#Contents #2 The Leadership Journey #4 Leadership Continued #6 Creating Greater Stakeholders Value Overview #8 Sustainable Business Model... #12 Formulating Long-term Growth Plan #16 Executive Vice-Chairman and Managing Director’s Message #18 Film Pipeline #19 Engaging Content for 2014-15 and Beyond #20 Corporate Social Responsibility #21 Awards... #22 Board of Directors #26 Directors’ Report #34 Management Discussion and Analysis #50 Corporate Governance Standalone Financials #73 Independent Auditors’ Report #78 Balance Sheet #79 Statement of Profit and Loss #80 Cash Flow Statement #82 Notes Consolidated Financials #111 Independent Auditors’ Report #112 Balance Sheet #113 Statement of Profit and Loss #114 Cash Flow Statement #116 Notes Financial Statements#141 Notice Governance Reports Business Review Corporate Forward-looking Statements In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take investment decisions. This report and other statements ‒ written or oral ‒ that we periodically make, contain forward-looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried wherever possible, to identify such statements by using words such as ‘anticipate’, estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in assumptions. The achievements of results are subject to risks, uncertainties, and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated, or projected. Readers should keep this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. #WehavegottheworldtalkingaboutIndianentertainment We capture the world’s imagination through engaging entertainment and hence not just sustain, but grow our leadership across platforms, formats and geographies. Our creativity informs and inspires people, delights and defines trends from largest to the smallest screen globally. In our effort to showcase the best of entertainment to our viewers, we leverage technologies that are cutting edge and strategies that are industry leading. #2 #TheLeadershipJourney* #1977 Began acquiring international IP rights for Indian content #1981 Early adopter of DVD distribution #1982-1998 Established global distribution network outside India #1999 Launch of first digital Bollywood TV network #2006 First Indian media company to list on AIM First to adopt vertically integrated model #2007-2008 SVOD agreement with Comcast Launch of You Tube channel Ayngaran Tamil acquisition #2010-2013 Listed Eros International Media Limited (EIML) on the BSE and NSE Digital distribution channels: HBO Asia and ErosNow Listed on NYSE Euronext * Eros Group Eros InternationalInternaationala MediaMede iaa LimitedLimitedd AnnualAnnn ual ReReportport 2013-1420133-141 #3 Corporate Overview C or p or ate O v erv iew In 2014, Eros International was listed among Forbes Asia’s 200 ‘Best under a Billion’ Companies. Bu Business Review Governance Reports Financial Statements us in ine Entry into the premium ss Re Rev ev v ie television space with HBO via ew an exclusive partnership. The two premium channels HBO defined and HBO hits offer an ad free experience with a growing foothold over the Gov G premium television market. ern anc c e R The launch of ‘ErosNow’ epo r rt rts online SVOD service (add in ts two models; premium and freemium). Fin anc ial St ate men ts #4 #LeadershipContinued 69 films in multiple languages were released during FY 2013-14 1,200+ films library & digital rights to additional 700+ films 220+ films released over last three years, largest scale among Indian studios 40%+ market share in key international markets, such as USA and UK, through our parent Eros Plc Eros InternationalInternationnal Media Limitedd AnnualAnnual Report 2013-14 #5 Corporate Overview C or p orate O verview Business Business Review Governance Reports Financial Statements Rev v iew w Govern ance R e p Released 37 Hindi films (FY2013-14), 30 Hindi orts films (FY2012-13) and 27 Hindi films (FY 2011-12) First Indian Media Company to get listed on the F in NYSE with successful listing of parent company ancia l St ate e ments 4 out of top 10 in CY 2013 grossing films, 2 out of top 10 in CY 2012 and 4 out of top 10 in CY 2011 were Eros films #6 #CreatingGreaterStakeholdersValue Key Performance Indicators (Consolidated) Total Income grew from `10,743.5 Million in FY 2012-13 to `11,396.4 Million in FY 2013-14 Up by 6.1% PBT (Profit Before Tax) grew from ` 2,170.0 Million in FY 2012-13 to ` 2,669.7 Million in FY 2013-14 Up by 23.0% Revenue (` in Million) Profit Before Tax (` in Million) 11,396 2,670 10,744 9,632 2,123 2,170 7,159 6,278 6,535 4,902 1,122 1,159 1,039 660 2,248 169 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 7-year CAGR 26.1% 7-year CAGR 48.3% EBIT (` in Million) Profit After Tax (` in Million) 2,997 1,997 1,558 2,257 2,262 1,491 1,182 1,613 1,213 826 1,100 748 688 427 221 135 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 7-year CAGR 45.1% 7-year CAGR 71.4% Eros International Media Limited Annual Report 2013-14 #7 Corporate Overview PAT (Profit After Tax) grew from ` 1,545.3 Million in FY 2012-13 to ` 1,996.9 Million in FY 2013-14 Up by 29.2% Diluted EPS (Earnings per share) grew from ` 16.81 in FY 2012-13 to ` 21.63 in FY 2013-14 Business Review Governance Reports Financial Statements Up by 28.7% Diluted EPS (`) Diversified Revenue Mix (%) 21.63 16.81 16.16 25.9 14.35 11.27 41.8 10.27 5.76 32.3 1.86 ` FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 ( in Million) Theatrical 4,749 Overseas 2,934 7-year CAGR 63.3% Others 3,664 Networth (` in Million) 12,086 9,865 8,346 6,705 2,375 1,580 814 413 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 7-year CAGR 62.0% #8 #SustainableBusinessModel... We create refreshing and engaging content for consumers across geographies and platforms, in order to deliver sustainable and attractive returns for stakeholders. CONTENT STRATEGY MITIGATES RISK AND MAXIMIZES CASH FLOW Disciplined Green lighting Process Co-Production & Acquisitions Portfolio Approach by Firm Budget, Genre & Language Pre-Sale Focus 25% - 77% of Maximise Cash Hindi Film and >100% of Tamil Flows & Library Direct Production Costs Value Low P&A Costs Content Bundling Maximizes Exploitation Diversified Distribution Channels 1. DISCIPLINED GREEN-LIGHTING PROCESS Our films have consistently been appearing in ‘Top 10 Films’ at the box office owing to our disciplined and well-defined green-lighting process of acquiring filmed content, which is executed by a professional team, along with the Executive Board of Directors. We evaluate films on multiple parameters, including creative, financial and estimated ROI. 2. CO-PRODUCTION AND ACQUISITIONS Content acquisition is executed largely through co-production and acquisition deals.. We will continue to leverage the long-standing relationships with creative talent, production houses and other key industry participants that we have built since our inception to source a wide variety of content. Through Co-production we get IPR for perpetuity and through acquisition we get IPR for 15-25 years or perpetuity as per the deal specific. &SPT*OUFSOBUJPOBM.FEJB-JNJUFE Annual Report 2013-14 #9 Corporate Overview Business Review 3. WORLDWIDE DISTRIBUTION 4. PORTFOLIO APPROACH BY FILM BUDGET, We distribute our films to the Indian GENRE AND LANGUAGE population in India, the South Asian The portfolio approach is one of the key diaspora and to non-Indian consumers, strategies we follow consistently. We who view subtitled or dubbed Indian films. select our content with utmost care to Internationally, we distribute through minimise potential risks to the business. Governance Reports Financial Statements our parent Eros International Plc, with a We are also building a diverse film slate as network spanning over50 countries, such part of our strong portfolio approach, with as, the United States of America, United a mix of films by budget, language and Kingdom and throughout the Middle genre that reduces our reliance on fewer East, where we distribute films to Indian talent, market volatilities and the so called expatriate populations. We additionally ‘Hit film’ business and scale our business distribute across Germany, Poland, Russia, operations efficiently. Romania, Indonesia, Malaysia, Taiwan, Japan, South Korea, China and Arabic speaking countries, where we release 5. PRE-SALE FOCUS Indian films that are subtitled or dubbed in We follow a pre-sales focused strategy local languages. for covering production costs for 25% to 77% of Hindi films and more than 100% of Through this global distribution network, Tamil Direct Production costs. A focused we distribute content over the multiple approach towards pre-sales is a consistent distribution channels such as theatrical, strategy that strengthens our balance television syndication and digital platforms. sheet. We consciously try to pre-licence Our internal distribution network allows our carved out rights to various channel us greater control, transparency and partners in order to de-risk the business flexibility over the regions in which we model and thereby secure cash.