Replacement -Final Results and Notice of AGM

Replacement for "Final Results and Notice of AGM" announcement released on 28 January 2011 under RNS number 3034A. The announcement is the same in every respect save for the following amendments: where the extracted financial statements and notes have reported a profit, the terminology has been corrected to reflect this.

Prime Focus London plc

(the "Company")

Final Results

The Company is pleased to announce its final results for the year ended 31 March 2010. Extracts from the financial statements are set out below and a full version is available on the Company's website www.primefocusworld.com

Notice of Annual General Meeting

The Company announces that the Annual General Meeting will be held at 37 Dean Street, London W1D 4PT on 30 March 2011 at 11:00am. Extracts from the notice are set out below and a full version is available on the Company's website www.primefocusworld.com

Enquiries:

Chairman's Statement

"Prime Focus is well positioned to deliver the highest quality post-production, VFX, and 3D solutions to the Global Visual Entertainment space with the most cost-effective Worldsourcing™ model".

This past year has seen the global economy start to recover, with the associated benefits starting to filter through to the media and entertainment sector. This has enabled Prime Focus to report an improvement in its financial performance.

The Group increased turnover to £21.5m for the year to 31 March 2010, up from £15.9m, whilst the group made profit before tax of £3.0m compared to a loss of £7.3m (as restated) in the previous year.

The Company took a critical review of all its subsidiary businesses with a view to restructuring the operations in line with the changing business scenario. As a result of the restructuring the Company closed down certain subsidiary businesses. The assets and liabilities of the closed down subsidiaries were written off / back in the accounts even though technically in the case of two subsidiaries namely 'Kpost Limited' and 'PF Post Production Limited', the subsidiaries entered formal liquidation / administration only after the end of the financial year being the date of the appointment of the administrator / liquidator. As per strict interpretation of the technical guidelines laid down by the accounting standards the Company should only write off assets in the current financial period and write back the liabilities in the next financial period. The Company has taken a view of substance over form to ensure that the accounts disclose the true and fair view of the state of affairs and that there is no abnormal loss or profit in any one particular financial period. Please refer to note 32 to the financial statements.

Operational highlights and opportunities

The global entertainment industry is improving. After two difficult years, market commentators expect the industry to grow at 2-3% in the short to medium term. Importantly, the big Hollywood blockbusters spend up to 70% of the movie production cost on post-production and visual effects. The directors expect this to remain the same given the importance and success of movies with great VFX (Feature Film Visual Effects) with the industry looking at getting 'more for less'. Prime Focus' ability to provide these services efficiently while maintaining high quality ensures a strong position going forward.

The Group has focused on changing its business model and is looking at forging more long term contracts with the ultimate end clients of its services. The most significant change being in the area of advertising, where the Group is looking to engage with global brands to become a preferred supplier with a direct relationship and guaranteed volume of work over multiple years.

The market for traditional film post production services has undergone change as well. Post Production Companies such as ours are now making investment into films in return for services rather than discounting the price for services. The discount has therefore been transformed into an investment with returns being earned from the sales of the films themselves.

Animation Services Contract

During the year the Company also entered into a contract worth £12.3m to deliver animation services for an animated feature film. As part of the delivery the Company was able to re-purpose and re-use animation assets created in the past and to that extent has made a significant profit margin on the contract. This contract has opened a new area of revenue for the Company being animated services for television and feature productions.

I want to thank all of our stakeholders - our employees, our customers, our vendors and our investors across the world for their support.

Outlook

The business model changes outlined above are all good news for Prime Focus. We are uniquely positioned to deliver the highest quality post-production, VFX, and 3D solutions to the global visual entertainment space with the most cost-effective Worldsourcing model.

I am optimistic about the future of Prime Focus. The economy is looking much more confident, and we are seeing an increase in all sectors of our business. The current period has seen a continuation of a positive trend that started to emerge in the year to end March 2010 although the current financial year will see the impact of incremental costs as the business refocuses its emphasis onto the 3D film industry.

Further to the Company's announcement of 30 September 2010 the Board continues to seek out and identify opportunities and proposals with the intention to significantly enhance shareholders value and further announcements will be made as required.

Changes to the Board

Since the end of the period Anshul Doshi has left the Board to take up a position with the wider Prime Focus India group as Chief Operations Officer. Neil Barnett left the Company on 20 January to pursue other opportunities. We thank them for their contribution to the Company and success in their new endeavours.

Namit Malhotra

Chairman

28 January 2011

Managing Director's Review

GROUP STRATEGY

Our mission is to:

·; build a globally competitive business through the use of talent and technology.

·; provide a platform for our people where growth = focus + hardwork.

·; provide our customers greater levels of service by adapting and learning from them constantly.

·; earn profit respectably by always delivering greater value for money.

·; be a leader in the business by harnessing creativity and passion with a zeal to change convention through conviction.

·; deliver to our shareholders a commitment to working with full Integrity and Intelligence at all times.

Prime Focus London plc is part of Prime Focus, a company born in India, which has grown by acquiring businesses in the major media centres around the world. Prime Focus has taken examples of best practice from each of its businesses and united them in a single brand with one set of values, one clear brand position and one strategic vision. That brand is Prime Focus. Our values represent our company, our brand and our people.

Diversity Our strength lies in the qualities and diversity of our people.

Family We are a family of differing backgrounds and experiences that share a common purpose and goal.

Hunger Our hunger for creative and commercial success means that we constantly strive for improvement.

Adventure Our people share a sense of adventure and a thirst for knowledge. We listen, question and use our insight to make good ideas even better.

Full-blooded We share a full-blooded passion for our work which means we will always go the extra mile in the pursuit of excellence.

Visionary Our visionary outlook, talent and commitment means we are able to meet any challenge and succeed.

As a result we create strong relationships built on total confidence in the quality of our work, the honesty of our opinions and the effectiveness of our ideas.

REVIEW OF THE YEAR

After a number of demanding years, we have positioned Prime Focus London to deliver organic growth. The global visual entertainment space is evolving, challenging and dynamic and Prime Focus is at the centre, providing creative and technical services to the film, broadcast, commercials, gaming, internet and media industries.

During the year the group took the important step of bringing the entire global business under one brand. Prime Focus is now represented globally under one name, one visual identity, one set of values and one voice.

Revenue

The reported growth in revenue from £15.9m to £21.5m was due to a number of reasons, the most significant being the award to the company of contract to provide animation services for a feature film.

Operating profit

Operating profit before exceptional items increased to £1.6m from a loss of £3.0m (as restated) in the prior year. The most significant factor contributing to the profit being the ability of the Group to re-purpose and re-use existing animation assets to deliver its contracted services under the contract to provide animation services for a feature film awarded to the Company.

Exceptional items

The operating profit is before exceptional items. These are non-recurring items which are material to the Group's performance and included in the profit before tax:

- The company recognized net income of £1.7m on the closure through administration / liquidation of three of its subsidiary businesses. The closure of the subsidiary businesses was based on the critical review undertaken by the Company of its existing operations.

In the case of two subsidiaries namely K

Finance costs

Net finance costs have decreased from £0.4m to £0.3m.

Key hires

The Group has continued to hire high quality executives. Romilly Endacott joined from Glassworks as Executive Producer for the Commercials division, with a special emphasis on driving the telecine business with Chief Creative Director Tareq Kubaisi.

Rowan Bray joined from Halo Post Production as Facilities Director for the UK Broadcast division.

Sue Mitchell joined from Technicolor as Commercial Director, Content Services, charged with setting the sales strategy for the UK business in duplication, encoding, film mastering and archive restoration services, whilst also exploring opportunities for digital delivery and global content services contracts utilising CLEAR.

Michael Elson and Martin Hobbs, both formerly of MPC, were brought in to oversee our expanding Film VFX and View-DTMoperations in the UK.

Film rights

During the year the Group entered into a global content distribution agreement in respect of 50 Hindi language films. The fair value of consideration paid by the Group for access to these rights was £9.055m. The Company has subsequently after the end of the financial year end sold these rights to a wholly owned subsidiary of the parent group - Prime Focus Motion Pictures Limited for equivalent value in cash consideration. These rights have been disclosed in the Consolidated Statement of Financial Position as at 31 March 2010 under Intangible Assets.

REVIEW BY OPERATING SEGMENT

An analysis of revenue and profit or loss by operating segment is set out below.

Content Services, post-production and animation

This segment currently represents the largest piece of the Group's business and comprises data and content management facilities as well as top-end post-production and visual effects services for the broadcast & commercial sectors.

These activities are aggregated together into one reportable segment on the basis that the economic characteristics are equivalent.

During the year, revenues have increased from £15.3m to £19.0m due to a number of reasons. The most significant being the award to the company of contract to provide animation services for a feature film.

Content Services

We launched CLEARTM during the financial year, our proprietary web-based media asset management service. CLEARTM manages the entire lifecycle of content from production to distribution, and offers a secure, fast and reliable digital delivery platform. This also enables the Prime Focus 'global digital pipeline' by seamlessly interconnecting the 16 Prime Focus offices around the world.

The availability of CLEARTM to clients, alongside our growing Content Services offering in the UK, has led to new relationships in this area with companies such as Sony, Nickelodeon and Discovery.

We also launched our WorldVersioningTM offering, managed out of the UK. WorldVersioningTM is a next-generation service for the regional adaptation of TV, online and print campaigns, and answers a growing need among multi-national companies for efficient, high quality versioning that stays true to the centrally approved concept.

We have partnered with Schawk!, the world's largest print supplier, giving us over 100 locations worldwide - the largest global footprint of any transcreation company.

Post-production

This segment includes short-form title sequences, idents and on-air promos to long-form television programming such as documentaries, sitcoms, dramas and factual series. We also offer high-end visual effects ("VFX"), colour grading and full post production services to the international commercials, music video and feature film industries.

We opened a new 5.1 Sound Studio in our London facility during the year. This suite, the fourth at our London facility, was installed to meet the growing demand from broadcast and commercials clients. It is also specified for Dolby commercials and trailer certification.

Whilst the year has been challenging owing to the continued impact of the global recession, we have:

- cemented our position as a leader in providing top-end broadcast post-production and visual effects across broadcasters including Discovery Channel, National Geographic, History Channel, BBC, BBC HD, ITV and Channel 4. Some of the major projects executed during the year included BBC HD Channel Idents, Wonders of the Solar System, UEFA Super Cup idents, 9/11 Phone Calls from the Towers, How Earth Made US, Who Was Jesus, Great British Menu, Heston's Feasts, Inside Planet Earth and America The Story of Us; and

- established a well-earned reputation for working with some of the biggest brands in the UK for commercials and advertisements, including NatWest, McDonalds, Burger King, Debenhams, Herbal Essences, Sony Playstation, Subaru, ghd, Canon, AXA and Nokia alongside strong relationships with some of the leading agencies including; M&C Saatchi, Mother Euro RSCG, AMV BBDO, Saatchi & Saatchi, Leo Burnett, TBWA, JWT and RKCR/Y&R.

Animation Services Contract

During the year the Company also entered into a contract worth £12.3m to deliver animation services for an animated feature film. As part of the delivery the Company was able to re-purpose and re-use animation assets created in the past and to that extent has made a significant profit margin on the contract. The said contract has opened a new area of revenue for the company being animated services for television and feature productions.

Visual Effects ("VFX")

The VFX division offers a full range of services to film and broadcast including pre-production, pre-visualisation and design, VFX supervision, 3D animation, matte paintings, digital grading and title design.

Our VFX division witnessed a number of exciting opportunities and projects which have seen revenues grow from £0.6m to £2.5m. We completed Creation, the film based on the life of Charles Darwin, which involved the completion of 60 VFX shots as well as Robin Hoodfor Ridley Scott, which involved the delivery of over 150 VFX shots over a four month period.

While this sector currently continues to be loss making, VFX is an area in which we see the potential for substantial growth in the UK, and we will be concentrating heavy attention and investment in this area.

Our revolutionary 2D-to-3D conversion process View-DTM was brought online in the UK during the year. The impact of 3D on the global visual entertainment industry is enormous. View-DTM allows filmmakers to efficiently create stereoscopic 3D movies from source material shot on virtually any medium. With View-DTM, we are offering the industry an exciting new production method to convert both library titles and new releases to terrific stereoscopic quality in considerably less time than other methods. We expect this to lead to a significant increase in work for Prime Focus in the UK film VFX and 3D space.

FINANCIAL POSITION

Net debt

Net debt increased to £7.1m. Whilst the Group has repaid £0.8m of bank and other third party loans in the year, this has been compensated through an increased number of finance leases and intercompany borrowings to support the investment and growth of the business.

Non-current assets

Two major changes in the non-current assets

- £9.1m being investment in film rights classified under Intangible Assets. As stated earlier the company has sold these rights to a wholly owned subsidiary of the parent group - Prime Focus Motion Pictures Limited for equal value in cash consideration.

- Write off of non-current assets on the closure of subsidiary businesses. During the year the Company undertook a critical review of its subsidiary businesses with a view to restructure the operations in line with the changing business scenario. As a result of the restructuring the Company closed down certain subsidiary businesses. All assets of the closed down subsidiary businesses have been written off in the Consolidated Statement of Financial Position as at March 31, 2010.

CASHFLOW

Our cash balance has reduced to £1.2m from £1.5m in the prior year. This reflects operating cash inflows of £10.1m offset by investing cash out flows of £10m and financing cash out flows of £0.3m.

KEY PERFORMANCE INDICATORS

Key performance indicators (KPIs) used by the Board to monitor progress are listed in the table

below.

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the Group's strategy are subject to a number of risks. Risks are formally reviewed by the Board and appropriate processes put in place to monitor and mitigate them.

The following section comprises a summary of the main risks the Board believes could potentially impact the Group's operating and financial performance.

Key Creative Staff

The Group's performance depends largely on the retention of key creative staff. The Group has successfully retained its key staff up to this point by ensuring that it gives them the necessary tools and working atmosphere such that they can maximize their creative energies and output.

Competition

The Group operates in highly competitive markets with several companies, small and large, competing for the same market share. Investment in the latest technology and a reputation of consistently delivering high quality services are a prime asset in the market. The Group continues to operate a programme for investment in the latest technology to bring the Group up to speed and ahead of competition in terms of technology.

Macro economic environment

Business environment risks considered by the Group include a downturn in film production activity in the UK, potential delay in revenue generation from the Group's media asset management business, the timing of television production and the cut in advertising spend by blue chip clients.

Technology

The Group is reliant on a number of technology systems to provide services to clients. Due to the rapid advancement of technology, there is a risk that systems could become outdated with the potential to affect efficiency and have an impact on revenue and client service. This risk is mitigated by regular reviews of the Group's technology strategy and ongoing development of in-house technology and software.

The Company's policy in relation to the use of financial instruments and its exposure to price risk, liquidity risk and cash flow risk is given in Note 4 to the financial statements.

Namit Malhotra

Group Managing Director

28 January 2011

Independent Auditors' report to the members of Prime Focus London plc

We have audited the group financial statements of Prime Focus London plc for the year ended 31 March 2010 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Financial Position, the Consolidated Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of the directors and auditors

As explained more fully in the Directors' Responsibilities Statement (set out on page 15), the Directors are responsible for the preparation of the Group financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the Group financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements.

Adverse opinion on financial statements

As explained in note 32 to the financial statements, certain of the company's subsidiary undertakings entered administration / liquidation subsequent to the year end. The directors consider that as the liabilities of these subsidiaries will not be settled by the group, the liabilities should be written back in the period to 31 March 2010. In our opinion, as the subsidiaries remained under the control of the group as at 31 March 2010, the liability should still be recognised in the consolidated financial statements as at that date. If these liabilities had been so recognised, the effect would have been to increase current liabilities by £3,462,425 and reduce the profit for the year and retained earnings by the same amount.

In view of the effect of the failure to recognise the liabilities referred to above, in our opinion the group financial statements:

- do not give a true and fair view of the state of the Group's affairs as at 31 March 2010 and of its result for the year then ended; and

- have not been properly prepared in accordance with IFRSs as adopted by the European Union.

In all other respects, in our opinion the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

Notwithstanding our adverse opinion on the financial statements, in our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

- adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

- the parent company financial statements are not in agreement with the accounting records and returns; or

- certain disclosures of directors' remuneration specified by law are not made; or

- we have not received all the information and explanations we require for our audit.

Other matter

We have reported separately on the Parent Company financial statements of Prime Focus London plc for the year ended 31 March 2010.

Joseph Kinton (Senior Statutory Auditor)

For and on behalf of

Shipleys LLP

Chartered Accountants & Statutory Auditor

10 Orange Street

Haymarket

London

WC2H 7DQ

28 January 2011

Consolidated Statement of Comprehensive Income for the year ended 31 March 2010

The above results are derived from continuing activities.

 Namit Malhotra

Director

Consolidated Statement of Financial Position at 31 March 2010

The financial statements were approved by the Board of Directors and authorised for issue on 28 January 2011.

Namit Malhotra

Director

Consolidated Statement of cash flows for the year ended 31 March 2010

Consolidated statement of changes in equity

(i) Share premium - amount subscribed for share capital in excess of nominal value, net of directly attributable issue costs.

(ii) Capital redemption reserve - created as a result of a previous share buy-back.

(iii) Fair value reserve - represents cumulative gains or losses on the fair value of available for sale investments recognized in other comprehensive income.

(iv) Special reserve - created following court application for reduction in share capital. This was then released against the deficit recorded in retained earnings as permitted by the court.

(v) Retained earnings - cumulative net gains and losses recognized in the consolidated statement of comprehensive income net of associated share based payment credits.

Notes to the Accounts

1. General information

Prime Focus London plc ("the Company") and its subsidiaries (together "the Group") are technology based creative service providers to the media and entertainment industry.

The Company is a public limited company which is listed on the AIM Market of the London Stock Exchange and is incorporated and domiciled in England (Registration number 1694613). The address of its registered office and principal place of business is 64 Dean Street, London W1D 4QQ.

These financial statements were authorised for issue on 28 January 2011.

5. Segmental Reporting

The Group is organised into operating segments based on the nature of services provided. The information reviewed by the executive directors, who are perceived to fulfill the function of chief operating decision maker for the Group, contains various operating segments however, certain of these operating segments are aggregated into one reportable segment on the basis of the operating segments having similar economic characteristics and one management team is responsible for these combined segments.

The reportable segments of the group are comprised of the following:

·; Content services, post production & animation - providing data, content management and full post production & animation services and facilities to the broadcasting, advertising and film production sectors;

·; VFX - offers a full range of services to film and broadcast including pre-production, pre-visualisation and design, VFX supervision, 3D animation, matte paintings, digital grading and title design.

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies. The executive directors evaluate performance on the basis of profit or loss before tax.

Entity wide disclosures

30. Ultimate controlling party

Prime Focus Limited, a company incorporated in India is the ultimate controlling party.

31. Prior year restatements

Identification of intangible assets on business combination

In January 2008, the Group acquired Machine Effects Limited and the excess of consideration over the fair value of identifiable assets and liabilities, totalling £1.8m, was recognised as goodwill. Subsequently, the directors have identified certain intangible assets, substantially comprising certain customer contracts and relationships, which should have been separated and recognised at fair value. This has therefore resulted in a material misstatement of the Group financial position and performance presented in the financial statements for 2008 and 2009.

These intangible assets have retrospectively been valued as at the date of acquisition as £1.8m (with a corresponding deferred tax liability of £0.4m) and the directors believe the expected useful life to have been one year from the date of acquisition, given the short duration of the key customer contract in question.

Furthermore, the directors believe that the restated goodwill of £0.5m arising from this business combination was incorrectly tested for impairment based on forecast cash flows which arose outside of the Machine Effects Limited cash generating unit. Accordingly, having revisited this analysis, the directors believe the goodwill should have been fully impaired as at 31 March 2009 and have made the related adjustment to the statement of financial position at 31 March 2009.

Accounting entries with respect to a capital reduction

In March 2009, the Company applied to the court for a reduction of the Company's share premium account by £3.8m. Subsequently, the directors have identified that the accounting entries recognised had been misclassified and therefore resulted in a material misstatement of the Group financial performance presented in the financial statements for 2009.

The accounting entries have subsequently been corrected such that the level of exceptional income recognised in 2009 has been reduced to reflect losses which had been incorrectly recognised directly in equity. There has been no overall effect on equity.

Accounting entries with respect to profit on sale of E-Title

In the period to March 31, 2009, the Company sold certain software IP it had created in prior years. The substance of the sale agreement was for consideration to be received as equity shares in an unlisted entity. The Company had recognised as exceptional income the notional contract amount of £1.8m. In doing so it resulted in a material misstatement of the Group financial position and performance presented in the financial statements for 2009. Subsequently the directors have revisited the accounting treatment for recognition of consideration received in the form of shares in an unlisted entity and consider that the original fair value of the consideration approximated to book value being £0.1. Accordingly the exceptional income of £1.8m has been reversed in 2009 resulting in related adjustment to the statement of financial position at 31 March 2009.

Effect on the financial statements

The effect of above restatements is summarised below:

There was no cash flow impact as a result of the restatements other than the consequential adjustments arising as a result of the restatement of the comparative Statement of Consolidated Financial Position.

32. Events after the reporting date

Closure of subsidiary businesses

In the case of two subsidiaries namely K

Sale of film rights

Subsequent to the end of the financial year the Company has sold these rights to a wholly owned subsidiary of the parent group - Prime Focus Motion Pictures Limited, the 3D rights for 50 Hindi Films acquired by the Company in the financial year. The sale was for a cash consideration of £9.1m being the book value of the rights.

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of Prime Focus London PLC (the "Company") will be held at 37 Dean Street, London W1D 4PT on 30 March 2011 at 11:00 am for the transaction of the following business:

Ordinary Business

Special Business

To consider and, if thought fit, to pass the following Resolutions: