Press



Eros International plc provides Trading Update in advance of Interim Results

17/10/2006

Eros International Plc (“Eros”), the Bollywood integrated media and entertainment Company which was listed on London’s AIM market on 4 July 2006, provides a trading update for the six months ended 30 September 2006, prior to the announcement of its interim results scheduled for November 2006. The Company reports a positive trading outlook and is on track to achieve full year performance in line with expectations.

Since admission to AIM, Eros has remained focused on delivering its key strategic objectives of co-producing, acquiring and exploiting content, expanding its extensive global distribution network, making in-roads in new media digital opportunities and beginning to consolidate its overall market leadership position within the fragmented $4.5 billion Indian entertainment industry.

Operational Highlights

1. Co-Productions:
Eros has entered into a five-year output deal with Bombay Stock Exchange listed production house K Sera Sera, to co-produce and exclusively handle global distribution of its forthcoming films. The deal gives Eros a first option on all of K Sera Sera’s projects without having to commit upfront to financing or distributing them.

Omkara was Eros’s first co-production for the year with Big Screen Entertainment. The Company is on track to release its planned co-productions by the end of the financial year March 2007.

2. Global Distribution:
‘Omkara’ – Having traditionally focused on international markets, Eros signalled its firm intention to increasingly move into global distribution with the film Omkara, a powerful Indian adaptation of Shakespeare’s Othello. Eros launched its own music label, EROS MUSIC, and its Indian cinema distribution arm with this film. Omkara’s music featured in the Top 10 charts in India and when the film released in August, it appeared in the Box Office charts in UK and USA. Apart from being a box-office success grossing more than $6.7 million globally, the film is in the process of being screened for the Golden Globe awards.

‘Lage Raho Munna Bhai’ – This comedy sequel was successful at the box-office, grossing close to $6 million internationally, since its release in September. It also received tax-free status from the Government of India. The film has been nominated as an independent entry to the 2007 Academy Awards.

‘Provoked’ – In August 2006 Eros entered into an agreement to distribute “Provoked” in the UK, USA and India. The British produced film, in English, is directed by Jag Mundhra and casts Aishwarya Rai (Bride and Prejudice, Devdas) in the lead role with a star studded supporting cast including Miranda Richardson (The Hours, Get Carter) and Robbie Coltrane (Harry Potter, Ocean’s 12) amongst others. Eros plans a mainstream release of Provoked in February 2007.

Eros has visibility of the pipeline of releases up to the end of its financial year and beyond; this includes a big budget Bollywood musical ‘Salaam-E-Ishq’, scheduled for a global release in January 2007.

As set out at the time of the IPO, the Company has also enhanced and augmented its unique and valuable catalogue.

3. ‘New Media’ Digital Deals:
‘Comcast’ – In September 2006, Eros launched North America’s first Bollywood subscription video-on-demand service on the Comcast cable network, representing a significant milestone in its new media strategy. The service has received favourable consumer response since launch.

‘Movielink’ – In July 2006, Eros launched its branded Bollywood video-on-demand movie download service on Movielink in the U.S. Once again, Eros has signed an exclusive arrangement for Bollywood content with Movielink.

‘RTL Holland’ – In June 2006, Eros launched a digital movie download service with RTL, Europe’s largest TV, Radio and Production Company, to make Eros’ Bollywood movies available for on-demand delivery in the Netherlands through RTL’s Internet-based platform. Eros has played a pivotal role in popularizing Bollywood in crossover markets and marketing the appeal of Indian films to a wider audience.

Eros also has similar ongoing video-on-demand deals with Homechoice in the UK and Rogers Cable in Canada. Furthermore it has a deal to distribute mobile content with Vodafone, Orange and other networks in UK and Fiji.

www.bondemand.tv – Eros plans to market its unique online service B on Demand, for which it has a strategic technology and marketing alliance with Intel Corporation, in the last quarter of calendar year 2006.

Financial Overview
The pro forma aggregated results for the year ended 31 March 2006 will be published with the interim results announcement. The figures are expected to be in line with the profit estimate published at the time of the admission to AIM. At the date of admission the pro forma turnover and pro forma profit before tax and goodwill amortisation were estimated to be not less than $44.2 million and $18.2m million respectively.

Outlook
The Board is confident that the interim results for the six months to 30 September 2006 will be in line with its expectations. Based upon the current strong pipeline of releases, the Board is also confident that it is on track to deliver full year performance in line with expectations.

Eros will continue to focus on its strategic priorities including ensuring the steady availability of quality film content for distribution through its global network and initiatives may involve growth enhancing acquisitions or joint ventures. It is anticipated that following the success of Germany, new markets with demand for dubbed Bollywood content will be developed. Sector consolidation will also continue with further output deals.

Kishore Lulla, Chairman and CEO, Eros International, said:
“Following our successful listing on AIM we have been focused on executing our strategy to deliver on the objectives set out at the time of IPO. We are well placed to consolidate our position through strengthening our large library of content rights across a range of media formats, continuing to expand our extensive distribution network and pursuing opportunities to acquire Bollywood film content as well as related film content in areas like music, television and regional films. The business is performing well and we are confident of meeting full year targets.”

ENQUIRIES:

Eros +44 (0)20 8963 8700
Kishore Lulla – Chairman & CEO  
Jyoti Deshpande – COO & Commercial Director  
Andrew Heffernan – CFO  
   
Brunswick +44 (0)20 7404 5959
Jonathan Glass  
Anisha Patel  

About Eros International plc.
Eros International plc, an integrated media and entertainment company, is a global international player in the Bollywood arena. Being vertically integrated means that Eros is not only a production house making films but it also distributes/exploits films across formats globally via cinemas, home entertainment, television formats and new media.

Established in 1977, Eros International has three decades of market leadership as an international owner-distributor of Indian films. The company operates in over 50 countries with worldwide offices in India, UK, USA, Dubai, Australia, Fiji and Isle of Man. It has built a business model around the release of new films and the exploitation of a film library containing more than 1,300 titles, making it one of the largest content owners in the business.

Other business streams include high-definition DVDs, digital broadcasting, e-commerce models, mobile downloads, on-demand TV channels and Video On Demand through Eros’ bespoke website www.bondemand.tv.

For more information visit www.erosintl.com

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