Corporate Governance

Statement by the Directors on compliance with the Code of Best Practice

As an AIM listed company, Eros International Plc is not required to comply with the provisions of the Combined Code on Corporate Governance published by the Financial Reporting Council that applies to Companies with a full London Stock Exchange listing.

However, the Directors acknowledge the importance and value of good corporate governance procedures and have selected those elements of the Combined Code that they consider relevant and appropriate to the Group taking account of its size and structure.

Corporate Governance Policy

Corporate governance policy

The Board’s overriding requirement when looking at what principles to apply to good governance are that the Company be run in the long-term interest of the shareholders. In order to do this, the Company needs to effectively manage relationships with its employees, suppliers and customers and behave in an ethical manner with regard to the environment and society as a whole.

Board and Committee meeting attendance

At 31 March 2011, the Board consisted of four Executive Directors and two Non-Executive Directors. Naresh Chandra is the Senior Non-Executive Director. The two Non-Executive Directors have confirmed that they have been throughout the year, and continue to be, independent of the management of the Group and free from any business or other relationship that could materially interfere with the exercise of their independent judgement.

The Board operates both formally, through Board and Committee meetings, and informally, through regular contact amongst Directors and senior executives. The Board is supplied in a timely manner with information in a form and a quality appropriate to enable it to discharge its duties. There is a schedule of matters that are specifically reserved to the Board for its decision, including approval of interim and annual results, dividend policy, approval of circulars and listing particulars, matters relating to share capital, approval of major capital expenditure and investments.

The Directors can obtain independent professional advice at the Company’s own expense in performance of their duties as Directors.

The Board formally approves the appointment of all new Directors. All Directors are required to submit themselves for re-election at the first Annual General Meeting following their appointment and subsequent to this at the Annual General Meeting on a rotational basis, which ensures that each Director is submitted for re-election approximately every three years.

The Chairman of the audit committee is Dilip Thakkar with Naresh Chandra being the other independent member. The Audit Committee operates under terms of reference agreed with the Board and will normally meet up to three times a year to consider amongst other matters:

The preliminary announcement of the annual results, to review the year’s results and the audit findings
Internal risk management and controls and to consider progress reports on such matters
The half-year results and the scope of the full year audit and associated considerations
In carrying out its operations that Committee particularly focuses on
- major judgemental areas
- accounting policies and practices; and
- compliance with accounting standards, the AIM rules of the London Stock Exchange and legal requirements

The effectiveness of the internal control system is under constant review and a formal assessment is ongoing. The Internal Audit function presently covers a significant part of the Group’s business and is being extended.

The Audit Committee also undertakes a formal assessment of the auditor’s independence each year. Based on information supplied by the auditor and from its own assessment of the fees for audit and non-audit work for the Group in the year, the Committee has concluded that the nature and extent of the non-audit fees do not present a threat to the external auditor’s independence.

In addition the Committee has approved the auditor’s terms of engagement, the scope of the work and the process for the full audit.
Based on written reports presented to the Audit Committee, the Committee has reviewed with the auditor the findings of their work and confirmed that all significant matters have been satisfactorily resolved.

During the year the Remuneration Committee comprised Naresh Chandra and Dilip Thakkar. The Committee meets periodically as required and is responsible for overseeing the policy regarding executive remuneration and for approving the remuneration packages for the Group’s Executive Directors. It is also responsible for reviewing incentive schemes for the Group as a whole. Kishore Lulla as Executive Chairman, although not a member of the Committee, may attend meetings and provide input on proposals relating to other Executive Directors and other senior executives. He does not attend when the Committee discusses matters relating to him.

Board and Committee meeting attendance

The table below sets out the attendance of Directors at Board and Committee meetings in the year ended 31 March 2011 by presence or by telephone of individual directors.

Number of meetings	Board	Audit	Remuneration
Kishore Lulla	4	-	2
Vijay Ahuja	4	-	-
Jyoti Deshpande	4	-	-
Sunil Lulla	3	-	-
Dilip Thakkar	4	4	2
Naresh Chandra	3	3	2

Shareholder communication

The Company seeks to clearly communicate the plans they are pursuing and the likely financial and wider consequences of those plans. These goals and plans have been set out in the Chairman and CEO’s Statement and the Operating Review and Financial Review. In addition, the Company seeks to regularly update shareholders through stock exchange announcements (RNS) and wider press releases on its activities. The Group has recently started to send out Shareholder’s Bulletins and is exploring other ways of keeping interested parties informed of its progress.

The Executive Directors regularly meet with institutional shareholders to discuss the Company’s performance and future prospects.
Comments made and views communicated by the institutional shareholders at these meetings together with feedback from the Company’s advisors are reported back to the Board so that it can understand any shareholder issues.

Anti-Bribery Policy
Introduction

Bribery is, in the conduct of the company’s business, the offering or accepting of any gift, loan, payment, reward or advantage for personal gain as an encouragement to do something which is dishonest, illegal or a breach of trust.

Bribery is a criminal offence. Eros International Plc and its subsidiaries ("Eros International" or "The Company") prohibits any form of bribery. We require compliance, from everyone connected with our business, with the highest ethical standards and anti-bribery laws applicable. Integrity and transparency are of utmost importance to us and we have a zero tolerance attitude towards corrupt activities of any kind, whether committed by Eros International employees or by third parties acting for or on behalf of Eros International.

Offences
It is a criminal offence to:
- Offer a bribe
- Accept a bribe
- Bribe a foreign official
- As a commercial organisation, to fail to prevent a bribe
You should be aware that if you are found guilty by a court of committing bribery, you could face imprisonment and/or an unlimited fine. The Company could also face prosecution and be liable to pay a fine.
Purpose

The purpose of this policy is to convey to all employees and interested parties of Eros International the rules of the Company in relation to our unequivocal stance towards the eradication of bribery and our commitment to ensuring that Eros International conducts its business in a fair, professional and legal manner.

Scope

This policy applies to all employees of Eros International, regardless of seniority or location. It also extends to anyone working for or on our behalf e.g. those engaged by us on a self-employed basis or an agency arrangement.

We will encourage the application of this policy where our business involves the use of third parties e.g. suppliers; contractors.

Policy

It is prohibited, directly or indirectly, to offer, give, request or accept any bribe i.e. gift, loan, payment, reward or advantage, either in cash or any other form of inducement, to or from any person or company in order to gain commercial, contractual or regulatory advantage for the Company, or in order to gain any personal advantage for an individual or anyone connected with the individual in a way that is unethical.

It is also prohibited to act in the above manner in order to influence an individual in his capacity as a foreign public official. You should not make a payment to a third party on behalf of a foreign public official.

If you are offered a bribe, or a bribe is solicited from you, you should not agree to it unless your immediate safety is in jeopardy. You should immediately contact the CFO so that action can be taken if considered necessary. You may be asked to give a written account of events.

If you, as an employee or person working on our behalf, suspect that an act of bribery, or attempted bribery, has taken place, even if you are not personally involved, you are expected to report this to the CFO. You may be asked to give a written account of events.

Appropriate checks will be made before engaging with suppliers or other third parties of any kind to reduce the risk of our business partners breaching our anti-bribery rules.

The Company will ensure that all of its transactions, including any sponsorship or donations given to charity, are made transparently and legitimately.

Eros International takes any actual or suspected breach of this policy extremely seriously and will carry out a thorough investigation should any instances arise.

We will uphold laws relating to bribery and will take disciplinary action against any employee, or other relevant action against persons working on our behalf or in connection with us, should we find that an act of bribery, or attempted bribery, has taken place. This action may result in your dismissal if you are an employee, or the cessation of our arrangement with you if you are self-employed, an agency worker, contractor etc.

Gifts and hospitality

We realise that the giving and receiving of gifts and hospitality where nothing is expected in return helps form positive relationships with third parties where it is proportionate and properly recorded. This does not constitute bribery and consequently such actions are not considered a breach of this policy.

Gifts include money; goods (flowers, vouchers, food, drink, event tickets when not used in a hosted business context); services or loans given or received as a mark of friendship or appreciation.

Hospitality includes entertaining; meals or event tickets (when used in a hosted business context) given or received to initiate or develop relations. Hospitality will become a gift if the host is not present.

No gift should be given nor hospitality offered by an employee or anyone working on our behalf to any party in connection with our business without receiving prior written approval from the CFO. Similarly, no gift nor offer of hospitality should be accepted by an employee or anyone working on our behalf without receiving prior written approval from the CFO.

A record will be made of every instance in which gifts or hospitality are given or received.

As the law is constantly changing, this policy is subject to review and the Company reserves the right to amend this policy without prior notice.

Kishore Lulla
Chairman & CEO

“Kishore Lulla, 50 years, is our Chairman & CEO of Eros International, the largest fully integrated film and Entertainment Company in India.

Mr. Lulla graduated with a bachelors' degree in Arts from Mumbai University and attended the School of Business and Law at the Government & Law College, Mumbai. As Chairman & CEO of the Eros International Group, he has been instrumental in spearheading the growth of Eros International Group and since the 1980'S expanding their presence in UK, USA, Europe, Middle East, Australia, Fiji and other international markets.

Corporate Governance Policy

Anti-Bribery Policy