |      |        |   |   |   |   |   |
| Issued capital                                   |   |   | 14     |   |    |   | 14,842,224  |     |   |   | 16,174,814  |   |   |      | 19,454,686  |   |   |   | 19,454,686 |   |
| Convertible debentures                           |   |   | 15     |   |    |   | 3,432,450   |     |   |   | 3,432,450   |   |   |      | 3,432,450   |   |   |   | 3,432,450 |   |
| Additional paid in capital                       |   |   | 14,17  |   |    |   | 9,248,415   |     |   |   | 7,735,990   |   |   |      | 4,415,026   |   |   |   | 4,355,100 |   |
| Receivable from related parties                  |   |   | 18     |   |    |   | (2,121,458  | )        |   |   | (2,480,176  | )      |   |      | -           |   |   |   | - |   |
| Accumulated deficit                              |   |   |   |   |    |   | (20,938,095 | )        |   |   | (25,675,060 | )      |   |      | (26,031,681 | ) |   |   | (21,473,796 | ) |
| Translation reserve                              |   |   |   |   |    |   | (1,787,411  | )        |   |   | (2,208,374  | )      |   |      | (795,308    | ) |   |   | (800,558 | ) |
| Profit/(loss) current period                     |   |   |   |   |    |   | (475,651    | )        |   |   | 4,736,965   |   |   |      | 356,621     |   |   |   | (4,557,885 | ) |
|                                             |   |   |   |   |    |   |        |     |   |   |        |   |   |      |        |   |   |   |   |   |
| Shareholders’ equity                       |   |   |   |   |    |   | 2,200,474   |     |   |   | 1,716,609   |   |   |      | 831,794     |   |   |   | 409,997 |   |
|                                             |   |   |   |   |    |   |        |     |   |   |        |   |   |      |        |   |   |   |   |   |
| Total liabilities and shareholders’ equity |   |   |   |   |    | $      | 28,624,810  |     |   | $      | 27,387,365  |   |   | $         | 400,853,137 |   |   | $ | 302,387,596 |   |

----

| Seven Arts Pictures Plc               |
|---------------------------------------|
| Consolidated Statements of Cash Flows |   |

|                                                                                               |   | Year ended |       |   | Year ended |   |         | Three months ended |   |   | Year ended   |   |
|----------------------------------------------------------------------------------------------------|--------|------------|------------|--------|------------|--------|--------------|--------------------|--------|--------|--------------|--------|
|                                                                                               |   | June 30,   |       |   | June 30,   |   |         | June 30,           |   |   | March 31,    |   |
|                                                                                               |   | 2010       |       |   | 2009       |   |         | 2008               |   |   | 2008         |   |
| Cash flow from operating activities                                                                |   |       |       |   |       |   |         |               |   |   |         |   |
|                                                                                               |   |       |       |   |       |   |         |               |   |   |         |   |
| Net income/(loss)                                                                                  |   | $          | (475,651   | )      |       | $      | 4,736,965    |               |   | $      | 356,621      |   |   | $ | (4,557,885 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
| Depreciation of property and  equipment                                                  |   |       | 13,884     |   |       |   | 26,702       |               |   |   | 7,163        |   |   |   | 14,979 |   |
| Amortization of film cost                                                                          |   |       | 1,575,093  |   |       |   | 2,559,932    |               |   |   | 781,030      |   |   |   | 490,239 |   |
| Impairment of film cost                                                                            |   |       | 195,557    |   |       |   |         |               |   |   |         |   |   |   |   |   |
| Write off of previously capitalized film assets                                                    |   |       | 244,640    |   |       |   | -            |               |   |   | -            |   |   |   | - |   |
| Forgiveness of debt                                                                                |   |       | (150,000   | )      |       |   | (5,601,683   | )                  |   |   | -            |   |   |   | - |   |
| Forgiveness of  interest by lender                                                       |   |       | (383,874   | )      |       |   | -            |               |   |   | -            |   |   |   | - |   |
| Reduction of EBT interest receivable                                                               |   |       | 178,904    |   |       |   | -            |               |   |   | -            |   |   |   | - |   |
| Stock based compensation                                                                           |   |       | -          |   |       |   | 459,741      |               |   |   | 60,104       |   |   |   | 121,878 |   |
| Write-off of other receivables and prepayments                                                     |   |       | 572,509    |   |       |   | -            |               |   |   | -            |   |   |   | - |   |
| Ordinary shares issuance in exchange for interest and fees                                         |   |       | 257,159    |   |       |   | -            |               |   |   | -            |   |   |   | - |   |
| Bad debts expenses and provision for doubtful accounts                                             |   |       | 319,345    |   |       |   | 542,811      |               |   |   | (9,324       | )      |   |   | 159,974 |   |
| Write-off of previously accrued participations                                                     |   |       | (215,250   | )      |       |   | -            |               |   |   | -            |   |   |   | - |   |
| Changes in operating assets and liabilities:                                                       |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
| Restricted cash – Zeus                                                                  |   |       |       |   |       |   | 102,698,377  |               |   |   | 86,040,618   |   |   |   | (198,405,009 | ) |
| Trade receivables                                                                                  |   |       | (218,659   | )      |       |   | 1,080,401    |               |   |   | (3,099,686   | )      |   |   | 7,103,737 |   |
| Zeus receivables                                                                                   |   |       | -          |   |       |   | 225,986,921  |               |   |   | (188,191,262 | )      |   |   | (59,122,429 | ) |
| Due to and due from related parties, net                                                           |   |       | (907,699   | )      |       |   | 337,334      |               |   |   | (745,013     | )      |   |   | (726,068 | ) |
| Capitalized film assets                                                                            |   |       | (2,470,299 | )      |       |   | (5,669,371   | )                  |   |   | (1,924,271   | )      |   |   | (2,562,046 | ) |
| Other assets                                                                                       |   |       | (66,008    | )      |       |   | 5,037,407    |               |   |   | (3,214,524   | )      |   |   | (2,959,597 | ) |
| Accounts payable                                                                                   |   |       | 541,212    |   |       |   | 1,753,087    |               |   |   | (194,882     | )      |   |   | 5,558,257 |   |
| Other current liabilities                                                                          |   |       | 2,205,483  |   |       |   | (23,937,024  | )                  |   |   | 22,338,463   |   |   |   | (3,223,066 | ) |
| Deferred income –Zeus                                                                        |   |       | -          |   |       |   | (107,629,111 | )                  |   |   | 90,815,318   |   |   |   | 27,066,971 |   |
| Deferred income – non Zeus                                                                   |   |       | 96,620     |   |       |   | 76,210       |               |   |   | (1,976,409   | )      |   |   | 2,296,365 |   |
| Proceeds from/(repayment of) Zeus loan                                                             |   |       |       |   |       |   | (206,027,156 | )                  |   |   | -            |   |   |   | 225,444,481 |   |
| Net cash provided by (used in) operating activities                                                |   |       | 1,312,966  |   |       |   | (3,568,458   | )                  |   |   | 1,043,946    |   |   |   | (3,299,219 | ) |
|                                                                                               |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
| Cash flow from investing activities                                                                |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
| Purchase of property and equipment                                                                 |   |       | (2,808     | )      |       |   | (37,039      | )                  |   |   | (1,542       | )      |   |   | (26,821 | ) |
|                                                                                               |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
| Net cash used in in investing activities                                                           |   |       | (2,808     | )      |       |   | (37,039      | )                  |   |   | (1,542       | )      |   |   | (26,821 | ) |
|                                                                                               |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
|                                                                                               |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
| Cash flow from financing activities:                                                               |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
| Proceeds from/(repayment of) participation equity/investment and notes payable                     |   |       | (1,353,958 | )      |       |   | 2,413,294    |               |   |   | (2,004,612   | )      |   |   | 4,400,002 |   |
| Issuance of ordinary stock for cash                                                                |   |       | 23,818     |   |       |   | 36,429       |               |   |   | -            |   |   |   | 849,487 |   |
|                                                                                               |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
| Net cash provided by (used in) financing activities                                                |   |       | (1,330,140 | )      |       |   | 2,449,723    |               |   |   | (2,004,612   | )      |   |   | 5,249,488 |   |
|                                                                                               |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
|  Net increase/(decrease) in cash                                                              |   |       | (19,982    | )      |       |   | (1,155,773   | )                  |   |   | (962,208     | )      |   |   | 1,923,449 |   |
| Cash and cash equivalents at beginning of period                                                   |   |       | 28,793     |   |       |   | 1,172,593    |               |   |   | 2,133,338    |   |   |   | 9,317 |   |
|                                                                                               |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
| Effect of exchange rate changes on cash and cash equivalents                                       |   |       | 18,007     |   |       |   | 11,973       |               |   |   | 1,463        |   |   |   | 200,573 |   |
|                                                                                               |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
| Cash and cash equivalents at end of period                                                         |   | $          | 26,818     |   |       | $      | 28,793       |               |   | $      | 1,172,593    |   |   | $ | 2,133,338 |   |
|                                                                                               |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
|                                                                                               |   | Year ended |       |   | Year ended |   |         | 3 months ended     |   |   | Year ended   |   |
|                                                                                               |   | June 30,   |       |   | June 30,   |   |         | June 30,           |   |   | March 31,    |   |
|                                                                                               |   |  2010 |       |   |  2009 |   |         |  2008         |   |   |  2008   |   |
|                                                                                               |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
| Supplemental disclosure of cash flow information:                                                  |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
| Cash paid during the year or period for:                                                           |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
| Interest                                                                                           |   | $          | 1,173,528  |   |       | $      | 9,854,087    |               |   | $      | 437,910      |   |   | $ | 245,768 |   |
| Income taxes                                                                                       |   |       | -          |   |       |   | -            |               |   |   | -            |   |   |   | - |   |
|                                                                                               |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
| Non cash investing and financing transactions:                                                     |   |       |       |   |       |   |         |               |   |   |         |   |   |   |   |   |
| Capitalised film cost acquired under Knife Edge tax credit                                         |   | $          | -          |   |       | $      | -            |               |   | $      | -            |   |   | $ | 2,614,084 |   |
| EBT receivable set off against equity accounts                                                     |   | $          | -          |   |       | $      | 2,480,176    |               |   | $      | -            |   |   | $ | - |   |
| Production loan received for capitalised film cost /development cost                               |   | $          | -          |   |       | $      | 1,700,998    |               |   | $      | 399,558      |   |   | $ | 11,204,756 |   |
| Accounts receivable applied against loan set off                                                   |   | $          | 457,374    |   |       | $      | 1,005,998    |               |   | $      | 311,873      |   |   | $ | 496,465 |   |

| Production loan settled by shares owned by EBT           |   | $ | 133,661   |   |   | $ | -         |   |   | $ | -       |   |   | $ | -         |   |
|----------------------------------------------------------|--------|---|-----------|--------|--------|---|-----------|--------|--------|---|---------|--------|--------|---|-----------|--------|
| Reclassification of share premium to accrued liabilities |   | $ | 221,142   |   |   | $ | -         |   |   | $ | -       |   |   | $ | -         |   |
| Related party advances settled by shares owned by EBT    |   | $ | 212,980   |   |   | $ | -         |   |   | $ | -       |   |   | $ | -         |   |
| Interest of loan payable capitalized on film assets      |   | $ | 429,142   |   |   | $ | 750,997   |   |   | $ | 673,084 |   |   | $ | 2,692,338 |   |
| Accrued interest included in loan payable amount         |   | $ | 1,946,705 |   |   | $ | 1,463,893 |   |   | $ | 437,973 |   |   | $ | 245,277   |   |

----

|                                                                                                      |   | Ordinary Stock |      |   | Deferred Stock |   |      | Convertible Preference Shares |   | Convertible Debentures |       | Additional Paidin Capital |   |   | Receivablefrom Related Parties |   |   | Accumulated Deficit |       |   | TranslationAdjustment |   |       |   |   |
|-----------------------------------------------------------------------------------------------------------|--------|----------------|-----------|--------|----------------|--------|-----------|-------------------------------|--------|------------------------|------------|---------------------------|--------|--------|--------------------------------|--------|--------|---------------------|------------|--------|-----------------------|--------|------------|--------|--------|
|                                                                                                      |   | Shares         |      |   | Amount         |   |      | Shares                        |   |                   | Amount     |                      |   | Shares |                           |   | Amount |                |       | Shares |                  |   | Amount     |   |   | Amount |   |   | Amount |   |   | Amount |   |   | Amount |   |   | Total |   |
|                                                                                                      |   |           |      |   |           |   |      |                          |   |                   |       |                      |   |   |                           |   |   |                |       |   |                  |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, March 31, 2007                                                                                   |   |           | 4,336,800 |   |           | $      | 1,883,079 |                          |   |                   | 13,184,000 |                      |   | $      | 11,636,594                     |   |   |                | 3,000,000  |   |                  | $      | 5,668,800  |   |   |   | 1,750,000 |   |   | $ | 3,432,450 |   |   | $ | 3,650,308 |   |   | $ | - |   |   | $ | (21,473,796 | ) |   | $ | (800,558 | ) |   | $ | 3,996,877 |   |
| Ordinary Stock Issued to Unique Fidelity Engineering (£1.50 per share)                               |   |           | 34,000    |   |           |   | 16,950    |                          |   |                   |       |                      |   |   |                           |   |   |                |       |   |                  |   |       |   |   |   |   |   |   |   |   |   |   |   | 84,749 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 101,699 |   |
| Ordinary Stock Issued to US Dry Cleaning Inc (£0.75 per share)                                       |   |           | 500,000   |   |           |   | 249,264   |                          |   |                   |       |                      |   |   |                           |   |   |                |       |   |                  |   |       |   |   |   |   |   |   |   |   |   |   |   | 498,525 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 747,789 |   |
| Option Issued for the period                                                                              |   |           |      |   |           |   |      |                          |   |                   |       |                      |   |   |                           |   |   |                |       |   |                  |   |       |   |   |   |   |   |   |   |   |   |   |   | 121,518 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 121,518 |   |
| Net Profit/ (loss) for the period                                                                         |   |           |      |   |           |   |      |                          |   |                   |       |                      |   |   |                           |   |   |                |       |   |                  |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (4,557,885 | ) |   |   |   |   |   |   | (4,557,885 | ) |
| Balance, March 31, 2008                                                                                   |   |           | 4,870,800 |   |           | $      | 2,149,292 |                          |   |                   | 13,184,000 |                      |   | $      | 11,636,594                     |   |   |                | 3,000,000  |   |                  | $      | 5,668,800  |   |   |   | 1,750,000 |   |   | $ | 3,432,450 |   |   | $ | 4,355,100 |   |   | $ | - |   |   | $ | (26,031,681 | ) |   | $ | (800,558 | ) |   | $ | 409,998 |   |
| Option issued for the period                                                                              |   |           |      |   |           |   |      |                          |   |                   |       |                      |   |   |                           |   |   |                |       |   |                  |   |       |   |   |   |   |   |   |   |   |   |   |   | 59,926 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 59,926 |   |
| Net Profit/ (loss)                                                                                        |   |           |      |   |           |   |      |                          |   |                   |       |                      |   |   |                           |   |   |                |       |   |                  |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 356,621 |   |   |   | 5,249 |   |   |   | 361,870 |   |
| Balance, June 30, 2008                                                                                    |   |           | 4,870,800 |   |           | $      | 2,149,292 |                          |   |                   | 13,184,000 |                      |   | $      | 11,636,594                     |   |   |                | 3,000,000  |   |                  | $      | 5,668,800  |   |   |   | 1,750,000 |   |   | $ | 3,432,450 |   |   | $ | 4,415,026 |   |   | $ | - |   |   | $ | (25,675,060 | ) |   | $ | (795,309 | ) |   | $ | 831,793 |   |
| Exercise of Stock Options Oct 2008 £(0.756 per share)                                                |   |           | 12,500    |   |           |   | 5,161     |                          |   |                   |       |                      |   |   |                           |   |   |                |       |   |                  |   |       |   |   |   |   |   |   |   |   |   |   |   | 10,446 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 15,607 |   |
| EBT conversion of 2,500,000 preference shares into 2,000,000 ordinary shares (£0.255 per share) |   |           | 2,000,000 |   |           |   | 825,800   |                          |   |                   |       |                      |   |   |                           |   |   |                | (2,500,000 | )      |                  |   | (4,129,000 | )      |   |   |   |   |   |   |   |   |   |   | 3,303,200 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Exercise of Stock Option Dec 2008 (£1.05 per share)                                                  |   |           | 10,000    |   |           |   | 4,129     |                          |   |                   |       |                      |   |   |                           |   |   |                |       |   |                  |   |       |   |   |   |   |   |   |   |   |   |   |   | 13,246 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 17,375 |   |

----

|                                                                                             |   | Ordinary Stock |      |   | Deferred Stock     |   |      |  Convertible Preference Shares |   |   | Convertible Debentures |   |   | AdditionalPaidin Capital |       |   | Receivablefrom Related Parties |   |     |  Accumulated Deficit |   |   | TranslationAdjustment |   |   |               |      |   |
|--------------------------------------------------------------------------------------------------|--------|----------------|-----------|--------|--------------------|--------|-----------|-------------------------------------|--------|--------|------------------------|--------|--------|--------------------------|------------|--------|--------------------------------|--------|----------|---------------------------|--------|--------|-----------------------|--------|--------|--------------------|-----------|--------|
|                                                                                             |   | Shares    |      |   | Amount   |   |      | Shares                         |   |   | Amount                 |   |   | Shares              |       |   | Amount               |   |     | Shares               |   |   | Amount      |   |   | Amount   |      |   | Amount   |   |   | Amount   |   |   | Amount  |   |   | Total |   |
|                                                                                             |   |           |      |   |               |   |      |                                |   |   |                   |   |   |                     |       |   |                           |   |     |                      |   |   |                  |   |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of Ordinary Stock to Trafalgar in exchange for cancellation of options May 2009    |   |           | 34,000    |   |               |   | 14,038    |                                |   |   |                   |   |   |                     |       |   |                           |   |     |                      |   |   |                  |   |   |               |      |   |   |   |   |   |   |   | (14,038 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Options issued for period endJune 30, 2009                                                       |   |           |      |   |               |   |      |                                |   |   |                   |   |   |                     |       |   |                           |   |     |                      |   |   |                  |   |   |               |      |   |   |   |   |   |   |   | 195,521 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 195,521 |   |
| Adjustment for issuance of 700,000 shares in settlement of the March 31, 2007 Apollo loan        |   |           |      |   |               |   |      |                                |   |   |                   |   |   |                     |       |   |                           |   |     |                      |   |   |                  |   |   |               |      |   |   |   |   |   |   |   | (408,553 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (408,553 | ) |
| Share options subscribed December 2, 2008paid $200,000 but not issued                            |   |           |      |   |               |   |      |                                |   |   |                   |   |   |                     |       |   |                           |   |     |                      |   |   |                  |   |   |               |      |   |   |   |   |   |   |   | 221,142 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 221,142 |   |
| EBT Stock Purchase                                                                               |   |           |      |   |               |   |      |                                |   |   |                   |   |   |                     |       |   |                           |   |     |                      |   |   |                  |   |   |               |      |   |   |   |   |   |   |   |   |   |   |   | (2,480,176 | ) |   |   |   |   |   |   |   |   |   |   | (2,480,176 | ) |
| Net Profit/ (loss)                                                                               |   |           |      |   |               |   |      |                                |   |   |                   |   |   |                     |       |   |                           |   |     |                      |   |   |                  |   |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 4,736,965 |   |   |   |   |   |   |   | 4,736,965 |   |
| Foreign currency Translation gain/(loss)                                                         |   |           |      |   |               |   |      |                                |   |   |                   |   |   |                     |       |   |                           |   |     |                      |   |   |                  |   |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,413,066 | ) |   |   | (1,413,066 | ) |
| Balance, June 30, 2009                                                                           |   |           | 6,927,300 |   |               | $      | 2,998,420 |                                |   |   | 13,184,000             |   |   | $                        | 11,636,594 |   |                           |   | 500,000  |                      |   | $      | 1,539,800             |   |   |               | 1,750,000 |   |   | $ | 3,432,450 |   |   | $ | 7,735,990 |   |   | $ | (2,480,176 | ) |   | $ | (20,938,095 | ) |   | $ | (2,208,374 | ) |   | $ | 1,716,609 |   |
| Exercise of share options at £1.475/share                                                   |   |           | 10,000    |   |               |   | 4,037     |                                |   |   |                   |   |   |                     |       |   |                           |   |     |                      |   |   |                  |   |   |               |      |   |   |   |   |   |   |   | 19,781 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 23,818 |   |
| Shares issued in error, guaranteed to be returned by a related party                             |   |           | 40,000    |   |               |   | 16,148    |                                |   |   |                   |   |   |                     |       |   |                           |   |     |                      |   |   |                  |   |   |               |      |   |   |   |   |   |   |   | 103,852 |   |   |   | (120,000 | ) |   |   |   |   |   |   |   |   |   |   | - |   |
| Transfer of M Garstin stock subscription to accrued payable                                      |   |           |      |   |               |   |      |                                |   |   |                   |   |   |                     |       |   |                           |   |     |                      |   |   |                  |   |   |               |      |   |   |   |   |   |   |   | (221,142 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (221,142 | ) |
| Issuance of ordinary stock in exchange for, interest and fees                                    |   |           | 100,000   |   |               |   | 37,405    |                                |   |   |                   |   |   |                     |       |   |                           |   |     |                      |   |   |                  |   |   |               |      |   |   |   |   |   |   |   | 219,754 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 257,159 |   |
| EBT conversion of 500,000 preference shares into 400,000 ordinary shares (£0.255 per share) |   |           | 400,000   |   |               |   | 149,620   |                                |   |   |                   |   |   |                     |       |   |                           |   | (500,000 | )                         |   |   | (1,539,800            | )      |   |               |      |   |   |   |   |   |   |   | 1,390,180 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Loan payable, settled by shares owned by EBT                                                     |   |           |      |   |               |   |      |                                |   |   |                   |   |   |                     |       |   |                           |   |     |                      |   |   |                  |   |   |               |      |   |   |   |   |   |   |   |   |   |   |   | 133,661 |   |   |   |   |   |   |   |   |   |   |   | 133,661 |   |
| Pay down of due to related party (SAPINC) with shares owned by EBT                               |   |           |      |   |               |   |      |                                |   |   |                   |   |   |                     |       |   |                           |   |     |                      |   |   |                  |   |   |               |      |   |   |   |   |   |   |   |   |   |   |   | 212,980 |   |   |   |   |   |   |   |   |   |   |   | 212,980 |   |
| Net reduction in interest of related party receivable                                            |   |           |      |   |               |   |      |                                |   |   |                   |   |   |                     |       |   |                           |   |     |                      |   |   |                  |   |   |               |      |   |   |   |   |   |   |   |   |   |   |   | 132,077 |   |   |   |   |   |   |   |   |   |   |   | 132,077 |   |
| Net (loss)                                                                                       |   |           |      |   |               |   |      |                                |   |   |                   |   |   |                     |       |   |                           |   |     |                      |   |   |                  |   |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (475,651 | ) |   |   |   |   |   |   | (475,651 | ) |
| Foreign currency Translation gain/(loss)                                                         |   |           |      |   |               |   |      |                                |   |   |                   |   |   |                     |       |   |                           |   |     |                      |   |   |                  |   |   |               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 420,963 |   |   |   | 420,963 |   |
| Balance, June 30, 2010                                                                           |   |           | 7,477,300 |   |               | $      | 3,205,630 |                                |   |   | 13,184,000             |   |   | $                        | 11,636,594 |   |                           |   | -        |                      |   | $      | -                     |   |   |               | 1,750,000 |   |   | $ | 3,432,450 |   |   | $ | 9,248,415 |   |   | $ | (2,121,458 | )  |   | $ | (21,413,746 | )  |   |   | (1,787,411 | ) |   | $ | 2,200,474 |   |

----

| 1  | Accounting policies |
|---------|---------------------|

| 1.1  | Basis of accounting |
|-----------|---------------------|

| a) | To the extent such tax benefit proceeds would exceed the capitalized cost of the film or represent fee income not applied to production cost, such proceeds are accounted for as producers’ fees income where relevant producers contracts are in place. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b) | To the extent that the Group were to receive benefits from tax advantaged investments relating to |
|----|---------------------------------------------------------------------------------------------------|

| a.   | a picture that has not commenced production by a particular date and that investment is forfeited such that the Group has no further obligations to the investor (See note 1.3) |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | third party productions taken on by the Group as sales agent/distributor then such benefits are also recorded as producer fees income |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------|

----

| 1.2  | Transition from UK GAAP to IFRS |
|-----------|---------------------------------|

| a. | International Financial Reporting Standards (IFRSs);                                                                                                          |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| b. | International Accounting Standards (IASs) and;                                                                                                                |
| c. | Interpretations by the International Financial Reporting Interpretation Committee (IFRICs) or its predecessor, the Standing Interpretations Committee (SICs). |

| 1.3  | Revenue Recognition |
|-----------|---------------------|

| 1)   | Film revenues:  earned from the exploitation of our new productions, back catalogue and third party productions taken on as sales agent |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| 2)   | Fee-related revenues:  Producer’s fees income earned by the Group on productions controlled by the Group is earned when the Group is entitled to receive under a binding agreement a fixed sum irrespective of the distribution revenue from that picture. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a.   | Persuasive evidence of a sale or licensing arrangement with a customer exists. |
|----------------|--------------------------------------------------------------------------------|

| b.   | The film is complete and, in accordance with the terms of the arrangement, has been delivered or is available for immediate and   unconditional delivery. (i.e. the “notice of delivery”(NOD)  has been sent and there is a master negative available for the customer) |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | The license period of the arrangement has begun and the customer can begin its exploitation, exhibition, or sale. |
|----------------|-------------------------------------------------------------------------------------------------------------------|

| d.   | The arrangement fee is fixed or determinable. |
|----------------|-----------------------------------------------|

| e.   | Collection of the arrangement fee is reasonably assured. |
|----------------|----------------------------------------------------------|

----

| a)   | the UK and several other European territories for their European productions |
|----------------|------------------------------------------------------------------------------|

| b)   | Canada for their Canadian productions |
|----------------|---------------------------------------|

| c)   | Louisiana for their US productions |
|----------------|------------------------------------|

| d)   | Tax preferred financing deals |
|----------------|-------------------------------|

| a)   | exceed the capitalized cost of the film or |
|----------------|--------------------------------------------|

| b)   | represent fee income not applied to production cost, such proceeds are accounted for as producers’ fees income where relevant producers contracts are in place. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a)   | a picture that has not commenced production by the investment agreement closing date that investment is forfeited such that the Group has no further obligations to the investor |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | third party productions taken on by the Group as sales agent/distributor then such benefits are also recorded as producer fees income |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------|

----

| 1.4  | Investments |
|-----------|-------------|

| 1.5  | Film costs |
|-----------|------------|

| 1.6  | Property and equipment and depreciation |
|-----------|-----------------------------------------|

| 1.7  | Income taxes |
|-----------|--------------|

----

| 1.8  | Foreign currency translation |
|-----------|------------------------------|

| 1.9  | Derivative instruments and hedging activities |
|-----------|-----------------------------------------------|

| 1.10  | Use of estimates |
|------------|------------------|

| 1.11  | Re-classifications |
|------------|--------------------|

----

| 1.12  | Accounts receivables |
|------------|----------------------|

| 1.13  | Accounts payables |
|------------|-------------------|

| 1.14  | Fair value of financial instruments |
|------------|-------------------------------------|

| 1.15  | Share based payments |
|------------|----------------------|

| 1.16  | Cash and cash equivalents |
|------------|---------------------------|

----

| 1.17  | Restricted cash |
|------------|-----------------|

| 1.18  | Convertible preference shares and debentures accounted for as equity transactions |
|------------|-----------------------------------------------------------------------------------|

----

| 1.19  | Employee benefit plan |
|------------|-----------------------|

----

| 1.20  | New accounting pronouncements |
|------------|-------------------------------|

| Title                                                                                                            |   | Issued   |   | Effective date                           |   |       |
|------------------------------------------------------------------------------------------------------------------|--------|----------|--------|------------------------------------------|--------|------------|
| IAS 39 Financial Instruments: Recognition and Measurement (Amendment) – Eligible Hedged Items              |   | Jul-08   |   | Accounting periods beginning on or after |   | 01/07/2009 |
| IFRIC 17 Distributions of Non-cash Assets to Owners                                                              |   | Nov-08   |   | Accounting periods beginning on or after |   | 01/07/2009 |
| IFRS 7 Improving Disclosures about Financial Instruments Amendments to IFRS 7 Financial Instruments: Disclosures |   | Mar-09   |   | Accounting periods beginning on or after |   | 01/01/2009 |
| IFRIC 18 Transfers of Assets from Customers                                                                      |   | Jan-09   |   | Accounting periods beginning on or after |   | 01/07/2009 |
| Amendment to IAS 32 Classification of Rights Issues                                                              |   | Oct-09   |   | Accounting periods beginning on or after |   | 01/02/2010 |
| Amendments to IFRS 2 Group Cash-settled Share-based Payment Transactions                                         |   | Jun-09   |   | Accounting periods beginning on or after |   | 01/01/2010 |
| Improvements to IFRS (detail below)                                                                              |   | April 09 |   | Accounting periods beginning on or after |   | 01/01/2010 |
| Amendments to IFRS 1 Additional Exemptions for First-time Adopters                                               |   | Jul-09   |   | Accounting periods beginning on or after |   | 01/01/2010 |
| IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments                                             |   | Nov-09   |   | Accounting periods beginning on or after |   | 01/07/2010 |
| IFRIC 14 (Amendment) Prepayments of a minimum funding requirement                                                |   | Nov-09   |   | Accounting periods beginning on or after |   | 01/01/2011 |
| Revised IAS 24 Related Party Disclosures (Issued 4 November 2009)                                                |   | Nov-09   |   | Accounting periods beginning on or after |   | 01/01/2011 |
| IFRS 1 Amendment – Limited exemption from IFRS 7 Disclosures for first time adopters                       |   | Jan-10   |   | Accounting periods beginning on or after |   | 01/07/2010 |

| IFRS 9 Financial Instruments               |   | Nov-09 |   | Accounting periods beginning on or after |   | 01/01/2013 |
|--------------------------------------------|--------|--------|--------|------------------------------------------|--------|------------|
| Annual Improvements to IFRS (detail below) |   | May 10 |   | Accounting periods beginning on or after |   | 01/07/2010 |
| Annual Improvements to IFRS (detail below) |   | May 10 |   | Accounting periods beginning on or after |   | 01/01/2011 |

| 2  | Revenues |
|---------|----------|

|                   |   | Year ended |      |   | Year ended |   |      | 3 months ended |   |   | Year ended |   |
|------------------------|--------|------------|-----------|--------|------------|--------|-----------|---------------------|--------|--------|------------|--------|
|                   |   | June 30,   |      |   | June 30,   |   |      | June 30,            |   |   | March 31,  |   |
|                   |   | 2010       |      |   | 2009       |   |      | 2008                |   |   | 2008       |   |
|                   |   |       |      |   |       |   |      |                |   |   |       |   |
| Europe                 |   | $          | 110,285   |   |       | $      | 563,753   |                |   | $      | 568,061    |   |   | $ | 1,726,841 |   |
| North America          |   |       | 1,714,271 |   |       |   | 2,278,490 |                |   |   | 2,086,902  |   |   |   | 884,936 |   |
| South America          |   |       | 24,000    |   |       |   | 173,536   |                |   |   | 0          |   |   |   | 222,673 |   |
| Africa and Middle East |   |       | 0         |   |       |   | 100,511   |                |   |   | 26,447     |   |   |   | 6,178 |   |
| Asia                   |   |       | 91,942    |   |       |   | 366,815   |                |   |   | 86,706     |   |   |   | 401,580 |   |
| Australia              |   |       | 34,018    |   |       |   | 734,804   |                |   |   | 24,720     |   |   |   | 23,600 |   |
|                   |   |       |      |   |       |   |      |                |   |   |       |   |   |   |   |   |
| Total                  |   | $          | 1,974,516 |   |       | $      | 4,217,909 |                |   | $      | 2,792,836  |   |   | $ | 3,265,808 |   |

| a. | $2,650,794 of fee income derived from the Equicap transactions, a structured finance transaction with UK investors who invested in certain third party motion pictures distributed by the Group.  The fee items related to the Equicap transactions were contractually entered with Seven Arts Pictures Louisiana LLC (“SAPLA”), a related party or an affiliate who is acting on behalf of the Group but collected and recorded by the Group under the Group’s agreement with SAPLA as fee income. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b. | Producer's fees of $637,397 resulting from excess tax credits received on Night of the Demons. This item was collected by SAPLA who then paid or will pay it over to the Group under the agreement between the Group and SAPLA. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c. | Producer’s fees income of $1,154,728 resulting from excess tax credits received on American Summer (Pool Boys) and Autopsy. This item will be collected by SAPLA and will be paid over to the Group under the Group’s agreement. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a. | $5,085,679 of net fee income derived from the Zeus transaction, a structured finance transaction with UK investors who invested in certain of the Group’s motion picture and distribution activities. The Zeus transaction resulted in a net benefit to the Group of $16,002,766, of which $10,917,087 has been applied as a reduction in certain of the Group's motion picture costs and the balance has been recorded as fee income. The fee items related to the Zeus transaction were contractually entered with SAPLA, but collected and recorded by the Group under the Group’s agreement with SAPLA. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b. | Tax credit revenues of $928,634 resulting from certain infrastructure expenditures relating to its post-production facilities in Louisiana made by the Group. This item was collected by SAPLA and paid over to the Group. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 3  | Net interest expense |
|---------|----------------------|

|                                                 |   | Year ended |       |   | Year ended |   |        | 3 months ended |   |   | Year ended |   |
|------------------------------------------------------|--------|------------|------------|--------|------------|--------|-------------|----------------|--------|--------|------------|--------|
|                                                 |   | June 30,   |       |   | June 30,   |   |        | June 30,       |   |   | March 31,  |   |
|                                                 |   | 2010       |       |   | 2009       |   |        | 2008           |   |   | 2008       |   |
| Interest expense                                     |   |       |       |   |       |   |        |           |   |   |       |   |
| Bank loan interest expense incurred relating to Zeus |   | $          | -          |   |       | $      | (8,581,436  | )              |   | $      | (3,258,060 | )      |   | $ | (427,206 | ) |
| Production loans interest expense                    |   |       | (1,107,050 | )      |       |   | (1,935,185  | )              |   |   | (424,490   | )      |   |   | (108,041 | ) |
| Corporate loans interest expense                     |   |       | (672,004   | )      |       |   | (340,557    | )              |   |   | (13,483    | )      |   |   | (137,236 | ) |
| Bank interest expense                                |   |       | (36,916    | )      |       |   | (50,377     | )              |   |   | -          |   |   |   | (490 | ) |
|                                                 |   |       |       |   |       |   |        |           |   |   |       |   |   |   |   |   |
| Total interest expenses                              |   | $          | (1,815,970 | )      |       | $      | (10,907,555 | )              |   | $      | (3,696,033 | )      |   | $ | (672,973 | ) |
|                                                 |   |       |       |   |       |   |        |           |   |   |       |   |   |   |   |   |
| Interest income                                      |   |       |       |   |       |   |        |           |   |   |       |   |   |   |   |   |
| Bank loan interest income relating to Zeus           |   | $          | -          |   |       | $      | 8,581,436   |           |   | $      | 3,258,053  |   |   | $ | 427,204 |   |
| Interest income from collection account              |   |       | 110,365    |   |       |   | 5,392       |           |   |   | -          |   |   |   | - |   |
| Bank interest income                                 |   |       | 44         |   |       |   | 12,268      |           |   |   | 14,815     |   |   |   | 39,683 |   |
|                                                 |   |       |       |   |       |   |        |           |   |   |       |   |   |   |   |   |
| Total interest income                                |   | $          | 110,409    |   |       | $      | 8,599,096   |           |   | $      | 3,272,868  |   |   | $ | 466,887 |   |
|                                                 |   |       |       |   |       |   |        |           |   |   |       |   |   |   |   |   |
| Net interest expense                                 |   | $          | (1,705,561 | )      |       | $      | (2,308,459  | )              |   | $      | (423,165   | )      |   | $ | (206,086 | ) |

| 4   | Other income relating to cancellation of indebtedness. |
|---------------|--------------------------------------------------------|

----

| 5  | Taxes |
|---------|-------|

| Long term gross deferred tax asset  |   | Year ended |        |   | Year ended |   |        | 3 months ended |   |   | Year ended  |   |
|-------------------------------------|--------|------------|-------------|--------|------------|--------|-------------|----------------|--------|--------|-------------|--------|
|                                |   | June 30,   |        |   | June 30,   |   |        | June 30,       |   |   | March 31,   |   |
|                                |   | 2010       |        |   | 2009       |   |        | 2008           |   |   | 2008        |   |
|                                |   |       |        |   |       |   |        |           |   |   |        |   |
| Net operating loss carry forwards   |   | $          | 11,579,923  |   |       | $      | 10,285,529  |           |   | $      | 8,839,662   |   |   | $ | 257,000 |   |
| Capital loss carry forwards         |   |       | 5,398,529   |   |       |   | 6,258,049   |           |   |   | 6,806,073   |   |   |   | 2,060,000 |   |
|                                |   |       |        |   |       |   |        |           |   |   |        |   |   |   |   |   |
| Total long-term deferred tax assets |   |       | 16,978,452  |   |       |   | 16,543,578  |           |   |   | 15,645,736  |   |   |   | 2,317,000 |   |
| Less: valuation allowance           |   |       | (16,978,452 | )      |       |   | (16,543,578 | )              |   |   | (15,645,736 | )      |   |   | (2,317,000 | ) |
|                                |   |       |        |   |       |   |        |           |   |   |        |   |   |   |   |   |
| Net long-term deferred tax assets   |   | $          | -           |   |       | $      | -           |           |   | $      | -           |   |   | $ | - |   |
|                                |   |       |        |   |       |   |        |           |   |   |        |   |   |   |   |   |

|                                                                                                                                                                      |   | Year ended |        |   | Year ended |   |       | 3 months ended |   |   | Year ended  |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|-------------|--------|------------|--------|------------|----------------|--------|--------|-------------|--------|
|                                                                                                                                                                      |   | June 30,   |        |   | June 30,   |   |       | June 30,       |   |   | March 31,   |   |
|                                                                                                                                                                      |   | 2010       |        |   | 2009       |   |       | 2008           |   |   | 2008        |   |
|                                                                                                                                                                      |   |       |        |   |       |   |       |           |   |   |        |   |
| Current tax charge/(benefit)                                                                                                                                              |   | $          | -           |   |       | $      | -          |           |   | $      | -           |   |   | $ | (485,634 | ) |
|                                                                                                                                                                      |   |       |        |   |       |   |       |           |   |   |        |   |   |   |   |   |
| Factors affecting the tax charge for the year:                                                                                                                            |   |       |        |   |       |   |       |           |   |   |        |   |   |   |   |   |
|                                                                                                                                                                      |   |       |        |   |       |   |       |           |   |   |        |   |   |   |   |   |
| Profit/(loss) before taxes                                                                                                                                                |   |       | (475,651    | )      |       |   | 4,736,965  |           |   |   | 356,621     |   |   |   | (5,043,519 | ) |
|                                                                                                                                                                      |   |       |        |   |       |   |       |           |   |   |        |   |   |   |   |   |
| Profit/(loss) before taxes multiplied by the standard rate of UK corporation tax of June 30 2010 at 28%; (June 30 2009 at 28%; June 30 2008 at 28%; March 31 2008 at 30%) |   |       | (133,182    | )      |       |   | 1,326,351  |           |   |   | 99,854      |   |   |   | (1,513,056 | ) |
| Effects of:                                                                                                                                                               |   |       |        |   |       |   |       |           |   |   |        |   |   |   |   |   |
| Non deductible expenses                                                                                                                                                   |   |       | 42,000      |   |       |   | 54,746     |           |   |   | 19,876      |   |   |   | 122,116 |   |
| Non taxable income                                                                                                                                                        |   |       | -           |   |       |   | (1,997,932 | )              |   |   | (1,131,236  | )      |   |   | - |   |
| Excess of amortization over tax deductions                                                                                                                                |   |       | (14,416     | )      |       |   | -          |           |   |   | 86,298      |   |   |   | 14,889 |   |
| Non-qualifying depreciation                                                                                                                                               |   |       | 495,782     |   |       |   | -          |           |   |   | -           |   |   |   |  - |   |
| Excess of capital allowances over depreciation                                                                                                                            |   |       | (824)  |   |       |   | -     |           |   |   | (824)  |   |   |   | -  |   |
| Tax losses carried forward                                                                                                                                                |   |       |        |   |       |   | 616,835    |           |   |   | 926,037     |   |   |   | 890,417 |   |
| Movement in tax losses                                                                                                                                                    |   |       | (727,311    | )      |       |   | -          |           |   |   | -           |   |   |   | - |   |
| Film tax profit adjustment                                                                                                                                                |   |       | 337,950     |   |       |   | -          |           |   |   | -           |   |   |   | - |   |
| Current tax charge/(credit)                                                                                                                                               |   | $          | -           |   |       | $      | -          |           |   | $      | -           |   |   | $ | (485,634 | ) |

----

| 6  | Earnings per share |
|---------|--------------------|

|                                                       |   | Year ended |      |   | Year ended |   |      | 3 months ended |   |   | Year ended |   |
|------------------------------------------------------------|--------|------------|-----------|--------|------------|--------|-----------|----------------|--------|--------|------------|--------|
|                                                       |   | June 30,   |      |   | June 30,   |   |      | June 30,       |   |   | March 31,  |   |
|                                                       |   | 2010       |      |   | 2009       |   |      | 2008           |   |   | 2008       |   |
|                                                       |   |       |      |   |       |   |      |           |   |   |       |   |
| Weighted average number of ordinary shares – Basic   |   |       | 7,013,601 |   |       |   | 6,051,453 |           |   |   | 4,870,800  |   |   |   | 4,676,301 |   |
|                                                       |   |       |      |   |       |   |      |           |   |   |       |   |   |   |   |   |
| Effect of dilutive potential ordinary shares:              |   |       |      |   |       |   |      |           |   |   |       |   |   |   |   |   |
| - convertible preference shares                            |   |       | -         |   |       |   | 1,138,000 |           |   |   | 2,400,000  |   |   |   | - |   |
| - convertible debt                                         |   |       | -         |   |       |   | 700,000   |           |   |   | 700,000    |   |   |   | - |   |
| - share options                                            |   |       | -         |   |       |   | 257,500   |           |   |   | 285,055    |   |   |   | - |   |
|                                                       |   |       |      |   |       |   |      |           |   |   |       |   |   |   |   |   |
| Weighted average number of ordinary shares – Diluted |   |       | 7,013,601 |   |       |   | 8,146,953 |           |   |   | 8,255,855  |   |   |   | 4,676,301 |   |

| 7  | Receivables |
|---------|-------------|

|                                          |   | At June 30, |      |   | At June 30, |   |      | At June 30, |   |   | At March 31, |   |
|-----------------------------------------------|--------|-------------|-----------|--------|-------------|--------|-----------|-------------|--------|--------|--------------|--------|
|                                          |   | 2010        |      |   | 2009        |   |      | 2008        |   |   | 2008         |   |
| Amounts falling due within one year:          |   |        |      |   |        |   |      |        |   |   |         |   |
| Trade receivables                             |   | $           | 1,478,400 |   |        | $      | 1,579,086 |        |   | $      | 4,273,337    |   |   | $ | 8,302,975 |   |
| Zeus receivables (i)                          |   |        | -         |   |        |   | -         |        |   |   | 247,322,586  |   |   |   | 53,601,395 |   |
| Other receivables                             |   |        | -         |   |        |   | 19,077    |        |   |   | 4,061,609    |   |   |   | 2,261,219 |   |
| Related party receivables                |   |        | 3,021,184 |   |        |   | 2,048,133 |        |   |   | 2,794,727    |   |   |   | 2,049,405 |   |
| Other receivbles and prepayments              |   |        | 263,150   |   |        |   | 769,651   |        |   |   | 4,702,282    |   |   |   | 2,891,880 |   |
|                                          |   |        |      |   |        |   |      |        |   |   |         |   |   |   |   |   |
| Total                                         |   | $           | 4,762,734 |   |        | $      | 4,415,947 |        |   | $      | 263,154,541  |   |   | $ | 69,106,874 |   |
|                                          |   |        |      |   |        |   |      |        |   |   |         |   |   |   |   |   |
| Amounts falling due after more than one year: |   |        |      |   |        |   |      |        |   |   |         |   |   |   |   |   |
| Other receivables                             |   | $           | -         |   |        | $      | -         |        |   | $      | 2,794,729    |   |   | $ | 1,882,897 |   |
|                                          |   |        |      |   |        |   |      |        |   |   |         |   |   |   |   |   |
| Total receivables                             |   | $           | 4,762,734 |   |        | $      | 4,415,947 |        |   | $      | 265,949,270  |   |   | $ | 70,989,771 |   |

|   | (i) Accounting for the Zeus financing transaction resulted in the creation of substantial, offsetting assets (restricted cash and receivables) and liabilities (short term bank debt and deferred income) in the periods ended June 30, 2008 and March 31, 2008. As of June 30, 2008, these receivables amounted to $247,322,586 and as of March 31, 2008 they amounted to $53,601,395.  Value added tax included within the Zeus receivable is $23,224,656 at June 30, 2008 and $5,521,034 at March 31, 2008. All of these receivables had been collected and the associated loans paid down completely during the period ended June 30, 2009. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                |   | Year ended |   |   | Year ended |   |   | 3 months ended |   |   | Year ended |   |
|---------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|----------------|--------|--------|------------|--------|
|                                                                |   | June 30,   |   |   | June 30,   |   |   | June 30,       |   |   | March 31,  |   |
|                                                                |   | 2010       |   |   | 2009       |   |   | 2008           |   |   | 2008       |   |
| Name of Company                                                     |   |       |   |   |       |   |   |           |   |   |       |   |
|                                                                |   |       |   |   |       |   |   |           |   |   |       |   |
| Seven Arts Pictures Plc                                             |   |       | 100    | %      |       |   | 100    | %              |   |   | 100        | %      |   |   | 100 | % |
| Seven Arts Filmed Entertainment Limited                             |   |       | 100    | %      |       |   | 100    | %              |   |   | 100        | %      |   |   | 100 | % |
| Seven Arts Filmed Entertainment (UK) Limited (formed March 6, 2008) |   |       | 100    | %      |       |   | 100    | %              |   |   | 100        | %      |   |   | 100 | % |
| Cinematic Finance Limited(formed February 14, 2008)                 |   |       | 100    | %      |       |   | 100    | %              |   |   | 100        | %      |   |   | 100 | % |
| Cinematic Finance (Equicap) Ltd(formed February 27, 2009)           |   |       | 100    | %      |       |   | 100    | %              |   |   | 0          | %      |   |   | 0 | % |

----

|                                         |   | At June 30, 2010 |       |   | At June 30, 2009 |   |       | At June 30, 2008 |   |   | At March 31, 2008 |   |
|----------------------------------------------|--------|------------------|------------|--------|------------------|--------|------------|------------------|--------|--------|-------------------|--------|
|                                         |   |             |       |   |             |   |       |             |   |   |              |   |
| Film Costs- beginning balance                |   | $                | 39,420,325 |   |             | $      | 33,662,259 |             |   | $      | 42,398,291        |   |   | $ | 30,375,149 |   |
| Additional Costs incurred                    |   |             | 2,677,006  |   |             |   | 10,174,712 |             |   |   | 3,420,522         |   |   |   | 14,468,369 |   |
| Third party investments/tax credit           |   |             | -          |   |             |   | (4,416,646 | )                |   |   | (12,156,554       | )      |   |   | (2,445,227 | ) |
| Film Costs- ending balance                   |   | $                | 42,097,331 |   |             | $      | 39,420,325 |             |   | $      | 33,662,259        |   |   | $ | 42,398,291 |   |
|                                         |   |             |       |   |             |   |       |             |   |   |              |   |   |   |   |   |
|                                         |   |             |       |   |             |   |       |             |   |   |              |   |   |   |   |   |
| Accumulated Amortization - beginning balance |   | $                | 16,517,812 |   |             | $      | 13,957,880 |             |   | $      | 13,176,850        |   |   | $ | 12,686,611 |   |
| Amortization and impairment of film costs    |   |             | 1,770,650  |   |             |   | 2,559,932  |             |   |   | 781,030           |   |   |   | 490,239 |   |
| Accumulated Amortization -ending balance     |   | $                | 18,288,462 |   |             | $      | 16,517,812 |             |   | $      | 13,957,880        |   |   | $ | 13,176,850 |   |
|                                         |   |             |       |   |             |   |       |             |   |   |              |   |   |   |   |   |
| Film Costs, net                              |   | $                | 23,808,869 |   |             | $      | 22,902,513 |             |   | $      | 19,704,379        |   |   | $ | 29,221,441 |   |

----

| Cost as of March 31, 2007           |   | $      | 30,508   |   |
|-------------------------------------|--------|--------|----------|--------|
| Additions                           |   |   | 27,374   |   |
| Depreciation charge for the period  |   |   | (15,125  | )      |
| Net book value as of March 31, 2008 |   | $      | 42,757   |   |
|                                |   |   |     |   |
| Additions                           |   |   | 917      |   |
| Depreciation charge for the period  |   |   | ( 6,539  | )      |
| Net book value as of June 30, 2008  |   | $      | 37,135   |   |
|                                |   |   |     |   |
| Additions                           |   |   | 28,088   |   |
| Depreciation charge for the period  |   |   | ( 25,111 | )      |
| Net book value as of June 30, 2009  |   | $      | 40,112   |   |
|                                |   |   |     |   |
| Additions                           |   |   | 2,672    |   |
| Depreciation charge for the period  |   |   | ( 13,875 | )      |
| Exchange differences                |   |   | ( 2,520  | )      |
| Net book value as of June 30, 2010  |   | $      | 26,389   |   |

|                        |   | At June 30, |      |   | At June 30, |   |      | At June 30, |   |   | At March 31, |   |
|-----------------------------|--------|-------------|-----------|--------|-------------|--------|-----------|-------------|--------|--------|--------------|--------|
|                        |   | 2010        |      |   | 2009        |   |      | 2008        |   |   | 2008         |   |
|                        |   |        |      |   |        |   |      |        |   |   |         |   |
| Accounts payable            |   | $           | 2,304,009 |   |        | $      | 1,901,651 |        |   | $      | 1,029,580    |   |   | $ | 569,664 |   |
| Accrued liabilities         |   |        | 2,414,963 |   |        |   | 2,176,369 |        |   |   | 6,037,723    |   |   |   | 2,169,240 |   |
| Participation and residuals |   |        | 480,357   |   |        |   | 666,707   |        |   |   | 1,657,906    |   |   |   | 1,549,635 |   |
| Deferred income (i)         |   |        | 1,460,230 |   |        |   | 1,363,610 |        |   |   | 119,355,201  |   |   |   | 30,511,702 |   |
| VAT payable net (ii)        |   |        | 1,463,497 |   |        |   | 1,734,238 |        |   |   | 23,224,656   |   |   |   | 5,521,034 |   |
|                        |   | $           | 8,123,056 |   |        | $      | 7,842,575 |        |   | $      | 151,305,066  |   |   | $ | 40,321,275 |   |
|                        |   |        |      |   |        |   |      |        |   |   |         |   |   |   |   |   |

| (i)    | Deferred income of $89,350, $98,630, $118,067,801 and $27,247,893 as of June 30, 2010, June 30, 2009,   June 30, 2008 and March 31, 2008 arose from the Zeus transaction |
|-----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)    | Value Added Tax attributed to the Zeus transaction payable in all four periods is as shown below. The amount presented in the above table is net of other taxes receivable relates to input VAT that HMRC are withholding pending resolution of the Zeus issue. |
|------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                           |   | At June 30, |      |   | At June 30, |   |      | At June 30, |   |   | At March 31, |   |
|--------------------------------|--------|-------------|-----------|--------|-------------|--------|-----------|-------------|--------|--------|--------------|--------|
|                           |   | 2010        |      |   | 2009        |   |      | 2008        |   |   | 2008         |   |
|                           |   |        |      |   |        |   |      |        |   |   |         |   |
| Taxes payable – Zeus     |   | $           | 1,927,104 |   |        | $      | 2,127,259 |        |   | $      | 23,224,656   |   |   | $ | 5,521,034 |   |
| Taxes receivable – other |   |        | (463,607  | )      |        |   | (393,021  | )           |   |   | -            |   |   |   | - |   |
|                           |   |        |      |   |        |   |      |        |   |   |         |   |   |   |   |   |
| Net VAT payable                |   | $           | 1,463,497 |   |        | $      | 1,734,238 |        |   | $      | 23,224,656   |   |   | $ | 5,521,034 |   |

----

| Loan maturity analysis                        |   |        |       |   |        |   |       |        |   |   |         |   |
|-----------------------------------------------|--------|-------------|------------|--------|-------------|--------|------------|-------------|--------|--------|--------------|--------|
|                                          |   | At June 30, |       |   | At June 30, |   |       | At June 30, |   |   | At March 31, |   |
|                                          |   | 2010        |       |   | 2009        |   |       | 2008        |   |   | 2008         |   |
| Due within one year                           |   |        |       |   |        |   |       |        |   |   |         |   |
| Bank loans – Zeus                       |   | $           | -          |   |        | $      | -          |        |   | $      | 225,478,399  |   |   | $ | 225,444,481 |   |
| Corporate loans                               |   |        | 1,534,591  |   |        |   | 2,507,531  |        |   |   | -            |   |   |   | 997,050 |   |
| Film & production loans                   |   |        | 16,766,689 |   |        |   | 15,320,650 |        |   |   | 16,485,429   |   |   |   | 27,957,342 |   |
|                                          |   |        |       |   |        |   |       |        |   |   |         |   |   |   |   |   |
| Total due within one year                     |   | $           | 18,301,280 |   |        | $      | 17,828,181 |        |   | $      | 241,963,828  |   |   | $ | 254,398,873 |   |
|                                          |   |        |       |   |        |   |       |        |   |   |         |   |   |   |   |   |
| Due in more than 1 year but less than 5 years |   |        |       |   |        |   |       |        |   |   |         |   |   |   |   |   |
| Film & production loans                   |   | $           | -          |   |        | $      | -          |        |   | $      | 6,752,449    |   |   | $ | 7,257,451 |   |
|                                          |   |        |       |   |        |   |       |        |   |   |         |   |   |   |   |   |
| Total bank, production and corporate loans    |   | $           | 18,301,280 |   |        | $      | 17,828,181 |        |   | $      | 248,716,277  |   |   | $ | 261,656,324 |   |

| ● | A loan of $8,300,000 is included under "Production loans" in the periods ended June 30, 2008 and March 31, 2008. This loan was advanced to Seven Arts Future Flows I LLC ("SFF"), a subsidiary of Seven Arts Pictures Inc., on a non-recourse basis by Arrowhead Ltd. ("Arrowhead") and was secured by a pledge of Seven Arts Filmed Entertainment Limited’s distribution rights in twelve designated pictures owned by SFF for the period of the loan. During the period ended June 30, 2009, Arrowhead made the decision to take control over the distribution rights to these pictures. Since the Group no longer controls the licensing of these motion pictures, it has removed all investment in the cost of these pictures as well as receivables from its assets and has removed the non-recourse indebtedness and accrued interest from its liabilities as of June 30, 2009. This resulted in the recognition of $5,601,683 of “Other income” in the period ended June 30, 2009 relating to the cancellation of indebtedness described in Note 4. Arrowhead has now made a claim against the Group by reason of monies the Group has collected from distribution of these motion pictures and not paid to Arrowhead based on the Group’s interpretation of the transactional contracts (see note 22). Management has accounted for the monies collected and not remitted from the Arrowhead titles as accrued liabilities in the Group’s books and records as of June 30, 2010. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | An original loan of $7,500,000 taken out from Cheyne Specialty Finance Fund LLP ($6,500,000) senior debt and Arrowhead Consulting Group Limited ($1,000,000) -subordinated debt. The Cheyne portion of the loan was acquired by the SAFE Ltd for payment of $6,500,000 in April 2008, leaving a balance still owed by the Group of $1,000,000 due to Arrowhead Consulting Group Limited but subordinated to the collection of $6,500,000 plus interest from certain pictures after June 30, 2008.  The $1,000,000 balance of the loan is secured with all of the income over and above the $6,500,000 plus interest from six films (Deal, Noise,Pool Hall Prophets, A Broken Life, Mirror Wars and Boo) as well as with a secondary security interest in certain film library assets (behind Arrowhead) and a first security interest in 1,607,000 shares of the Group owned by Seven Arts Pictures Inc. The Group is in litigation with the liquidator of Arrowhead Consulting Group regarding the $1,000,000 plus accrued interest and whilst it believes this debt will never be paid due to its subordination to the senior loan, the Group has nevertheless accrued for both the loan and accrued interest as of June 30, 2010. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | A security interest in favor of Palm Finance Corporation ("Palm") was lodged at Companies House in January 2008, by the Group to cover loans made by Palm to finance the films Nine Miles Down, The Pool Boys and Autopsy.  The Group entered into two senior financing loan and security agreements with Palm Finance Corp (“Palm”) to finance the production costs of The Pool Boys, Autopsy and Nine Miles Down dated May 7, 2007 and December 17, 2007. These loans are secured by the revenues to be collected from these motion pictures. The revenues so far collected have been insufficient to repay the majority of these loans, primarily as result of management’s decision to delay the release of these films. The original principal amount of the Palm loan for The Pool Boys and Autopsy are $5,500,000 including  $700,000 of accrued interest, and for Nine Miles Down was $4,000,000 including $750,000 of accrued interest. The outstanding balance on these loans as at June 30, 2010 was 6,575,881 (Pool Boys/Autopsy) and $4,243,835 (Nine Miles Down). The accrued interest was added to the loan during the loan term. Subsequent to the date of the financial statements, the Group entered into a new financing agreement with Palm extending the due date of these loans to December 31, 2011 (see Subsequent Events note 22). |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ●   | Trafalgar Loan On October 15, 2008 the Group borrowed £1,000,000 from Trafalgar Capital Special Investment Fund (“Trafalgar”). A portion of this loan the Group advanced to the EBT for it to use as the first installment for the acquisition of all the Preference Shares owned by Armadillo.  On September 2, 2009 the Group repaid Trafalgar $1,000,000 (about £698,934) as a partial payment against this loan, with the remaining balance subject to repayment in cash or convertible to the ordinary shares of the Group at the conversion terms as agreed between Trafalgar and the Group. On June 22, 2010 an amended agreement was entered into with Trafalgar for an extension of the due date of the convertible debentures to December 31, 2010, and the Group agreed to issue 340,000 ordinary shares to settle a portion of the debt. Trafalgar agreed to reduce the loan amount from the proceeds it receives from selling the 340,000 ordinary shares.  The transaction was consummated subsequent to the date of the financial statements and all of the 340,000 shares have been sold in the market before December 31 , 2010. Subsequent to June 30, 2010, a further amended agreement was entered into with Trafalgar for an extension of the due date of the convertible debentures to March 31, 2011, and the Group agreed to issue 425,000 ordinary shares to settle a portion of the debt (see subsequent events note 22). Trafalgar agreed to reduce the loan amount from the proceeds it receives from selling the 425,000 ordinary shares. The balance outstanding on the loan after sale of these 425,000 shares is expected to be approximately $225,000. The per-share value is determined as the amount recovered by Trafalgar on sale thereof in the market and Trafalgar may “put” these shares to the Group at £1.00 per share on April  30, 2011 if not previously sold.  We intend to pay the balance of the sum due to Trafalgar by similar conversion of our shares. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | A security interest in favor of Palm Finance Corporation ("Palm") was lodged at Companies House in January 2008, by the Group to cover loans made by Palm to finance the films Nine Miles Down, The Pool Boys and Autopsy.  The Group entered into two senior financing loan and security agreements with Palm Finance Corp (“Palm”) to finance the production costs of The Pool Boys, Autopsy and Nine Miles Down dated May 7, 2007 and December 17, 2007. These loans are secured by the revenues to be collected from these motion pictures. The revenues so far collected have been insufficient to repay the majority of these loans, primarily as result of management’s decision to delay the release of these films. The original principal amount of the Palm loan for The Pool Boys and Autopsy are $5,500,000 including  $700,000 of accrued interest, and for Nine Miles Down was $4,000,000 including $750,000 of accrued interest. The outstanding balance on these loans as at June 30, 2010 was $6,575,881 (Pool Boys/Autopsy) and $4,243,835 (Nine Miles Down). The accrued interest was added to the loan during the loan term. Subsequent to the date of the financial statements, the Group entered into a new financing agreement with Palm extending the due date of these loans to December 31, 2011 (see Subsequent Events note 22). |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Asher Loan In May and June 2010, the Group issued an aggregate of $150,000 Convertible Promissory Notes to Asher Enterprises, Inc. (“Asher Notes”) that mature on March 11, 2011 and March 17, 2011. The Asher Notes bear interest at a rate of 8% per annum and can be convertible into the Group’s ordinary shares beginning on the date which is one hundred twenty (120) days following the issuance of the Asher Notes, at the holder’s option, at the conversion rate of 60% of the market price of the lowest three trading prices of the Group’s ordinary shares during the ten-day period ending one trading day prior to the date of the conversion notice is sent by the note holders via facsimile. The Group has identified the embedded derivatives related to the Asher Notes.  These embedded derivatives included certain conversion features and reset provision.  The accounting treatment of derivative financial instruments requires that the Group record fair value of the derivatives as of the inception date of Asher Notes and to fair value as of each subsequent reporting date.  At the inception of the Asher Notes, the Group determined a fair value of $132,807 on the embedded derivative.  The fair value of the embedded derivative was determined using the Black Scholes Option Pricing Model based on the following assumptions:    |
|---------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Dividend yield: |   |   | -0-         | % |
|-----------------|--------|--------|-------------|---|
| Volatility      |   |   | 141 ~ 142   | % |
| Risk free rate: |   |   | 0.31 ~ 0.37 | % |

|    | During the year ended June 30, 2010, the amortization of the debt discount is insignificant as a result of the short-outstanding period of the notes before the year-end, and therefore the Group had not charged the amortization of the debt discount at June 30, 2010. However, the debt discount will be amortized and charged to interest expense before the maturity or conversion of the notes.At June 30, 2010, the Group marked to market the fair value of the debt derivative. The fair value of the debt derivative at June 30, 2010 is approximately the fair value of the debt derivative at inception, therefore no gain or loss on change in fair value of debt derivative is recorded at June 30, 2010. The Group valued the derivative at June 30, 2010 using the Black Scholes Option Pricing Model, with the following assumptions: |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Dividend yield: |   |   | -0-  | % |
|-----------------|--------|--------|------|---|
| Volatility      |   |   | 142  | % |
| Risk free rate: |   |   | 0.32 | % |

|    | As of June 30, 2010, the debt derivative valued at $132,807, and has been classified as a current liability, included in the film and production loan. In December 2010, all of the Asher Notes were converted to the ordinary shares of the Group (see Subsequent Events note 22). |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Lender                                        |   | Amount outstanding |       | Applicable interest rate |             | Status |
|-----------------------------------------------|--------|--------------------|------------|--------------------------|------------------|--------|
|                                          |   |               |       |                     |             |   |   |   |   |
| Film & production loans                   |   | At June 30, 2010   |       |                     | At June 30, 2009 |   |   |   |   |
|                                          |   |               |       |                     |             |   |   |   |   |
| Arrowhead Consulting Group                    |   | $                  | 1,788,904  |                     |             | $      | 1,100,000 |   | 19-23% Variable |   | Subordinated |
|                                          |   |               |       |                     |             |   |   |   |   |   |   |
| Palm Finance Corporation                      |   |               | 6,575,881  |                     |             |   | 6,134,716 |   | 18% Fixed |   | Forbearance agreement |
|                                          |   |               |       |                     |             |   |   |   |   |   |   |
| Palm Finance Corporation                      |   |               | 4,243,835  |                     |             |   | 4,010,238 |   | 18% Fixed |   | Forbearance agreement |
|                                          |   |               |       |                     |             |   |   |   |   |   |   |
| Blue Rider Finance Inc                        |   |               | 1,599,813  |                     |             |   | 1,490,348 |   | 22.5% per annum plus 4% of outstanding indebtedness for each 30 days period the indebtedness remains outstanding after December 15, 2008 |   | Due on demand |
|                                          |   |               |       |                     |             |   |   |   |   |   |   |
| 120dB Film Finance LLC                        |   |               | 219,000    |                     |             |   | 647,848 |   | No stated interest rate |   | Due on demand |
|                                          |   |               |       |                     |             |   |   |   |   |   |   |
| Cold Fusion Media Group LLC                   |   |               | 920,410    |                     |             |   | 787,500 |   | 10% Fixed |   | Due on demand |
|                                          |   |               |       |                     |             |   |   |   |   |   |   |
| Parallel Media                                |   |               | 1,418,846  |                     |             |   | 1,000,000 |   | No stated interest rate |   | Due on demand  |
|                                          |   |               |       |                     |             |   |   |   |   |   |   |
| Kismet Entertainment Group                    |   |               | -          |                     |             |   | 150,000 |   |   |   |   |
|                                          |   |               |       |                     |             |   |   |   |   |   |   |
|                                          |   |               |       |                     |             |   |   |   |   |   |   |
| Film & production loans                   |   | $                  | 16,766,689 |                     |             | $      | 15,320,650 |   |   |   |   |
|                                          |   |               |       |                     |             |   |   |   |   |   |   |
| Other loans                                   |   |               |       |                     |             |   |   |   |   |   |   |
| Trafalgar Capital Specialized Investment Fund |   | $                  | 1,176,608  |                     |             | $      | 2,204,887 |   | 9% Fixed |   | Forbearance agreement |
|                                          |   |               |       |                     |             |   |   |   |   |   |   |
| Asher Enterprise, Inc.                        |   |               | 150,000    |                     |             |   | - |   | 8% Fixed |   | Due on March 11, 2011 and March 17, 2011 |
|                                          |   |               |       |                     |             |   |   |   |   |   |   |
| Lion House                                    |   |               | 207,983    |                     |             |   | 302,644 |   | 30% Fixed |   | In default |
|                                          |   |               |       |                     |             |   |   |   |   |   |   |
| Other loans                                   |   | $                  | 1,534,591  |                     |             | $      | 2,507,531 |   |   |   |   |
|                                          |   |               |       |                     |             |   |   |   |   |   |   |
| Total loans                                   |   | $                  | 18,301,280 |                     |             | $      | 17,828,181 |   |   |   |   |

----

|                                                                                                                                 |   | As of    |       |   | As of    |   |       | As of    |   |   | As of      |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|----------|------------|--------|----------|--------|------------|----------|--------|--------|------------|--------|
|                                                                                                                                 |   | June 30, |       |   | June 30, |   |       | June 30, |   |   | March 31,  |   |
|                                                                                                                                 |   | 2010     |       |   | 2009     |   |       | 2008     |   |   | 2008       |   |
| Authorized:                                                                                                                          |   |     |       |   |     |   |       |     |   |   |       |   |
| 6,000,000, £1 convertible, redeemable preference shares for all periods.                                                        |   | $        | 11,337,600 |   |     | $      | 11,337,600 |     |   | $      | 11,337,600 |   |   | $ | 11,337,600 |   |
|                                                                                                                                 |   |     |       |   |     |   |       |     |   |   |       |   |   |   |   |   |
| 102,636,800 ordinary shares of £ 0.25 each for all periods.                                                                     |   |     | 45,278,595 |   |     |   | 45,278,595 |     |   |   | 45,278,595 |   |   |   | 45,278,595 |   |
|                                                                                                                                 |   |     |       |   |     |   |       |     |   |   |       |   |   |   |   |   |
| 13,184,000 deferred shares of £0.45 each for all periods                                                                        |   |     | 11,636,594 |   |     |   | 11,636,594 |     |   |   | 11,636,594 |   |   |   | 11,636,594 |   |
|                                                                                                                                 |   |     |       |   |     |   |       |     |   |   |       |   |   |   |   |   |
|                                                                                                                                 |   | $        | 68,252,789 |   |     | $      | 68,252,789 |     |   | $      | 68,252,789 |   |   | $ | 68,252,789 |   |
| Issued and outstanding:                                                                                                              |   |     |       |   |     |   |       |     |   |   |       |   |   |   |   |   |
| Nil as at June 30, 2010; 500,000 as at June 30 2009; 3,000,000, £1 convertible, redeemable preference shares for other periods. |   | $        | -          |   |     | $      | 1,539,800  |     |   | $      | 5,668,800  |   |   | $ | 5,668,800 |   |
|                                                                                                                                 |   |     |       |   |     |   |       |     |   |   |       |   |   |   |   |   |
| 7,477,300 as at June 30 2010; 6,927,300 as at June 30 2009; 4,870,800 ordinary shares of £0.25 outstanding for other periods.   |   |     | 3,205,630  |   |     |   | 2,998,420  |     |   |   | 2,149,292  |   |   |   | 2,149,292 |   |
|                                                                                                                                 |   |     |       |   |     |   |       |     |   |   |       |   |   |   |   |   |
| 13,184,000 deferred shares of £0.45 each for all periods.                                                                       |   |     | 11,636,594 |   |     |   | 11,636,594 |     |   |   | 11,636,594 |   |   |   | 11,636,594 |   |
|                                                                                                                                 |   |     |       |   |     |   |       |     |   |   |       |   |   |   |   |   |
|                                                                                                                                 |   | $        | 14,842,224 |   |     | $      | 16,174,814 |     |   | $      | 19,454,686 |   |   | $ | 19,454,686 |   |

| a. | The convertible redeemable preference shares held by Armadillo were acquired by the Seven Arts Employee Benefit Trust (‘EBT”) on October 30, 2008 and 2,500,000 of the preference shares were converted into 2,000,000 of the Seven Arts Pictures Plc ordinary shares on November 20, 2008. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b. | The remaining 500,000 convertible preference shares owned by the EBT were converted  into 400,000 ordinary shares of Seven Arts Pictures Plc on June 30 2010. As of June 30, 2010, there were no convertible redeemable preference shares outstanding. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i)  | no dividends, |
|-----------|---------------|

| (ii)  | a liquidation preference, |
|------------|---------------------------|

| (iii) | conversion rights into ordinary shares, and |
|-------|---------------------------------------------|

| (iv) | redemption rights only in the event of certain defaults by Group |
|------|------------------------------------------------------------------|

----

| a. |  400,000 shares issued to the EBT on conversion of 500,000 convertible preference shares.  The EBT conversion resulted in an addition of $149,620 to the share capital account and $1,390,180 to the additional paid in capital account and a reduction of $1,539,800 in the carrying value of the preference shares in the capital account. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b. | 10,000 share options were converted to 50,000 ordinary shares by a former employee.  As the excess 40,000 ordinary shares were issued in error, a related party (SAP Inc.) has promised to advance and pledge 40,000 of its shares of Seven Arts Pictures Plc to the Group until it can arrange for the cancellation of these shares and replace with the correct shares to be issued and sent to the former employee.  As of June 30, 2010 the Group had not received these shares. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c. | 100,000 shares were issued to Eden Finance to cover loan, interest and fees in April 2010. |
|----|--------------------------------------------------------------------------------------------|

| a. | 2,000,000 shares issued to the EBT on conversion of 2,500,000 convertible preference shares.  The EBT conversion resulted in an addition of $825,800 to the share capital account and $3,303,200 to the additional paid in capital account and in a reduction of $4,129,000 in the carrying value of the preference shares in the capital account. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b. | 34,000 shares issued to Trafalgar Capital Specialized Investment Fund in exchange for cancellation of warrants. |
|----|-----------------------------------------------------------------------------------------------------------------|

| c. | 22,500 shares issued upon conversion of stock options. |
|----|--------------------------------------------------------|

| d. | 34,000 shares issued for cash consideration of £51,000 ($77,352) to Unique Fidelity Engineering Ltd (“Unique”) – a Hong Kong Conglomerate who wanted to take a major stake in Seven Arts Picture Plc. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| e. | 500,000 shares were issued to Unique – for consideration of £375,000 ($568,763) which was satisfied by issuance to the Group of 300,000 shares that Unique owned in US Dry Cleaning Inc. The Group subsequently sold these shares within the year but received less than £375,000. Unique agreed to make good the difference and other receivable of $500,000 was included in other assets at June 30, 2008 in respect of this transaction. This receivable was written off in June 2009 as the collectability became unlikely. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Group and Company      |   |     |      |   |     |   |      |     |   |   |      |   |
|------------------------|--------|----------|-----------|--------|----------|--------|-----------|----------|--------|--------|-----------|--------|
|                   |   | As of    |      |   | As of    |   |      | As of    |   |   | As of     |   |
|                   |   | June 30, |      |   | June 30, |   |      | June 30, |   |   | March 31, |   |
|                   |   | 2010     |      |   | 2009     |   |      | 2008     |   |   | 2008      |   |
|                   |   |     |      |   |     |   |      |     |   |   |      |   |
| Convertible debentures |   | $        | 3,432,450 |   |     | $      | 3,432,450 |     |   | $      | 3,432,450 |   |   | $ | 3,432,450 |   |
|                   |   |     |      |   |     |   |      |     |   |   |      |   |   |   |   |   |

----

|                          |   | Denominated inSterling |      |   | Denominated inUS Dollars |   |       | Total  |   |
|-------------------------------|--------|------------------------|-----------|--------|--------------------------|--------|------------|--------|--------|
|                          |   |                   |      |   |                     |   |       |   |   |
| Trade receivables             |   | $                      | -         |   |                     | $      | 1,478,400  |   |   | $ | 1,478,400 |   |
| Prepayments                   |   |                   | 43,226    |   |                     |   | 219,924    |   |   |   | 263,150 |   |
|                          |   |                   |      |   |                     |   |       |   |   |   |   |   |
| Assets                        |   | $                      | 43,226    |   |                     | $      | 1,698,324  |   |   | $ | 1,741,550 |   |
|                          |   |                   |      |   |                     |   |       |   |   |   |   |   |
|                          |   |                   |      |   |                     |   |       |   |   |   |   |   |
| Trade payables                |   |                   | 1,485,056 |   |                     |   | 818,953    |   |   |   | 2,304,009 |   |
| Accrued liabilities           |   |                   | 107,145   |   |                     |   | 2,307,818  |   |   |   | 2,414,963 |   |
| Participation & residuals |   |                   | -         |   |                     |   | 480,357    |   |   |   | 480,357 |   |
| Corporate loans               |   |                   | 1,384,591 |   |                     |   | -          |   |   |   | 1,384,591 |   |
| Film & production loans   |   |                   | -         |   |                     |   | 16,766,689 |   |   |   | 16,766,689 |   |
| Deferred income               |   |                   | 89,350    |   |                     |   | 1,370,880  |   |   |   | 1,460,230 |   |
| Taxes payable                 |   |                   | 1,463,497 |   |                     |   | -          |   |   |   | 1,463,497 |   |
|                          |   |                   |      |   |                     |   |       |   |   |   |   |   |
| Liabilities                   |   | $                      | 4,529,639 |   |                     | $      | 21,744,697 |   |   | $ | 26,274,336 |   |

----

----

|                                                       |   | Year ended |       |   | Year ended |   |       | 3 months ended |   |   | Year ended  |   |
|------------------------------------------------------------|--------|------------|------------|--------|------------|--------|------------|----------------|--------|--------|-------------|--------|
|                                                       |   | June 30,   |       |   | June 30,   |   |       | June 30,       |   |   | March 31,   |   |
|                                                       |   | 2010       |       |   | 2009       |   |       | 2008           |   |   | 2008        |   |
|                                                       |   |       |       |   |       |   |       |           |   |   |        |   |
| Fixed & variable rate - production and corporate loans |   | $          | 16,663,434 |   |       | $      | 17,828,181 |           |   | $      | 14,753,795  |   |   | $ | 28,213,060 |   |
| No stated interest - production loans                      |   |       | 1,637,846  |   |       |   | -          |           |   |   | 8,453,381   |   |   |   | 7,998,783 |   |
| Fixed rate - bank loan – Zeus                        |   |       | -          |   |       |   | -          |           |   |   | 225,478,399 |   |   |   | 225,444,481 |   |
| Floating rate - bank loans                                 |   |       | -          |   |       |   | -          |           |   |   | 30,702      |   |   |   | - |   |
|                                                       |   |       |       |   |       |   |       |           |   |   |        |   |   |   |   |   |
| Total financial liabilities                                |   | $          | 18,301,280 |   |       | $      | 17,828,181 |           |   | $      | 248,716,277 |   |   | $ | 261,656,324 |   |

| ● | On February 1, 2008, the Group issued 160,000 five year options from its Unapproved Share Option Scheme to Trafalgar Capital Specialized Investment Fund (“Trafalgar”) to secure a loan at an exercise price of $1.95 per share. These options were valued at $0.65 per share using the Black Scholes pricing model and the Group consequently took a charge of approximately $103,000 in the period ended March 31, 2008. These options, together with 60,000 options granted to Trafalgar in November 2008 (see below), were subsequently canceled in May 2009 in return for the issuance to Trafalgar of 34,000 restricted ordinary shares |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | On June 1, 2008, the Group issued 110,000 five year options from its Unapproved Share Option Scheme to a Director of the Group (100,000) as part of his employment package and to an associate (10,000) at an exercise price of $1.54 per share as part of his fee for producing Night of the Demons. These associate options were exercised on December 19, 2008.  The value of these options were determined to be $0.50 per share based on the Black Scholes pricing model and a charge of approximately $60,000 was consequently recorded for the period ended June 30, 2008. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ● | On September 1, 2008, the Group issued 20,000 five year options from its Unapproved Share Option Scheme to a Director of the Group at an exercise price of $1.69 per share as part of his employment package, and October 15 2008, 60,000 options were issued to Trafalgar Capital Specialized Investment Fund a loan provider at an exercise price of $1.11 per share in lieu of interest on their loan.  On November 5, 2008, the Group issued 60,000 five year options to Management of the Group at an exercise price of $1.69 per share as part of an unapproved bonus scheme.  The value of these options were determined to be $0.51 per share based on the Black Scholes pricing model and a charge of approximately $195,000 was consequently recorded for the period ended June 30, 2009. The 60,000 options issued, together with 160,000 options granted in February 2008 (see above) to Trafalgar were subsequently canceled in May 2009 in return for the issuance of 34,000 restricted ordinary shares. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | A former employee exercised his 10,000 options in December 2009. 50,000 shares were issued to him in error and SAP INC, an affiliated company has guaranteed the return of the shares issued in error and pledged 40,000 of their shares of Seven Arts Pictures Plc until the completion of the shares cancellation and reissuance. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                               |   | Year ended |    |   | Year ended |   |     | 3 months ended |   |   | Year ended |   |
|------------------------------------|--------|------------|---------|--------|------------|--------|----------|----------------|--------|--------|------------|--------|
|                               |   | June 30,   |    |   | June 30,   |   |     | June 30,       |   |   | March 31,  |   |
|                               |   | 2010       |    |   | 2009       |   |     | 2008           |   |   | 2008       |   |
|                               |   |       |    |   |       |   |     |           |   |   |       |   |
| Outstanding at beginning of period |   | $          | 257,500 |   |       | $      | 360,000  |           |   | $      | 250,000    |   |   | $ | 40,000 |   |
| Granted                            |   |       | -       |   |       |   | 140,000  |           |   |   | 110,000    |   |   |   | 210,000 |   |
| Exercised                          |   |       | (10,000 | )      |       |   | (22,500  | )              |   |   | -          |   |   |   | - |   |
| Cancelled or expired               |   |       | (30,000 | )      |       |   | (220,000 | )              |   |   | -          |   |   |   | - |   |
|                               |   |       |    |   |       |   |     |           |   |   |       |   |   |   |   |   |
| Outstanding at end of period       |   | $          | 217,500 |   |       | $      | 257,500  |           |   | $      | 360,000    |   |   | $ | 250,000 |   |

----

|                             | Year ended |    | 3 months ended |   | Year ended |   |
|----------------------------------|------------|---------|----------------|--------|------------|--------|
|                             | June 30,   |    | June 30,       |   | March 31,  |   |
|                             | 2009       |    | 2008           |   | 2008       |   |
|                             |       |    |           |   |       |   |
| Risk-free interest rate          |       |    | 5              | %      |       |   | 5 | % |   |   | 5 | % |
| Expected option lives (in years) |       | 3 years |           |   | 3 years    |   |   | 3 years |   |
| Expected volatility for options  |       |    | 207%-238       | %      |       |   | 26 | % |   |   | 26 | % |
| Expected dividend yield          |       |    | 0              | %      |       |   | 0 | % |   |   | 0 | % |
| Forfeiture rate                  |       |    | 0              | %      |       |   | 0 | % |   |   | 0 | % |

|   |   | Year ended |    |   | 3 months ended |   |   | Year ended |   |
|--------|--------|------------|---------|--------|----------------|--------|--------|------------|--------|
|   |   | June 30,   |    |   | June 30,       |   |   | March 31,  |   |
|   |   | 2009       |    |   | 2008           |   |   | 2008       |   |
|   |   |       |    |   |           |   |   |       |   |
|   |   | $          | 195,521 |   |           | $      | 60,104 |       |   | $ | 121,878 |   |

----

|     |         |   | Options outstanding |   |         | Options exercisable |
|----------|--------------|--------|--------------------------|--------|--------------|--------------------------|
|     |         |   |                     |   |         |                     | Weighted |   |   |   |   | Weighted |
|     |         |   |                     |   | Weighted     |                     | average |   |   |   |   | average |
|     |         |   |                     |   | Average      |                     | exercise |   |   |   |   | exercise |
| Range of |         |   | Number of                |   | Remaining    |                     | price of |   |   | Number of |   | price of |
| Exercise |         |   | Shares                   |   | Contractual  |                     | outstanding |   |   | shares |   | exercisable |
| Prices   |         |   | Outstanding              |   | life (years) |                     | options |   |   | exercisable |   | options |
|     |         |   |                     |   |         |                     |   |   |   |   |   |   |
| $        | 1.54         |   |                     |   | 100,000      |                     | 0.92 |   | $ | 1.54 |   |   |   | 100,000 |   | $1.54 |
| $        | 1.46         |   |                     |   | 20,000       |                     | 1.17 |   | $ | 1.46 |   |   |   | 20,000 |   | $1.46 |
| $        | 1.54         |   |                     |   | 60,000       |                     | 1.35 |   | $ | 1.54 |   |   |   | 60,000 |   | $1.54 |
| $        | 1.46 - $1.54 |   |                     |   | 180,000      |                     | 1.09 |   | $ | 1.53 |   |   |   | 180,000 |   | $1.53 |

|     |   |   | Options outstanding |   | Options exercisable |
|----------|--------|--------|--------------------------|--------|--------------------------|
|     |   |   |                     |   |                     |   | Weighted |   |   |   | Weighted |
|     |   |   |                     |   | Weighted                 |   | average |   |   |   | average |
|     |   |   |                     |   | Average                  |   | exercise |   |   |   | exercise |
| Range of |   |   | Number of                |   | Remaining                |   | price of |   | Number of |   | price of |
| Exercise |   |   | Shares                   |   | Contractual              |   | outstanding |   | shares |   | exercisable |
| Prices   |   |   | Outstanding              |   | life (years)             |   | options |   | exercisable |   | options |
|     |   |   |                     |   |                     |   |   |   |   |   |   |
| $        | 1.125  |   |                     |   | 37,500                   |   |    0.57 |   | $1.125 |   |   | 37,500 |   | $1.125 |

----

----

----

----

----

| i)   | SAP INC. has an employment agreement with Peter Hoffman pursuant to which he will act as the Group CEO until December 31, 2013. Upon acquisition of control of Group, it entered into a contract with SAP INC. to secure Mr. Hoffman's services solely to the Group as  CEO.  In connection with that employment agreement,  Mr. Hoffman has been granted |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | the right to sole responsibility for creative and business decisions regarding motion pictures we develop and produce,                                                                                   |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                     |
| ● | a right of first refusal to produce remakes, sequels or prequels of motion pictures produced by Mr. Hoffman and acquired by the Group or any motion picture produced by the Group during his employment, |

| ● | an annual salary of $500,000 per year plus bonuses, expenses and a signing option and |
|---------|---------------------------------------------------------------------------------------|

| ● | a right upon termination without cause to a lump sum payment of approximately $1,500,000, an assignment of all projects in development during the term of his employment and any amounts due upon such compensation as an excise tax. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ii)   | The Group has an employment agreement with Michael Garstin pursuant to which he will serve as President until December 31, 2013 at a salary of $200,000 per year plus bonuses and expenses. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| iii)   | The Group has an employment agreement with Kate Hoffman pursuant to which she will act as COO ad infinitum at a salary of $85,000 (£52,000) per year plus bonuses and expenses. Ms. Hoffman’s contract contains a “non-compete’ clause pursuant to which she will be excluded from competing against the Group for 6 months following the date of her termination. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| iv)   | The Group has an employment agreement with Elaine New pursuant to which she will act as an executive director ad infinitum at a salary of $225,000 (£150,000) per year plus bonuses and expenses. Ms. New’s contract contains a “non-compete’ clause pursuant to which she will be excluded from competing against the Group for 6 months following the date of her termination. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | a) | Exemption for business combination: The Group opted not to remeasure the business acquisitions that took place before the IFRS transition date in compliance with IFRS 3; therefore, goodwill arising from acquisitions before that date was maintained at its amortized net carrying value as of March 31, 2007, determined in accordance with UK GAAP. However, as required by IFRS 1, the retained profit and loss of the legal subsidiary pre-acquisition, plus the combined entity profit or loss post acquisition, is shown on the balance sheet. In addition goodwill created by the reverse takeover has been removed.  As of the transition date the Group removed goodwill in the amount of $5,207,600. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | Exemption for presenting the fair value of Property, plant and equipment as acquisition cost: The Group opted not to remeasure its fixed assets on the transition date at fair value, and opted to maintain the acquisition cost less accumulated depreciation adopted under UK GAAP as fixed asset amount, monetarily adjusted in accordance with IAS 21 and IAS 29. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | Exemption for presenting cumulative translation difference: The Group opted to present the accumulated effects on the IFRS transition date resulting from the translation of the consolidated financial statements of subsidiaries and investees with a functional currency different from the Group's reporting currency as retained earnings on the opening balance sheet. The Group recognizes the translation adjustments directly in a specific Equity account as from IFRS transition date. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d) | Exemption related to measurement of the compound financial instruments: The Group did not have compound financial instruments on the IFRS transition date. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | e) | Exemption related to the recognition of interests in subsidiaries, jointly-controlled entities, and associates: The Groups’ subsidiaries, jointly-controlled entities, and associates on the transition date did not have Financial Statements under IFRS and, as a result, the Group adopted the same IFRS transition date for all its subsidiaries, jointly-controlled entities, and associate companies. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | f) | Exemption related to the classification of financial instruments: The Group opted to classify and assess its financial instruments according to IAS 32 and IAS 39 on the IFRS transition date. Retroactive analyses to the original contracting date of the current financial instruments were not made on the IFRS transition date. All financial instruments contracted after the transition date were analyzed and classified on the contract date of the operations. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | g) | Exemption related to the initial measuring of share-based payments: The Group opted to recognize the accumulated effects of share-based payments on the IFRS transition date and as a result of that recognized the amount of which was just a reclassification in the “Retained earnings” account. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                    |   | April 1, 2007  |       |
|---------------------------------------------------------|--------|----------------|------------|
|                                                    |   | UK GAAP £ |       |   | UK GAAP $ |   |   | IFRSAdjustments |   |   | Note |   |   | IFRS |   |
| Assets                                                  |   |           |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and Cash Equivalents                               |   | £         | 4,748      |   |   | $ | 9,313 |   |   | $ | - |   |   |   |   |   | $ | 9,313 |   |
| Trade Receivables                                       |   |           | 6,687,271  |   |   |   | 13,116,414 |   |   |   | - |   |   |   |   |   |   | 13,116,414 |   |
| Investments                                             |   |           | 800,000    |   |   |   | 1,569,120 |   |   |   | - |   |   |   |   |   |   | 1,569,120 |   |
| Film Costs                                              |   |           | 9,013,268  |   |   |   | 17,678,623 |   |   |   | 9,915 |   |   |   | b |   |   |   | 17,688,538 |   |
| Goodwill                                                |   |           | 2,655,042  |   |   |   | 5,207,600 |   |   |   | (5,207,600 | ) |   |   | a |   |   |   | - |   |
| Property and Equipment                                  |   |           | 15,554     |   |   |   | 30,508 |   |   |   | - |   |   |   |   |   |   |   | 30,508 |   |
| Total Assets                                            |   | £         | 19,175,884 |   |   | $ | 37,611,578 |   |   | $ | (5,197,685 | ) |   |   |   |   |   | $ | 32,413,893 |   |
|                                                    |   |           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities & Shareholders Equity                   |   |           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accounts Payable and Accrued Liabilities                |   |           | 3,746,776  |   |   |   | 7,348,926 |   |   |   | (258,725 | ) |   |   | b |   |   |   | 7,090,201 |   |
| Film & Production Loans                             |   |           | 10,297,380 |   |   |   | 20,197,281 |   |   |   | - |   |   |   |   |   |   |   | 20,197,281 |   |
| Deferred Income                                         |   |           | 575,882    |   |   |   | 1,129,535 |   |   |   | - |   |   |   |   |   |   |   | 1,129,535 |   |
| Total Liabilities                                       |   | £         | 14,620,038 |   |   | $ | 28,675,742 |   |   | $ | (258,725 | ) |   |   |   |   |   | $ | 28,417,017 |   |
|                                                    |   |           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shareholders Equity                                     |   |           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issued Capital                                          |   |           | 10,017,000 |   |   |   | 19,188,473 |   |   |   | - |   |   |   |   |   |   |   | 19,188,473 |   |
| Convertible Debentures                                  |   |           | 1,750,000  |   |   |   | 3,432,450 |   |   |   | - |   |   |   |   |   |   |   | 3,432,450 |   |
| Additional Paid In Capital                              |   |           | 1,863,483  |   |   |   | 3,650,308 |   |   |   | - |   |   |   |   |   |   |   | 3,650,308 |   |
| Accumulated Deficit                                     |   |           | (9,511,477 | ) |   |   | (18,108,333 | ) |   |   | (5,207,600 | ) |   |   | a |   |   |   | (23,315,933 | ) |
| Accumulated deficit – foreign currency            |   |           | (530,290   | ) |   |   | (1,069,198 | ) |   |   | 1,069,198 |   |   |   | b |   |   |   | - |   |
| Comprehensive income/loss- foreign currency translation |   |           | -          |   |   |   | - |   |   |   | (800,558 | ) |   |   | b |   |   |   | (800,558 | ) |
| Profit/(Loss) Current Period                            |   |           | 967,130    |   |   |   | 1,842,136 |   |   |   | - |   |   |   |   |   |   |   | 1,842,136 |   |
|                                                    |   |           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shareholders Equity                                     |   |           | 4,555,846  |   |   |   | 8,935,836 |   |   |   | (4,938,960 | ) |   |   |   |   |   |   | 3,996,876 |   |
|                                                    |   |           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Liabilities & Shareholders Equity             |   | £         | 19,175,884 |   |   | $ | 37,611,578 |   |   | $ | (5,197,685 | ) |   |   |   |   |   | $ | 32,413,893 |   |

----

| a) | Business Combinations:  in accordance with IFRS, the purchase method is applied. The cost of business combination is measured at the fair value on the date of acquisition. The acquiring entity should allocate, on the date of the combination, the acquisition cost (including the direct costs of the transaction) to acquired assets and liabilities and contingent liabilities assumed at its fair value, that meet specified criteria, even if some of them have not been previously recognized by the acquired Group in its accounting records. The process of allocating the cost of a business acquired to its assets, liabilities and contingent liabilities acquired should be performed within twelve months of the date of the combination. When the acquisition cost is higher than the fair value of the interest of the acquiring entity in net assets, liabilities and contingent liabilities of the acquired entity, the acquiring entity records a goodwill arising from the transaction, related to such difference. Goodwill and other intangible assets with an indefinite useful life are not amortized. The recoverable amount of cash-generating units to which goodwill is allocated must be evaluated for impairment at least once a year and whenever there is an indication that the value of an asset might be impaired. When the recoverable amount of goodwill or of any other asset is less than its carrying amount, an impairment loss must be recorded in income for the year. If the interest of the acquiring entity in the fair value of the identifiable assets, liabilities and contingent liabilities is higher than the acquisition cost, the excess (negative goodwill) should be reviewed in order to determine whether the fair values attributed to the acquired assets, assumed liabilities and contingent liabilities were adequately identified and valued. If, after such review, it is concluded that a negative goodwill resulted from the transaction, it should be recorded as a gain in income for the year. Minority interests in the net assets acquired must be recorded at its fair value on the date of acquisition in a specific Equity account.    In accordance with UK GAAP, the following practices were adopted: goodwill or negative goodwill is calculated by the simple difference between acquisition cost and equity of the acquired entity at its historical cost. The allocation of the acquisition cost to the assets, liabilities and contingent liabilities acquired based on its fair value is not used and assets and liabilities were recorded upon acquisition at its historical cost in the books of the entity acquired, except as described below. Goodwill can be attributed to: (i) excess of value of the assets (generally property, plant and equipment), which is incorporated into their value and is amortized over the useful life of such assets, (ii) future profitability, or (iii) other reasons. Goodwill based on future profitability must be amortized according to future income projections over a period of not more than ten years, except when it refers to concessions granted by the public authority, in which case it will be amortized over the concession term. Goodwill which cannot be economically supported (“without economic basis”) must be expensed at the time of the purchase and negative goodwill without economic basis must be recorded as a gain only when the investment is written off or discontinued. UK GAAP does not allow transaction costs to be accounted for as part of the acquisition price. Minority interests are recorded at cost.The acquisition of Cabouchon Plc was considered a reverse acquisition and the Group subsequently changed its name to Seven Arts Pictures Plc.  In accordance with IFRS, the capital structure of the legal parent and the retained profit and loss of the legal subsidiary arising prior to the acquisition, plus the combined entity profit and loss post acquisition, is presented on the balance sheet.  As a result, the goodwill created by the acquisition is charged to the profit and loss account.  As of the transition date, the Group removed goodwill totaling $5.2 million. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | Exchange differences and translation of foreign operations:according to IFRS, exchange differences on translation of consolidated subsidiaries, associates and joint-controlled entities with a functional currency different from the functional currency of the parent Group should be recognized directly in Equity in the translation reserve account. This resulted in reduction of $1.1 million in accumulated deficit and an increase of $0.8 million to other comprehensive loss from foreign currency translation, an equity account, with the offset against adjustments in film costs of approximately $10,000 and accounts payable and accrued liabilities of approximately of $0.3 million which was resulted from slightly different exchange rates used while preparing the financial statements under UK GAAP.  |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                          |   | All as of June 30, 2008 |        |
|-----------------------------------------------------------------------------------------------|--------|-------------------------|-------------|
|                                                                                          |   | UK GAAP £          |        |   | UK GAAP $ |   |   | IFRSAdjustments $ |   |   | Reclassificationof Assetsand Liabilities $ |   |   | Notes |   |   | IFRS $ |   |
|  Assets                                                                                  |   |                    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Cash and Cash Equivalents                                                               |   | £                  | 587,942     |   |   | $ | 1,172,593 |   |   | $ | - |   |   | $ | - |   |   |   |   |   | $ | 1,172,593 |   |
|  Restricted Cash and Cash Equivalents – Zeus                                       |   |                    | 56,354,914  |   |   |   | 112,394,240 |   |   |   | - |   |   |   | - |   |   |   |   |   |   | 112,394,240 |   |
|  Trade Receivables                                                                       |   |                    | 7,904,418   |   |   |   | 15,764,571 |   |   |   | (5,941,938 | ) |   |   | (5,549,296 | ) |   |   | b,h |   |   |   | 4,273,337 |   |
|  Trade Receivables – Zeus                                                          |   |                    | 124,008,517 |   |   |   | 247,322,586 |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | 247,322,586 |   |
|  Due from Related Parties                                                                |   |                    | 1,219,662   |   |   |   | 2,432,494 |   |   |   | - |   |   |   | 362,233 |   |   |   | h  |   |   |   | 2,794,727 |   |
|  Other Receivables and Prepayments                                                       |   |                    | 4,560,364   |   |   |   | 9,095,190 |   |   |   | - |   |   |   | 2,463,4330 |   |   |   | h |   |   |   | 11,558,620 |   |
|  Investments                                                                             |   |                    | 1,852,969   |   |   |   | 3,695,561 |   |   |   | (2,100,041) |   |   |   | - |   |   |   | c |   |   |   | 1,595,520 |   |
|  Film Costs                                                                              |   |                    | 13,374,660  |   |   |   | 26,674,422 |   |   |   | (719,610 | ) |   |   | (6,250,433 | ) |   |   | h |   |   |   | 19,704,379 |   |
|  Goodwill                                                                                |   |                    | 2,603,799   |   |   |   | 5,193,017 |   |   |   | (5,193,017 | ) |   |   | - |   |   |   | a |   |   |   | - |   |
|  Property and Equipment                                                                  |   |                    | 18,620      |   |   |   | 37,135 |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | 37,135 |   |
|  Total Assets                                                                            |   | £                  | 212,485,865 |   |   | $ | 423,781,809 |   |   | $ | (13,954,606 | ) |   | $ | (8,974,066 | ) |   |   |   |   |   | $ | 400,853,137 |   |
|                                                                                          |   |                    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Liabilities & Shareholders Equity                                                   |   |                    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Accounts Payable and Accrued Liabilities                                                |   | £                  | 4,409,814   |   |   | $ | 8,794,933 |   |   | $ | (1,392,782 | ) |   | $ | (334,846 | ) |   |   | c,f,h  |   |   | $ | 7,067,303 |   |
|  Participation & Residuals                                                           |   |                    | 831,280     |   |   |   | 1,657,906 |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | 1,657,906 |   |
|  Bank Loans – Zeus                                                                 |   |                    | 113,055,755 |   |   |   | 225,478,399 |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | 225,478,399 |   |
|  Film & Production Loans                                                             |   |                    | 15,981,394  |   |   |   | 31,873,292 |   |   |   | - |   |   |   | (8,635,414 | ) |   |   | h |   |   |   | 23,237,878 |   |
|  Deferred Income                                                                         |   |                    | 465,504     |   |   |   | 928,401 |   |   |   | 358,999 |   |   |   | - |   |   |   | b |   |   |   | 1,287,400 |   |
|  Deferred Income – Zeus                                                            |   |                    | 59,199,659  |   |   |   | 118,067,801 |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | 118,067,801 |   |
|  VAT Payable – Zeus                                                                |   |                    | 11,644,934  |   |   |   | 23,224,656 |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | 23,224,656 |   |
|  Total Liabilities                                                                       |   |                    | 205,588,340 |   |   |   | 410,025,388 |   |   |   | (1,033,783 | ) |   |   | (8,970,260 | ) |   |   |   |   |   |   | 400,021,343 |   |
|                                                                                          |   |                    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Shareholders Equity                                                                     |   |                    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Issued Capital                                                                          |   |                    | 10,150,500  |   |   |   | 19,453,805 |   |   |   | - |   |   |   | 881 |   |   |   | e  |   |   |   | 19,454,686 |   |
|  Convertible Debentures                                                                  |   |                    | 1,750,000   |   |   |   | 3,432,450 |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | 3,432,450 |   |
|  Additional Paid In Capital                                                              |   |                    | 2,246,974   |   |   |   | 4,413,634 |   |   |   | - |   |   |   | 1,392 |   |   |   | e  |   |   |   | 4,415,026 |   |
|  Accumulated Deficit                                                                     |   |                    | (8,415,048  | ) |   |   | (16,266,197 | ) |   |   | (5,193,017 | ) |   |   | (14,583 | )  |   |   | a,e |   |   |   | (21,473,797 | ) |
|  Accumulated Deficit - foreign currency exchange                                         |   |                    | (659,589    | )  |   |   | (1,274,979 | ) |   |   | 1,266,472 |   |   |   | 8,504 |   |   |   | e |   |   |   | - |   |
|  Other comprehensive income/loss –     foreign currency translation |   |                    |        |   |   |   |   |   |   |   | (795,308 | ) |   |   |   |   |   |   | e |   |   |   | (795,308 | ) |
|  Profit/(Loss) Current Period                                                            |   |                    | 1,824,688   |   |   |   | 3,997,706 |   |   |   | (8,198,970 | ) |   |   | - |   |   |   | i |   |   |   | (4,201,264 | ) |
|  Shareholders Equity                                                                     |   |                    | 6,897,525   |   |   |   | 13,756,422 |   |   |   | (16,734,996 | ) |   |   | 310,368 |   |   |   |   |   |   |   | 831,794 |   |
|                                                                                          |   |                    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Total Liabilities & Shareholders Equity                                             |   | £                  | 212,485,865 |   |   | $ | 423,781,810 |   |   | $ | (13,954,606 | ) |   | $ | (8,974,066 | ) |   |   |   |   |   | $ | 400,853,137 |   |

----

| STATEMENT OF INCOME |
|---------------------|

|                                              |   | UK GAAP 'June 30, 2008 (15 months) BP £ |       |   | UK GAAP 'June 30, 2008 (15 months) $ |   |        | IFRS Adjustments $ |   |   | Reclassification of Assets & liabilities $ |   |   | Notes  |       |   | IFRS 'March 31, 2008 (12 months) $ |   |      | IFRS June 30, 2008 (3 months) $ |   |   | Total IFRS June 30, 2008 (15 months) $ |   |
|---------------------------------------------------|--------|--------------------------------------------------------|------------|--------|------------------------------------------------|--------|-------------|-------------------------|--------|--------|----------------------------------------------------------|--------|--------|--------|------------|--------|-----------------------------------------|--------|-----------|-------------------------------------------|--------|--------|--------------------------------------------------|--------|
|    Revenue:                        |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   |       |   |                                    |   |      |                                      |   |   |                                             |   |
|  Film Revenues                               |   | £                                                 | 8,874,197  |   |                                           | $      | 17,678,288  |                    |   | $      | (7,934,536                                               | )      |   | $      | (3,685,108 | )      |                                    |   | b,f       |                                      |   | $      | 3,265,808                                        |   |   | $ | 2,792,836 |   |   | $ | 6,058,644 |   |
|  Fee Related Revenues-Equicap                |   |                                                   | -          |   |                                           |   | -           |                    |   |   |                                                     |   |   |   | -          |   |                                    |   |      |                                      |   |   | -                                                |   |   |   | - |   |   |   | - |   |
|  Fee Related Revenues                        |   |                                                   | -          |   |                                           |   | -           |                    |   |   | -                                                        |   |   |   | -          |   |                                    |   |      |                                      |   |   | -                                                |   |   |   | - |   |   |   | - |   |
|  Other Revenue                               |   |                                                   | -          |   |                                           |   | -           |                    |   |   | -                                                        |   |   |   | -          |   |                                    |   |      |                                      |   |   | -                                                |   |   |   | - |   |   |   | - |   |
|  Total Revenues                              |   |                                                   | 8,874,197  |   |                                           |   | 17,678,288  |                    |   |   | (7,934,536                                               | )      |   |   | (3,685,108 | )      |                                    |   |      |                                      |   |   | 3,265,808                                        |   |   |   | 2,792,836 |   |   |   | 6,058,644 |   |
|                                              |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   |       |   |                                    |   |      |                                      |   |   |                                             |   |   |   |   |   |   |   |   |   |
|    Cost of Sales:                  |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   |       |   |                                    |   |      |                                      |   |   |                                             |   |   |   |   |   |   |   |   |   |
|  Amortization of Film Costs                  |   |                                                   | (964,640   | )      |                                           |   | (1,921,659  | )                       |   |   | 650,390                                                  |   |   |   | -          |   |                                    |   | b,d       |                                      |   |   | (490,239                                         | )      |   |   | (781,030 | ) |   |   | (1,271,269 | ) |
|  Other Cost of Sales                         |   |                                                   | (4,745,295 | )      |                                           |   | (9,453,102  | )                       |   |   | 1,651,165                                                |   |   |   | 3,683,927  |   |                                    |   | b,c,d,h   |                                      |   |   | (3,597,469                                       | )      |   |   | (520,541 | ) |   |   | (4,118,010 | ) |
|  Total Cost of Sales                         |   |                                                   | (5,709,935 | )      |                                           |   | (11,374,762 | )                       |   |   | 2,301,555                                                |   |   |   | 3,683,927  |   |                                    |   |      |                                      |   |   | (4,087,708                                       | )      |   |   | (1,301,571 | ) |   |   | (5,389,279 | ) |
|                                              |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   |       |   |                                    |   |      |                                      |   |   |                                             |   |   |   |   |   |   |   |   |   |
|  Gross Profit                                |   |                                                   | 3,164,262  |   |                                           |   | 6,303,526   |                    |   |   | (5,632,981                                               | )      |   |   | (1,181     | )      |                                    |   |      |                                      |   |   | (821,900                                         | )      |   |   | 1,491,265 |   |   |   | 669,365 |   |
|                                              |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   |       |   |                                    |   |      |                                      |   |   |                                             |   |   |   |   |   |   |   |   |   |
|   Operating Expenses:                   |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   |       |   |                                    |   |      |                                      |   |   |                                             |   |   |   |   |   |   |   |   |   |
|  General & Administrative Expenses       |   |                                                   | (2,143,985 | )      |                                           |   | (4,271,033  | )                       |   |   | (455,979                                                 | )      |   |   | -          |   |                                    |   | f,g  |                                      |   |   | (4,015,533                                       | )      |   |   | (711,479 | ) |   |   | (4,727,012 | ) |
|  Total Operating Expenses                    |   |                                                   | (2,143,985 | )      |                                           |   | (4,271,033  | )                       |   |   | (455,979                                                 | )      |   |   | -          |   |                                    |   |      |                                      |   |   | (4,015,533                                       | )      |   |   | (711,479 | ) |   |   | (4,727,012 | ) |
|                                              |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   |       |   |                                    |   |      |                                      |   |   |                                             |   |   |   |   |   |   |   |   |   |
|                                              |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   |       |   |                                    |   |      |                                      |   |   |                                             |   |   |   |   |   |   |   |   |   |
|  Profit/(Loss) Before Interest and Taxes     |   |                                                   | 1,020,277  |   |                                           |   | 2,032,494   |                    |   |   | (6,088,960                                               | )      |   |   | (1,181     | )      |                                    |   |      |                                      |   |   | (4,837,433                                       | )      |   |   | 779,786 |   |   |   | (4,057,647 | ) |
|                                              |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   |       |   |                                    |   |      |                                      |   |   |                                             |   |   |   |   |   |   |   |   |   |
|  Share of operating profit of the associate  |   |                                                   | 1,052,969  |   |                                           |   | 2,097,620   |                    |   |   | (2,097,620                                               | )      |   |   | -          |   |                                    |   | c    |                                      |   |   | -                                                |   |   |   | - |   |   |   | - |   |
|    Net Interest (Expense) Income:  |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   | -          |   |                                    |   |      |                                      |   |   |                                             |   |   |   |   |   |   |   |   |   |
|  Interest paid                               |   |                                                   | (343,898   | )      |                                           |   | (685,079    | )                       |   |   | -                                                        |   |   |   | (3,683,927 | )      |                                    |   | h    |                                      |   |   | (672,973                                         | )      |   |   | (3,696,033 | ) |   |   | (4,369,006 | ) |
|  Interest received                           |   |                                                   | 27,432     |   |                                           |   | 54,647      |                    |   |   | -                                                        |   |   |   | 3,685,108  |   |                                    |   | h    |                                      |   |   | 466,887                                          |   |   |   | 3,272,868 |   |   |   | 3,739,755 |   |
|  Net Interest (Expense)/Income               |   |                                                   | (316,466   | )      |                                           |   | (630,432    | )                       |   |   | -                                                        |   |   |   | 1,181      |   |                                    |   |      |                                      |   |   | (206,086                                         | )      |   |   | (423,165 | ) |   |   | (629,251 | ) |
|                                              |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   |       |   |                                    |   |      |                                      |   |   |                                             |   |   |   |   |   |   |   |   |   |
|  Profit/(Loss) Before Taxes and Other Income |   |                                                   | 1,756,780  |   |                                           |   | 3,499,681   |                    |   |   | (8,186,580                                               | )      |   |   | -          |   |                                    |   |      |                                      |   |   | (5,043,519                                       | )      |   |   | 356,621 |   |   |   | (4,686,898 | ) |
|                                              |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   |       |   |                                    |   |      |                                      |   |   |                                             |   |   |   |   |   |   |   |   |   |
|  Other income                                |   |                                                   | -          |   |                                           |   | -           |                    |   |   | -                                                        |   |   |   | -          |   |                                    |   |      |                                      |   |   | -                                                |   |   |   | - |   |   |   | - |   |
|                                              |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   |       |   |                                    |   |      |                                      |   |   |                                             |   |   |   |   |   |   |   |   |   |
|  Profit/(Loss) Before Taxes                  |   |                                                   | 1,756,780  |   |                                           |   | 3,499,681   |                    |   |   | (8,186,580                                               | )      |   |   | -          |   |                                    |   |      |                                      |   |   | (5,043,519                                       | )      |   |   | 356,621 |   |   |   | (4,686,898 | ) |
|                                              |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   |       |   |                                    |   |      |                                      |   |   |                                             |   |   |   |   |   |   |   |   |   |
|  Provision for Tax                           |   |                                                   | 250,000    |   |                                           |   | 498,025     |                    |   |   | (12,391                                                  | )      |   |   | -          |   |                                    |   |      |                                      |   |   | 485,634                                          |   |   |   | - |   |   |   | 485,634 |   |
|                                              |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   |       |   |                                    |   |      |                                      |   |   |                                             |   |   |   |   |   |   |   |   |   |
|  Profit/ (Loss) After Taxes                  |   |                                                   | 2,006,780  |   |                                           |   | 3,997,706   |                    |   |   | (8,198,971                                               | )      |   |   | -          |   |                                    |   |      |                                      |   |   | (4,557,885                                       | )      |   |   | 356,621 |   |   |   | (4,201,264 | ) |
|                                              |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   |       |   |                                    |   |      |                                      |   |   |                                             |   |   |   |   |   |   |   |   |   |
|  Foreign Exchange Translation                |   |                                                   | (182,092   | )      |                                           |   | (471,164    | )                       |   |   | 471,164                                                  |   |   |   | -          |   |                                    |   | e    |                                      |   |   | -                                                |   |   |   |   |   |   |   |   |   |
|  Net Income/(Loss)                           |   | £                                                 | 1,824,688  |   |                                           | $      | 3,526,542   |                    |   | $      | (7,727,807                                               | )      |   | $      | -          |   |                                    |   |      |                                      |   | $      | (4,557,885                                       | )      |   | $ | 356,621 |   |   | $ | (4,201,264 | ) |
|  Comprehensive Income/Loss                   |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   |       |   |                                    |   |      |                                      |   |   |                                             |   |   |   |   |   |   |   |   |   |
|  Foreign currency translation                |   |                                                   | -          |   |                                           |   | -           |                    |   |   | 5,250                                                    |   |   |   | -          |   |                                    |   |      |                                      |   |   | -                                                |   |   |   | 5,250 |   |   |   | 5,250 |   |
|  Comprehensive Income/Loss                   |   | £                                                 | 1,824,688  |   |                                           | $      | 3,526,542   |                    |   | $      | (7,722,557                                               | )      |   | $      | -          |   |                                    |   | e    |                                      |   | $      | (4,557,885                                       | )      |   | $ | 361,871 |   |   | $ | (4,196,014 | ) |
|                                              |   |                                                   |       |   |                                           |   |        |                    |   |   |                                                     |   |   |   |       |   |                                    |   |      |                                      |   |   |                                             |   |   |   |   |   |   |   |   |   |

----

| a) | Business Combinations:  the $5.2 million adjustment to goodwill was a roll forward adjustment from prior year balance sheet adjustment in accordance with IFRS, as described above (note 21.2.1). Minor difference from prior year was due to exchange rate fluctuation. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b) | Revenue recognition:  In accordance with IFRS and IAS 18, the Group adopted the specific industry guidance; entertainment-films or film-related products, or formerly known as accounting by producers or distributors of films , which provides guidance on revenue recognition for the distribution and exploitation of films as described in footnote 1.3. As a result, approximately $7.9 million of film revenues recorded under UK GAAP for the year ended June 30, 2008 were reversed or reclassified into deferred income as a result of revenue recognition conditions not met in accordance with IFRS. Accordingly, the related trade receivable was reduced by approximately $6.0 million, cost of sales and general and administrative expenses were  reduced by $1.0 million and $0.5 million respectively (as revenues on certain  films  were originally recorded at gross including distribution and marketing fees under UK GAAP), and deferred income was increased by approximately $0.4 million. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c) | Profit and costs from associated companies:Under UK GAAP the Group accounted for the distribution cost of sales to be paid to associated companies with a corresponding accrued liability and accounted for the distribution revenues of associated companies with a corresponding investment account. These entries were reversed and netted under IFRS. This resulted in a reduction in investment and corresponding other income  (profit from associated companies) of  $2.1million and a reduction in with corresponding accrued liabilities of the same amount. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d) | Costs of sales and other costs of sales:as described in item #b above, the Group adjusted revenues due to certain revenue recognition conditions not met in accordance with IFRS,  accordingly, amortization of film costs was reduced by $0.7 million. Other cost of sales was reduced by $2.1 million related to the reversal of profit and cost from associate companies as described in item #c. The Group also reduced other costs of sales by $1.0 million in connection with reversal of the reduction in royalty revenues recognized on the film Deal as described in item #b. Other costs of sales was increased by $1.4 million due to write off of certain capitalized film costs. Net decease in other costs of sales amounted $1.7 million. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| e) | Exchange differences and translation of foreign operations:according to IFRS, exchange differences on translation of consolidated subsidiaries, associates and joint-controlled entities with a functional currency different from the functional currency of the parent Group should be recognized directly in Equity in the translation reserve account. This resulted in reduction of $1.3 million in accumulated deficit attributable to foreign currency exchange (which included $0.4 million from current period), and an increase of $0.8 million to other comprehensive loss from foreign currency translation (which included approximately $5,000 from current period), an equity account. The slight exchange rate differences while preparing the financial statements under UK GAAP also resulted in some minor reclassifications among the equity accounts. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| f) | Accrued liabilities. Accrued liabilities was reduced by $2.1 million due to reversal of the profit and costs from associated as described in item #c above, offset by additional accrued liabilities of $0.7 million resulted from a litigation that was not commenced until after the financial statements prepared under UK GAAP were published. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| g) | General and administrative expenses: General and administrative expenses increased by approximately $0.4 million, mainly due to the $0.7 million additional accrued liabilities as described in item #f, and by approximately $0.2 million currency adjustments, due to slightly different exchange rates used as compared to the financial statements prepared under UK GAAP, offset by general and administration cost reductions of approximately $0.5 million as described in item # b. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| h) | Reclassifications:  The Group reclassified certain accounts while preparing the Consolidated Financial Statements presented with IFRS. These  reclassifications are as follows: |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1)   | Interest income in Cinematic Finance previously treated as turnover under UK GAAP totaling $3.6 million was reclassified from revenues to non-operating income. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2)   | The corresponding Interest expense in Cinematic Finance totaling $3.6 million was reclassified from cost of goods sold to non-operating expense. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| 3)   | Trade receivable, totaling $5.5 million, was reclassified into other receivable. Other receivable was also increased by $1.3million resulted from tax credits to be received with the corresponding reduction in film costs. Other receivable was reduced by $4.0 million to net against film and production loans and other receivable was further reduced by $0.4 million to reclassify into due from related parties. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4)   | Film costs, of approximately $4.9 million, were netted against film and production loans together with $1.3 million  reduction from the tax credit to be received (as described above) resulted in  total reduction in film costs in the amount of approximately $6.3 million. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5)   | Film & production loans decreased by a total of $8.6 million, which was a result of $4.9 million netted against film costs, $4 million netted against other receivables and an increase of approximately $0.3 million from a reclassification from accrued liabilities. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| i) | Net income (loss):aggregate changes to profit and losses as shown in the Statement of Income |
|----|----------------------------------------------------------------------------------------------|

----

| 21.2.3  | STATEMENT OF CASH FLOW |
|--------------|------------------------|

|                                                         |   | UK GAAP 'June 30, 2008 (15 months) BP £ |         |   | UK GAAP 'June 30, 2008 (15 months) $ |   |         | IFRS Adjustments and Reclassifications $ |   |   | Notes        |   |   | IFRS 'March 31, 2008 (12 months) $ |   |   | IFRS June 30, 2008 (3 months) $ |         |   | Total IFRS June 30, 2008 (15 months) $ |   |
|--------------------------------------------------------------|--------|--------------------------------------------------------|--------------|--------|-----------------------------------------------------|--------|--------------|-----------------------------------------------|--------|--------|--------------|--------|--------|----------------------------------------------|--------|--------|-------------------------------------------|--------------|--------|-------------------------------------------------------|--------|
|  Cash flow from operating activities                    |   |                                                   |         |   |                                                |   |         |                                          |   |   |         |   |   |                                         |   |   |                                      |         |   |                                                  |   |
|                                                         |   |                                                   |         |   |                                                |   |         |                                          |   |   |         |   |   |                                         |   |   |                                      |         |   |                                                  |   |
|  Net income/(loss)                                      |   | £                                                 | 1,824,688    |   |                                                | $      | 3,526,542    |                                          |   | $      | (7,727,806   | )      |   |  a                                      |   |   | $                                         | (4,557,885   | )      |                                                  | $      | 356,621 |   |   | $ | (4,201,264 | ) |
|                                                         |   |                                                   |         |   |                                                |   |         |                                          |   |   |         |   |   |                                         |   |   |                                      |         |   |                                                  |   |   |   |   |   |   |   |
|  Depreciation of property & equipment               |   |                                                   | 11,158       |   |                                                |   | 22,254       |                                          |   |   | (112         | )      |   |  b                                      |   |   |                                      | 14,979       |   |                                                  |   | 7,163 |   |   |   | 22,142 |   |
|  Amortization of film cost                              |   |                                                   | 964,641      |   |                                                |   | 1,923,880    |                                          |   |   | (652,611     | )      |   | c                                            |   |   |                                      | 490,239      |   |                                                  |   | 781,030 |   |   |   | 1,271,269 |   |
|  Amortization of goodwill                               |   |                                                   | -            |   |                                                |   | -            |                                          |   |   | -            |   |   |                                         |   |   |                                      |         |   |                                                  |   |   |   |   |   | - |   |
|  Forgiveness of debt                                    |   |                                                   | -            |   |                                                |   | -            |                                          |   |   | -            |   |   |                                         |   |   |                                      |         |   |                                                  |   |   |   |   |   | - |   |
|  Stock based Expenses                                   |   |                                                   | 90,991       |   |                                                |   | 181,472      |                                          |   |   | 510          |   |   | b                                       |   |   |                                      | 121,878      |   |                                                  |   | 60,104 |   |   |   | 181,982 |   |
|  Provision for Bad Debts                                |   |                                                   | -            |   |                                                |   | -            |                                          |   |   | 150,650      |   |   | d                                       |   |   |                                      | 159,974      |   |                                                  |   | (9,324 | ) |   |   | 150,650 |   |
|  Tax and foreign exchange                               |   |                                                   | 67,903       |   |                                                |   | 248,042      |                                          |   |   | (248,042     | )      |   | b                                       |   |   |                                      | -            |   |                                                  |   | - |   |   |   | - |   |
|                                                         |   |                                                   |         |   |                                                |   |         |                                          |   |   |         |   |   |                                         |   |   |                                      |         |   |                                                  |   |   |   |   |   |   |   |
|  Changes in assets and liabilities                      |   |                                                   |         |   |                                                |   |         |                                          |   |   |         |   |   |                                         |   |   |                                      |         |   |                                                  |   |   |   |   |   |   |   |
|  Restricted cash - Zeus                                 |   |                                                   | (56,354,914  | )      |                                                |   | (112,394,240 | )                                             |   |   | 29,849       |   |   | b                                            |   |   |                                      | (198,405,009 | )      |                                                  |   | 86,040,618 |   |   |   | (112,364,391 | ) |
|  Trade receivables                                      |   |                                                   | (1,217,147   | )      |                                                |   | (2,427,478   | )                                             |   |   | 6,431,529    |   |   | g                                            |   |   |                                      | 7,103,737    |   |                                                  |   | (3,099,686 | ) |   |   | 4,004,051 |   |
|  Zeus receivables                                       |   |                                                   | (124,008,517 | )      |                                                |   | (247,322,586 | )                                             |   |   | 8,895        |   |   | b                                       |   |   |                                      | (59,122,429  | )      |                                                  |   | (188,191,262 | ) |   |   | (247,313,691 | ) |
|  Intercompany accounts                                  |   |                                                   | (1,219,662   | )      |                                                |   | (2,432,494   | )                                             |   |   | 961,413      |   |   | g                                       |   |   |                                      | (726,068     | )      |                                                  |   | (745,013 | ) |   |   | (1,471,081 | ) |
|  Capitalized film assets                                |   |                                                   | (5,273,085   | )      |                                                |   | (10,516,641  | )                                             |   |   | 6,030,324    |   |   | g                                       |   |   |                                      | (2,562,046   | )      |                                                  |   | (1,924,271 | ) |   |   | (4,486,317 | ) |
|  Other assets                                           |   |                                                   | (5,613,333   | )      |                                                |   | (11,195,231  | )                                             |   |   | 5,021,110    |   |   | g                                       |   |   |                                      | (2,959,597   | )      |                                                  |   | (3,214,524 | ) |   |   | (6,174,121 | ) |
|                                                         |   |                                                   |         |   |                                                |   |         |                                          |   |   |         |   |   |                                         |   |   |                                      |         |   |                                                  |   |   |   |   |   |   |   |
|  Accounts payable and accrued liabilities               |   |                                                   | 13,028,874   |   |                                                |   | 25,984,786   |                                          |   |   | (1,506,015   | )      |   | f                                       |   |   |                                      | 2,335,191    |   |                                                  |   | 22,143,580 |   |   |   | 24,478,771 |   |
|  Deferred income Zeus                                   |   |                                                   | 59,199,659   |   |                                                |   | 118,067,800  |                                          |   |   | 134,445      |   |   | c                                       |   |   |                                      | 29,363,336   |   |                                                  |   | 88,838,909 |   |   |   | 118,202,245 |   |
|  Proceeds from/(repayment of) Zeus loan                 |   |                                                   | 113,055,755  |   |                                                |   | 225,478,398  |                                          |   |   | (33,917      | )      |   | b                                       |   |   |                                      | 225,444,481  |   |                                                  |   | - |   |   |   | 225,444,481 |   |
|  Net cash provided by/(used in) in operating activities |   | £                                                 | (5,442,989   | )      |                                                | $      | (10,855,497  | )                                             |   | $      | 8,600,223.18 |   |   |                                         |   |   | $                                         | (3,299,219   | )      |                                                  | $      | 1,043,945 |   |   | $ | (2,255,274 | ) |
|                                                         |   |                                                   |         |   |                                                |   |         |                                          |   |   |         |   |   |                                         |   |   |                                      |         |   |                                                  |   |   |   |   |   |   |   |
|  Cash flow from Investing Activities                    |   |                                                   |         |   |                                                |   |         |                                          |   |   |         |   |   |                                         |   |   |                                      |         |   |                                                  |   |   |   |   |   |   |   |
|  Purchase of property and equipment                     |   |                                                   | (15,929      | )      |                                                |   | (31,769      | )                                             |   |   | 3,406        |   |   | b                                       |   |   |                                      | (26,821      | )      |                                                  |   | (1,542 | ) |   |   | (28,363 | ) |
|  Net cash provided by/(used in) in investing activities |   | £                                                 | (15,929      | )      |                                                | $      | (31,769      | )                                             |   | $      | 3,406        |   |   |                                         |   |   | $                                         | (26,821      | )      |                                                  | $      | (1,542 | ) |   | $ | (28,363 | ) |
|                                                         |   |                                                   |         |   |                                                |   |         |                                          |   |   |         |   |   |                                         |   |   |                                      |         |   |                                                  |   |   |   |   |   |   |   |
|  Cash flow from Financing Activities                    |   |                                                   |         |   |                                                |   |         |                                          |   |   |         |   |   |                                         |   |   |                                      |         |   |                                                  |   |   |   |   |   |   |   |
|  Proceeds from/(repayment of) loans                     |   |                                                   | 5,684,014    |   |                                                |   | 11,336,198   |                                          |   |   | (8,940,808   | )      |   | e                                       |   |   |                                      | 4,400,002    |   |                                                  |   | (2,004,612 | ) |   |   | 2,395,390 |   |
|                                                         |   |                                                   |         |   |                                                |   |         |                                          |   |   |         |   |   |                                         |   |   |                                      |         |   |                                                  |   |   |   |   |   |   |   |
|  Issuance of common stock                               |   |                                                   | 426,000      |   |                                                |   | 849,614      |                                          |   |   | (127         | )      |   | b                                       |   |   |                                      | 849,487      |   |                                                  |   | - |   |   |   | 849,487 |   |
|  Net cash provided by/(used in) in financing activities |   | £                                                 | 6,110,014    |   |                                                | $      | 12,185,812   |                                          |   | $      | (8,940,935   | )      |   |                                         |   |   | $                                         | 5,249,489    |   |                                                  | $      | (2,004,612 | ) |   | $ | 3,244,877 |   |
|                                                         |   |                                                   |         |   |                                                |   |         |                                          |   |   |         |   |   |                                         |   |   |                                      |         |   |                                                  |   |   |   |   |   |   |   |
|  Net increase/(decrease) in cash                        |   |                                                   | 651,096      |   |                                                |   | 1,298,546    |                                          |   |   | (337,306     | )      |   |                                         |   |   |                                      | 1,923,449    |   |                                                  |   | (962,209 | ) |   |   | 961,240 |   |
|                                                         |   |                                                   |         |   |                                                |   |         |                                          |   |   |         |   |   |                                         |   |   |                                      |         |   |                                                  |   |   |   |   |   |   |   |
|  Cash and cash equivalents at Beginning of year         |   |                                                   | 4,748        |   |                                                |   | 9,469        |                                          |   |   | (152         | )      |   |                                         |   |   |                                      | 9,317        |   |                                                  |   | 2,133,338 |   |   |   | 9,317 |   |
|                                                         |   |                                                   |         |   |                                                |   |         |                                          |   |   |         |   |   |                                         |   |   |                                      |         |   |                                                  |   |   |   |   |   |   |   |
|  Currency translation Adjustment                        |   |                                                   | (72,650      | )      |                                                |   | (144,893     | )                                             |   |   | 346,929      |   |   |                                         |   |   |                                      | 200,573      |   |                                                  |   | 1,463 |   |   |   | 202,036 |   |
|  Cash and cash equivalents at End of year - computed    |   | £                                                 | 583,194      |   |                                                | $      | 1,163,122    |                                          |   | $      | 9,470        |   |   |                                         |   |   | $                                         | 2,133,339    |   |                                                  | $      | 1,172,592 |   |   | $ | 1,172,593 |   |
|                                                         |   |                                                   |         |   |                                                |   |         |                                          |   |   |         |   |   |                                         |   |   |                                      |         |   |                                                  |   |   |   |   |   |   |   |

----

| Supplemental Disclosure of Cash Flow Information:                           |   |   |    |   |   |   |    |   |   |   |       |   |   |   |   |   |   |       |   |   |   |    |   |   |
|-----------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|------------|--------|--------|--------|--------|--------|--------|------------|--------|--------|--------|---------|--------|--------|
|  Cash paid during the year for:                                        |   |   |    |   |   |   |    |   |   |   |       |   |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |
|  Interest                                                              |   | £ | 343,898 |   |   | $      | 685,870 |   |   | $      | (2,192     | )      |   |   |   |   | $      | 245,768    |   |   | $      | 437,910 |   |   | $ | 683,678 |   |
|  Income taxes                                                          |   | £ | -       |   |   | $      | -       |   |   | $      | -          |   |   |   |   |   | $      | -          |   |   | $      | -       |   |   | $ | - |   |
|                                                                        |   |   |    |   |   |   |    |   |   |   |       |   |   |   |   |   |   |       |   |   |   |    |   |   |   |   |   |
| Non cash investing and financing transactions:                              |   |   |    |   |   |   |    |   |   |   |       |   |   |   |   |   |   |       |   |   |   |    |   |   |
|  Capitalised film cost acquired under Knife Edge Tax Credit            |   | £ | -       |   |   | $      | -       |   |   | $      | 2,614,084  |   |   |   |   |   | $      | 2,614,084  |   |   | $      | -       |   |   | $ | 2,614,084 |   |
|  Production loan received for capitalised film cost / development cost |   | £ | -       |   |   | $      | -       |   |   | $      | 11,604,314 |   |   |   |   |   | $      | 11,204,756 |   |   | $      | 399,558 |   |   | $ | 11,604,314 |   |
|  Accounts receivable applied against Loan set off                      |   | £ | 405,304 |   |   | $      | 808,338 |   |   | $      | -          |   |   |   |   |   | $      | 496,465    |   |   | $      | 311,873 |   |   | $ | 808,338 |   |

| a) | Net income (loss):  aggregate changes to profit and losses as described above (note 21.2.2) and as shown on the Statement of Income. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------|

| b) | Exchange differences and translation of foreign operations:The Group prepared the cash flow statement in accordance with IFRS, under which cash flow of foreign entities was prepared in functional currency and translated to the reporting currency and consolidated. This compared with the cash flow statement prepared under UK GAAP resulted in minor discrepancies in certain accounts due to slight difference in exchange rates used, as well as presentation differences in foreign currency translation adjustments . |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c) | Amortization of film costs and deferred income:  As described above (note 21.2.2), the Group reversed or reclassified certain revenues to deferred income due to revenue recognition conditions not met in accordance with IFRS and IAS 18. The corresponding reduction of amortization of film costs was approximately $0.7 million, and the deferred income increased by approximately $0.4 million. The impact of these two items on the cash flow is in line with the change in the balance sheet, with slight discrepancies due to different exchange rates being used in translating balance sheet accounts and cash flow. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d) | Provision for bad debt: While preparing the cash flow under IFRS, the Group presented the bad debt in the non-cash adjustment items, whereas the amount was netted under the UK GAAP presentation. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| e) | Film and production loans: The Group adjusted and/or reclassified film & production loans by approximately $8.6 million due to reclassifications as described in note 21.2.2. The impact on the cash flow related to this account is in line with the change in the balance sheet, with the slight discrepancy due to different exchange rates being used in translating balance sheet accounts and cash flow. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| f) | Accounts payable and accrued liabilities: The Group adjusted accounts payable and accrued liabilities by approximately $1.7 million as described in note 21.2.2. The impact on the cash flow related to this account is in line with the change in the balance sheet, with the slight discrepancy due to different exchange rates being used in translating balance sheet accounts and cash flow. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| g) | Trade receivable and other assets:The cash flow prepared under UK GAAP classified a number of asset and liability accounts differently. As described in note 21.2.2, the Group reduced trade receivable by approximately $6 million due to revenue recognition conditions not met in accordance with IFRS and IAS 18. In addition, due to reclassifications as described in note 21.2.2, the Group reduced trade receivable by approximately $5.5 million, reduced film costs by approximately $7 million, reduced investment by approximately $2 million, increased other receivable by $2.5 million, and increased due from related party by approximately $0.4 million. The aggregate impact of these items on the cash flow approximately $18 million, which is in line with the changes of these accounts on the balance sheet, as described in note 21.2.2, with slight discrepancies due to different exchange rates being used in translating balance sheet accounts and cash flow.  |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                    |   | UK GAAP (£) |      |   | UK GAAP ($) |   |        | Note   |   |
|-------------------------------------------------------------------------|--------|------------------|-----------|--------|-------------|--------|-------------|--------|--------|
| Balance Stockholders’ equity at April 1, 2007                     |   |             | 4,555,846 |   |        | $      | 8,935,836   |   |   |   |   |
| IFRS adjustments :                                                      |   |             |      |   |        |   |        |   |   |   |   |
|   Foreign exchange currency adjustments                       |   |             |      |   |        |   | 268,640     |   |   |   | b |   |
|   Business combination accounting adjustment, net        |   |             |      |   |        |   | (5,207,600) |   |   |   | a |   |
|   Balance, Stockholders’ Equity, IFRS, at April 1, 2007 |   |             |      |   |        | $      | 3,996,876   |   |   |   |   |   |

|   a) | Business Combinations:  the $5.2 million adjustment to goodwill was a roll forward adjustment from prior year balance sheet adjustment in accordance with IFRS, as described above (note 21.2.1). Minor difference from prior year was due to exchange rate fluctuation. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)    | Exchange differences and translation of foreign operations: as described in note 21.2.1, to conform with IFRS, accumulated deficit was reduced by approximately $1.1 million, offset by an increase of $0.8 million to other comprehensive loss from foreign currency translation, an equity account. |
|----------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ExhibitNo. |       | Description                                                                                                                                                |
|------------|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.24      |                           | Subscription Agreement, dated August 30, 2010 and revised December 17, 2010 and February 9, 2011, between Seven Arts Pictures plc and Agua Alta LTD        |
| 10.25      |                           | Subscription Agreement, dated August 30, 2010 and revised December 17, 2010 and February 9, 2011, between Seven Arts Pictures plc and Scarborough Limited  |
| 10.26      |                           | Subscription Agreement, dated August 30, 2010 and revised December 17, 2010 and February 9, 2011, between Seven Arts Pictures plc and Sendero Capital Inc. |
| 12.1       |       | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                    |
| 13.1       |                           | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                    |