FILM FINANCING

TYPICAL FILM FINANCING PLAN Funding Plan 8% GAP FUNDING 12% CASH FLOWED FROM TAX CREDIT 30% PRE SALE 20% CO PRODUCTION FINANCING 30% UK EQUITY INVESTORS

TYPICAL FILM FINANCING PLAN Recoupment Order 1st GAP 2nd Pro rata Co-producer and Equity Assuming 15% sales commission: total sales required to break even from rest of the world (excluding pre sales) £1,441,000. Above this the film is into profit.

EIS FUNDING WITH 50% EQUITY Funding Plan 30% PRE SALE 20% CO PRODUCTION FINANCING 50% UK EQUITY INVESTORS

EIS FUNDING WITH 50% EQUITY Recoupment Order 1st UK EQUITY INVESTORS (tax credit) 2nd UK Equity and Co producers pro rata pari passu. Assuming 15% sales commission: total sales required to break even from rest of the world (excluding pre sales)£1,058,882. Above this profit. Difference is the EIS tax relief on £1,000,000 equity investment.

EIS FUNDING WITH 100% EQUITY Funding Plan 100% UK EQUITY INVESTORS/PRODUCERS £2,000,000 budget is net £1,400,000.

EIS FUNDING WITH 100% EQUITY Recoupment Order 1st UK EQUITY INVESTORS/producers Recoupment from: £400,000 film tax credit £600,000 pre sale £400,000 co-production finance Assuming 15% commission: total sales required to break even from rest of the world (excluding pre sales) £1,058,882 i.e. only £705,882 required from rest of world to break even net of tax relief. Above this is profit.

EIS FUNDING WITH 100% EQUITY Summary By 100% funding via EIS, the Producer will have received £500,000, In the 50% model they would have seen nothing. This difference is the additional 30% tax relief being achieved on the funding through EIS. In 50% model Investors require £1,058,882 to recoup £1M. In 100% model investors require £ 1,058,882 to recoup £ 2M.

Important Notice Prospective Investors should be aware that the value of the Shares, which will be unquoted, can fluctuate. In addition, there is no certainty that Investors will get back the full amount which they invest. Having regard to the Company's investment strategy and the tax reliefs available, the Ordinary Shares should be considered as a medium to long term investment. The value of Shares may go up or down. An Investor in any Company may not get back the full amount invested; consequently, they may lose some or all of the funds invested. There is no market, nor is there intended to be a market for the Shares at the present time for the foreseeable future. There is no guarantee that the Company's investment strategy will be successful. Investors are strongly advised to seek professional advice in relation to the taxation implications of an investment in an EIS qualifying company. There are circumstances in which an Investor could cease to qualify for the taxation reliefs offered by the EIS. In addition, an Investor could cease to qualify for the EIS reliefs if they received value from the Company during the period beginning one year before the Shares are issued and ending three years after the date of issue or from when the Company commences trading, if later. There is no guarantee that either provisional or formal EIS clearance will be agreed or that such agreement will not be subsequently withdrawn. In those circumstances, subscription monies will not be returned to Investors. Returns to Investors will be lower in the event that the Company fails to obtain EIS tax relief or if it is subsequently withdrawn, in which case the EIS Income Tax Relief and CGT Deferral Relief referred to above would not be granted.. It is possible for Investors to lose their EIS tax reliefs by taking or not taking certain steps; Investors are advised to take appropriate independent professional advice on the tax aspects of their investment. The information in this document is based upon current taxation and other legislation and any changes in the legislation or in the levels and basis of, and reliefs from, taxation may affect the value of an investment in the Company. The subscription for Shares and the performance of Shares will not be covered by the Financial Services Compensation Scheme or by any other compensation scheme. The investment described in this document may not be suitable for all investors. Investors are accordingly advised to consult an investment adviser authorised under the Financial Services and Markets Act 2000 and an appropriately qualified taxation adviser, prior to investing. Park Caledonia Capital Limited is Authorised and Regulated by the Financial Services Authority. Registration No