Pre-close trading update

Entertainment One Ltd.

Pre-close trading update

§ Trading expected to be at the top end of recently upgraded market expectations

§ The Twilight Saga: New Moon number one selling DVD in UK and Canada in 2010

§ Proposed move to the Main Market of London Stock Exchange

§ Relocation of place of incorporation to Canada

§ Revised equity incentive arrangements

Prior to entering its close period, Entertainment One Ltd (AIM: ETO), the independent international entertainment group, is pleased to announce the following update on trading for the financial year ended 31 March 2010.

The Company expects results for the financial year to be at the top end of the recently upgraded market expectations. During March 2010, the Company's DVD release of The Twilight Saga: New Moon reached number one in the UK and Canadian DVD charts with more than 1.5m units sold across the two territories; this followed its strong box office performance in November 2009. The outlook for the new financial year remains positive with a strong film slate across all territories and further growth in the TV business.

Results for the financial year ended 31 March 2010 will be announced on or around 25 May 2010.

Main Market Listing

Whilst the Board is pleased with the recent performance of the Company's share price, it continues to review opportunities to improve the value of the Company's shares and broaden its shareholder base.

The Company is also therefore pleased to announce that it is in dialogue with the UKLA regarding the move of its listing from AIM to a Standard Listing on the Main Market of the London Stock Exchange (the "Main Market"). The Board considers the current size, increasing maturity and ambition of the Company to be more appropriately served by a listing on London's Main Market.

Subject to UKLA and other approvals as required, it is the Company's intention to move on to the Main Market following the announcement of its full year results and contemporaneously with the redomiciliation of the Company as described below.

Proposed redomiciliation

In addition to the proposed move to the Main Market, the Board believes that the relocation of the Company's incorporation from the Cayman Islands to Canada will further improve its market perception and attract a wider investor base. The Company is therefore currently considering relocating its incorporation from the Cayman Islands to Canada. Concurrently the Company will change its residence for tax purposes from Jersey to Canada. The Board believes this will enable the Company to simplify its group structure and more efficiently address certain regulatory requirements applicable to businesses operating in the Canadian film and television distribution industry. It is anticipated that the relocation would be undertaken through a scheme of arrangement in the Cayman Islands, which would also be subject to the approval of the Cayman Islands courts and the Company's shareholders.

Further updates will be provided on progress of the redomiciliation and move to the Main Market.

Executive Share Scheme

The Board have approved the implementation of a new equity incentivisation scheme for the Executive Directors (Darren Throop, Patrice Theroux and Giles Willits (together the "Executives") as of 1 April 2010 (the "New Scheme"). Under the New Scheme, Executives will only be rewarded if Shareholder value is created, thereby aligning the interests of the Executives directly with those of Shareholders. Following the implementation of the New Scheme, the total maximum number of Ordinary Shares of the Company available for incentivisation of all employees will remain unchanged from that set out at the Admission of the Company to Aim in March 2007, being 15% on a fully diluted basis.

As part of the New Scheme, the Executives have entered into arrangements with the Company to give up their rights to 3,185,976 unvested options and/or share awards previously awarded to them.

Existing options and awards for employees other than the Executives remain unchanged as a result of the implementation of the New Scheme.

Notes to Editors:

Entertainment One Ltd. (AIM: ETO) is an independent international entertainment group operating in Canada, US, UK, Holland and Belgium. The Group specialises in film, television, and music, acquiring rights and producing content which it exploits across all media (cinema, DVD, TV and digital) in over 190 countries. The Group operates through two divisions: Entertainment and Distribution; which represent our expertise in film distribution, television and music production/distribution and kids' content, licensing and distribution. The Group's content library includes more than 4,000 feature films, 2,800 hours of original television programming and 15,000 music tracks.

Further information is available at www.entertainmentonegroup.com or email Redleaf at [email protected] 

Additional information relating to the Executive Management Incentivisation Arrangements

Under the New Scheme, the Executives will subscribe for Participation Shares in a newly incorporated subsidiary of the Company. The Participation Shares will entitle the Executives to an aggregate value equivalent to the sum of (i) 6.4 per cent. of the increase in Shareholder value based on the shares in issue on 31 March 2010; and (ii) 10 per cent. of the increase in Shareholder value on any additional Ordinary Shares issued subsequent to 31 March 2010, subject to minimum long term compound equity returns to shareholders as measured through the Company's share price.

The performance condition is that the compound annual growth of the Company's share price must be at least 12.5 per cent. per annum (the "Growth Condition"). The Growth Condition takes into account the 20 day VWAP up to and including 31 March 2010 and the issue price of any subsequent issue of Ordinary Shares, the date on which they are issued, any dividends paid on the Ordinary Shares and any capital returned to Shareholders. The Growth Condition will be measured between three and five years from 31 March 2010 and, if earlier, on a change of control of the Company. If the Growth Conditions has not been satisfied after five years, the Management Participation Shares must be sold to the Company for a nominal amount.