ResearchBytes.com Eros International Media Ltd. Registered Office: 201, Kailash Plaza, Plot No. A-12, Opp. Laxmi Industrial Estate, Off New Link Road, Andheri (West), Mumbai – 400053. Earnings Release for Q2 and H1 ended September 30, 2010 Eros International Posts strong results H1 FY2011 PAT up 30% at Rs. 608 million, PAT margins strong at 19% Q2 FY2011 PAT up 13% to Rs. 453 million, PAT margins up significantly to 24% Mumbai, 10 November 2010: Eros International Media Limited (Eros International), India’s largest integrated film studio, today announced its consolidated financial results for the second quarter and half year ended September 30, 2010. This is Eros International’s maiden result since its listing on BSE and NSE on 06 October, 2010. Financial highlights (Consolidated) H1 FY2011 Financial Performance Highlights (compared to H1 FY2010) EBIT increases 20.4% to Rs. 809.2 million from Rs. 672.0 million PAT registered an increase of 29.5% to Rs.608.4 million from Rs. 470.0 million Total revenues were steady at Rs. 3,149.1 million as compared to Rs. 3,373.6 million Basic EPS strongly higher at Rs. 8.52 compared with Rs. 6.58 Q2 FY2011 Financial Performance Highlights (compared to Q2 FY2010) EBIT at Rs. 562.7 million from Rs. 583.1 million. PAT reported at Rs. 453.3 million, a growth of 12.9% from Rs. 401.6 million. Total revenues at Rs. 1879.0 million compared to Rs. 2717.9 million. Basic EPS at Rs. 6.35 compared with Rs. 5.62 ResearchBytes.com Earnings Release – Q2 & H1 FY2011 Operating Highlights Eros International successfully completed its IPO in October 2010 o Issue Size: Rs 3,500 million; Issue subscribed over 29 times o Priced at Rs. 175 per share at the top of the price range o Shares listed on BSE and NSE on October 06, 2010 o Funds raised by the Company to be utilized primarily for acquiring and co-producing Indian films including Hindi language films as well as certain Tamil and other regional language films 39 films were released in H1 FY2011 – the highest by any player in the sector During the quarter the Company signed a multi-film content licensing deal worth Rs. 640 million for broadcast on Zee Entertainment Network. o This deal involves exclusive broadcasting of a select number of Eros International’s films across Zee Entertainment’s television network o To date, the Company has signed Rs. 2,400 million worth television and music syndication deals that will start augmenting revenues and deliver earnings that have attractive margins in FY2011 and FY2012. This also includes deal with Star Network for over Rs. 1,000 million under which we have delivered films. o These and other deals adopt the Company’s portfolio strategy as they include a selection of catalogue films from Eros International's strong content library of over 1,000 titles, including recent blockbuster releases and yet to be released highly anticipated titles from Eros International‘s repertoire H1 FY2011 witnessed robust box office collections for several of Eros International’s Hindi and regional films such as, Housefull, Anjaana Anjaani, Paathshaala and overseas release of Dabangg & Endhiran (Tamil & Telugu), Ravanan, Singham, Sura (in Tamil) and Haapus in Marathi. The Company has a strong slate of movies for H2 FY2011 comprising Golmaal 3, No Problem, Game, Toonpur ka Superhero which ensure substantial revenue visibility in the coming quarters EyeQube: Delivered prestigious Hollywood top end projects. Moreover, EyeQube is engaged with Ra.One and Desi Boyz, scheduled for a summer 2011 release, on select high end shots 2 ResearchBytes.com Earnings Release – Q2 & H1 FY2011 Under New Media initiative the Company has taken several pioneering initiatives which includes tieups with mobile operators such as Airtel, Internet monetization through YouTube, DTH platforms and cable licensing. At the heart of this strategy is the Eros Library and strong slate of new films. Commenting on the Q2 & H1 FY2011 results, Mr. Sunil Lulla, Managing Director, Eros International Media Ltd. said: “This has been an extremely successful year for Eros International including the overwhelming response to our IPO. At the heart of our business strategy is our catalogue, our strong movie pipeline mainly tied up through our co-productions and our strong distribution network in India and international market leadership through our parent Eros International plc. With over a 30-year successful track record backed by a unique de-risked business model underpinned by our portfolio pre-sales approach, we are proud to have achieved a scale second to none by staying focused and building on our core competency of content and distribution. The strong results saw notable box office contributions from our releases such as Housefull, Anjaana Anjaani and Paathshaala (globally) and Dabangg, Endhiran (internationally), Ravanan, Singham, Sura (in Tamil) and Haapus in Marathi, significant contributions from television and music syndication, and an equally valuable contribution from licensing of overseas rights to Eros Plc in the first half of the year. Not only has the Company delivered an encouraging earnings performance with PAT of Rs. 608.4 million, a rise of 29.5% over last year, but also delivered good results in terms of cash generation of Rs 1,457 million, a rise of 25% over last year. Our strong margins bring out how we successfully leverage our scale and our co-production relationships to keep down costs and bring revenue predictability, reflecting robust business fundamentals. The second half has already started brilliantly with the huge box office success of Golmaal 3 to be followed by No Problem, Toonpur Ka Superhero and Game. For H2 FY 2011, FY 2012 & 2013 the Company has an unparalleled line-up of more than 50 films in Hindi, Tamil and other languages, which is by far the largest visibility in terms of number of films. The films such as SRK’s RA.One, Hrithik’s Zindagi Na Milegi Dobara, Ranbir’s Rockstar, Akshay’s Desi Boyz and Shahid’s Mausam to name a few. We are confident that our Hindi and regional strategy will continue to allow us to maintain a sustainable competitive advantage and offer us the opportunity to rapidly consolidate our position in this exciting and rapidly growing Indian media and entertainment sector.” 3 ResearchBytes.com Earnings Release – Q2 & H1 FY2011 Key Growth Drivers for Revenues within India INDIAN BOX OFFICE Theatrical revenues were strong in H1 FY2011 primarily driven by box office successes of Housefull and Anjaana Anjaani. Housefull is the 3rd highest grosser in the box office charts this year. Eros International has its own distribution offices in the major circuits of Mumbai, Delhi and Punjab which cover over 65% of the Indian theatrical market and works through sub-distributors in other smaller circuits. In the South, the Company distributes films through its subsidiary - Ayngaran. Typically about 40-50% of theatrical sales are secured through minimum guarantees and advances from sub-distributors. Self distribution in the main circuits is reflected in the higher overall margins. As a trend since more and more releases are ‘wide’, which means that films go out in close to 2,000 screens simultaneously, the box office collection is skewed towards the first week performance and over 70% of the box office gross revenues of the first week are captured in the first weekend. Eros International enjoys a share of 52.5% of the net box office collections in the first week from the national multiplex chains. Also increased interest from leading brands to associate with a film has significantly reduced the cost of marketing. For example, in Anjaana Anjaani the Company has had 5 brand tie-ups such as Godrej Interio, Religare Insurance, Go gio, Killer and Provogue which significantly subsidized the cost of marketing the film. Further, the prolific penetration of digital screens, especially in the single screen cinemas, has reduced the distribution cost of reaching out to incremental audiences without having to invest in physical prints. H2 FY2011 has witnessed a very promising start with the significant success from its Diwali release - Golmaal 3 which grossed Rs 700 million worldwide in the first weekend. This will be followed by Toonpur Ka Superhero, No Problem and Game in the second half of the year. For H2 FY 2011, FY 2012 & 2013 the Company has an unparalleled line-up of more than 50 films in Hindi Tamil and other languages, which is by far the largest visibility in terms of number of films. The exciting portfolio of films includes Shah Rukh Khan, Ranbir Kapoor, Hrithik Roshan, Akshay Kumar, Saif Ali Khan, Shahid Kapoor, John Abraham, Katrina Kaif, Deepika Padukone and Kareena Kapoor in lead roles. The lineup is expected to have an excellent opening at the box office as the market continues to grow rapidly with more screens being added each day. 4 ResearchBytes.com Earnings Release – Q2 & H1 FY2011 TELEVISION This was a successful year for television syndication. The Company was able to successfully pre-sell most of its visible slate for exclusive broadcast on a range of channels including Star and Zee network. TV networks have seen a huge spike in their ratings from broadcast of premium movies. For example, 3 Idiots which was previously licensed through Eros Plc group for broadcast on Sony delivered a rating of 11+ which set a new bar in the world of TV rating points. Television networks are able to better monetise the content with advertisers and market the films more efficiently to audiences to drive ratings when there is an early tie-up. Having a strong slate of films strengthens the cable carriage deals for networks which drives substantial revenues for them.