Press Release

Reports strong Adjusted EBITDA⁽¹⁾ growth of 21.5% and margin expansion of 587 bps

Eros Now paying subscribers grew 248.3% YoY to 10.1 million

Eros Now launching three new original series - Side Hero, Flip and Smoke

Eros Now partnered with Sri Lanka’s premier connectivity provider,‘Dialog Axiata’

ISLE OF MAN, United Kingdom--(BUSINESS WIRE)--Aug. 23, 2018-- Eros International Plc (NYSE: EROS) (“Eros” or “the Company”), a leading global Indian film and digital studio, today announced unaudited financial results for the three months ended June 30, 2018.

Financial Highlights:

Q1 FY 2019 Highlights

Revenue of $60.2 million in Q1 FY2019 compared to $60.8 million in Q1 FY2018. Reported strong Adjusted EBITDA(1) of $19.2 million in Q1 FY2019, compared to $15.8 million in Q1 FY2018, an increase of 21.5 % year-over-year. Adjusted EBITDA margin expanded to 31.9% in Q1 FY2019, compared to 26.0% in Q1 FY2018. Reported net debt of $186.8 million as on June 30, 2018, compared to $189.2 million as on March 31, 2018 and net leverage ratio of 2.28x. The net debt to equity ratio remains conservative at 18.9%.

(1) A reconciliation of the non-GAAP financial measures discussed within this release to our GAAP operating results are included at the end of this release. See also “Non-GAAP Financial Measures.”

Key Business Highlights:

• As of June 30, 2018, Eros Now worldwide paying subscribers increased by 248.3% year-over-year and 27.8% sequentially to 10.1 million. The Company is reiterating its guidance of 16 million paying subscribers by fiscal year end 2019.
• As of June 30, 2018, Eros Now has exceeded 113 million registered users worldwide across APP, WAP and Web.
• Over the next year, Eros Now is planning to launch a stable of feature films, made-for-digital originals films and over 20 original episodic programs, all of which will be available exclusively on Eros Now to paying subscribers. Three original series, Side Hero, Flip and Smoke, will be launched in the next few weeks. Originals will feature popular names like Rohan Sippy, Kunal Roy Kapoor, Rajat Kapoor, Siddharth Anand and Pavan Kriplani in various capacities.
• Eros Now announced a partnership with InMobi, a leading global digital marketing platform. The partnership will for the first time enable advertisers to directly monetise on Eros Now’s video platform.
• Eros Now reinforced its mission of non-stop entertainment, anytime, anywhere with one-of-a-kind brand campaign ‘Bolo Kya Dekhogey.’ The campaign, which rolled out three television commercials, reiterates Eros Now’s leadership position in the movie category, offering its extensive movie library across languages.
• Eros released 14 films in Q1 FY2019 (one medium budget and 13 small budget films) as compared to five films in Q1 FY2018 (one high budget, one medium budget and three small budget films). This is in line with Eros’ strategy of developing its own intellectual property and concentrating on content-driven films rather than high budget star-driven films.
• Bhavesh Joshi (Hindi), Meri Nimmo (Digital release), Blackmail (Overseas), Haami (Bengali), Goodnight City (Bengali), Alinagarer Golokdhadha (Bengali) and otherswere the main revenue contributing films during the first quarter.
• Reliance Industries Ltd (“RIL” or “Reliance”) completed its acquisition of a 5% equity stake in Eros at a price of $15 per share for a total cash consideration of $46.6 million on August 6, 2018.
• On a pro forma basis including the $46.6 million equity investment from RIL, Eros’ net debt as of June 30, 2018 is $140.2 million and the net leverage ratio is 1.71x.
• Eros formed a ground-breaking joint venture with V. Vijayendra Prasad, one of India’s top screen-writers and directors. The exclusive collaboration will build a quality content pipeline through joint development of scripts and production and distribution of films and web-series.
• Eros also partnered with Phars Film, one of the UAE’s largest film distribution and exhibition networks. Eros also intends to partner with Pana Film, one of the largest Turkish film studios for Indo-Turkish co-productions.
• Eros releases ‘Bajrangi Bhaijaan’ in Turkey across 190 screens after over $45 million in box office collection in China.
• Eros also has a distribution partnership with Central Partnership in Russia, which may open new markets for Eros releases. These strategic partnerships not only help Eros augment its in-house content production model, but also expand the geographical canvas for content monetization.

Kishore Lulla, Eros’ Group Executive Chairman and Chief Executive Officer, stated:

“We delivered a strong set of results this quarter, underscoring our market leadership, solid business fundamentals and continued growth in our digital platform, Eros Now. As we continue to develop our digital offering and adapt to the dynamic global media landscape we operate in, I want to reflect on the journey we have taken so far. At our core we are, and always have been, a content company delivering premium Indian filmed entertainment to the masses with unparalleled distribution capacity. Almost 20 years ago, Eros developed the first vertically integrated film studio model in India. We combined premium content production and acquisition abilities with best-in-class international distribution reach. Over the last decade we have witnessed many of the major Hollywood studios make their entries into India. It is a testament to our content offering, brand strength and people that we have been able to maintain and grow our market share in the face of this competition.

We are also proud to have one the deepest and richest Indian content libraries in the world. Over the last 10 years Eros has been responsible for 30 of the top 100 highest grossing box office films in India. We must not forget that even in the digital age, premium content is still immensely valuable. Our industry relationships spanning over 40 years allow us access to the best talent across the nation. Our library is constantly evolving and replenished every year with new and innovative content that appeals to all consumers.

We continue to focus on appropriate budget films promising high IRR’s based on our unique portfolio approach. As we increase production across genres and languages, the stories we tell are driven and backed by pre-sale potential with reduced reliance on box office success. The real star of today is the story being told on screen. We are especially excited about our upcoming theatrical slate this year, in addition to our upcoming slate of Eros Now original releases. Our content partnership with Reliance, new venture with V. Vijayendra Prasad and continued relationship with Aanand Rai are all instrumental to our future and will be keys to our success.”

Rishika Lulla, Chief Executive Officer, Eros Digital who received the award for ‘Women leadership in Industry’ at the Times National Awards for Marketing Excellence, commented:

“The continued strength of our digital entertainment offering was once again a significant driving force behind our solid start to Fiscal 2019. With our diversified and unparalleled library we continue to see growing consumer appetite for compelling content. We are excited to have the largest paying and registered users, beating our own target of 2 million every quarter to be at 10.1 million paying subs this quarter. Our new partnership with InMobi will also allow us to start monetising our 113 million plus registered user base while still being an SVOD model. Living up to our core philosophy of innovative and non-intrusive ad formats, we will also be experimenting with new concepts such as allowing brands to engage seamlessly with branded and high quality digital content.

We truly believe that Eros Now’s extensive content bouquet will satisfy the insatiable appetite of our audiences and further enhance our commitment to be the source of entertainment with penetration in 100 cities across India. This is a significant expansion and with the best talent on board in our industry for movies and originals, we aim to capture an even larger audience with our upcoming star studded ‘Originals’ slate starting with ‘Side Hero’, the first ever Indian original comedy-drama featuring Kunal Roy Kapoor and directed by Rohan Sippy.

India is undergoing a digital revolution which is further fuelled by Reliance Giga venture and other telcos bringing consumers a seamless connectivity experience, where Indian OTT players are now leaving no stone unturned to lure the viewers to sign up. Eros Now with its matchless proposition of 52 weeks of 52 premiers across genre and languages is uniquely positioned to execute a wide distribution strategy with a library of over 11,000 films spread across over nine Indian languages. According to our proprietary data, the longest content format is the most engaging where the best movies on Eros Now gets viewed in less than two sessions and an engaged viewer returns at least three times a week, spending a minimum of 40 Minutes, making it safe to say that Eros Now is the best engagement platform.”

Prem Parameswaran, Group Chief Financial Officer and President of North America, also commented:

“I am pleased with our first quarter performance, highlighted by strong margin expansion, continued balance sheet strength and solid subscriber additions out of our Eros Now business. We believe the Company is now firing on all cylinders as our Adjusted EBITDA growth and margin expansion is at 21.5% and 587 bps respectively. This coupled with our conservative balance sheet with net debt leverage ratio of 2.28x has us poised for growth in the coming fiscal year.

Having reached over 10.1 million paying subscribers in Eros Now through the end of the First Quarter, we are confident in continuing to grow our subscriber base over the next few years, especially given our premium content offering coupled with the large Indian and global market opportunities.”

Business Outlook

• Eros has a compelling film slate planned for the rest of Fiscal Year 2019, including films such as Çolor Yellow Productions “Happy Phir Bhaag Jayegi”, Anurag Kashyap’s “Manmarziyan”, Namaste England (Overseas), Helicopter Eela (Overseas), trilingual “Haathi mere Saathi.” Eros looks forward to releasing Hindi, Bengali, Marathi, Tamil, Punjabi, and Malayalam films during the year.
• Eros’ first Indo-China film is starting production next year. The Company is currently in pre-production, completing the writing and casting developments.

Eros Now

Partnerships & Developments:

• Eros Now, in association with Dab Gaming Ltd, launched Eros Now Betz, a unique app created for millions of football lovers globally. The app allows users to be a part of the on-going matches and experience victory as their teams also win along. This association also offered Eros Now Betz’s users the accessibility to Eros Now’s unparalleled movie library of 11,000 plus films, free for a period of one month.
• Eros Now announced a strategic partnership with Xiaomi Mi TV, enhancing Eros Now’s distribution to the larger screen in India and then across Asia. Eros Now is now available within Patchwall on all Mi TVs sold in India, giving all users access to its compelling bouquet of Bollywood and regional language films, entertainment shows, music videos and originals.
• Eros Now partnered with Sri Lanka’s premier connectivity provider, Dialog Axiata, for best in regional content allowing users to seamlessly browse through over 20,000 hours of original Indian content in over 10 languages. Available via the Dialog ViU app, Eros Now gives subscribers access to a high-quality content library which comprises of over 11,000 plus movies with multi language subtitles, originals, music and entertainment shows in High Definition (HD).
• With a base of over 113 million registered users, Eros’ partnership with InMobi will enable brands to advertise to their target audiences through Eros Now for the first time. Over 95% viewership on the platform belongs to the core target audience (M/F 18-30).
• Eros Now reinforced its mission of non-stop entertainment, anytime, anywhere with one-of-a-kind brand campaign ‘Bolo Kya Dekhogey.’ The campaign, which rolled out three television commercials, reiterated Eros Now’s leadership position in the movie category, offering its extensive movie library across languages.
• Eros Now is engaged with the best social media fan base in the country, with less than 1% dropout from Instagram and Facebook traffic driven to the platform.
• Eros Now announced a partnership with Gold’s Gym in India, offering Gold’s Gym members a 60% discount on Eros Now’s annual subscription. The partnership offers Gold’s Gym’s 134 fully equipped gyms across 85 cities in India.
• Eros Now successfully closed multiple marketing partnerships with Natures Basket, Voonik and Paytm (Kicking off a 70% cash back offer).

Content:

This quarter Eros Now successfully premiered 11 movies across five Indian languages: Hindi, Marathi, Tamil, Telegu and Gujarati. Eros continues to invest in a diverse range of content to fulfill penetration across 100 cities in India.

Eros Now Q1 FY19 Premieres
Film Title			Language
Zindagi Virat			Marathi
Meri Nimmo			Hindi
Mukkabaaz			Hindi
Mo			Tamil
Chitthi			Marathi
Duniyadari			Gujarati
Dhol Taashe			Marathi
Aav Taru Kari Nakhu			Gujarati
Madura Veeran			Tamil
Gavthi			Marathi
Oru Kidayin Karunai Manu			Tamil

Eros successfully premiered India’s first straight-to-digital film, Anand L Rai’s first Eros Now original Meri Nimmo, on the platform and is excited for its slate of originals that are being produced internally in partnership with the best talent. Global concepts that will entertain audiences are being produced internally. A selection of upcoming titles includes:

• Side Hero with Rohan Sippy: Featuring Kunaal Roy Kapur as a fictionalised version of himself – the less successful younger brother of a hotshot Bollywood producer and star – this comedy-drama follows Kunaal trying to land a leading role in a bid to prove that his profession of acting is not just a ‘hobby.’ (Target release September 2018)
• Smoke: An unflinching look at the politics within the drug mafia that resides in the intoxicant riddled underbelly of its tropical paradise, Goa. Smoke is led by an all-star cast including Jim Sarbh, Gulshan Devaiah, Kalki Koechlin, Mandira Bedi, Tom Alter amongst others. (Target release October 2018)
• Dashavatarwith Anirudh Pathak:When mankind became corrupt and greedy, Vishnu, the protector of the realms, incarnated to vanquish evil and save the world. Dashavatar tells this fascinating story of Vishnu’s reincarnations. (Target release December 2018/January 2019)
• Ponnyin Selvin with Krish Jagarlamudi: A multi-seasonal, multi-lingual show based on the famous Tamil novels. Written in five volumes, Ponniyin Selvan narrates the story of Arulmozhivarman – later crowned as Rajaraja Chola I - one of the kings of the Chola Dynasty, during the 10th and 11th centuries. (Target release March 2019)
• Flesh with Siddharth Anand: An eight-year-old girl goes missing and her NRI parents are forced to seek the help of a suspended female cop in their search for her. An ex-human trafficker is blackmailed to join the search or else risk his sinful past catching with him. (Target release March 2019)
• Mrityulok with Zeishan Qadri: A story that shows a mirror to the ruthless, selfish face of the society and how we all are culprits in a system that offers no incentive to “be good”. (Target release March 2019)
• Bhumi with Pavan Kripilani: A survival thriller set in a dystopian version of Delhi which begs the question, how far is our reality from this supposedly fictional dystopia? (Target Release April 2019)
• Crisiswith Nikhil Advani and Gaurav Chawla: On the day of his 50^th birthday, Dr Gopichand Wadhwani – one of India’s top cardiologists – decides to follow his childhood dream and become a rapper. Crisis is a story of two generations coming together to help each other get from life what they want. (Target Release May 2019)
• Sanyasi Raja with Prakash Jha: A fictional depiction of the infamous Bhawal case of West Bengal, in which a possible imposter claimed to be the prince of Bhawal, who was at that point presumed dead for over a decade. (Target release June 2019)
• Kurukshetra: The tribals thought they were Gods. The army thought they were militants. What they turn out to be, are five children with ‘superpowers’ emerging from a genetic mutation. And with destinies that, almost uncannily, resemble the trajectory of the Mahabharata. (Target release TBD)
• Blue Oak Academy: A teen-drama thriller that follows one young boy’s quest to exact revenge with the most prestigious academic institution of the nation. (Target release June 2019)

Apart from this, Eros also has a selection of upcoming short form content and short film anthologies to accompany this slate.

Theatrical Release Slate

Eros has a solid stable of upcoming theatrical releases covering many genres and regional languages. Selected key titles include:

Tentative

Film Name

Star Cast/(Director/Producer)

Language

Release

Happy Phir Bhaag Jayegi

Sonakshi Sinha, Abhay Deol, Jimmy Shergill (Mudassar Aziz / Colour Yellow Productions)

Hindi

Q2 FY2019

Manmarziyaan

Abhishek Bachchan, Vicky Kaushal, Tapsee Pannu (Anurag Kashyap / Colour Yellow Productions)

Hindi

Q2 FY2019

Helicopter Eela (Overseas)

Kajol, Riddhi Sen, Tota Roy Chowdhury (Pradeep Sarkar)

Hindi

Q2 FY2019

Tumbbad

Sohum Shah, Harish Khanna (Colour Yellow Productions/ A Little Town Productions)

Hindi

Q3 FY2019

Namaste England (Overseas)

Arjun Kapoor, Parineeti Chopra (Vipul Amrutlal Shah)

Hindi

Q3 FY2019

Boyz II

(Everest Entertainment)

Marathi

FY2019

Haathi Mere Saathi

Rana Dugabatti (Prabhu Soloman)

Hindi / Tamil / Telugu

FY2019

Ticket to Bollywood

Amyra Dastoor, Diganth Manchale / (Eros)

Hindi

FY2019

Kaptan

Saif Ali Khan, Zoya and others (Navdeep Singh / ColourYellow Productions)

Hindi

FY2019

Mumbai Pune Mumbai 3

Swapnil Joshi, Mukta Barve

Marathi

FY2019

Nervazhi

Nayanthara (Bharath Krishna)

Tamil

FY2019

Guru Tegh Bahadur

(Harry Baweja)

Punjabi

FY2019

Kaamiyab

Drishyam Films

Hindi

FY2019

Cobra

Gautam Ghulati, Tarun Khanna, Nyra Banerjee, Ruhi Singh, Director - Munesh Rawal

Hindi

FY2019

Untitled

Ravi Vasudevan

Malayalam

FY2019

Annum Pennum

Rajish Parameshwaran

Malayalam

FY2019

Untitled

Vijith Nambiar

Malayalam

FY2019

Untitled

(Homi Adajania / Maddock Films)

Hindi

FY2019

Jaita

Harman Baweja (Harry Baweja)

Hindi

FY2019

Ankhen 2

Amitabh Bachchan & Others

Hindi

FY2020

Shubh Mangal Savdhan - 2

(Colour Yellow Productions)

Hindi

FY2020

Panda (Indo-China)

(Kabir Khan)

Hindi

FY2020

Tannu Weds Manu 3

Anand L Rai

Hindi

FY2020

Roam Rom Mein

Nawazuddin Siddiqui & others (Tanishtha Chatterjee / Rising Star Entertainment)

Hindi

FY2020

Chandamama Door Ke

Sushant Singh Rajput, Nawazuddin Siddiqui (Sanjay Puran Singh)

Hindi

FY2020

Pitch White

(Vipul Shah)

Hindi

FY2020

Untitled

(Rahul Dholakia / Next Gen Films)

Hindi

FY2020

Heer

(Colour Yellow Productions)

Hindi

FY2020

Fake

(Raj & DK)

Hindi

FY2020

Re-Union

(Sujoy Ghosh)

Hindi

FY2020

Hera Pheri -3

Suniel Shetty and others

Hindi

FY2020

Phobia 2

(Next Gen Films - Pawan Kriplani)

Hindi

FY2020

2 Guns

(Krishna Jagarlamudi)

Hindi

FY2020

R. Rajkumar 2

(PrabhuDeva / Next Gen Films)

Hindi

FY2020

Khalifey

Sanjay Dutt, SaifAli Khan, Arshad Warsi (Prakash Jha)

Hindi

FY2020

Make in India

(Next Gen Films)

Hindi

FY2020

Jugaadu

Harman Baweja

Hindi

FY2020

1234 (Part 2)

SunielShetty, Paresh Rawal (Ashwni Dhir)

Hindi

FY2020

Eros International Plc Financial Highlights:

		Three Months Ended
		June 30
(dollars in millions)		2018			2017			% change
Revenue			60.2		$	60.8		(1.0)
Gross profit		23.6			25.9			(8.9)
Operating profit		10.4			11.7			(11.1)
Adjusted EBITDA(1)		19.2			15.8			21.5
Adjusted Gross EBITDA(1)		47.7			47.8			(0.2)

(1) A reconciliation of the non-GAAP financial measures discussed within this release to our GAAP operating results are included at the end of this release. See also “Non-GAAP Financial Measures.”

Financial Results for the Three Months Ended June 30, 2018

Revenue

In the three months ended June 30, 2018, the Eros’ film slate was comprised of 14 films of which one was medium budget film and 13 were low budget films as compared to five films in the three months ended June 30, 2017, of which one was high budget, one was medium budget and three were low budget films.

In the three months ended June 30, 2018, the Company’s slate of 14 films comprised of three Hindi films, two Tamil films and nine regional language films as compared to the same period last year where its slate of five films comprised one Hindi film, one Tamil film and three regional films.

Three months ended				High				Medium				Low				Total
June 30, 2018								1				13				14
June 30, 2017				1				1				3				5

The gross revenue for June 30, 2018 is $64.3 million compared to $60.8 million for the three months ended June 30, 2017. But due to credit impairment loss adjustment amounting to $4.1 million on adoption of IFRS 9, the reported net revenue is $60.2 million for the three months ended June 30, 2018.

For the three months ended June 30, 2018, aggregate theatrical revenues decreased by 36.9% to $14.9 million from $23.6 million for the three months ended June 30, 2017, primarily due to the mix of films.

For the three months ended June 30, 2018, aggregate revenues from television syndication increased by 7.5% to $18.7 million from $17.4 million for the three months ended June 30, 2017, mainly due to increased catalogue revenues.

For the three months ended June 30, 2018, the aggregate revenues from digital and ancillary increased by 34.3 % to $26.6 million from $19.8 million for the three months ended June 30, 2017 primarily on account of contribution from catalogue revenues and revenues from digital business .

Revenue from India decreased by 13.4% to $22.0 million in the three months ended June 30, 2018, compared to $25.4 million in the three months ended June 30, 2017 primarily due to the mix of films .

Revenue from Europe increased by 59.4% to $15.3 million in the three months ended June 30, 2018, compared to $9.6 million in the three months ended June 30, 2017. This was due to higher contribution from the monetization of catalogue films.

Revenue from North America increased by 50% to $0.3 million in the three months ended June 30, 2018, compared to $0.2 million in the three months ended June 30, 2017.

Revenue from the rest of the world decreased by 12.1% to $22.6 million in the three months ended June 30, 2018, compared to $25.7 million in the three months ended June 30, 2017. This was on account of relatively lower theatrical revenue from the film slate.

Cost of sales

For the three months ended June 30, 2018, cost of sales increased by 4.6% to $36.6 million compared to $35.0 million in the three months ended June 30, 2017. The increase was mainly due to higher marketing and advertising costs, partially offset on account of lower amortization cost of film intangibles and content rights.

Gross profit

For the three months ended June 30, 2018, gross profit decreased by 8.9% to $23.6 million, compared to $25.9 million in the three months ended June 30, 2017. As a percentage of revenues, the Company’s gross profit margin was 39.2% in the three months ended June 30, 2018, compared to 42.6% in the three months ended June 30, 2017. The decrease was mainly due to higher marketing costs and credit impairment loss adjustment amounting to $4.1 million on adoption of IFRS 9, partially offset on account of lower amortization cost of film intangibles and content rights.

Administrative costs

For the three months ended June 30, 2018, administrative costs decreased by 7.0 % to $ 13.2 million compared to $14.2 million for the three months ended June 30, 2017. The administrative costs for the three months ended June 30, 2018 is after considering charge of credit impairment amounting to $1.6 million on adoption of IFRS 9. Thus, gross administrative costs has been decreased by $2.6 million mainly on account of reduction in other administrative costs and decrease in share based compensation costs.

EBIT (Non- GAAP)

For the three months ended June 30, 2018, gross EBIT is $16.2 million compared to $11.7 million in the three months ended June 30, 2017. But due to credit impairment charge on revenue and administrative cost amounting to $4.1 million and $1.6 million respectively on adoption of IFRS 9, the net EBIT is $10.4 million for the three months ended June 30, 2018

Adjusted EBITDA (Non- GAAP)

For the three months ended June 30, 2018, Adjusted EBITDA increased by 21.5% to $19.2 million compared to $15.8 million in the three months ended June 30, 2017 mainly due to lower amortization cost of intangible film and content rights, partially offset on account of higher marketing and advertisement cost.

Net finance costs

For the three months ended June 30, 2018, net finance costs decreased by 57.4% to $2.3 million, compared to $5.4 million in the three months ended June 30, 2017 mainly due to unwinding of credit impairment loss by $2.1 million and reduction in borrowing costs.

Income tax expense

For the three months ended June 30, 2018, income tax expenses decreased by 3.3% to $2.9 million, compared to $ 3 million in the three months ended June 30, 2017. Effective income tax rates were 15.0% and 30.5% for June 30, 2018 and June 30, 2017, respectively excluding non-deductible share-based payment charges and gain/loss on fair valuation of financial instrument including derivatives. The change in effective rate principally reflects a change in the mix of the profits earned from taxable and non- taxable jurisdictions.

Trade Receivables

As of June 30, 2018, trade receivables decreased to $208.5 million from $225.0 million as of March 31, 2018.

Net Debt

As of June 30, 2018, net debt decreased by 1.3% to $186.8 million from $189.2 million as of March 31, 2018.

Conference Call:

The Company will host a conference call on Thursday, August 23, 2018, at 8:30 AM Eastern Standard Time.

To access the call please dial 929-477-0448 or 888-254-3590 from the United States, or 44 (0) 330 336 9411 or 44 (0) 800 279 7204 from outside the U.S. The conference call I.D. number is 5688153. Participants should dial in 5 to 10 minutes before the scheduled time.

A replay of the call can be accessed through August 30, 2018 by dialing 719-457-0820 or 888-203-1112 from the U.S., or 44 (0) 207 660 0134 or 44 (0) 808 101 1153 from outside the U.S. The conference call I.D. number is 5688153. The call will be available as a live webcast, which can be accessed at Eros’ Investor Relations website.

About Eros International Plc

Eros International Plc (NYSE: EROS) is a leading global company in the Indian film entertainment industry that acquires, co-produces and distributes Indian films across all available formats such as cinema, television and digital new media. Eros International Plc became the first Indian media company to list on the New York Stock Exchange. Eros International has experience of over three decades in establishing a global platform for Indian cinema. The Company has an extensive and growing movie library comprising of over 3,000 films, which include Hindi, Tamil, and other regional language films. The Company also owns the rapidly growing OTT platform Eros Now which has rights to over 11,000 films across Hindi and regional languages. For further information, please visit: www.erosplc.com.

EROS INTERNATIONAL PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Amounts in thousands, except share and per share data)
				June 30,				March 31,
		Note		2018				2018
ASSETS
Non-current assets
Property and equipment				$	9,760			$	10,013
Goodwill					3,800				3,800
Intangible assets - trade name					14,000				14,000
Intangible assets - content		5			1,004,763				998,543
Intangible assets - others					4,795				5,280
Available-for-sale financial assets					27,337				27,257
Trade and other receivables		1			8,401				9,144
Income tax receivable					1,252				1,269
Restricted deposits					1,505				1,100
Deferred income tax assets					74				351
Total non-current assets				$	1,075,687			$	1,070,757
Current assets
Inventories				$	80			$	353
Trade and other receivables		1			224,518				245,079
Cash and cash equivalents					86,054				87,762
Restricted deposits					6,695				6,368
Total current assets					317,347				339,562
Total assets				$	1,393,034			$	1,410,319
LIABILITIES
Current liabilities
Trade and other payables				$	75,560			$	72,142
Acceptances		3			8,464				8,898
Short-term borrowings		2			160,229				151,963
Current income tax payable					8,879				6,324
Total current liabilities				$	253,132			$	239,327
Non-current liabilities
Long-term borrowings		2		$	112,628			$	124,983
Other long-term liabilities					2,884				3,073
Deferred income tax liabilities					35,560				39,519
Total non-current liabilities				$	151,072			$	167,575
Total liabilities				$	404,204			$	406,902
EQUITY
Share capital		4		$	36,472			$	35,334
Share premium					491,357				453,997
Reserves					398,044				422,992
Other components of equity					(55,333	)			(48,649	)
JSOP reserve					(15,985	)			(15,985	)
Share application money pending allotment					-				18,000
Equity attributable to equity holders of Eros International Plc				$	854,555			$	865,689
Non-controlling interest					134,275				137,728
Total equity				$	988,830			$	1,003,417
Total liabilities and shareholder’s equity				$	1,393,034			$	1,410,319

EROS INTERNATIONAL PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except share and per share data)
				Three Months Ended
				June 30,
		Note		2018				2017
Revenue		8		$	60,212			$	60,832
Cost of sales					(36,571	)			(34,955	)
Gross profit					23,641				25,877
Administrative cost					(13,219	)			(14,186	)
Operating profit					10,422				11,691
Financing costs					(4,927	)			(5,818	)
Finance income					2,579				434
Net finance costs					(2,348	)			(5,384	)
Other gains/(losses)		9			(14,685	)			(1,523	)
(Loss)/Profit before tax					(6,611	)			4,784
Income tax					(2,879	)			(2,986	)
(Loss)/Profit for the period				$	(9,490	)		$	1,798
Attributable to:
Equity holders of Eros International Plc				$	(13,591	)		$	(1,327	)
Non-controlling interest					4,101				3,125
(loss) per share(cents)
Basic (loss) per share		7			(20.2	)			(2.2	)
Diluted (loss) per share		7			(20.3	)			(2.3	)

EROS INTERNATIONAL PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands, except share and per share data)
		Three Months Ended
		June 30,
		2018				2017
(Loss)/Profit for the period		$	(9,490	)		$	1,798
Other comprehensive Income:
Items that will be subsequently reclassified to profit or loss
Exchange differences on translating foreign operations			(11,147	)			(398	)
Reclassification of the cash flow hedge to the statement operations, net of tax			-				187
Total other comprehensive income/(loss) for the period		$	(11,147	)		$	(211	)
Total comprehensive income for the period, net of tax		$	(20,637	)		$	1,587
Attributable to:
Equity holders of Eros International Plc		$	(20,241	)		$	(1,289	)
Non-controlling interest			(396	)			2,876

EROS INTERNATIONAL PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands, except share and per share data)
				Three Months Ended
				June 30,
		Note		2018				2017
Cash flows from operating activities:
(Loss)/Profit before tax				$	(6,611	)		$	4,784
Adjustments for:
Depreciation					248				263
Share based payment		6			4,430				5,189
Amortization of intangible film and content rights					28,495				32,012
Amortization of other intangibles assets					471				369
Other non-cash items		10			20,678				1,482
Net finance costs					4,444				5,384
Loss on sale of property and equipment					-				4
Movement in trade and other receivables					(37,921	)			(21,810	)
Movement in inventories					264				5
Movement in trade and other payables					5,299				6,318
Cash generated from operations					19,797				34,000
Interest paid(*)					(3,094	)			(5,948	)
Income taxes paid					(1,580	)			98
Net cash generated from operating activities				$	15,123			$	28,150
Cash flows from investing activities:
Purchases of property and equipment					(200	)			(107	)
Investment in restricted deposits held with banks					(1,102	)			(31	)
Purchase of intangible film and content rights (*)					(15,429	)			(35,037	)
Purchase of other intangible assets					(108	)			-
Interest received					461				890
Net cash (used in) investing activities				$	(16,378	)		$	(34,285	)
Cash flows from financing activities:
Proceeds from issue of share capital					33				448
Proceeds from issue of shares by subsidiary					20				-
Proceeds from short-term debt					20,786				20,327
Repayment of short-term debt					(18,300	)			(9,936	)
Proceeds from long-term debt					76				-
Repayment of long-term debt					(2,556	)			(3,067	)
Net cash generated from financing activities				$	59			$	7,772
Net increase/(decrease) in cash and cash equivalents					(1,196	)			1,637
Effect of exchange rate changes on cash and cash equivalents					(512	)			813
Cash and cash equivalents, beginning of period					87,762				112,267
Cash and cash equivalents at the end of period				$	86,054			$	114,717

^(*)The cash outflow towards intangible film and content right includes, interest paid and capitalized during the period ended June 30, 2018 and June 30, 2017 of $3,115 and $,3,681 respectively.

EROS INTERNATIONAL PLC
(Amounts in thousands, except share and per share data)
Reconciliation of Liabilities arising from Financing activities:
		Long term				Short term
		debt(*)				debt				Total
As at March 31, 2018		$	188,909			$	87,755			$	276,664
Considered in cash flow (net)			(2,480	)			2,486				6
Net finance cost			3,000				-				3,000
Movement in derivative financial instruments			282				-				282
Borrowing for purchase of property and equipment			99				-				99
Shares issued in lieu of convertible note			(19,391	)			-				(19,391	)
Convertible notes measured at fair value through profit and loss			21,323				-				21,323
Amortization of debt issuance cost			(153	)			-				(153	)
Exchange adjustment			(5,603	)			(3,370	)			(8,973	)
As at June 30, 2018		$	185,986			$	86,871			$	272,857

^(*) including current portion and derivative financial instruments

EROS INTERNATIONAL PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts in thousands, except share and per share data)
							Other components of equity												Reserves
																																		Equity
										Available																								Attributable to
										for sale																								Shareholders
				Share			Currency			fair									Reverse												Share			of EROS			Non-
	Share			premium			translation			value			Revaluation			Hedging			acquisition			Merger			Retained			JSOP			Application			International			controlling			Total
	capital			account			reserve			reserves			reserve			reserve			reserve			reserve			earnings			reserve			Reserve			PLC			interest			equity
	(in thousands)
Balance as at March 31, 2018	$	35,334		$	453,997		$	(56,722	)	$	6,238		$	1,835		$	-		$	(22,752	)	$	70,484		$	375,260		$	(15,985	)	$	18,000		$	865,689		$	137,728		$	1,003,417
Adoption of IFRS 9 (Refer Note 3)		-			-			(34	)		-			-			-			-			-			(14,270	)		-			-			(14,304	)		(3,520	)		(17,824	)
Balance as at April 1, 2018	$	35,334		$	453,997		$	(56,756	)	$	6,238		$	1,835		$	-		$	(22,752	)	$	70,484		$	360,990		$	(15,985	)	$	18,000		$	851,385		$	134,208		$	985,593
(Loss)/Profit for the period		-			-			-			-			-			-			-			-			(13,591	)		-			-			(13,591	)		4,101			(9,490	)
Other comprehensive income/(loss) for the period		-			-			(6,650	)		-			-			-			-			-			-			-			-			(6,650	)		(4,497	)		(11,147	)
Total comprehensive income/(loss) for the period		-			-			(6,650	)		-			-			-			-			-			(13,591	)		-			-			(20,241	)		(396	)		(20,637	)
Shares issued on exercise of employee stock options and awards		35			1,072			-			-			-			-			-			-			(1,074	)		-			-			33			-			33
Share based Compensation		-			-			-			-			-			-			-			-			4,264			-			-			4,264			166			4,430
Changes in ownership interests in subsidiaries that do not result in a loss of control		-			-			-			-			-			-			-			(277	)		-			-			-			(277	)		297			20
Shares pending for allotment		524			17,476			-			-			-			-			-			-			-			-			(18,000	)		-			-			-
Shares issued in lieu of convertible notes		579			18,812			-			-			-			-			-			-			-			-			-			19,391			-			19,391
Balance as at June 30, 2018	$	36,472			491,357			(63,406	)		6,238			1,835			-			(22,752	)		70,207			350,589			(15,985	)		-			854,555			134,275			988,830

EROS INTERNATIONAL PLC
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts in thousands, except share and per share data)
							Other components of equity												Reserves
																															Equity
										Available																					Attributable to
										for sale																					Shareholders
				Share			Currency			fair									Reverse												of EROS			Non-
	Share			premium			translation			value			Revaluation			Hedging			acquisition			Merger			Retained			JSOP			International			controlling			Total
	capital			account			reserve			reserves			reserve			reserve			reserve			reserve			earnings			reserve			PLC			interest			equity
	(in thousands)
Balance as at April 1, 2017	$	31,877		$	399,686		$	(55,810	)	$	6,238		$	1,829		$	(375	)	$	(22,752	)	$	70,275		$	389,474		$	(15,985	)	$	804,457		$	79,091		$	883,548
Profit for the period		-			-			-			-			-			-			-			-			(1,327	)		-			(1,327	)		3,125			1,798
Other comprehensive income/(loss) for the period		-			-			(144	)		-			(5	)		187			-			-			-			-			38			(249	)		(211	)
Total comprehensive income/(loss) for the period		-			-			(144	)		-			(5	)		187			-			-			(1,327	)		-			(1,289	)		2,876			1,587
Share based compensation		-			-			-			-			-			-			-			-			5,064			-			5,064			125			5,189
Shares issued on exercise of employee stock options and awards		5			469			-			-			-			-			-			-			(474	)		-			-			-			-
Changes in ownership interests in subsidiaries that do not result in a loss of control		-			-			-			-			-			-			-			6,512			-			-			6,512			16,955			23,467
Balance as at June 30, 2017	$	31,882			400,155			(55,954	)		6,238			1,824			(188	)		(22,752	)		76,787			392,737			(15,985	)		814,744			99,047			913,791

EROS INTERNATIONAL PLC
NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
1. TRADE AND OTHER RECEIVABLES
		As at
		June 30,				March 31,
		2018				2018
Trade accounts receivables		$	238,137			$	235,191
Credit impairment (loss)			(29,615	)			(10,193	)
Trade accounts receivables net			208,522				224,998
Other receivables*			19,909				20,933
Share option receivables			43				—
Prepaid charges			389				2,700
Accrued revenues			4,056				5,592
Trade and other receivables		$	232,919			$	254,223
Current			224,518				245,079
Non-current			8,401				9,144
		$	232,919			$	254,223

2. BORROWINGS
An analysis of long-term borrowings is shown in the table below.
						As at
		Nominal				June 30,				March 31,
		Interest Rate		Maturity		2018				2018
Asset backed borrowings
Vehicle loan		7.5% - 10.25%		2017-21		$	572			$	560
Term loan		9.12% - 11.66%		2018-22			101				—
Term loan		BPLR+2.85%		2019-20			2,737				3,453
Term loan		BPLR+2.55% - 3.4%		2020-21			7,549				8,767
Term loan		13.75%		2022-23			8,416				9,580
Term loan		MCLR+3.45%		2021-22			10,693				11,976
						$	30,068			$	34,336
Unsecured borrowings
Retail bond		6.5%		2021-22		$	66,033				70,055
Convertible notes		14.2%		2020-21			90,942				86,010
						$	156,975			$	156,065
Nominal value of borrowings						$	187,043			$	190,401
Cumulative effect of unamortized costs							(1,057)				(1,210)
Installments due within one year							(73,358)				(64,208)
Long-term borrowings						$	112,628			$	124,983

Bank prime lending rate (“BPLR”) and Marginal Cost based lending rate (“MCLR”) is the Indian equivalent to LIBOR. Asset backed borrowings are secured by fixed and floating charges over certain Group assets.

EROS INTERNATIONAL PLC
NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
Analysis of short-term borrowings
				As at
		Nominal		June 30,				March 31,
		interest rate (%)		2018				2018
Asset backed borrowings
Export credit bill discounting and overdraft		BPLR+1-3.5%		$	52,864			$	43,518
Export credit and overdraft		LIBOR+4.5%			20,958				21,226
Short term loan		13-14.25%			13,049				11,537
Other short-term loan		10.20%			-				11,474
				$	86,871			$	87,755
Unsecured borrowings
Installments due within one year on long-term borrowings					73,358				64,208
Short-term borrowings				$	160,229			$	151,963

Fair value of the long-term borrowings as at June 30, 2018 is $175,938 (March 31, 2018: $172,788). Fair values of long-term financial liabilities except retail bonds and convertible notes have been determined by calculating their present values at the reporting date, using fixed effective market interest rates available to the respective entities within the Group. As at June 30, 2018, the fair value of retail bond amounting to $59,694 (March 31, 2018: $58,218) has been determined using quoted prices from the London Stock Exchange (LSE). As at June 30, 2018, the fair value of convertible notes amounting to $90,942 has been determined using implied cost of debt as on the issue date. Carrying amount of short-term borrowings approximates fair value.

3. ACCEPTANCES
		June 30,				March 31,
		2018				2018
Payable under the film financing arrangements		$	8,464			$	8,898
		$	8,464			$	8,898

Acceptances comprise of short – term credit availed from financial institutions for payment to film producers for film co-production arrangement entered by the group. The carrying value of acceptances are considered a reasonable approximation of fair value.

4. ISSUED SHARE CAPITAL
		Number of Shares				GBP
Authorized
Ordinary shares of 30p each at March 31, 2018			100,000,000				30,000
Ordinary shares of 30p each at June 30, 2018			100,000,000				30,000

EROS INTERNATIONAL PLC
NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
		Number of Shares								USD
		A Ordinary				B Ordinary
Allotted, called up and fully paid		30p Shares(*)				30p Shares(*)				(in thousands)
As at March 31, 2017			41,312,202				19,379,382			$	31,877
Issue of shares in the quarter ended June 30, 2017			12,000				-				5
Issue of shares in the quarter ended September 30, 2017			288,291				-				114
Issue of shares in the quarter ended December 31, 2017			1,681,520				-				657
Transfer of B Ordinary to A Ordinary share			9,666,667				(9,666,667	)			-
Issue of shares in the quarter ended Mar 31, 2018			2,757,743								2,681
As at March 31, 2018			55,718,423				9,712,715			$	35,334
Issue of shares in the quarter ended June 30, 2018			2,747,645				-				1,138
As at June 30, 2018			58,466,068				9,712,715				36,472

The Company issued A Ordinary shares as follows:

		No. of shares
		June 30,								March 31,
		2018				2017				2018
Issuance to Founders Group (**)			1,225,323				-				1,421,520
Issuance towards settlement of Convertible notes			1,436,369				-				2,624,668
Exercise against Restricted Stock Unit/ Management scheme			76,370				12,000				683,158
2015 Share Plan (***)			9,583				-				10,208
Total			2,747,645				12,000				4,739,554

(**) Average exercise price of $14.69 (June 2017 Nil and March 2018$11.6)

(***)Average exercise price of $7.93 (June 2017 Nil and March 2018$8.71)

^(*) Each A ordinary shares is entitled to one vote on all matters and each B shares is entitled to ten votes.

Subsequent to the balance sheet date, the Company issued 3,111,088 A ordinary shares (to Reliance Industries Limited) for a total consideration of $46,666.

5. INTANGIBLE CONTENT ASSETS
		Gross
		Content				Accumulated				Net Content
		Assets				Amortization				Assets
As at June 30, 2018
Film and content rights		$	1,504,465			$	(858,247	)		$	646,218
Content advances			342,550				-				342,550
Film productions			15,995				-				15,995
Non-current content assets		$	1,863,010			$	(858,247	)		$	1,004,763
As at March 31, 2018
Film and content rights		$	1,493,099			$	(854,991	)		$	638,108
Content advances			349,568				-				349,568
Film productions			10,867				-				10,867
Non-current content assets		$	1,853,534			$	(854,991	)		$	998,543

EROS INTERNATIONAL PLC
NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
6. SHARE BASED COMPENSATION PLANS
The compensation cost recognized with respect to all outstanding plans and by grant of shares, which are all equity settled instruments, is as follows:
		Three months ending
		June 30,
		2018				2017
IPO India Plan		$	428			$	370
JSOP Plan			-				615
Option award scheme 2012			-				101
2014 Share Plan			47				259
2015 Share Plan			7				36
Other share option awards*			1,461				1,568
Management scheme (staff share grant)			2,487				2,240
		$	4,430			$	5,189

^(*) includes Restricted Share Unit (RSU) and Other share option plans.

In respect of 2,370 units/options granted towards RSU during the period ended June 30, 2018, grant date fair value approximates intrinsic value.

EROS INTERNATIONAL PLC
NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
7. EARNINGS PER SHARE
		Three months ended June 30,
		2018								2017
		Basic				Diluted				Basic				Diluted
(Loss) attributable to the equity holders of the parent		$	(13,591	)			(13,591	)		$	(1,327	)			(1,327	)
Potential dilutive effect related to share based compensation scheme in subsidiary undertaking							(115	)			-				(123	)
Adjusted (loss) attributable to equity holders of the parent		$	(13,591	)			(13,706	)		$	(1,327	)			(1,450	)
Number of shares
Weighted average number of shares			67,362,810				67,362,810				60,628,345				60,628,345
Potential dilutive effect of Senior Convertible Bonds and share based compensation scheme in subsidiary undertaking			-				75,383				-				1,221,584
Adjusted earnings/(loss) attributable to equity holders of the parent			67,362,810				67,438,193				60,628,345				61,849,929
Earnings per share
Earning attributable to the equity holders of the parent per share (cents)			(20.2	)			(20.3	)			(2.2	)			(2.3	)

The above table does not split the earnings per share separately for the ‘A’ ordinary 30p shares and the ‘B’ ordinary 30p shares as there is no variation in their entitlement to participate in undistributed earnings.

8. BUSINESS SEGMENTAL DATA
		Three months ended
		June 30,
		2018				2017
Revenue by customer's location
India		$	25,831			$	26,999
Europe			312				1,226
North America			1,349				1,169
Rest of the world			32,720				31,438
Total Revenue		$	60,212			$	60,832

		Three months ended
		June 30,
		2018				2017
Revenue by group's operation
India		$	21,954			$	25,368
Europe			15,296				9,566
North America			297				180
Rest of the world			22,665				25,718
Total Revenue		$	60,212			$	60,832

EROS INTERNATIONAL PLC
NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
9. OTHER GAINS/(LOSSES)
		Three months ended
		June 30,
		2018				2017
Foreign exchange (loss)/gain, net		$	3,361			$	(1,702	)
(Loss) on sale of property and equipment			-				(4	)
Reversal of expected credit loss			4,581				-
Net losses on de-recognition of financial assets measured at amortized cost, net*			(1,304	)			-
Gain /(Loss) on financial liability (convertible notes) measured at fair value through profit and loss			(21,323	)			-
Others			-				183
		$	(14,685	)		$	(1,523	)

^(*) arising on assignment and novation of trade receivables and trade payables with no-recourse. Derecognition of aforesaid financial assets/liabilities measured at amortized cost is to mitigate both credit risk and liquidity risk

10. NON-CASH EXPENSE/(INCOME)
Significant non-cash expenses/(income) except loss on sale of assets, share based compensation, depreciation, derivative interest and amortization were as follows:
		Three months ended
		June 30,
		2018				2017
Net losses on de-recognition of financial assets measured at amortized cost, net		$	1,304			$	-
Expected credit loss, net			1,412				-
Unrealized foreign exchange loss/(gain)			(3,361	)			1,665
Loss on financial liability (convertible notes) measured at fair value through profit and loss			21,323				-
Other			-				(183	)
		$	20,678			$	1,482

EROS INTERNATIONAL PLC
NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share data)
11. NON GAAP-FINANCIAL MEASURES
Adjusted EBITDA (Non-GAAP)
		Three months ended June 30,
		2018				2017
		(in thousand)
Net income (GAAP)		$	(9,490	)		$	1,798
Income tax expense			2,879				2,986
Net finance costs			2,348				5,384
Depreciation			248				263
Amortization(1)			471				369
EBITDA			(3,544	)			10,800
Share based payment(2)			4,430				5,189
Loss on sale of property and equipment							4
Reversal of expected credit loss			(4,581	)
Loss on de-recognition of financial assets measured at amortized cost, net			1,304
Closure of derivative asset			249
Loss / (Gain) on financial liability (convertible notes) measured at fair value through profit and loss			21,323
Others							(183	)
Adjusted EBITDA (Non-GAAP)		$	19,181			$	15,810
Amortization of intangible film and content rights			28,495				32,012
Gross Adjusted EBITDA (Non-GAAP)			47,676				47,822

(1) Includes only amortization of intangible assets other than intangible content assets.

(2) Consists of compensation costs recognized with respect to all outstanding plans and all other equity settled instruments.

EROS INTERNATIONAL PLC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

12.NEW STANDARDS ADOPTED AS AT APRIL 1, 2018

Adoption of IFRS 15, "Revenue from Contracts with Customers"

On April 1, 2018, the Company adopted IFRS 15, “Revenue from Contracts with Customers” (‘IFRS 15’), using the modified retrospective method applied to all contracts as of April 1, 2018. Results for reporting periods beginning after April 1, 2018 are presented under IFRS 15, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under IAS 18, Revenues (‘IAS 18’).

As a result of adopting IFRS 15, amounts reported under IFRS 15 were not materially different from amounts that would have been reported under the previous revenue guidance of IAS 18, as such, cumulative adjustment to retained earnings is not material.

The Company generates all of its revenue from contracts with customers. The Company recognizes revenue when it satisfies a performance obligation by transferring control of the promised services to a customer in an amount that reflects the consideration that we expect to receive in exchange for those services. The Company determines revenue recognition through the following steps:

	1.	Identification of the contract, or contracts, with a customer.
	2.	Identification of the performance obligations in the contract.
	3.	Determination of the transaction price.
	4.	Allocation of the transaction price to the performance obligations in the contract
	5.	Recognition of revenue when, or as, we satisfy a performance obligation.

At contract inception, the Company assesses the services promised in our contracts with customers and identify a performance obligation for each promise to transfer to the customer a service (or bundle of services) that is distinct. To identify the performance obligations, the Company considers all of the services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. The Company allocates the entire transaction price to a single performance obligation.

Five conditions must be met before revenue can be recognized: (i) there is persuasive evidence that an arrangement exists, (ii) the film is complete and has been delivered, (iii) the license period has begun, (vi) the price is fixed or determinable, and (v) collection is reasonably assured.

Adoption of IFRS 9, "Financial Instruments"

On April 1, 2018, the Company adopted IFRS 9, “Financial Instruments” (‘IFRS 9’), using the modified retrospective method applied as of April 1, 2018. IFRS 9 Financial Instruments replaces IAS 39 ‘Financial Instruments: Recognition and Measurement’ requirements with effect from April 1, 2018. When adopting IFRS 9, the Group elected not to restate prior periods. Rather, differences arising from the adoption of IFRS 9 in relation to classification, measurement, and impairment are recognised in opening retained earnings as at 1 April 2018.

Major changes in IFRS 9 as compared to IAS 39 is on account of introduction of the expected credit loss model and the changes in categories of financial assets and financial liabilities.

The adoption of IFRS 9 has mostly impacted the following areas:

• The classification and measurement of the Group’s financial assets. Management holds most financial assets to hold and collect the associated cash flows.
• The impairment of financial assets applying the expected credit loss model. This applies now to the Group’s trade receivables and other receivables. For contract assets arising from IFRS 15 and trade receivables, the Group applies a simplified model of recognising lifetime expected credit losses as these items do not have a significant financing component. For all other financial assets, expected credit losses are measured at an amount equal to the twenty-four month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL.
• the measurement of available for sale equity investments at cost less impairment. This investment is now measured at fair value with changes in fair value presented in other comprehensive income.
• the recognition of gains and losses arising from the Group’s from own credit risk. The Group continues to elect the fair value option for certain financial liabilities which means that fair value movements from changes in the Group’s own credit risk are now presented in other comprehensive income rather than profit or loss.

EROS INTERNATIONAL PLC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

Details showing the Classification and measurement of the Company’s financial instruments on adoption of IFRS 9 as of April 1, 2018.

						Total				Total
		IAS 39 Category		IFRS 9 Category		carrying value				fair value
Financial Assets
Cash and cash equivalents		Loans and Receivables		At amortized cost			87,762				87,762
Restricted deposits		Loans and Receivables		At amortized cost			7,468				7,468
Available for sale financial assets		At cost less impairment		Financial assets at FVTOCI*			27,257				27,257
Trade and other receivables		Loans and Receivables		At amortized cost			235,726				235,726
Total							358,213				358,213

						Total				Total
		IAS 39 Category		IFRS 9 Category		carrying value				fair value
Financial Liabilities
Total borrowings(excluding convertible notes)		At amortized cost		At amortized cost			190,936				174,533
Convertible notes		Financial liabilities at FVTPL		Financial liabilities at FVTPL**			86,010				86,010
Trade and other payables		At amortized cost		At amortized cost			72,142				72,142
Acceptances		At amortized cost		At amortized cost			8,898				8,898
Total							357,986				341,583

* FVTOCI – Fair value through other comprehensive income.

** FVTPL - Fair value through profit and loss.

EROS INTERNATIONAL PLC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

The cumulative effect of the changes made to our consolidated April 1, 2018 balance sheet for the adoption of IFRS 9, Financial Instruments were as follows:

		Balance at
		March 31,								Balance at
		2018				Adjustment				April 1,
Assets		(Reported)				Due to IFRS 9				2018
Trade and other receivables		$	254,223			$	(18,497	)		$	235,726
Liabilities and Shareholders' Equity
Currency translation reserve			(56,722	)			(34	)			(56,756	)
Retained earnings			375,260				(14,270	)			360,990
Deferred income tax liabilities			39,519				(673	)			38,846
Non-controlling interests			137,728				(3,520	)			134,208

The impact of adoption of IFRS 9 on our consolidated statement of financial position as at June 30, 2018 was as follow.

		Balance at
		June 30, 2018
		(Without								Balance at
		adoption of IFRS				Adjustment				June 30, 2018
Assets		9)				Due to IFRS 9				(Reported)
Trade and other receivables		$	252,788			$	(19,969	)		$	232,919
Liabilities and Shareholders' Equity
Currency translation reserve			(63,397	)			(9	)			(63,406	)
Retained earnings			366,757				(16,168	)			350,589
Deferred income tax liabilities			36,233				(673	)			35,560
Non-controlling interests			137,294				(3,019	)			134,275

The impact of adoption of IFRS 9 on our consolidated statement of income as at June 30, 2018 was as follow.

										Three Months
										Ended
		Three Months								June 30, 2018
		Ended				Adjustments				(without
		June 30, 2018				on adoption				adoption
		(reported)				of IFRS 9				of IFRS 9)
Revenue			60,212				4,130				64,342
Cost of sales			(36,571	)			-				(36,571	)
Gross profit			23,641				4,130				27,771
Administrative cost			(13,219	)			1,680				(11,539	)
Operating profit			10,422				5,810				16,232
Financing costs			(4,927	)			-				(4,927	)
Finance income			2,579				273				2,852
Net finance costs			(2,348	)			273				(2,075	)
Other gains/ (losses)			(14,685	)			(4,581	)			(19,266	)
(Loss)/Profit before tax			(6,611	)			1,502				(5,109	)
Income tax			(2,879	)			-				(2,879	)
(Loss)/ Profit for the period			(9,490	)			1,502				(7,988	)
Attributable to:
Equity holders of Eros International Plc			(13,591	)			1,898				(11,693	)
Non-controlling interest			4,101				(396	)			3,705

 

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Source: Eros International PLC

Eros International PLC
Mark Carbeck, +44 207 258 9909
Investor Relations Manager
mark.carbeck@erosintl.com
or
Sloane & Company
Erica Bartsch, 212-446-1875
ebartsch@sloanepr.com