SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC 20549



FORM 20-F



|☐  | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934                                             
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------
|OR
|   |                                                                                                                                              
|☑  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
        For the fiscal year ended March 31, 2016
|OR
|   |                                                                                                                                              
|☐  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                                                     
|OR
|   |                                                                                                                                              
|☐  | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                                                  



Commission file number 001-32945



|EROS INTERNATIONAL PLC                                                                           
|-------------------------------------------------------------------------------------------------
|(Exact name of Registrant as specified in its charter)                                           
|                                                                                                 
|Not Applicable                                                                                   
|(Translation of Registrant’s name into English)                                                  
|                                                                                                 
|Isle of Man                                                                                      
|(Jurisdiction of incorporation or organization)                                                  
|                                                                                                 
|550 County AvenueSecaucus, New Jersey 07094Tel: (201) 558 9001                                   
|(Address of principal executive offices)                                                         
|                                                                                                 
|Oliver WebsterFort Anne, South QuayDouglas, Isle of ManTel: (44) 1624 638 300Email: law@cains.com
|(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)          



Securities registered or to be registered pursuant to Section 12(b)
of the Act.



|Title of each class                            |  | Name of each exchange on which registered
|---------------------------------------------- |  | -----------------------------------------
|A ordinary share, par value GBP 0.30 per share |  | The New York Stock Exchange              



Securities registered or to be registered pursuant to Section 12(g)
of the Act.



|None            
|----------------
|(Title of Class)



Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act



|None            
|----------------
|(Title of Class)










Indicate the number of outstanding shares of each of the issuer’s
classes of capital or common stock as of the close of the period covered by the annual report.



At March 31, 2016, 32,949,314 ‘A’ ordinary shares and
24,960,654 ‘B’ ordinary shares, each at par value GBP 0.30 per share, were issued and outstanding.



Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.☐ Yes   ☑ No



If this report is an annual or transition report, indicate by check
mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.☐ Yes   ☑ No



Note — Checking the box above will not relieve any registrant
required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those
Sections.



Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.☑ Yes   ☐ No



Indicate by check mark whether the registrant has submitted electronically
and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files).☑ Yes   ☐ No



Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer”
in Rule 12b-2 of the Exchange Act. (Check one):



|Large accelerated filer ☐ |  | Accelerated filer ☑ |  | Non-accelerated filer ☐
|------------------------- |  | ------------------- |  | -----------------------



Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing:



|U.S. GAAP ☐ |  | International Financial Reporting Standards as issuedby the International Accounting Standards Board☑ |  | Other ☐
|----------- |  | ----------------------------------------------------------------------------------------------------- |  | -------



If “Other” has been checked in response to the previous
question, indicate by check mark which financial statement item the registrant has elected to follow:☐ Item 17   ☐ Item 18



If this report is an annual report, indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).☐ Yes   ☑ No










TABLE OF CONTENTS



EROS INTERNATIONAL PLC



|                                                                |                                                                              |     | Page
|--------------------------------------------------------------- | ---------------------------------------------------------------------------- | --- | ----
|PART I                                                          |                                                                              |     |     
|ITEM 1.                                                         | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                        |     | 1   
|ITEM 2.                                                         | OFFER STATISTICS AND EXPECTED TIMETABLE                                      |     | 1   
|ITEM 3.                                                         | KEY INFORMATION                                                              |     | 1   
|ITEM 4.                                                         | INFORMATION ON THE COMPANY                                                   |     | 27  
|ITEM 4A.                                                        | UNRESOLVED STAFF COMMENTS                                                    |     | 61  
|ITEM 5.                                                         | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                 |     | 62  
|ITEM 6.                                                         | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                   |     | 79  
|ITEM 7.                                                         | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                            |     | 92  
|ITEM 8.                                                         | FINANCIAL INFORMATION                                                        |     | 96  
|ITEM 9.                                                         | THE OFFER AND LISTING                                                        |     | 97  
|ITEM 10.                                                        | ADDITIONAL INFORMATION                                                       |     | 98  
|ITEM 11.                                                        | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   |     | 107 
|ITEM 12.                                                        | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       |     | 108 
|PART II                                                         |                                                                              |     |     
|ITEM 13.                                                        | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              |     | 109 
|ITEM 14.                                                        | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |     | 109 
|ITEM 15.                                                        | CONTROLS AND PROCEDURES                                                      |     | 109 
|ITEM 16A.                                                       | AUDIT COMMITTEE FINANCIAL EXPERT                                             |     | 110 
|ITEM 16B.                                                       | CODE OF ETHICS                                                               |     | 110 
|ITEM 16C.                                                       | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       |     | 110 
|ITEM 16D.                                                       | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   |     | 111 
|ITEM 16E.                                                       | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS       |     | 111 
|ITEM 16F.                                                       | CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT                                 |     | 111 
|ITEM 16G.                                                       | CORPORATE GOVERNANCE                                                         |     | 111 
|ITEM 16H.                                                       | MINE SAFETY DISCLOSURE                                                       |     | 111 
|PART III                                                        |                                                                              |     |     
|ITEM 17.                                                        | FINANCIAL STATEMENTS                                                         |     | 112 
|ITEM 18.                                                        | FINANCIAL STATEMENTS                                                         |     | 112 
|ITEM 19.                                                        | EXHIBITS                                                                     |     | 113 
|SIGNATURES                                                      |                                                                              |     | 115 
|INDEX TO EROS INTERNATIONAL’S CONSOLIDATED FINANCIAL STATEMENTS |                                                                              | F-1



i






CONVENTIONS USED IN THIS ANNUAL REPORT



Unless otherwise indicated or required by
the context, as used in this annual report, the terms “Eros,” “we,” “us,”, “the Group”,
“our” and the “Company” refer to Eros International Plc and all its subsidiaries that are consolidated
under International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board. Our fiscal
year ends on March 31 of each year. When we refer to a fiscal year, such as fiscal 2016 or FY 2016, we are referring to the
fiscal year ended on March 31 of that year. The “Founders Group” refers to Beech Investments Limited, Kishore
Lulla and Vijay Ahuja. “$” and “dollar” refer to U.S. dollars.



“High budget” films refer to Hindi
films with direct production costs in excess of $8.5 million and regional films with direct production costs in excess of
$7.0 million, in each case translated at the historical average exchange rate for the applicable fiscal year. “Low budget”
films refer to Hindi and regional films with less than $1.0 million in direct production costs, in each case translated
at the historical average exchange rate for the applicable fiscal year. “Medium budget” films refer to Hindi, Tamil
and Telugu films within the remaining range of direct production costs. With respect to low budget films, references to “film
releases” refer to theatrical releases or, for films that we did not theatrically release, to our initial DVD, digital or
other non-theatrical exhibition.



SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS



This annual report contains “forward-looking
statements” that are based on our current expectations, assumptions, estimates and projections about our company and our
industry. The forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements
can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “will,” “project,” “seek,” “should”
and similar expressions. Those statements include, among other things, the discussions of our business strategy and expectations
concerning our market position, future operations, margins, profitability, liquidity and capital resources, tax assessment orders
and future capital expenditures. We caution you that reliance on any forward-looking statement inherently involves risks and uncertainties,
and that although we believe that the assumptions on which our forward-looking statements are based are reasonable, any of those
assumptions could prove to be inaccurate, and, as a result, the forward-looking statements based on those assumptions could be
materially incorrect. These risks and uncertainties include but are not limited to:

| | · | anonymous letters,
                                         to regulators or business associates or anonymous allegations on social media regarding
                                         our business practices, accounting practices and/or officers and directors; we are
                                         party to class action lawsuits in the U.S.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | our
                                         ability to successfully defend class action law suits we are party to in the U.S.;
| | - | -------------------------------------------------------------------------------------------------------------------------------

| | · | our ability to successfully and cost-effectively source film content;
| | - | ---------------------------------------------------------------------

| | · | delays, cost overruns, cancellation or abandonment of the completion or release of our films;
| | - | ---------------------------------------------------------------------------------------------

| | · | our ability to predict the popularity of our films, or changing consumer tastes;
| | - | --------------------------------------------------------------------------------

| | · | our dependence on our relationships with theater operators and other industry participants to exploit
our film content;
| | - | -----------------------------------------------------------------------------------------------------------------------

| | · | our ability to maintain existing rights, and to acquire new rights, to film content;
| | - | ------------------------------------------------------------------------------------

| | · | our dependence on the Indian box office success of our Hindi and high budget Tamil and Telugu films;
| | - | ----------------------------------------------------------------------------------------------------

| | · | Eros Now has limited operating history and may incur operating losses and negative cash flow in future periods
| | - | --------------------------------------------------------------------------------------------------------------

| | · | our ability to recoup the full amount of box office revenues to which we are entitled due to underreporting of box office receipts
by theater operators;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | our ability
                                         to mitigate risks relating to distribution and collection in international markets;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------

| | · | fluctuation in the value of the Indian Rupee against foreign currencies;
| | - | ------------------------------------------------------------------------

| | · | our ability to compete in the Indian film industry;
| | - | ---------------------------------------------------

| | · | the impact of a new amendment to accounting standards for the recognition of revenue from contracts
with customers;
| | - | -------------------------------------------------------------------------------------------------------------------

| | · | our ability
                                         to combat piracy and to protect our intellectual property;
| | - | ---------------------------------------------------------------------------------------------------------------

| | · | contingent liabilities that may materialize, including our exposure to liabilities on account of unfavorable judgments/decisions
in relation to legal proceedings involving us or our subsidiaries and certain of our directors and officers;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | our ability to successfully respond to technological changes;
| | - | -------------------------------------------------------------

ii






| | · | regulatory changes in the Indian film industry and our ability to respond to them.
| | - | ----------------------------------------------------------------------------------

| | · | the monetary and fiscal policies of India and globally, inflation, deflation, unanticipated turbulence in interest rates, foreign
exchange rates, equity prices or other rates or prices; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | our ability to respond to the challenges relating to international distribution of our films and
related products.
| | - | ------------------------------------------------------------------------------------------------------------------



These and other factors are more fully discussed in “Part
I — Item 3. Key Information — D. Risk Factors,” “Part I — Item 5. Operating and Financial Review
and Prospects” and elsewhere in this annual report. In light of these and other uncertainties, you should not conclude that
we will necessarily achieve any plans, objectives or projected financial results referred to in any of the forward-looking statements.
Except as required by law, we do not undertake to release revisions of any of these forward-looking statements to reflect future
events or circumstances.



iii




PART I



ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS



Not applicable.



ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE



Not applicable.



ITEM 3. KEY INFORMATION



A. Selected Financial Data



The table set forth below presents our selected
historical consolidated financial data for the periods and at the dates indicated. The selected historical consolidated statement
of income data for each of the three years ended March 31, 2016, 2015 and 2014 and the selected statement of financial position
data as of March 31, 2016 and 2015 have been derived from and should be read in conjunction with “Part I — Item 5.
Operating and Financial Review and Prospects” and our consolidated financial statements included elsewhere in this Annual
Report on Form 20-F. The selected historical consolidated statement of income data for each of the two years ended March 31, 2013
and 2012 and the selected historical statement of financial position data as of March 31, 2014, 2013 and 2012 have been derived
from audited consolidated financial statements not included in this Annual Report on Form 20-F.



|                                           |  | Year ended March 31,                                                                       |         
|------------------------------------------ |  | ------------------------------------------------------------------------------------------ | --------
|                                           |  | 2016                                                                                       |         
|                                           |  | (in thousands, except net income per share and weighted average number of ordinary shares) |         
|Selected Statement of Income Data          |  |                                                                                            |         
|Revenue                                    |  | $                                                                                          | 274,428 
|Cost of sales                              |  |                                                                                            | (172,764
|Gross profit                               |  |                                                                                            | 101,664 
|Administrative costs                       |  |                                                                                            | (64,019 
|Operating profit                           |  |                                                                                            | 37,645  
|Net finance costs                          |  |                                                                                            | (8,010  
|Other losses                               |  |                                                                                            | (3,636  
|Profit before tax                          |  |                                                                                            | 25,999  
|Income tax expense                         |  |                                                                                            | (12,711 
|Net income (1)                             |  | $                                                                                          | 13,288  
|                                           |  |                                                                                            |         
|Net income per share                       |  |                                                                                            |         
|Basic                                      |  | $                                                                                          | 0.07    
|Diluted                                    |  | $                                                                                          | 0.05    
|                                           |  |                                                                                            |         
|Weighted average number of ordinary shares |  |                                                                                            |         
|Basic                                      |  |                                                                                            | 57,732  
|Diluted                                    |  |                                                                                            | 59,036  
|                                           |  |                                                                                            |         
|Other non-GAAP measures                    |  |                                                                                            |         
|EBITDA (2)                                 |  | $                                                                                          | 36,294  
|Adjusted EBITDA (2)                        |  | $                                                                                          | 70,852  



1








|                                                 |  | Year ended March 31, |          
|------------------------------------------------ |  | -------------------- | ---------
|                                                 |  | 2016                 |          
|                                                 |  | (in thousands)       |          
|Selected Statement of Financial Position Data:   |  |                      |          
|Cash and cash equivalents                        |  | $                    | 182,774  
|Goodwill                                         |  |                      | 1,878    
|Total assets                                     |  |                      | 1,246,639
|                                                 |  |                      |          
|Debt:                                            |  |                      |          
|Current portion                                  |  |                      | 219,275  
|Long-term portion                                |  |                      | 92,630   
|Total liabilities                                |  |                      | 437,545  
|                                                 |  |                      |          
|Equity attributable to Eros International Plc    |  |                      | 740,332  
|Equity attributable to non-controlling interests |  |                      | 68,762   
|Total equity                                     |  | $                    | 809,094  



_______________

|(1) | References to “net income” in this document correspond to “profit for the period” or “profit for the year” line items in our consolidated financial statement appearing elsewhere in this document.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | We use EBITDA and Adjusted EBITDA as supplemental financial measures. EBITDA is defined by us as net income before interest expense, income tax expense and depreciation and amortization (excluding amortization of capitalized film content and debt issuance costs). Adjusted EBITDA is defined as EBITDA adjusted for impairments of available-for-sale financial assets, profit/loss on held for trading liabilities (including profit/loss on derivatives), transactions costs relating to equity transactions, and share based payments. EBITDA, as used and defined by us, may not be comparable to similarly-titled measures employed by other companies and is not a measure of performance calculated in accordance with GAAP. EBITDA should not be considered in isolation or as a substitute for operating income, net income, cash flows from operating investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. EBITDA and Adjusted EBITDA provide no information regarding a company’s capital structure, borrowings, interest costs, capital expenditures and working capital movement or tax position.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The following table sets forth the reconciliation of our net income
to EBITDA and Adjusted EBITDA:



|                                                          |  | Year ended March 31, |       
|--------------------------------------------------------- |  | -------------------- | ------
|                                                          |  | 2016                 |       
|                                                          |  | (in thousands)       |       
|Net income                                                |  | $                    | 13,288
|Income tax expense                                        |  |                      | 12,711
|Net finance costs                                         |  |                      | 8,010 
|Depreciation                                              |  |                      | 1,154 
|Amortization(a)                                           |  |                      | 1,131 
|EBITDA                                                    |  |                      | 36,294
|Impairment of available-for-sale financial assets         |  |                      | —     
|Transaction costs relating to equity transactions         |  |                      | —     
|Net loss/(gain) on held for trading financial liabilities |  |                      | 3,566 
|Share based payments                                      |  |                      | 30,992
|Adjusted EBITDA(b)                                        |  | $                    | 70,852

_______________

| | (a) | Includes only amortization of intangible assets other than intangible content assets.
| | --- | -------------------------------------------------------------------------------------



| | (b) | Consists of compensation costs, recognized with respect to all outstanding plans and all other
equity settled instruments.
| | --- | --------------------------------------------------------------------------------------------------------------------------



2






Our management team believes that EBITDA and
Adjusted EBITDA are useful to an investor in evaluating our results of operations because these measures:

| | · | are widely used by investors to measure a company’s operating performance without regard
to items excluded from the calculation of such term, which can vary substantially from company to company depending upon accounting
methods and book value of assets, capital structure and the method by which assets were acquired, among other factors;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | help investors to evaluate and compare the results of our operations from period to period by removing
the effect of our capital structure from our operating structure; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | are used by our management team for various other purposes in presentations to our Board of Directors
as a basis for strategic planning and forecasting.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------



However, there are significant limitations
to using EBITDA and Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring
and non-recurring items that materially affect our net income or loss, the lack of comparability of results of operations of different
companies and the different methods of calculating EBITDA and Adjusted EBITDA reported by different companies.



Exchange Rate Information



Our reporting currency is the U.S. dollar.
Transactions in foreign currencies are translated at the exchange rate prevailing at the date of the transaction. Monetary assets
and liabilities in foreign currencies are translated into U.S. dollars at the exchange rates at the date of the applicable statement
of financial position. For the purposes of consolidation, all income and expenses are translated at the average rate of exchange
during the period covered by the applicable statement of income and assets and liabilities are translated at the exchange rate
prevailing on the date of the applicable statement of financial position. When the U.S. dollar strengthens against a foreign currency,
the value of our sales and expenses in that currency converted to U.S. dollars decreases. When the U.S. dollar weakens, the value
of our sales and expenses in that currency converted to U.S. dollars increases. Recently, there have been periods of higher volatility
in the Indian Rupee and U.S. dollar exchange rate. This volatility is illustrated in the table below for the periods indicated:



|               |  | Period End |  | Average(1) |  | High  |  | Low  
|-------------- |  | ---------- |  | ---------- |  | ----- |  | -----
|Fiscal Year    |  |            |  |            |  |       |  |      
|2011           |  | 44.54      |  | 45.46      |  | 47.49 |  | 43.90
|2012           |  | 50.89      |  | 48.01      |  | 53.71 |  | 44.00
|2013           |  | 54.52      |  | 54.36      |  | 57.13 |  | 50.64
|2014           |  | 60.35      |  | 60.35      |  | 68.80 |  | 53.65
|2015           |  | 62.58      |  | 61.15      |  | 63.70 |  | 58.46
|2016           |  | 66.25      |  | 65.39      |  | 68.84 |  | 61.99
|               |  |            |  |            |  |       |  |      
|Months         |  |            |  |            |  |       |  |      
|April 2015     |  | 63.52      |  | 62.72      |  | 63.59 |  | 62.23
|May 2015       |  | 63.83      |  | 63.73      |  | 64.26 |  | 63.47
|June 2015      |  | 63.59      |  | 63.78      |  | 64.21 |  | 63.43
|July 2015      |  | 63.87      |  | 63.60      |  | 64.24 |  | 63.24
|August 2015    |  | 66.39      |  | 65.10      |  | 66.80 |  | 63.67
|September 2015 |  | 65.50      |  | 66.17      |  | 66.70 |  | 65.50
|October 2015   |  | 65.40      |  | 65.03      |  | 65.57 |  | 64.70
|November 2015  |  | 66.43      |  | 66.10      |  | 66.86 |  | 65.46
|December 2015  |  | 66.19      |  | 66.50      |  | 67.10 |  | 66.00
|January 2016   |  | 67.87      |  | 67.33      |  | 68.08 |  | 66.49
|February 2016  |  | 68.21      |  | 68.24      |  | 68.84 |  | 67.57
|March 2016     |  | 66.25      |  | 66.89      |  | 67.75 |  | 66.25
|April 2016     |  | 66.39      |  | 66.42      |  | 66.70 |  | 66.05
|May 2016       |  | 66.96      |  | 66.88      |  | 67.59 |  | 66.36
|June 2016      |  | 67.51      |  | 67.27      |  | 67.92 |  | 66.51



|(1) | Represents the average of the U.S. dollar to Indian Rupee exchange rates on the last day of each month during the period for all fiscal years presented, and the average of the noon buying rate for all days during the period for all months presented.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



3






B. Capitalization and Indebtedness



Not Applicable.



C. Reason for the Offer and the Use of Proceeds



Not Applicable.



D. Risk Factors



This annual report contains forward-looking
statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking
statements as a result of a number of factors, including those described in the following risk factors and elsewhere in this annual
report. If any of the following risks actually occur, our business, financial condition and results of operations could suffer
and the trading price of our A ordinary shares could decline.



Risks Related to Our Business



Anonymous letters to regulators or business
associates or anonymous allegations on social media regarding our business practices, accounting practices and/or officers and
directors could have a resultant material adverse effect on our business, financial condition and results of operations and could
negatively impact the market price for our A ordinary shares; we are party to class action lawsuits in the U.S. and an adverse
ruling could have a material adverse effect on our business, financial condition and results of operations and could negatively
impact the market price of our A ordinary shares.



In the past, when we have publicly filed a
report relating to a proposed transaction in either the United Kingdom, India or the United States, we have received anonymous
letters sent either to us, a banker, and/or the regulator, making allegations about our business practices and/or officers and
directors. Every time we have received such a letter we have undertaken what we believe to be a reasonably prudent review, such
as extensive due diligence to investigate the allegations, and where necessary our board of directors has engaged third party professional
firms to report to them directly and cleared the matter from a corporate governance point of view. Having conducted these investigations,
in each instance we found the allegations were without merit.



There were a series of anonymous allegations
on social media targeted at the Company’s accounting practices and disclosures in October 2015 following which the market
price for our A ordinary shares dropped materially with the lowest being $5.59 per share. The Company’s Audit Committee
subsequently appointed Skadden Arps Slate Meagher & Flom LLP to assist them in conducting an independent internal review.
With the assistance of Skadden Arps Slate Meagher & Flom LLP, the Company's Audit Committee conducted the internal review
which commenced in November 2015 and completed in March 2016, and did not result in any recommendations
for restatements to prior year financials.



Beginning on November 13, 2015, the Company
was named a defendant in five substantially similar putative class action lawsuits filed in federal court in New Jersey and New
York by purported shareholders of the Company. The three actions in New Jersey were consolidated, and, on May 17, 2016, were transferred
to the United States District Court for the Southern District of New York where they were then consolidated with the other two
actions on May 27, 2016. In general, the plaintiffs alleged that the Company, and in some cases also the Company’s management,
violated federal securities laws by overstating the Company’s financial and business results, enriching the Company’s
controlling owners at the expense of other stockholders, and engaging in improper accounting practices. On April 5, 2016, a lead
plaintiff and lead counsel were appointed in the now-consolidated New York action. A single consolidated amended complaint was
filed on July 14, 2016. The Plaintiffs have alleged that the Company and certain individual defendants -- Kishore Lulla, Jyoti
Deshpande, Andrew Heffernan, and Prem Parameswaran -- have violated the federal securities laws, specifically Sections 10(b) and
20(a) of the Exchange Act. The amended consolidated complaint does not assert certain claims that had been asserted in prior complaints
including (1) claims for violations of Sections 11 and 15 of the Securities Act and (2) claims against certain individual defendants,
who are not now named defendants. The claims principally arise out of allegations that the Company and the individual defendants
made material misrepresentations about the success, size, and financial performance of Eros Now, our streaming video service,
and our film library.



We are unable to predict how long such proceedings
will continue, but we anticipate that we will continue to incur significant costs in connection with these matters to the extent
not covered by our insurance policy and that these proceedings, investigations and inquiries will result in a substantial distraction
of management’s time, regardless of the outcome.



If we receive similar letters, in
the future or are unsuccessful in defending the class action lawsuits it could result in a diversion of management resources,
time and energy, significant costs, a material decline in the market price for our A ordinary shares, increased share price
volatility, an increased directors and officers liability insurance premiums and could have a material adverse effect upon our
business, financial condition and results of operations, and ability to access the capital markets.



We may fail to source adequate film content
on favorable terms or at all through acquisitions or co-productions, which could have a material and adverse impact on our business.



We generate revenues by exploiting Indian
film content that we primarily co-produce or acquire from third parties, and then distribute through various channels. We have
also set up Trinity Pictures as a studio to develop and produce franchise films in-house and create our own
intellectual property. Our ability to successfully enter into co-productions and to acquire
content depends on, among other things our ability to maintain existing relationships, and form new ones, with talent and other
industry participants.



4






The pool of quality talent in India is limited
and as a result, there is significant competition to secure the services of certain actors, directors, composers and producers,
among others. Competition can increase the cost of such talent, and hence the cost of film content. These costs may continue to
increase, making it more difficult for us to access content cost-effectively and reducing our ability to sustain our margins and
maximize revenues from distribution and exploitation. Further, we may be unable to successfully maintain our long-standing relationships
with certain industry participants and continue to have access to content and/or creative talent and may be unable to establish
similar relationships with new leading creative talent. This is also dependent on relationships with various writers and talent
and has execution risk associated with it. If any such relationships are adversely affected, or we are unable to form new relationships
or our Trinity Pictures initiative fails or our access to quality Indian film content otherwise deteriorates, or if any party fails
to perform under its agreements or arrangements with us, our business, prospects, financial condition and results of operations
could be materially adversely affected.



Our business involves substantial
capital requirements, and our inability to maintain or raise sufficient capital could materially adversely affect our business.



Our business requires a substantial investment
of capital for the production, acquisition and distribution of films and a significant amount of time may elapse between our expenditure
of funds and the receipt of revenues from our films. This may require us to fund a significant portion of our capital requirements
from our credit facilities or other financing sources. Any capital shortfall could have a material adverse effect on our business,
prospects, financial condition, results of operations and liquidity.



Delays, cost overruns, cancellation or
abandonment of the completion or release of films may have an adverse effect on our business.



There are substantial financial risks relating
to film production, completion and release. Actual film costs may exceed their budgets and factors such as labor disputes, unavailability
of a star performer, equipment shortages, disputes with production teams or adverse weather conditions may cause cost overruns
and delay or hamper film completion. When a film we have contracted to acquire from a third party experiences delays or fails to
be completed, we may not recover advance monies paid for the proposed acquisition. When we enter into co-productions, we are typically
responsible for paying all production costs in accordance with an agreed upon budget and while we typically cap budgets in our
contracts with our co-producer, given the importance of ongoing relationships in our industry, longer-term commercial considerations
may in certain circumstances override strict contractual rights and we may feel obliged to fund cost over-runs where there is no
contractual obligation requiring us to do so.



Production delays, failure to complete projects
or cost overruns could result in us not recovering our costs and could have a material adverse effect on our business, prospects,
financial condition and results of operations.



The popularity and commercial success
of our films are subject to numerous factors, over which we may have limited or no control.



The popularity and commercial success of our
films depends on many factors including, but not limited to, the key talent involved, the timing of release, the promotion and
marketing of the film, the quality and acceptance of other competing programs released into the marketplace at or near the same
time, the availability of alternative forms of entertainment, general economic conditions, the genre and specific subject matter
of the film, its critical acclaim and the breadth, timing and format of its initial release. We cannot predict the impact of such
factors on any film, and many are factors that are beyond our control. As a result of these factors and many others, our films
may not be as successful as we anticipate, and as a result, our results of operations may suffer.



We depend on our relationships with theater
operators and other industry participants to exploit our film content. Any disputes with multiplex operators in India could have
a material adverse effect on our ability or willingness to release our films as scheduled.



We generate revenues from the exploitation
of Indian film content in various distribution channels through agreements with commercial theater operators, in particular multiplex
operators, and with retailers, television operators, telecommunications companies and others. Our failure to maintain these relationships,
or to establish and capitalize on new relationships, could harm our business or prevent our business from growing, which could
have a material adverse effect on our business, prospects, financial condition and results of operations.



We have had disputes with multiplex operators
in India that required us to delay our film releases and disrupted our marketing schedule for future films. These disputes were
subsequently settled pursuant to settlement agreements that expired in June 2011. We now enter into agreements on a film-by-film
and exhibitor-by-exhibitor basis instead of entering into long-term agreements. To date, our film-by-film agreements have been
on commercial terms that are no less favorable than the terms of the prior settlement agreements; however, we cannot guarantee
such terms can always be obtained. Accordingly, without a long-term commitment from multiplex operators, we may be at risk of losing
a substantial portion of our revenues derived from our theatrical business. We may also have similar future disruptions in our
relationship with multiplex operators, the operators of single-screen theaters or other industry participants, which could have
a material adverse effect on our business, prospects, financial condition and results of operations. Further, the theater industry
in India is rapidly growing and evolving and we cannot assure you that we will be able to establish relationships with new commercial
theater operators.



5






The success of our business depends on
our ability to consistently create and distribute filmed entertainment that meets the changing preferences of the broad consumer
market both within India and internationally.



Changing consumer tastes affect our ability
to predict which films will be popular with audiences in India and internationally. As we invest in a portfolio of films across
a wide variety of genres, stars and directors, it is highly likely that at least some of the films in which we invest will not
appeal to Indian or international audiences. Further, where we sell rights prior to release of a film, any failure to accurately
predict the likely commercial success of a film may cause us to underestimate the value of such rights. If we are unable to co-produce
and acquire rights to films that appeal to Indian and international film audiences or to accurately judge audience acceptance of
our film content, the costs of such films could exceed revenues generated and anticipated profits may not be realized. Our failure
to realize anticipated profits could have a material adverse effect on our business, prospects, financial condition and results
of operations.



Our ability to exploit our content is
limited to the rights that we acquire from third parties or otherwise own.



We have acquired over 90% of our film content
through contracts with third parties, which are primarily fixed-term contracts that may be subject to expiration or early termination.
Upon expiration or termination of these arrangements, content may be unavailable to us on acceptable terms or at all, including
with respect to technical matters such as encryption, territorial limitation and copy protection. In addition, if any of our competitors
offer better terms, we will be required to spend more money or grant better terms, or both, to acquire or extend the rights we
previously held. If we are unable to renew the rights to our film library on commercially favorable terms and to continue exploiting
the existing films in our library or other content, it could have a material adverse effect on our business, prospects, financial
condition and results of operations.



Based on our agreements in effect as of March
31, 2016, if we do not otherwise extend or renew our existing rights, we anticipate the rights we currently license in Hindi and
regional languages, will expire as summarized in the table below.



|Term Expiration Dates          |  | HindiFilm Rights                                                                     |    | RegionalFilm Rights(1)
|------------------------------ |  | ------------------------------------------------------------------------------------ | -- | ----------------------
|                               |  | (approximate percentage of films whoselicensed rights expire in theperiod indicated)
|Prior
    to December 31, 2020 |  |                                                                                      | 42 | %                     
|2021-2025                      |  |                                                                                      | 37 |                       
|2026-2030                      |  |                                                                                      | 6  |                       
|2031-2045                      |  |                                                                                      | 3  |                       
|Perpetual(2)                   |  |                                                                                      | 12 |                       



|(1) | Excludes
    the Kannada digital rights library for which we have perpetual rights subject to applicable copyright law.                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Subject to limitations imposed by Indian copyright law, which restricts the term to 60 years from the beginning of the calendar year following the year in which the film is released.



In addition, we typically only own certain
rights for the exploitation of content, which limits our ability to exploit content in certain media formats. In particular, we
do not own the audio music rights to the majority of the films in our library and to certain new releases. See “Part I—Item
4. Information on the Company — Our Film Library” for detail regarding our rights. To the extent we do not own the
music or other media rights in respect of a particular film, we may only exploit content through those channels to which we do
own rights, which could have an adverse effect on our ability to generate revenue from a film and recover our costs from acquiring
or producing content.



We may face claims from third parties
that our films may be infringing on their intellectual property.



Third parties may claim that certain of
our films misappropriate or infringe such third parties’ intellectual property rights with respect to previously developed
films, stories, characters, other entertainment or intellectual property. We may receive in the future claims of infringement
or misappropriation of other parties’ proprietary rights. Any such assertions or claims may impact our rights to exploit
the related films. Irrespective of the validity or the successful assertion of such claims, we could incur significant costs and
diversion of resources in defending against them. If any claims or actions are asserted against us, we may seek to settle such
claim by obtaining a license from the plaintiff covering the disputed intellectual property rights. We cannot provide any assurances,
however, that under such circumstances a license, or any other form of settlement, would be available on reasonable terms or at
all. Any of these occurrences could have a material adverse effect on our business, prospects, financial condition and results
of operations.



6






Our business involves risks of liability
claims for media content.



As a producer and distributor of media
content, we may face potential liability for:

| | • | defamation;
| | - | -----------

| | • | invasion of privacy;
| | - | --------------------

| | • | negligence;
| | - | -----------

| | • | copyright or trademark infringement;
                                         and
| | - | ---------------------------------------------------------------------------------

| | • | other claims based on the
                                         nature and content of the materials distributed.
| | - | -------------------------------------------------------------------------------------------------------------------



These types of claims have been brought,
sometimes successfully, against producers and/or distributors of media content. Any imposition of liability that is not covered
by insurance or is in excess of insurance coverage could have a material adverse effect on our business and financial condition.



We depend on the Indian box office success
of our Hindi and high budget Tamil and Telugu films from which we derive a significant portion of our revenues.



In India, a relatively high percentage of a
film’s overall revenues are derived from theater box office sales and, in particular, from such sales in the first week of
a film’s release. Indian domestic box office receipts are also an indicator of a film’s expected success in other Indian
and international distribution channels. As such, poor box office receipts in India for our films, even for those films for which
we obtain only international distribution rights, could have a significant adverse impact on our results of operations in both
the year of release of the relevant films and in the future for revenues expected to be earned through other distribution channels.
In particular, we depend on the Indian box office success of our Hindi films and high budget Tamil and Telugu films.



We may not be paid the full amount of
box office revenues to which we are entitled.



We derive revenues from theatrical exhibition
of our films by collecting a specified percentage of box office receipts from multiplex and single screen theater operators. The
Indian film industry continues to lack full exhibitor transparency. There is limited independent monitoring of such data in India
or the Middle East, unlike the monitoring services provided by Rentrak in the United Kingdom and the United States. We therefore
rely on theater operators and our sub-distributors to report relevant information to us in an accurate and timely manner.



While the multiplex and single-screen operators
have now moved to a digital distribution model that provides greater clarity on the number of screenings given to our films, many
still do not have computerized tracking systems for box office receipts which can be tracked independently by a third party and
we are reliant on box office reports generated internally by these multiplex and single screen operators which may not be entirely
accurate or transparent.



Because we do not have a reliable system to
determine if our box office receipts are underreported, box office receipts and sub-distribution revenues may be inadvertently
or purposefully misreported or delayed, which could prevent us from being compensated appropriately for exhibition of our films.
If we are not properly compensated, our business, prospects, financial condition and results of operations could be negatively
impacted.



Eros Now has limited operating history
and we may incur operating losses and negative cash flow in future periods.



While Eros Now was soft launched in 2012,
and as of March 31, 2016 we have over 44 million registered users, a vast majority of them are free users. Less than 1% of the
Eros Now user base are paid subscribers as we have only recently begun efforts towards monetization. We therefore consider this
OTT (Over The Top) business to be in its early stages of development. We must continue to grow and retain subscribers in India
(one of our key markets) where they are currently used to traditional channels for content consumption as well as grow our subscriber
base in markets outside of India. Our ability to attract and retain subscribers will depend in part on our ability to consistently
provide our subscribers a high quality experience with respect to content and features and the quality of data connectivity (either
WiFi, broadband, 3G or 4G mobile data) in India.



To achieve and sustain profitability for our
Eros Now business, we must accomplish numerous objectives, including substantially increasing the number of paid subscribers to
our service and retaining them, without which our revenues will be adversely affected. We cannot assure you that we will
be able to achieve these objectives due to any of the factors listed below, among other factors:

| | · | our ability to maintain an adequate content offering
| | - | ----------------------------------------------------

| | · | our ability to maintain, upgrade and develop our service offering on an ongoing basis
| | - | -------------------------------------------------------------------------------------

| | · | our ability to successfully distribute our service across multiple mobile, internet and cable platform
worldwide
| | - | ----------------------------------------------------------------------------------------------------------------

7






| | · | our
                                         ability to secure distribution across various platforms including telecom operators and
                                         original equipment manufacturers
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | our
                                         ability to convert free registered users into paid subscribers and retain them
| | - | ---------------------------------------------------------------------------------------------------------------------------

| | · | our ability to compete effectively against other Indian and foreign OTT services
| | - | --------------------------------------------------------------------------------

| | · | our ability to manage technical glitches or disruptions
| | - | -------------------------------------------------------

| | · | our ability to attract and retain our employees
| | - | -----------------------------------------------

| | · | any changes in government regulations and policies
| | - | --------------------------------------------------

| | · | any changes in the general economic conditions specific to the Internet and the movie industry
| | - | ----------------------------------------------------------------------------------------------



We incur significant costs to protect
electronically stored data and if our data is compromised despite this protection, we may incur additional costs, business interruption,
lost opportunities and damage to our reputation.



We collect and maintain information and data
necessary for conducting our business operations, which information includes proprietary and confidential data and personal information
of our customers and employees. Such information is often maintained electronically, which includes risks of intrusion, tampering,
manipulation and misappropriation. We implement and maintain systems to protect our digital data, but obtaining and maintaining
these systems is costly and usually requires continuous monitoring and updating for technological advances and change. Additionally,
we sometimes provide confidential, proprietary and personal information to third parties when required in connection with certain
business and commercial transactions. For instance, we have entered into an agreement with a third party vendor to assist in processing
employee payroll, and they receive and maintain confidential personal information regarding our employees. We take precautions
to try to ensure that such third parties will protect this information, but there remains a risk that the confidentiality of any
data held by third parties may be compromised. If our data systems, or those of our third party vendors and partners, are compromised,
there may be negative effects on our business including a loss of business opportunities or disclosure of trade secrets. If the
personal information we maintain is tampered with or misappropriated, our reputation and relationships with our partners and customers
may be adversely affected, and we may incur significant costs to remediate the problem and prevent future occurrences.



A downturn in the Indian and international
economies or instability in financial markets, including a decreased growth rate and increased Indian price inflation, could materially
and adversely affect our results of operations and financial condition.



Global economic conditions may negatively
impact consumer spending. Prolonged negative trends in the global or local economies can adversely affect consumer spending and
demand for our films and may shift consumer demand away from the entertainment we offer. For example, the results of the United
Kingdom’s referendum on withdrawal from the European Union may have a negative effect on global economic conditions, financial
markets and our business, financial condition and results of operations. In June 2016, a majority of voters in the United Kingdom
elected to withdraw from the European Union in a national referendum. The referendum was advisory, and the terms of any withdrawal
are subject to a negotiation period that could last two years after the government of the United Kingdom formally initiates a
withdrawal process. However, the referendum has created uncertainty about the future relationship between the United Kingdom and
the European Union. The referendum has also given rise to calls for the governments of other European Union member states to consider
withdrawal. These developments have had and may continue to have an adverse effect on global economic conditions and the stability
of global financial markets.



According to the International Monetary Fund’s
World Economic Outlook Database, published in April, 2016, the GDP growth rate of India is projected to increase from approximately
7.5% in 2016 and 2017 to 7.6% in 2018. The Central Statistics Office has estimated that the growth rate in GDP in the 12 months
period ended March 31, 2016 was 7.6% (Source: Press release dated May 31, 2016 on “Provisional Estimates of Annual National
Income, 2015-16 and Quarterly Estimates of Gross Domestic Product, 2015-16” released by the Ministry of Statistics and Programme
Implementation, Government of India).



A decline in attendance at theaters may
reduce the revenues we generate from this channel, from which a significant proportion of our revenues are derived. If the
general economic downturn continues to affect the countries in which we distribute our films, discretionary consumer spending
may be adversely affected, which would have an adverse impact on demand for our theater, television and digital distribution
channels. Economic instability and the continuing weak economy in India may negatively impact the Indian box office success
of our Hindi, Tamil and Telugu films, on which we depend for a significant portion of our revenues.



Further, a sustained decline in economic conditions
could result in closure or downsizing by, or otherwise adversely impact, industry participants on whom we rely for content sourcing
and distribution. Any decline in demand for our content could have a material adverse effect on our business, prospects, financial
condition and results of operations. In addition, global financial uncertainty has negatively affected the Indian financial markets.



8






Continued financial disruptions may limit our
ability to obtain financing for our films. For example, any adverse revisions to India’s credit ratings for domestic and
international debt by domestic or international rating agencies may adversely impact our ability to raise additional financing
and the interest rates and other commercial terms at which such additional financing is available. Any such event could have a
material adverse effect on our business, prospects, financial condition and results of operations. India has recently experienced
fluctuating wholesale price inflation compared to historical levels. An increase in inflation in India could cause a rise in the
price of wages, particularly for Indian film talent, or any other expenses that we incur. If this trend continues, we may be unable
to accurately estimate or control our costs of production. Because it is unlikely we would be able to pass all of our increased
costs on to our customers, this could have a material adverse effect on our business, prospects, financial condition and results
of operations.



Fluctuation in the value of the Indian
Rupee against foreign currencies could materially and adversely affect our results of operations, financial condition and ability
to service our debt.



While a significant portion of our revenues
are denominated in Indian Rupees, certain contracts for our film content are or may be denominated in foreign currencies. Additionally,
we report our financial results in U.S. dollars and most of our debt is denominated in U.S. dollars. We expect that the continued
volatility in the value of the Indian Rupee against foreign currency will continue to have an impact on our business. The Indian
Rupee experienced an approximately 6.3% drop in value as compared to the U.S. dollar
in fiscal 2016. In fiscal 2015 the drop was 3.7%. Changes in the growth of the Indian economy and the continued volatility of the
Indian Rupee, may adversely affect our business.



Further, at the end of fiscal 2016, $163.2
million, or 52% of our debt, was denominated in U.S. dollars, and we may not generate sufficient revenue in U.S. dollars to service
all of our U.S. dollar-denominated debt. Consequently, we may be required to use revenues generated in Indian Rupees to service
our U.S. dollar-denominated debt. Any devaluation or depreciation in the value of the Indian Rupee, compared to the U.S. dollar,
could adversely affect our ability to service our debt. See “Item 3. Key Information — C. Selected Financial Data —
Exchange Rates” for historical exchange rates between Indian Rupees and U.S. dollars.



Although we have not historically done so,
we may, from time to time, seek to reduce the effect of exchange rate fluctuations on our operating results by purchasing derivative
instruments such as foreign exchange forward contracts to cover our intercompany indebtedness or outstanding receivables. However,
we may not be able to purchase contracts to insulate ourselves adequately from foreign currency exchange risks. In addition, any
such contracts may not perform effectively as a hedging mechanism. See “Item 5. Operating and Financial Review and Prospects
— Exchange Rates” and “Item 11. Quantitative and Qualitative Disclosures about Market Risk — Foreign Currency
Risk.”



We face increasing competition with other
films for movie screens, and our inability to obtain sufficient distribution of our films could have a material adverse effect
on our business.



A substantial majority of the theater screens
in India are typically committed at any one time to a limited number of films, and we compete directly against other producers
and distributors of Indian films in each of our distribution channels. If the number of films released in the market as a whole
increases it could create excess supply in the market, in particular at peak theater release times such as school and national
holidays and during festivals, which would make it more difficult for our films to succeed.



Where we are unable to ensure a wide release
for our films to maximize screenings in the first week of a film’s release, it may have an adverse impact on our revenues.
Further, failure to release during peak periods, or the inability to book sufficient screens, could cause us to miss potentially
higher gross box-office receipts and/or affect subsequent revenue streams, which could have a material adverse effect on our business,
prospects, financial condition and results of operations.



We face increasing competition from other
forms of entertainment, which could have a material adverse effect on our business.



We also compete with all other sources of entertainment
and information delivery, including television, the internet and sporting events such as the Indian Premier League, for cricket.



Technological advancements such as VOD, mobile
and internet streaming and downloading have increased the number of entertainment and information delivery choices available to
consumers and have intensified the challenges posed by audience fragmentation. The increasing number of choices available to audiences
including crossover from our Eros Now online entertainment service could negatively impact consumer demand for our films,
and there can be no assurance that occupancy rates at theaters or demand for our other distribution channels will not fall.



9






Competition within the Indian film industry
is growing rapidly, and certain of our competitors are larger, have greater financial resources and are more diversified.



The Indian film industry’s rapid growth
is changing the competitive landscape, increasing competition for content, talent and release dates. Growth in the Indian film
industry has attracted foreign industry participants and competitors, such as, Viacom Inc., The Walt Disney Company, 21st Century
Fox and Sony Pictures many of which are substantially larger and have greater financial resources, including competitors that own
theaters and/or television networks. These larger competitors may have the ability to spend additional funds on production of new
films, which may require us to increase our production budgets beyond what we originally anticipated in order to compete effectively.
In addition, these competitors may use their financial resources to gain increased access to movie screens and enter into exclusive
content arrangements with key talent in the Indian film industry. Unlike some of these major competitors that are part of larger
diversified corporate groups, we derive substantially all of our revenue from our film entertainment business. If our films fail
to perform to our expectations we are likely to face a greater adverse impact than would a more diversified competitor. In addition,
other larger entertainment distribution companies may have larger budgets to exploit growing technological trends. If we are unable
to compete with these companies effectively, our business prospects, results of operations and financial condition could suffer.
With generally increasing budgets of Hindi, Tamil and Telugu films, we may not have the resources to distribute the same level
of films as competitors with greater financial strength.



Piracy of our content, including digital
and internet piracy, may adversely impact our revenues and business.



Our business depends in part on the adequacy,
enforceability and maintenance of intellectual property rights in the entertainment products and services we create. Motion picture
piracy is extensive in many parts of the world and is made easier by technological advances and the conversion of motion pictures
into digital formats. This trend facilitates the creation, transmission and sharing of high quality unauthorized copies of motion
pictures in theatrical release on DVDs, CDs and Blu-ray discs, from pay-per-view through set top boxes and other devices and through
unlicensed broadcasts on free television and the internet.



Although DVD and CD sales represent a relatively
small portion of Indian film and music industry revenues, the proliferation of unauthorized copies of these products results in
lost revenue and significantly reduced pricing power, which could have a material adverse effect on our business, prospects, financial
condition and results of operations. In particular, unauthorized copying and piracy are prevalent in countries outside of the United
States, Canada and Western Europe, including India, whose legal systems may make it difficult for us to enforce our intellectual
property rights and in which consumer awareness of the individual and industry consequences of piracy is lower. With broadband
connectivity improving, 3G internet penetration increasing and with the advent of 4G in India, digital piracy of our content is
an increasing risk.



In addition, the prevalence of third-party
hosting sites and a large number of links to potentially pirated content make it difficult to effectively monitor and prevent digital
piracy of our content. Existing copyright and trademark laws in India afford only limited practical protection and the lack of
internet-specific legislation relating to trademark and copyright protection creates a further challenge for us to protect our
content delivered through such media. Additionally, we may seek to implement elaborate and costly security and anti-piracy measures,
which could result in significant expenses and revenue losses. Even the highest levels of security and anti-piracy measures may
fail to prevent piracy.



Litigation may also be necessary in the
future to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary
rights of others or to defend against claims of infringement or invalidity. Regardless of the legitimacy or the success of these
claims, we could incur costs and diversion of resources in enforcing our intellectual property rights or in defending against
such claims, which could have a material adverse effect on our business, prospects, financial condition and results of operations.



We may be unable to adequately protect
or continue to use our intellectual property. Failure to protect such intellectual property may negatively impact our business.



We rely on a combination of copyrights, trademarks,
service marks and similar intellectual property rights to protect our name and branded products. The success of our business, in
part, depends on our continued ability to use this intellectual property in order to increase awareness of the Eros name. We attempt
to protect these intellectual property rights through available copyright and trademark laws. Despite these precautions, existing
copyright and trademark laws afford only limited practical protection in certain countries, and the actions taken by us may be
inadequate to prevent imitation by others of the Eros name and other Eros intellectual property. In addition, if the applicable
laws in these countries are drafted or interpreted in ways that limit the extent or duration of our rights, or if existing laws
are changed, our ability to generate revenue from our intellectual property may decrease, or the cost of obtaining and maintaining
rights may increase.



10






Further, many existing laws governing property
ownership, copyright and other intellectual property issues were adopted before the advent of the internet and do not address the
unique issues associated with the internet, personal entertainment devices and related technologies, and new interpretations of
these laws in response to emerging digital platforms may increase our digital distribution costs, require us to change business
practices relating to digital distribution or otherwise harm our business. We also distribute our branded products in some countries
in which there is no copyright or trademark protection. As a result, it may be possible for unauthorized third parties to copy
and distribute our branded products or certain portions or applications of our branded products, which could have a material adverse
effect on our business, prospects, results of operations and financial condition. If we fail to register the appropriate copyrights,
trademarks or our other efforts to protect relevant intellectual property prove to be inadequate, the value of the Eros name could
be harmed, which could adversely affect our business and results of operations.



We may be unable to continue to use the
domain names that we use in our business, or prevent third parties from acquiring and using domain names that infringe on, are
similar to or otherwise decrease the value of our brand or our trademarks or service marks.



We have registered several domain
names for websites that we use in our business, such as erosplc.com, erosentertainment.com, erosnow.com and
although our Indian subsidiaries currently own over 55 registered trademarks, we have not obtained a registered trademark for any
of our domain names. If we lose the ability to use a domain name, whether due to trademark claims, failure to renew the applicable
registration or any other cause, we may be forced to market our products under a new domain name, which could cause us to lose
users of our websites, or to incur significant expense in order to purchase rights to such a domain name. In addition, our competitors
and others could attempt to capitalize on our brand recognition by using domain names similar to ours. Domain names similar to
ours have been registered in the United States, India and elsewhere.



We may be unable to prevent third
parties from acquiring and using domain names that infringe on, are similar to or otherwise decrease the value of our brand, trademarks
or service marks. Protecting and enforcing our rights in our domain names may require litigation, which could result in substantial
costs and diversion of management’s attention.



Litigation may be necessary to enforce
our intellectual property rights or to determine the validity and scope of the proprietary rights of others or to defend against
claims of infringement or invalidity. Regardless of the validity or the success of the assertion of any claims, we could incur
significant costs and diversion of resources in enforcing our intellectual property rights or in defending against such claims,
which could have a material adverse effect on our business and results of operations. Our services and products could infringe
upon the intellectual property rights of third parties.



Other parties, including our competitors, may
hold or obtain patents, trademarks, copyright protection or other proprietary rights with respect to their previously developed
films, characters, stories, themes and concepts or other entertainment, technology and software or other intellectual property
of which we are unaware. In addition, the creative talent that we hire or use in our productions may not own all or any of the
intellectual property that they represent they do, which may instead be held by third parties. Consequently, the film content that
we produce and distribute or the software and technology we use may infringe the intellectual property rights of third parties,
and we frequently have infringement claims asserted against us. Any claims or litigation, justified or not, could be time-consuming
and costly, harm our reputation, require us to enter into royalty or licensing arrangements that may not be available on acceptable
terms or at all or require us to undertake creative changes to our film content or source alternative content, software or technology.
Where it is not possible to do so, claims may prevent us from producing and/or distributing certain film content and/or using certain
technology or software in our operations. Any of the foregoing could have a material adverse effect on our business, prospects,
financial condition and results of operations.



Our ability to remain competitive may
be adversely affected by rapid technological changes and by an inability to access such technology.



The Indian film entertainment industry continues
to undergo significant technological developments, including the ongoing transition from film to digital media. We may be unsuccessful
in adopting new digital distribution methods or may lose market share to our competitors if the methods that we adopt are not as
technologically sound, user-friendly, widely accessible or appealing to consumers as those adopted by our competitors. For example,
our on-demand entertainment portal accessible via internet-enabled devices, Eros Now, may not achieve the desired growth rate.



Further, advances in technologies or alternative
methods of product delivery or storage, or changes in consumer behavior driven by these or other technologies, could have a negative
effect on our home entertainment market in India. If we fail to successfully exploit digital and other emerging technologies, it
could have a material adverse effect on our business, prospects, financial condition and results of operations.



11






We rely on the proper and efficient
functioning of our computer and database systems, and a large-scale malfunction could result in disruptions to our business.



Our ability to keep our business operating
depends on the proper and efficient operation of our computer and database systems, which are hosted, third-party provider solutions.
Though third-party hosted solutions have extremely strong redundancies and back-up capabilities, computer and database systems
are susceptible to malfunctions and interruptions (including those due to equipment damage, power outages, computer viruses and
a range of other hardware, software and network problems), and we cannot guarantee that we will not experience such malfunctions
or interruptions in the future. A significant or large-scale malfunction or interruption of one or more of our computer or database
systems could adversely affect our ability to keep our operations running efficiently. Any malfunction that results in a wider
or sustained disruption to our business could have a material adverse effect on our business, prospects, financial condition and
results of operations.



We are currently migrating to an SAP
ERP system, which could substantially disrupt our business, and our failure to successfully integrate our IT systems across our
international operations could result in additional costs and diversion of resources and management attention.



We are currently in the process of migrating
to an SAP ERP system to replace several of our existing IT systems. We have completed this accounting migration in India, but the
process is ongoing in the rest of the world and the implementation has been delayed.



Also we have not yet integrated supporting
modules into the SAP ERP system, such as a module to manage our film library. This integration and migration may lead to unforeseen
complications and expenses, and our failure to efficiently integrate and migrate our IT systems could substantially disrupt our
business. We will implement further modules within SAP ERP once the initial worldwide integration has been completed. The SAP ERP
system will be implemented globally in our different office locations and will need to accommodate our multilingual operations,
resulting in further difficulties in such implementation. Our failure to successfully integrate our IT systems across our international
operations could result in substantial costs and diversion of resources and management attention, which could harm our business
and competitive position.



The music industry is highly competitive
and many of our competitors in the music industry focus more exclusively on music distribution and have greater resources than
we have.



The music industry, including the market for
music licensing and related services in the film and broadcast industry, is intensely competitive. Many companies focus exclusively
on music distribution and have greater resources and a larger depth and breadth of library, distribution capabilities and current
repertoire than we do. We expect competition to persist and to intensify as the markets for Indian music continue to develop and
as additional competitors enter the Indian music industry. To remain competitive, we may be forced to reduce our prices and increase
costs which may have a negative impact on our financial condition and results of operations.



Our business and activities are regulated
by the Competition Act.



The Competition Act, 2002, or the Competition
Act, prohibits practices that could have an appreciable adverse effect on competition in India. Under the Competition Act, any
arrangement, understanding or action, whether formal or informal, which causes or is likely to cause an appreciable adverse effect
on competition in India is void and may result in substantial penalties and compensation to be paid to persons shown to have suffered
losses. Any agreement among competitors which directly or indirectly determines purchase or sale prices, results in bid rigging
or collusive bidding, limits or controls production, supply, markets, technical development, investment or the provision of services,
or shares the market or source of production or provision of services in any manner, including by way of allocation of geographical
area or types of goods or services or number of customers in the market, is presumed to have an appreciable adverse effect on competition.
Further, the Competition Act prohibits the abuse of a dominant position by any enterprise either directly or indirectly, including
by way of unfair or discriminatory pricing or conditions in the sale of goods or services, using a dominant position in one relevant
market to enter into, or protect, another relevant market, and denial of market access, and such practices are subject to substantial
penalties and may also be subject to compensation for losses and orders to divide the enterprise.



If we or any member of our group, including
Eros International Media Limited (“Eros India”), are further affected, directly or indirectly, by the application or
interpretation of any provision of the Competition Act, or any enforcement proceedings initiated by, or claims made to the Competition
Commission of India or any other similar authority, our business, results of operations and reputation may be materially and adversely
affected.



Acquisitions, mergers and amalgamations which
exceed certain revenue and asset thresholds require prior approval by the Competition Commission of India. Any such acquisitions,
mergers or amalgamations which have an appreciable adverse effect on competition in India are prohibited and void. There can be
no assurance that we will be able to obtain approval for such future transactions on satisfactory terms, or at all.



12






Our financial condition and results of
operations fluctuate from period to period due to film release schedules and other factors and may not be indicative of results
for future periods.



Our financial condition and results of operations
for any period fluctuate due to film release schedules in that period, none of which we can predict with reasonable certainty.
Theater attendance in India has traditionally been highest during school holidays, national holidays and during festivals, and
we typically aim to release big-budget films at these times. This timing of releases also takes account of competitor film releases,
Indian Premier League cricket matches and the timing dictated by the film production process. As a result, our quarterly results
can vary from one year to the next, and the results of one quarter are not necessarily indicative of results for the next or any
future quarter. Additionally, the distribution window for the theatrical release of films, and the window between the theatrical
release and distribution in other channels, have each been compressing in recent years and may continue to change. Further shortening
of these periods could adversely impact our revenues if consumers opt to view a film on one distribution platform over another,
resulting in the cannibalizing of revenues across distribution platforms. Additionally, because our revenue and operating results
are seasonal in nature due to the impact of the timing of new releases, our revenue and operating results may fluctuate from period
to period, and which could have a material adverse effect on our business, prospects, results of operations, financial condition
and cash flows.



Our accounting practices and management
judgments may accentuate fluctuations in our annual and quarterly operating results and may not be comparable to other film entertainment
companies.



For first release film content, we use a stepped
method of amortization and a first 12 months amortization rate based on management’s judgment taking into account historic
and expected performance, typically amortizing 50% of the capitalized cost for high budget films released during or after
fiscal 2014, and 40% of the capitalized cost for all other films, in the first
12 months of their initial commercial exploitation, and then the balance evenly over the lesser of the term of the rights held
by us and nine years. Our management has determined to adjust the first-year amortization rate for high budget films because of
the high contribution of theatrical revenue. Similar management judgment taking into account historic and expected performance
is used to apply a stepped method of amortization on a quarterly basis within the first 12 months, within the overall parameters
of the annual amortization.



Typically 25% of capitalized cost for
high budget films released during or after fiscal 2014, and 20% of capitalized cost for all other films, is amortized in the initial quarter of their commercial exploitation. In fiscal 2009 and fiscal
years prior to 2009, the balance of capitalized film content costs were amortized evenly over a maximum of four years rather than
nine. Because management exercises its judgment regarding amortization amounts, our amortization practices may not be comparable
to other film entertainment companies. In the case of film content that we acquire after its initial exploitation, commonly referred
to as library, amortization is spread evenly over the lesser of ten years after our acquisition or our license period. At least
annually, we review film and content rights for indications of impairment in accordance with IAS 36: Impairment of Assets, an
International Accounting Standard, or IAS.



The amount of revenue which we report
may be impacted by a new accounting standard dealing with revenue from customers.



In May 2014, the IASB issued IFRS 15 Revenue
from Contracts with Customers (“IFRS 15”). This standard provides a single, principle-based five-step model to be applied
to all contracts with customers. Guidance is provided on topics such as the point at which revenue is recognized, accounting for
variable consideration, costs of fulfilling and obtaining a contract and various other related matters. IFRS 15 also introduced
new disclosure requirements with respect to revenue.



IFRS 15 is effective for fiscal years beginning
on or after January 1, 2018 wherein earlier adoption is permitted. The Company is currently evaluating the impact that this
new standard will have on its consolidated financial statements. Because the amendment to IFRS 15 has not yet been
implemented widely, we cannot yet predict how it will impact our revenues under the new standard. The amendment to IFRS 15 affects
all IFRS reporting companies. When the amendment becomes effective, it may have an impact on our consolidated financial statements
and results of operations. See also “Item 5. Operating and Financial Review and Prospects – D. Trend Information
– New accounting pronouncements issued but not yet effective” for information on accounting standards which may impact
our financial condition and results of operation.



13






If we fail to achieve or maintain an
effective system of internal control over financial reporting, our ability to accurately and timely report our financial results
or prevent fraud may be adversely affected.



When we cease to qualify as an “emerging
growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, we will become subject to additional
requirements under the Sarbanes-Oxley Act (“SOX Act”), including Section 404(b) of the SOX Act which will require
our independent registered public accounting firm attest to and report on management’s assessment of the effectiveness of
our internal control over financial reporting. However, because we qualify as an “emerging growth company” under the
JOBS Act, these attestation requirements do not apply to us for up to five years after November 18, 2013, the date of our initial
public offering in the U.S., unless we cease to qualify as an “emerging growth company.” Our management has provided
a report on the effectiveness of our internal control over financial reporting with this Annual Report on Form 20-F. Our management
may conclude in future years, that our internal controls are not effective. Moreover, even if our management concludes that our
internal control over financial reporting is effective, our independent registered public accounting firm may disagree and may
decline to attest to our management’s assessment or may issue an adverse opinion. If we identify control deficiencies as
a result of the assessment process in the future, we may be unable to conclude that we have effective internal controls over financial
reporting, which are necessary for us to produce reliable financial reports and are important to help prevent fraud. As a result,
our failure to achieve and maintain effective internal controls over financial reporting and certify the same in a timely manner,
could result in the loss of investor confidence in the reliability of our financial statements, which in turn could harm our business
and negatively impact the market price of our A ordinary shares.



Our revenue is subject to significant
variation based on the timing of certain licenses and contracts we enter into that may account for a large portion of our revenue
in the period in which it is completed, which could adversely affect our operating results.



From time to time, we license film content
rights to a group of films pursuant to a single license that constitutes a large portion of our revenue for the fiscal year in
which the revenue from the license is recognized. The timing and size of similar licenses subjects our revenue to uncertainties
and variability from period to period, which could adversely affect our operating results. We expect that we will continue to enter
into licenses with customers that may represent a significant concentration of our revenues for the applicable period and we cannot
guarantee that these revenues will recur.



We have entered into certain related
party transactions and may continue to rely on our founders for certain key development and support activities.



We have entered, and may continue to enter,
into transactions with related parties. We also rely on the Founders Group, which consists of Beech Investments, Kishore Lulla
and Vijay Ahuja and associates and enterprises controlled by certain of our directors and key management personnel for certain
key development and support activities. While we believe that the Founders Group’s interests are aligned with our own, such
transactions may not have been entered into on an arm’s-length basis, and we may have achieved more favorable terms had such
transactions been entered into with unrelated parties. If future transactions with related parties are not entered into on an arm’s-length
basis, our business may be materially harmed.



Further, because certain members of the Founders
Group are controlling shareholders of, or have significant influence on, both us and our related parties, conflicts of interest
may arise in relation to dealings between us and our related parties and may not be resolved in our favor. For further information,
see “Part I — Item 7. Major Shareholders and Related Party Transactions.”



We may encounter operational and other
problems relating to the operations of our subsidiaries, including as a result of restrictions in our current shareholder agreements.



We operate several of our businesses through
subsidiaries. Our financial condition and results of operations significantly depend on the performance of our subsidiaries and
the income we receive from them. Our business may be adversely affected if our ability to exercise effective control over our non-wholly
owned subsidiaries is diminished in any way. Although we control these subsidiaries through direct or indirect ownership of a majority
equity interest or the ability to appoint the majority of the directors on the boards of such companies, unanimous board approval
is required for major decisions relating to certain of these subsidiaries. To the extent there are disagreements between us and
our various minority shareholders regarding the business and operations of our non-wholly owned subsidiaries, we may be unable
to resolve them in a manner that will be satisfactory to us. Our minority shareholders may:

| | · | be unable or unwilling to fulfill their obligations, whether of a financial nature or otherwise;
| | - | ------------------------------------------------------------------------------------------------

| | · | have economic or business interests or goals that are inconsistent with ours;
| | - | -----------------------------------------------------------------------------

| | · | take actions contrary to our instructions, policies or objectives;
| | - | ------------------------------------------------------------------

| | · | take actions that are not acceptable to regulatory authorities;
| | - | ---------------------------------------------------------------

| | · | have financial difficulties; or
| | - | -------------------------------

| | · | have disputes with us.
| | - | ----------------------



Any of these actions could have a material
adverse effect on our business, prospects, financial condition and results of operations.



14






In Fiscal 2016, our subsidiary, Eros India,
acquired 100% of the shares and voting interest in Universal Power Systems Private Limited (“Techzone”) to
utilize Techzone’s billing integration and distribution across major telecom operators in India, in order to complement
our Eros Now services. There can be no assurance that such acquisition will be successfully integrated into our business or that
the intended benefits from such acquisition will be achieved.



Additionally, we have entered into shareholder
agreements with third party shareholders of two of our non-wholly-owned subsidiaries, Big Screen Entertainment, and Ayngaran International
Limited (“Ayngaran”), and have signed a term sheet with Colour Yellow Productions. These agreements contain various
restrictions on our rights in relation to these entities, including restrictions in relation to the transfer of shares, rights
of first refusal, reserved board matters and non-solicitation of employees by us. We may also face operational limitations due
to restrictive covenants in such shareholder agreements. In addition, under the terms of our shareholder agreement in relation
to Big Screen Entertainment, disputes between partners are required to be submitted to arbitration in Mumbai, India. These restrictions
in our current shareholder agreements, and any restrictions of a similar or more onerous nature in any new or amended agreements
into which we may enter, may limit our control of the relevant subsidiary or our ability to achieve our business objectives, as
well as limiting our ability to realize value from our equity interests, any of which could have a material adverse effect on our
business, prospects, financial condition and results of operations.



The interests of the other shareholders with
respect to the operation of Big Screen Entertainment, Colour Yellow Productions and Ayngaran may not be aligned with our
interests. As a result, although we own a majority of the ownership interest in each of Big Screen Entertainment, Ayngaran and
50% of the shareholding of Colour Yellow Productions, taking actions that require approval of the minority shareholders (or their
representative directors), such as entering into related party transactions, selling material assets and entering into material
contracts, may be more difficult to accomplish.



We depend on the services of senior management.



We have, over time, built a strong team of
experienced professionals on whom we depend to oversee the operations and growth of our businesses. We believe that our success
substantially depends on the experience and expertise of, and the longstanding relationships with key talent and other industry
participants built by, our senior management. Any loss of our senior management, any conflict of interest that may arise for such
management or the inability to recruit further senior managers could impede our growth by impairing our day-to-day operations and
hindering development of our business and our ability to develop, maintain and expand relationships, which would have a material
adverse effect on our business, prospects, financial condition and results of operations.



In recent years, we have experienced additions
to our senior management team, and our success depends in part on our ability to successfully integrate these new employees into
our organization. Since 2012, we have hired several members of senior management and have added new directors. In May 2015 we announced
the departure of Andrew Heffernan, who was our Group Chief Financial Officer since 2006, from the Company and the joining of Prem
Parameswaran as Group Chief Financial Officer and President North America operations. We anticipate the need to hire additional
members in senior management in connection with the expansion of our digital business. While some members of our senior management
have entered into employment agreements that contain non-competition and non-solicitation provisions, these agreements may not
be enforceable in Isle of Man, India or the United Kingdom, whose laws govern these agreements or where our members of senior management
reside. Even if enforceable, these non-competition and non-solicitation provisions are for limited time periods.



To be successful, we need to attract
and retain qualified personnel.



Our success continues to depend to a significant
extent on our ability to identify, attract, hire, train and retain qualified professional, creative, technical and managerial
personnel. Competition for the caliber of talent required to produce and distribute our films continues to increase. We cannot
assure you that we will be successful in identifying, attracting, hiring, training and retaining such personnel in the future.
If we were unable to hire, assimilate and retain qualified personnel in the future, such inability would have a material adverse
effect on our business and financial condition.



Some viewers or civil society organizations
may find our film content objectionable.



Some viewers or civil society organizations
in India or other countries may object to film content produced or distributed by us based on religious, political, ideological
or any other positions held by such viewers. This applies in particular, to content that is graphic in nature, including violent
or romantic scenes and films that are politically oriented or targeted at a segment of the film audience. Viewers or civil society
organizations, including interest groups, political parties, religious or other organizations may assert legal claims, seek to
ban the exhibition of our films, protest against us or our films or object in a variety of other ways. Any of the foregoing could
harm our reputation and could have a material adverse effect on our business, prospects, financial condition and results of operations.
The film content that we produce and distribute could result in claims being asserted, prosecuted or threatened against us based
on a variety of grounds, including defamation, offending religious sentiments, invasion of privacy, negligence, obscenity or facilitating
illegal activities, any of which could have a material adverse effect on our business, prospects, financial condition or results
of operations.



15






Our films are required to be certified
in India by the Central Board of Film Certification.



Pursuant to the Indian Cinematograph Act, 1952,
or the Cinematograph Act, films must be certified for adult viewing or general viewing in India by the Central Board of Film Certification,
or CBFC, which looks at factors such as the interest of sovereignty, integrity and security of the relevant country, friendly relations
with foreign states, public order and morality. There may be similar requirements in the United Kingdom, Canada and Australia,
among other jurisdictions. We may be unable to obtain the desired certification for each of our films and we may have to modify
the title, content, characters, storylines, themes or concepts of a given film in order to obtain any certification or a desired
certification for broadcast release that will facilitate distribution and exploitation of the film. Any modification or receipt
of an undesirable certification could reduce the appeal of any affected film to our target audience and reduce our revenues from
that film, which could have a material adverse effect on our business, prospects, financial condition and results of operations.



Litigation and negative claims about
us or the Indian film entertainment industry generally could have a material adverse impact on our reputation, our relationship
with distributors and co-producers and our business operations.



We and certain of our directors and officers
are subject to various legal proceedings in India. We are also subject to certain tax proceedings in India, including service tax
claims aggregating to approximately $59 million and value added tax claims aggregating to approximately $3 million. In addition,
there have been certain public allegations made against the Indian film entertainment industry generally, as well as against certain
of the entities and individuals currently active in the industry about purported links to organized crime and other negative associations.
As our success in the Indian film industry partially depends on our ability to maintain our brand image and corporate reputation,
in particular in relation to our dealings with creative talent, co-producers, distributors and exhibitors, any such proceedings
or allegations, public or private, whether or not routine or justified, could tarnish our reputation and cause creative talent,
co-producers, distributors and exhibitors not to work with us.



In addition, the nature of our business and
our reliance on intellectual property and other proprietary rights subjects us to the risk of significant litigation. Litigation,
or even the threat of litigation, can be expensive, lengthy and disruptive to normal business operations, and the results of litigation
are inherently uncertain and may result in adverse rulings or decisions. We may enter into settlements or be subject to judgments
that may, individually or in the aggregate, have a material adverse effect on our business, prospects, financial condition or results
of operations.



Our performance in India is linked to
the stability of its policies, including taxation policy, and the political situation.



The role of Indian central and state governments
in the Indian economy has been and remains significant. Since 1991, India’s government has pursued policies of economic liberalization,
including significantly relaxing restrictions on the private sector. The rate of economic liberalization could change, and specific
laws and policies affecting companies in the media and entertainment sector, foreign investment, currency exchange rates and other
matters affecting investment in our securities could change as well. A significant change in India’s economic liberalization
and deregulation policies, and in particular, policies in relation to the film industry, could disrupt business and economic conditions
in India and thereby affect our business.



Taxes generally are levied on a state-by-state
basis for the Indian film industry. Recently, there has been interest in rationalizing the industry’s taxes by instituting
a uniform set of entertainment taxes administered by the Indian government. Such changes may increase our tax rate, which could
adversely affect our financial condition and results of operations. Furthermore, in certain states, theater multiplexes have enjoyed
entertainment tax benefits that may be disrupted or discontinued if India moves to a uniform entertainment tax system. This could
slow the construction of new multiplexes, and may impact single screen theaters in tier 2 and tier 3 cities converting their 1,000
seater theatres into multiplexes with 2 or 3 screens with seating capacity of 300 seats or less, which we believe is a key driver
for domestic theatrical revenue growth. Separately, there are certain deductions available to film producers for expenditures on
production of feature films released during a given year. These tax benefits may be discontinued and impact current and deferred
tax liabilities. In addition, the government of India has issued and may continue to issue tariff orders setting ceiling prices
for distribution of content on cable television service charges in India.



Other proposed changes in the Indian law and
policy environment include the following:



The Government of India has proposed a national
goods and services tax or GST regime, which would replace most of the indirect taxes on goods and services, such as central excise
duty, service tax, countervailing duty of customs duty, special additional duty of customs, central sales tax, state value added
tax, surcharge and excise, entry tax, state level entertainment taxes currently being levied and collected by the central
and state governments in India. However, the basic duty of customs would continue to be levied. The Government of India has recently
released a model GST law.



16






Additionally, the General Anti Avoidance Rules
or GAAR will come into effect from April 1, 2017. GAAR provisions are intended to restrict “impermissible avoidance arrangements,”
which would be any arrangement, the main purpose or one of the main purposes of which is to obtain a tax benefit and which satisfy
at least one of the following tests: (i) creation of rights, or obligations, not ordinarily created between persons dealing at
arm’s-length; (ii) resulting, directly or indirectly, in misuse or abuse of provisions of the Income Tax Act, 1961; (iii)
lacking, or is deemed to be lacking, commercial substance, in whole or in part; or (iv) is entered into or carried out by means,
or in a manner, not ordinarily employed for bona fide purposes. If GAAR provisions are invoked, Indian tax authorities would
have wider powers, including denial of tax benefit or a benefit under a tax treaty.



The effects of these proposed changes in the
taxation system on us cannot be determined at present and there can be no assurance that such effects would not adversely affect
our business and future financial performance.



In relation to transfer pricing, pursuant to
the Finance Act, 2016, a three tiered transfer pricing documentation structure was introduced in India, consisting of a master
file, a local file and a country-by-country report. Such a structure is in line with the recommendations contained in the action
plan on the Base Erosion and Profit Shifting (BEPS) project issued by the Organization of Economic Cooperation and Development
or OECD in October 2015.



Further, an equalization levy or EL in respect
of e-commerce transactions has been introduced in India with effect from June 1, 2016. EL is to be deducted in respect
of payments towards “specified services” (in excess of INR 100,000). A “specified service” means online
advertisement, any provision for digital advertising space or any other facility or service for the purpose of online advertisement
and includes any other service as may be notified. Deduction of EL at the rate of six per cent (on a gross basis) is the responsibility
of Indian residents / non-residents having a permanent establishment or PE in India on payments to non-residents (not having a
PE in India). Consequently, if a non-resident (not having a PE in India) earns income towards a “specified service”
which is chargeable to EL, then the same would be exempt in the hands of non-resident company.



The concept of Place of Effective Management
or POEM has also been introduced with effect from April 1, 2017 for the purpose of determining the tax residence of overseas companies
in India. The POEM is defined to mean a place where key management and commercial decisions that are necessary for the conduct
of the business of an entity as a whole are in substance made. This could have significant impact on the foreign companies holding
board meeting(s) in India, having key managerial personnel located in India, having regional headquarters located in India, etc.
In the event the POEM of a foreign company is considered to be situated in India and consequently, it becomes tax resident in India,
its global income would be taxable in India (even if it is not earned in India).



Pursuant to the Finance Act, 2015, the central
government is empowered to levy a Swachh Bharat Cess or SBC, on all or any of the taxable services at the rate of 2% of the value
of taxable services. Pursuant to a notification by the central government, an SBC of 0.5% of the value of the taxable services
is to be levied on all taxable services with effect from November 15, 2015. Further, according to the frequently asked questions
in connection with SBC issued by Central Board of Excise and Customs, since SBC is not integrated in the CENVAT credit chain, the
credit of SBC will not be permitted. Further, SBC cannot be paid by utilizing credit of any other duty or tax and will have to
be paid in cash. Accordingly, SBC will be a cost to taxpayers. Pursuant to the Finance Act, 2016, the central government has also
imposed a new levy by way of Krishi Kalyan Cess or KKC with effect from June 1, 2016, on all or any of the taxable services at
the rate of 0.5% of the value of taxable services. The credit of KKC paid on input services is permitted to be used for payment
of the proposed cess leviable on taxable services provided by a service provider. The levy of SBC along with KKC has increased
the effective rate of service tax to 15% with effect from June 1, 2016.



Our business and financial performance could
be adversely affected by unfavorable changes in or applications or interpretations of existing, or the promulgation of new, laws,
rules and regulations applicable to us and our business. Such unfavorable changes could decrease demand for our products, increase
costs and/or subject us to additional liabilities.



In addition, tax increases could place pricing
pressures on cable television service providers and broadcasters, which may, among other things, restrict the ability and willingness
of cable television broadcasters in India to pay for content acquisition, including for our films. Any of the foregoing could have
a material adverse effect on our business, prospects, financial condition and results of operations.



Natural disasters, epidemics, terrorist
attacks and other acts of violence or war could adversely affect the financial markets, result in a loss of business confidence
and adversely affect our business, prospects, financial condition and results of operations.



Numerous countries, including India, have experienced
community disturbances, strikes, terrorist attacks, riots, epidemics and natural disasters. These acts and occurrences may result
in a loss of business confidence and could cause a temporary suspension of our operations, for example, local authorities close
theaters and could have an adverse effect on the financial markets and economies of India and other countries. Such closures have
previously and could in the future impact our ability to exhibit our films and have a material adverse effect on our business,
prospects, financial condition and results of operations. In addition, travel restrictions as a result of such events may interrupt
our marketing and distribution efforts and have an adverse impact on our ability to operate effectively.



17






Our insurance coverage may be inadequate
to satisfy future claims against us.



While we believe that we have adequately insured
our operations and property in a way that we believe is customary in the Indian film entertainment industry and in amounts that
we believe to be commercially appropriate, we may become subject to liabilities against which we are not adequately insured or
against which we cannot be insured, including losses suffered that are not easily quantifiable and cause severe damage to our
reputation. Film bonding, which is a customary practice for U.S. film companies, is rarely used in India. Even if a claim
is made under an existing insurance policy, due to exclusions and limitations on coverage, we may not be able to successfully
assert our claim for any liability or loss under such insurance policy. In addition, in the future, we may not be able to maintain
insurance of the types or in the amounts that we deem necessary or adequate or at premiums that we consider appropriate. The occurrence
of an event for which we are not adequately or sufficiently insured including any class action litigation, the successful
assertion of one or more large claims against us that exceed available insurance coverage, the successful assertion of claims
against our co-producers, or changes in our insurance policies could have a material adverse effect on our business, prospects,
financial condition and results of operations.



Our Indian subsidiary, Eros India, from
which we derive a substantial portion of our revenues, is publicly listed and we may lose our ability to control its activities.



Our Indian subsidiary, Eros India, from which
we derive a substantial portion of our revenues, is publicly listed on the Indian stock exchanges. As such, under Indian law,
minority stockholders have certain rights and protections against oppression and mismanagement. Further, as of June 30, 2016 we
own approximately 73.54% of this entity. Over time, we may lose control over its activities and, consequently, lose our
ability to consolidate its revenues.



Eros India is subject to the provisions
of the Indian Companies Act, 2013 which has significantly changed the Indian company law framework. Also, the Securities and Exchange
Board of India (the “SEBI”), the securities market regulator in India, introduced the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (the “Listing Regulations”) that has subjected us to enhanced compliance
requirements and increased our compliance costs.



A majority of the provisions and rules under
the Indian Companies Act, 2013 (the “New Companies Act”) have come into effect, resulting in the corresponding provisions
of the Indian Companies Act, 1956 ceasing to have effect. The New Companies Act and the rules thereunder have brought into effect
significant changes to the Indian company law framework, such as in the provisions related to issue of capital (including provisions
in relation to issue of securities on a private placement basis), disclosures in offer documents, corporate governance norms, accounting
policies and audit matters, related party transactions, introduction of a provision allowing the initiation of class action suits
in India against companies by shareholders or depositors, a restriction on investment by an Indian company through more than two
layers of subsidiary investment companies (subject to certain permitted exceptions), prohibitions on loans to directors, insider
trading and restrictions on directors and key managerial personnel from engaging in forward dealing.



Eros India is required to spend, in each financial
year, at least 2% of the average net profits during the three immediately preceding financial years towards corporate social responsibility
activities (otherwise disclose the reasons why it has not done so) and disclose its corporate social responsibility policies
and activities on its website. Further, the New Companies Act imposes greater monetary and other liability on Eros India and its
subsidiaries and the directors of Eros India for any non-compliance. To ensure compliance with the requirements of the New Companies
Act, Eros India may need to allocate additional resources, which may increase our regulatory compliance costs and divert management
attention.



The New Companies Act has introduced certain
additional requirements which do not have corresponding equivalents under the Companies Act, 1956. Accordingly, Eros India may
face challenges in interpreting and complying with such provisions due to limited jurisprudence on them. In the event, our interpretation
of such provisions of the New Companies Act differs from, or contradicts with, any judicial pronouncements or clarifications issued
by the Government in the future, Eros India may face regulatory actions or we may be required to undertake remedial steps. Additionally,
some of the provisions of the New Companies Act overlap with other existing laws and regulations (such as the corporate governance
norms and insider trading regulations issued by the SEBI). Recently, the SEBI issued the Listing Regulations which came into effect
from December 1, 2015.



Pursuant to the Listing Regulations, Eros
India will be required to, inter alia, maintain a functional website containing the prescribed details and ensure compliance with
the prescribed corporate governance norms. Eros India may face difficulties in complying with any such requirements. Further,
the impact of provisions of the New Companies Act or the Listing Regulations has led to an increase in compliance requirements
or in compliance costs which may have an adverse effect on our business and results of operations.



18






Dividend distributions by our subsidiaries
are subject to certain limitations under local laws, including Indian and Dubai law and other contractual restrictions.



As a holding company, we rely on funds from
our subsidiaries to satisfy our obligations. Dividend payments by our subsidiaries, including Eros India and Eros Worldwide FZ-LLC,
or Eros Worldwide, are subject to certain limitations under local laws. For example, under Indian law, dividends other than in
cash are not permitted and cash dividends are only permitted to be paid out of distributable profits. Dubai law imposes similar
limitations on dividend payments. An Indian company paying dividends is also liable to pay dividend distribution tax at an effective
rate of 20.3% including cess and surcharge. In addition, the Shareholders Agreement of Ayngaran, limits the ability of that entity
to pay dividends without shareholders approval.



The Relationship Agreement with our subsidiaries
may not reflect market standard terms that would have resulted from arm’s length negotiations among unaffiliated third parties
and may include terms that may not be obtained from future negotiations with unaffiliated third parties.



The 2009 Relationship Agreement between Eros
India and Eros Worldwide FZ LLC (“Eros Worldwide”) and other Eros entities (the “Relationship Agreement”),
exclusively assigns to Eros Worldwide certain intellectual property rights and all distribution rights for Indian films (other
than Tamil films) held by Eros India or any of its subsidiaries other than Ayngaran and its subsidiaries, or the Eros India Group,
in all territories other than India, Nepal, and Bhutan, the rights for which are retained by Eros India and its subsidiaries. In
return, Eros Worldwide provides a lump sum minimum guarantee fee for each assigned film to the Eros India Group plus certain additional
contingent amounts.



The Relationship Agreement may not reflect
terms that would have resulted from arm’s length negotiations among unaffiliated third parties, and the Eros’s future
operating results may be negatively affected if it does not receive terms as favorable in future negotiations with unaffiliated
third parties. Further, as Eros does not own 100% of Eros India, it may lose control over its activities and, consequently, its
ability to ensure its continued performance under the Relationship Agreement.



The transfer pricing arrangements in the Relationship
Agreement are not binding on the applicable taxing authorities, and may be subject to scrutiny by such taxing authorities. Accordingly,
there may be material and adverse tax consequences if the applicable taxing authorities challenge these arrangements, and they
may adjust our income and expenses for tax purposes for both present and prior tax years, and assess interest on the adjusted but
unpaid taxes.



Our indebtedness could adversely affect
our operations, including our ability to perform our obligations, fund working capital and pay dividends.



As of March 31, 2016, we had $311.9 million
of borrowings outstanding of which $136.8 million is repayable within one year. We may also incur substantial additional indebtedness.
Our indebtedness could have important consequences to you, including the following:

| | · | we may be unsuccessful in refinancing our revolving credit facility;
| | - | --------------------------------------------------------------------

| | · | we could have difficulty satisfying our debt obligations, and if we fail to comply with these requirements,
an event of default could result;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------

| | · | we may be required to dedicate a substantial portion of our cash flow from operations to required
payments on indebtedness, thereby reducing the cash flow available to fund working capital, capital expenditures and other general
corporate activities or to pay dividends;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | in
                                         order to manage our debt and cash flows, we may increase our short-term indebtedness
                                         and decrease our long-term indebtedness which may not achieve the desired results;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | covenants relating to our indebtedness may restrict our ability to make distributions to our shareholders;
| | - | ----------------------------------------------------------------------------------------------------------

| | · | covenants relating to our indebtedness may limit our ability to obtain additional financing for
working capital, capital expenditures and other general corporate activities, which may limit our flexibility in planning for,
or reacting to, changes in our business and the industry in which we operate;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | lenders are able to require us to repay certain secured loans to
each of Eros India and Eros International Limited prior to their maturity, which as of March 31, 2016, represented $60.5
million of the outstanding indebtedness of Eros India and $15.52 million
of the outstanding indebtedness of Eros International Limited;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | certain Eros India loan agreements are subject to annual renewal, and until these renewals are
obtained, the lenders under these loan agreements may at any time require repayment of amounts outstanding. As at March 31, 2016
no loan agreements were pending annual renewal;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | we may be more vulnerable to general adverse economic and industry conditions;
| | - | ------------------------------------------------------------------------------

| | · | we may be placed at a competitive disadvantage compared to our competitors with less debt; and
| | - | ----------------------------------------------------------------------------------------------

| | · | we may have difficulty repaying or refinancing our obligations under our senior credit facilities
on their respective maturity dates.
| | - | -------------------------------------------------------------------------------------------------------------------------------------



19






If any of these consequences occur, our financial
condition, results of operations and ability to pay dividends could be adversely affected. This, in turn, could negatively affect
the market price of our A ordinary shares, and we may need to undertake alternative financing plans, such as refinancing
or restructuring our debt, selling assets, reducing or delaying capital investments or seeking to raise additional capital.



We cannot assure you that any refinancing would
be possible, that any assets could be sold, or, if sold, of the timing of the sales and the amount of proceeds that may be realized
from those sales, or that additional financing could be obtained on acceptable terms, if at all.



Our ability to incur debt and the use
of our funds could be limited by the restrictive covenants in the loan agreement for our revolving credit facility as well as our
GBP denominated London Stock Exchange listed bond (“UK Retail Bond”).



The loan agreement for our revolving credit
facility and the UK Retail Bond contain restrictive covenants, as well as requirements to comply with certain leverage
and other financial maintenance tests. These covenants and requirements could limit our ability to take various actions, including
incurring additional debt, guaranteeing indebtedness and engaging in various types of transactions, including mergers, acquisitions
and sales of assets. These covenants could place us at a disadvantage compared to some of our competitors, who may have fewer
restrictive covenants and may not be required to operate under these restrictions. Further, these covenants could have an adverse
effect on our business by limiting our ability to take advantage of financing, mergers and acquisitions or other opportunities.



We may not be able to generate sufficient
cash to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness
that may not be successful.



Based on interest rates as of March 31, 2016,
and assuming no additional borrowings or principal payments on our revolving credit facilities and the UK Retail Bond until
their maturities, we would need approximately $232.1 million over the next year, and $41.1 million over the next five years, to
meet our principal and interest payments under our debt agreements. Our ability to satisfy our debt obligations will depend upon,
among other things:

| | · | our future financial and operating performance, which will be affected by prevailing economic conditions
and financial, business, regulatory and other factors, many of which are beyond our control;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | our ability to refinance our debt as it becomes due, which will be affected by the cost and availability
of credit; and
| | - | -----------------------------------------------------------------------------------------------------------------------

| | · | our future ability to borrow under our revolving credit facilities, the availability of which depends
on, among other things, our compliance with the covenants in our revolving credit facilities.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



There can be no assurance that our business
will generate sufficient cash flow from operations, or that we will be able to refinance debt as it comes due or draw under our
revolving credit facilities in an amount sufficient to fund our liquidity needs. If our cash flows and capital resources are insufficient
to service our indebtedness, we may be forced to reduce or delay capital expenditures, sell assets, or seek additional capital.
These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. In addition,
the terms of existing or future debt agreements may restrict us from adopting some of these alternatives. Our ability to restructure
or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing
of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict
our business operations. If we are unable to generate sufficient cash flow, refinance our debt on favorable terms or sell additional
debt or equity securities or our assets, it could have a material adverse effect on our financial condition and on our ability
to make payments on our indebtedness.



We face risks relating to the international
distribution of our films and related products.



We derive a significant percentage of our
net revenues from customers located outside of India. We derived 42.1% of our fiscal 2016 net revenue from the exploitation of
our films in territories outside of India. We do not track revenues by geographical region other than based on our company or
customer domicile and not necessarily the country where the rights have been exploited or licensed. As a result, revenue by customer
location may not be reflective of the potential of any given market. As a result of changes in the location of our customers,
our revenues by customer location may vary year to year. Further, we may enter into a number of our contracts for international markets that have longer payment cycles that may extend up to a year from the date of the contract creating a mismatch
in revenue and cash received.



We are currently
in the process of entering the China market and estimate contributing to the budgets in excess of $20 million to at least
two Indo-Chinese co-productions. If we are unsuccessful in the production, distribution and exploitation of films not only in
India but also in the international markets including China, we may suffer losses and it may materially affect our growth prospects.



20






Our business is subject to risks inherent
in international trade, many of which are beyond our control. These risks includes:

| | · | fluctuating foreign exchange rates;
| | - | -----------------------------------

| | · | laws and policies affecting trade, investment and taxes, including laws and policies relating to
the repatriation of funds and withholding taxes and changes in these laws;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | differing cultural tastes and attitudes, including varied censorship laws;
| | - | --------------------------------------------------------------------------

| | · | differing degrees of protection for intellectual property;
| | - | ----------------------------------------------------------

| | · | financial instability and increased market concentration of buyers in other markets;
| | - | ------------------------------------------------------------------------------------

| | · | the
                                         increased day sales outstanding and difficulty of collecting trade receivables
                                         across multiple jurisdictions;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | the instability of other economies and governments; and
| | - | -------------------------------------------------------

| | · | war and acts of terrorism.
| | - | --------------------------



Events or developments related to these and
other risks associated with international trade could adversely affect our revenues from non-Indian sources, which could have a
material adverse effect on our business, prospects, financial condition and results of operations.



We may pursue acquisition opportunities,
which could subject us to considerable business and financial risk.



We evaluate potential acquisitions of complementary
businesses on an ongoing basis and may from time to time pursue acquisition opportunities. We may not be successful in identifying
acquisition opportunities, assessing the value, strengths and weaknesses of these opportunities or consummating acquisitions on
acceptable terms. Future acquisitions may result in near term dilution to earnings, including potentially dilutive issuances of
equity securities or issuances of debt. For instance, in Fiscal 2016, our subsidiary, Eros India acquired 100% of the shares
and voting interest in Techzone, to utilize Techzone’s billing integration and distribution across major telecom operations
in India, in order to complement our Eros Now services. Acquisitions may expose us to particular business and financial risks
that include, but are not limited to:

| | · | diverting of financial and management resources from existing operations;
| | - | -------------------------------------------------------------------------

| | · | incurring indebtedness and assuming additional liabilities, known and unknown, including liabilities
relating to the use of intellectual property we acquire;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | incurring significant additional capital expenditures, transaction and operating expenses and non-recurring
acquisition-related charges;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------

| | · | experiencing an adverse impact on our earnings from the amortization or impairment of acquired
goodwill and other intangible assets;
| | - | ------------------------------------------------------------------------------------------------------------------------------------

| | · | failing to successfully integrate the operations and personnel of the acquired businesses;
| | - | ------------------------------------------------------------------------------------------

| | · | entering new markets or marketing new products with which we are not entirely familiar; and
| | - | -------------------------------------------------------------------------------------------

| | · | failing to retain key personnel of, vendors to and clients of the acquired businesses.
| | - | --------------------------------------------------------------------------------------



If we are unable to address the risks associated
with acquisitions, or if we encounter expenses, difficulties, complications or delays frequently encountered in connection with
the integration of acquired entities and the expansion of operations, we may fail to achieve acquisition synergies and may be required
to focus resources on integration of operations rather than on our primary business activities. In addition, future acquisitions
could result in potentially dilutive issuances of our A ordinary shares, the incurrence of debt, contingent liabilities or amortization
expenses, or write-offs of goodwill, any of which could harm our financial condition.





21




Risks Related to our A Ordinary Shares



Our A ordinary share price may be highly
volatile and, as a result, shareholders could lose a significant portion or all of their investment or we could become subject
to securities class action litigation.



Prior to November 12, 2013, our ordinary shares
had been admitted on the Alternative Investment Market of the London StockExchange (“AIM”) since 2006 and our ‘A’
ordinary shares have been traded on the New York Stock Exchange (“NYSE”) since our initial public offering. The trading
price of our ordinary shares on AIM and the NYSE has been highly volatile. For example, the highest price that our ordinary shares
traded in the period beginning November 12, 2012 and ending November 12, 2013 was $4.48 per share and the lowest price
was $2.96 per share, prior to giving effect to the one-for-three reverse stock split effectuated on November 12, 2013.
Since the listing of our A ordinary shares on the NYSE, the highest closing price of the A ordinary shares, in the period beginning
November 12, 2013 and ending May 31, 2016, was $39.01 per share and the lowest price was $5.59 per share. The market
price of the A ordinary shares on the NYSE may fluctuate as a result of several factors, including the following:

| | · | attacks
                                         from short sellers;
| | - | --------------------------------------------------------------------

| | · | variations in our quarterly operating results;
| | - | ----------------------------------------------

| | · | adverse media report about us or our directors and officers;
| | - | ------------------------------------------------------------

| | · | changes in financial estimates or publication of research reports by analysts regarding our A ordinary
shares, other comparable companies or our industry generally;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | volatility in our industry, the industries of our customers and the global securities markets;
| | - | ----------------------------------------------------------------------------------------------

| | · | risks relating to our business and industry, including those discussed above;
| | - | -----------------------------------------------------------------------------

| | · | strategic actions by us or our competitors;
| | - | -------------------------------------------

| | · | adverse judgments or settlements obligating us to pay damages;
| | - | --------------------------------------------------------------

| | · | actual or expected changes in our growth rates or our competitors’ growth rates;
| | - | --------------------------------------------------------------------------------

| | · | investor perception of us, the industry in which we operate, the investment opportunity associated
with the A ordinary shares and our future performance;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | addition or departure of our executive officers;
| | - | ------------------------------------------------

| | · | trading volume of our A ordinary shares;
| | - | ----------------------------------------

| | · | sales of our ordinary shares by us or our shareholders;
| | - | -------------------------------------------------------

| | · | domestic and international economic, legal and regulatory factors unrelated to our performance;
or
| | - | --------------------------------------------------------------------------------------------------

| | · | the release or expiration of lock-up or other transfer restrictions on our outstanding A ordinary
shares.
| | - | ---------------------------------------------------------------------------------------------------------



These broad market and industry fluctuations,
as well as general economic, political and market conditions such as recessions or interest rate changes may cause the market price
of ordinary shares to decline.



In addition, some companies that have experienced
volatility in the market price of their stock have been subject to securities class action litigation. We have also recently become
the subject of securities class action litigation against us. Securities litigation against us could result in substantial
costs and divert our management’s attention from other business concerns, which could adversely impact our business and
affect the market price of our A ordinary shares.



Additional equity issuances will dilute
your holdings, and sales by the Founders Group could adversely affect the market price of our A ordinary shares.



Sales of a large number of our ordinary shares
by the Founders Group, as defined in “Part I — Item 4. Information on the Company — C. Organizational Structure”
could adversely affect the market price of our A ordinary shares. Similarly, the perception that any such primary or secondary
sale may occur; could adversely affect the market price of our A ordinary shares. Any future issuance of our A ordinary shares
by us may dilute the holdings of our existing shareholders, causing the market price of our A ordinary shares to decline. In addition,
any perception by potential investors that such issuances or sales might occur could also affect the trading price of our A ordinary
shares.





22




The Founders Group, which includes our
Chairman, Kishore Lulla, holds a substantial interest in and, through the voting rights afforded to our B ordinary shares and held
by the Founders Group, will continue to have the ability to exercise a controlling influence over our business, which will limit
your ability to influence corporate matters.



Our B ordinary shares have ten votes per share
and our A ordinary shares, which are trading on the NYSE, have one vote per share. As of June 30, 2016, the Founders Group collectively
owns 46.68% of our issued share capital in the form of 2,075,071 A ordinary shares, representing 0.73% of the voting power of our
outstanding ordinary shares, and 24,960,654 B ordinary shares, representing all of our B ordinary shares and 88.34% of the
voting power of our outstanding ordinary shares.



Due to the disparate voting powers attached
to our two classes of ordinary shares, the Founders Group continues to have significant influence over management and affairs
and over all matters requiring shareholder approval, including our management and policies and the election of our directors and
senior management, the approval of lending and investment policies, revenue budgets, capital expenditure, dividend policy, significant
corporate transactions, such as a merger or other sale of our company or its assets and strategic acquisitions, for the foreseeable
future. In addition, because of this dual class structure, the Founders Group will continue to be able to control all matters
submitted to our shareholders for approval unless and until they come to own less than 10% of the outstanding ordinary
shares, when all B ordinary shares held by the Founders Group will automatically convert into A ordinary shares on a one-for-one
basis.



This concentrated control could delay, defer
or prevent a change in control of our Company, impede a merger, consolidation, takeover or other business combination involving
our company, or discourage a potential acquirer from making a tender offer, initiating a potential merger or takeover or otherwise
attempting to obtain control of the Company even though other holders of A ordinary shares may view a change in control as beneficial.
Many of our directors and senior management also serve as directors of, or are employed by, our affiliated companies, and we cannot
guarantee that any conflicts of interest will be resolved in our favor. As a result of these factors, members of the Founders Group
may influence our material policies in a manner that could conflict with the interests of our shareholders. As a result, the market
price of our A ordinary shares could be adversely affected.



We will continue to incur substantial
costs as a result of being a U.S. public company.



We became a U.S. public company in November
2013. As a U.S. public company, we incur significant legal, accounting and other expenses and these expenses will likely increase
after we no longer qualify as an “emerging growth company.” Being a U.S. public company increased our legal and financial
compliance costs and make some activities more time-consuming and costly. In addition it has made it more difficult and more expensive
for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage
or incur substantially higher costs to obtain the same or similar coverage in the future. As a result, it may be more difficult
for us to attract and retain qualified individuals to serve on our board of directors or as executive officers.



As a foreign private issuer, we are subject
to different U.S. securities laws and NYSE governance standards than domestic U.S. issuers. This may afford less protection to
holders of our A ordinary shares, and you may not receive corporate and company information and disclosure that you are accustomed
to receiving or in a manner in which you are accustomed to receiving it.



As a foreign private issuer, the rules governing
the information that we disclose differ from those governing U.S. corporations pursuant to the Securities Exchange Act of 1934,
as amended, or the Exchange Act. Although we intend to report quarterly financial results and report certain material events, we
are not required to file quarterly reports on Form 10-Q or provide current reports on Form 8-K disclosing significant events within
four days of their occurrence and our quarterly or current reports may contain less information than required under U.S. filings.
In addition, we are exempt from the Section 14 proxy rules, and proxy statements that we distribute will not be subject to review
by the SEC. Our exemption from Section 16 rules regarding sales of ordinary shares by insiders means that you will have less data
in this regard than shareholders of U.S. companies that are subject to the Securities Exchange Act. As a result, you may not have
all the data that you are accustomed to having when making investment decisions. For example, our officers, directors and principal
shareholders are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange
Act and the rules thereunder with respect to their purchases and sales of our A ordinary shares.



The periodic disclosure required of foreign
private issuers is more limited than that required of domestic U.S. issuers and there may therefore be less publicly available
information about us than is regularly published by or about U.S. public companies. See “Part I — Item 10. Additional
Information — H. Documents on Display.”





23




As a foreign private issuer, we are exempt
from complying with certain corporate governance requirements of the NYSE applicable to a U.S. issuer, including the requirement
that a majority of our board of directors consist of independent directors. Although we are in compliance with the current NYSE
corporate governance requirements imposed on U.S. issuers, with the exception of our Audit Committee currently having two rather
than three members, our charter does not require that we meet these requirements.



As the corporate governance standards applicable
to us are different than those applicable to domestic U.S. issuers, you may not have the same protections afforded under U.S. law
and the NYSE rules as shareholders of companies that do not have such exemptions. It is also possible that the significant ownership
interest of the Founders Group could adversely affect investor perception of our corporate governance.



We are an “emerging growth company”
and if we decide to comply only with reduced disclosure requirements applicable to emerging growth companies, our A ordinary shares
could be less attractive to investors and our share price may be more volatile.



We are an “emerging growth company,”
as defined in the JOBS Act, and, for as long as we continue to be an “emerging growth company,” we may choose to take
advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth
companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section
404 of the SOX Act. We will cease to be an “emerging growth company” upon the earliest of (1) the first fiscal year
following the fifth anniversary of our initial public offering, November 12, 2013, (2) the first fiscal year after our annual gross
revenue is $1 billion or more, (3) the date on which we have, during the previous three-year period, issued more than $1 billion
in non-convertible debt securities or (4) the end of any fiscal year in which the market value of our common stock held by non-affiliates
exceeds $700 million as of the end of the second quarter of that fiscal year. We cannot predict if investors will find our A ordinary
shares less attractive if we choose to rely on these exemptions. If some investors find our A ordinary shares less attractive as
a result of any choices to reduce future disclosure, there may be a less active trading market for our A ordinary shares and our
share price may be more volatile.



You may be subject to Indian taxes on
income arising through the sale of our A ordinary shares.



The Indian Income Tax Act, 1961 has been amended
to provide that income arising directly or indirectly through the sale of a capital asset, including shares of a company incorporated
outside of India, will be subject to tax in India, if such shares derive, directly or indirectly, their value substantially from
assets located in India, whether or not the seller of such shares has a residence, place of business, business connection, or any
other presence in India, if, on the specified date, the value of such assets (i) represents 50% of the value of all assets owned
by the company or entity, or and (ii) exceeds the amount of 100 million rupees.



If the Indian tax authorities determine that
our A ordinary shares derive their value substantially from assets located in India you may be subject to Indian income taxes on
the income arising, directly or indirectly, through the sale of our A ordinary shares. However, the impact of the above indirect
transfer provisions would need to be separately evaluated under the tax treaty scenario of the country of which the shareholder
is a tax resident. For additional information, see “Part I—Item 10. Additional Information—E. Taxation.”



We are an Isle of Man company and, because
judicial precedent regarding the rights of shareholders is more limited under Isle of Man law than under U.S. law, you may have
less protection of your shareholder rights than you would under U.S. law.



Our constitution is set out in our memorandum
and articles of association, and we are subject to the Isle of Man Companies Act 2006, as amended, — see “Part II —
Item 4. Information on the Company — Government Regulations” and Isle of Man common law. The rights of shareholders
to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us
under Isle of Man law are to an extent governed by the common law of the Isle of Man. The common law of the Isle of Man is derived
in part from comparatively limited judicial precedent in the Isle of Man as well as from English common law, which has persuasive,
but not binding, authority on a court in the Isle of Man. The rights of our shareholders and the fiduciary responsibilities of
our directors under Isle of Man law are not as clearly established as they would be under statutes or judicial precedent in some
jurisdictions in the United States. In particular, the Isle of Man has a less developed body of securities laws than the United
States. In addition, some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate
law than the Isle of Man. Furthermore, shareholders of Isle of Man companies may not have standing to initiate a shareholder derivative
action in a federal court of the United States. As a result, shareholders may have more difficulties in protecting their interests
in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as shareholders
of a U.S. company.



24






Our board of directors may determine
that a shareholder meets the criteria of a “prohibited person” and subject such shareholder’s shares to forced
divestiture.



Our articles of association permit our board
of directors to determine that any person owning shares (directly or beneficially) constitutes a “prohibited person”
and is not qualified to own shares if such person is in breach of any law or requirement of any country and, as determined solely
by our board of directors, such ownership would cause a pecuniary or tax disadvantage to us, another shareholder or holders of
our other securities. If our board of directors determines that a shareholder meets the above criteria of a “prohibited person,”
they may direct such shareholder to transfer all A ordinary shares such shareholder owns to another person. Under the provisions
of our articles of association, such a determination by our board of directors would be conclusive and binding on such shareholder.



If our board of directors directs such shareholder
to transfer all A ordinary shares such shareholder owns, such shareholder may recognize taxable gain or loss on the transfer. See
“Part I — Item 10. Additional Information — E. Taxation” for a more detailed description of the tax consequences
of a sale or exchange or other taxable disposition of such shareholders A ordinary shares.



Judgments obtained against us by our
shareholders may not be enforceable.



We are an Isle of Man company and substantially
all of our assets are located outside of the United States. A substantial part of our current operations are conducted in India.
In addition, substantially all of our directors and executive officers are nationals and residents of countries other than the
United States and we believe that a substantial portion of the assets of these persons may be located outside the United States.
As a result, it may be difficult for you to effect service of process within the United States upon these persons. It may also
be difficult for you to enforce in U.S. courts judgments obtained in U.S. courts based on the civil liability provisions of the
U.S. federal securities laws against us and our officers and directors. Moreover, the courts of India would not automatically
enforce judgments of U.S. courts obtained in such actions against us or our directors and officers, or entertain actions brought
in India against us or such persons predicated solely upon United States federal securities laws. Further, the U.S. has not been
declared by the Government of India to be a reciprocating territory for the purposes of enforcement of foreign judgments, and
there are grounds upon which Indian courts may decline to enforce the judgments of United States courts. Some remedies available
under the laws of United States jurisdictions, including remedies available under the United States federal securities laws, may
not be allowed in Indian courts if contrary to public policy in India. Since judgments of United States courts are not automatically
enforceable in India, it may be difficult for you to recover against us or our directors and officers based upon such judgments.
There is uncertainty as to whether the courts of the Isle of Man would recognize or enforce judgments of United States courts
against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state.
In addition, there is uncertainty as to whether such Isle of Man courts would be competent to hear original actions brought in
the Isle of Man against us or such persons predicated upon the securities laws of the United States or any state.



If securities or industry analysts do
not publish research or publish unfavorable or inaccurate research about our business, our share price and trading volume could
decline.



The trading market for our ordinary shares
depends, in part, on the research and reports that securities or industry analysts publish about us or our business. We may be
unable to sustain coverage by well-regarded securities and industry analysts. If either none or only a limited number of securities
or industry analysts maintain coverage of our company, or if these securities or industry analysts are not widely respected within
the general investment community, the trading price for our ordinary shares would be negatively impacted. In the event we obtain
securities or industry analyst coverage, if one or more of the analysts who cover us downgrade our ordinary shares or publish inaccurate
or unfavorable research about our business, our share price would likely decline. We have experienced such downgrade from two of
our analysts in fiscal 2016 during the period of anonymous short seller attack on our stock. If one or more of these analysts cease
coverage of our company or fail to publish reports on us regularly, or fail to maintain a favourable outlook on the company, it
may cause investor sentiment to be weak, demand for our ordinary shares could decrease, which might cause our share price and trading
volume to decline.





25




We do not currently intend to pay dividends
on our ordinary shares. Our ability to pay dividends in the future will depend upon satisfaction of the Isle of Man 2006 Companies
Act solvency test, future earnings, financial condition, cash flows, working capital requirements and capital expenditures.



We currently intend to retain any future earnings
and do not expect to pay dividends on our ordinary shares. The amount of our future dividend payments, if any, will depend upon
our satisfaction of the solvency test contained in the 2006 Companies Act, our future earnings, financial condition, cash flows,
working capital requirements and capital expenditures. The 2006 Companies Act provides that a company satisfies the solvency test
if: (i) it is able to pay its debts as they become due in the normal course of the company’s business: and (ii) the value
of the company’s assets exceeds the value of its liabilities. There can be no assurance that we will be able to pay dividends.
Additionally, we are restricted by the terms of certain of our current debt financing facilities and may be restricted by the terms
of any future debt financings in relation to the payment of dividends.



We may be classified as a passive foreign
investment company, or PFIC, under United States tax law, which could result in adverse United States federal income tax consequences
to U.S. investors.



Based upon the past and projected composition
of our income and valuation of our assets, we do not believe we will be a PFIC for our taxable year ending December 31, 2016, and
we do not expect to become one in the future, although there can be no assurance in this regard. The determination of whether or
not we are a PFIC for any taxable year is made on an annual basis and will depend on the composition of our income and assets from
time to time. Specifically, we will be classified as a PFIC for United States federal income tax purposes if either:

| | · | 75% or more of our gross income in a taxable year is passive income, or
| | - | -----------------------------------------------------------------------

| | · | 50% or more of the average quarterly value of our gross assets in a taxable year is attributable
to assets that produce passive income or are held for the production of passive income.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The calculation of the value of our assets
will be based, in part, on the then market value of our A ordinary shares, which is subject to change. We cannot assure you that
we were not a PFIC for the 2013, 2014 and 2015 taxable years or that we will not be a PFIC for this or any future taxable year.
Moreover, the determination of our PFIC status is based on an annual determination that cannot be made until the close of a taxable
year and involves extensive factual investigation. This investigation includes ascertaining the fair market value of all of our
assets on a quarterly basis and the character of each item of income we earn, which cannot be completed until the close of a taxable
year, and, therefore, our U.S. counsel expresses no opinion with respect to our PFIC status.



If we were to be or become classified as a
PFIC, a U.S. Holder (as defined in “Part I — Item 10. Additional Information — E. Taxation”) may be subject
to burdensome reporting requirements and may incur significantly increased United States income tax on gain recognized on the sale
or other disposition of the shares and on the receipt of distributions on the shares to the extent such gain or distribution is
treated as an “excess distribution” under the United States federal income tax rules. Further, if we were a PFIC for
any year during which a U.S. Holder held our shares, we would continue to be treated as a PFIC for all succeeding years during
which such U.S. Holder held our shares. Each U.S. Holder is urged to consult its tax advisors concerning the United States federal
income tax consequences of acquiring, holding and disposing of shares if we are or become classified as a PFIC. See “Part
I — Item 10. Additional Information — E. Taxation” for a more detailed description of the PFIC rules.



26






ITEM 4. INFORMATION ON THE COMPANY



A. History and Development of our Company



Eros International Plc was incorporated in
the Isle of Man as of March 31, 2006 under the Companies Act 1931 commonly known as the 1931 Act — see “Part II —
Item 4. Information on the Company — Government Regulations,” as a public company limited by shares. Effective as of
September 29, 2011, the Company was de-registered under the 1931 Act and re-registered as a company limited by shares under the
2006 Act. We maintain our registered office at Fort Anne, Douglas, Isle of Man IM15PD; our principal executive office in the U.S.
is at 550 County Avenue, Secaucus, New Jersey 07094; and our telephone number is +1(201) 558-9021. We maintain a website at www.erosplc.com.
Information contained in our website is not a part of, and is not incorporated by reference into, this annual report.



Our capital
expenditures in fiscal 2016, 2015 and 2014 were $211.3 million, $276.2million and $163.2
million, respectively. Our principal capital expenditures were incurred for the purposes of purchasing intangible film rights and
related content. We expect our capital expenditure needs in fiscal 2017 to be approximately $225.0 million, a significant amount
of which we expect to be used for the acquisition of further intangible film rights and related content.



B. Business Overview



Eros International Plc is a leading global
company in the Indian film entertainment industry, which co-produces, acquires and distributes Indian language films in multiple
formats worldwide. We are one of the oldest companies in the Indian film industry to focus on international markets and we believe
we are pioneers in our business. Our success is built on the relationships we have cultivated over the past 39 years with leading
talent, production companies, exhibitors and other key participants in our industry. Leveraging these relationships, we have aggregated
rights to over 3,000 films in our library,including recent and classic titles that span different genres, budgets and languages.
Eros Now has rights to over 5,000 films across Hindi and regional languages from Eros’s internal library as well
as third party aggregated content which we believe makes it one of the largest Indian movie offering platforms around the world.



Eros Now, our digital over-the-top entertainment
service is increasingly focused on offering quality content including Indian films, music and original shows, opening new markets,
delivering consumer-friendly product features such as offline viewing and subtitles and adopting a platform agnostic distribution
strategy on Android and iOS platforms across mobile, tablets, cable or internet, including deals with original equipment manufacturers
(“OEMs”). Eros Now has garnered over 44 million registered users across WAP, APP and Web at the end of fiscal
2016. While a majority of users are from India, Eros Now has registered users in 135 different countries. Eros Now has rights
to over 5,000 films, and 250,000 music tracks from 13 different labels. Eros Now service is integrated with Bharti Airtel
and Idea, India’s leading telecom operators and has struck deals with LeEco and Micromax to pre-bundle Eros Now in smart
phones to be sold in India. The focus for Eros Now is monetization and it has a target to convert at least one million
users into paid subscribers by the end of fiscal 2017.



Our portfolio of films over the last three
completed fiscal years comprised 197 films. In fiscal 2016 we released 63 films in total
either in India, overseas or both. These comprised 33 Hindi films, 19 Tamil films and 11 regional language films.The Company’s
strong portfolio of films drove theatrical, television and digital/ancillary revenues worldwide with Bajrangi Bhaijaan, Bajirao
Mastani and Tanu Weds Manu Returnstaking No. 1, No. 3 and No. 4 positions on the box office charts with other major
films such as Welcome Back, Singh is Bling (Overseas), Gabbar is back (Overseas) and Dil Dhadakne Do (Overseas), giving
Eros a total of seven out of the Top 15 box office films in Calendar Year 2015 (according to www.bollywoodhungama.com).
In addition to this, Srimanthudu was the second highest Telugu grossing film of all time, according to www.123telugu.comFor fiscal 2016, our aggregate revenues were $274.4 million and were derived from theatrical, television syndication and
digital and ancillary distribution channels, globally.



We won over 150 awards including Best Studio
of the Year and Excellence in International Distribution. Further our films won Best Film, Best Director, Best Story, Best Actor,
Best Music, Best Special Effects awards, to name a few. Bajrangi Bhaijaanwon 37 awards including the 63rd National Film
Award for Popular Film. Bajirao Mastaniwon over 75 award titles including National Award for Best Director. Tanu Weds
Manu Returnswon 18 awards including National Award for best female Actor in a leading role, Herowon 7 awards and Badlapurwon 7 awards. The Company’s Malayalam film Pathemarialso won a national award for Best Malayalam Film.



27






Indian films have a global appeal and their
popularity has been increasing in many countries that consume dubbed and subtitled foreign content in local languages. These markets
includes Germany, Poland, Russia, France, Italy, Spain, Indonesia, Malaysia, Japan, South Korea, the Middle East, Latin
America among others. In all these markets it is the locals who are neither English nor Hindi speaking who view Bollywood content
in a dubbed or subtitled version in their language, just as they view Hollywood content. China is increasingly becoming an important
market and we expect to release select films from our slate for wider release into China. One of our box office hits of
fiscal 2016, Bajirao Mastaniis expected to be released in China in September 2016 in across 6,000 screens, one
of the widest ever releases for an Indian film in China. As per PwC Outlook 2016, China is expected to overtake the US box office
next year. China box office grew 49% in 2015 to $6.3 billion and is expected to grow to $10.3 billion next year. In comparison
the US box office is expected to contract from $10.3 billion to $10 billion next year. Hollywood’s share of Chinese box
office has slipped to 38.4% in 2015 from 45.5% in 2014. In early 2014 China had just under 19,000 screens and by end of 2015 that
number grew to almost 32,000. Overall China is propelling Asia-Pacific’s growth (including Indonesia, Malaysia) with box
office revenue across Asia-Pacific expected to grow to $21.11 billion in 2020 and this continues to emerge as important
growth markets for Bollywood.



We set up Trinity Pictures in fiscal 2015
as what we believe to be one of India’s first dedicated franchise studio that develops valuable intellectual property
in the form of franchise films with at least four films that will go into production during fiscal 2017 and expected to release
in fiscal 2018. The first Indo-China film “The Zookeeper” (working title) written and developed in-house by
Trinity Pictures to be co-produced with Chinese studio Peacock Mountain Culture & Media Ltd will be directed by Kabir Khan
who also directed Bajrangi Bhaijaanand will be shot simultaneously in both languages. Another Indo-China film will be
co-produced with Huaxia Film Distribution Co Ltd and which is currently titled, ‘Love in Beijing” (working title)will be directed by Siddharth Anand and will be shot in both languages. Both films are expected to release in Fiscal 2018.
Other projects include a children’s action franchise, live action elephant film and a buddy cop film. Trinity Pictures is
in discussions with third parties to create a digital comic book series, online gaming, animation series and merchandise for these
franchise films.



Our distribution capabilities enable us to
target a majority of the 1.3 billion people in India, our primary market for Hindi language films, where, according to bollywoodhungama.com,
we participated in four, three and four films of the top ten grossing films in India, in calendar year 2015, 2014 and 2013
respectively. Our distribution capabilities further enable us to target consumers in over 50 countries internationally, including
markets with large South Asian populations, such as the United States and the United Kingdom, where Rentrak reported our market
share (as an average over the preceding five calendar years to 2015) as 35% of all theatrically released Indian language films
in the United Kingdom, based on gross collections — including releases by Ayngaran, our majority-owned subsidiary, and 34%
in the United States on the same basis. Other international markets that exhibit significant demand for subtitled or dubbed Indian-themed
entertainment include Europe and South East Asia. Depending on the film, the distribution rights we acquire may be global, international
or India only. Recently, as demand for regional film and other media has increased in India, our brand recognition in Hindi films
has helped us to grow our non-Hindi film business by targeting regional audiences in India and beyond. With our distribution network
for Hindi and Tamil films and additional distribution support through our majority owned subsidiary, Ayngaran, we believe we are
well positioned to expand our offering of non-Hindi content.



We distribute our film content globally across
the following distribution channels: theatrical, which includes multiplex chains and stand-alone theaters; television
syndication, which includes satellite television broadcasting, cable television and terrestrial television; and digital
and ancillary, which includes primarily music, inflight entertainment, home video, internet protocol television, or IPTV, video
on demand, or VOD, and internet channels and Eros Now.



Our total revenues for fiscal 2016 decreased
to $274.4 million from$284.2 million in fiscal 2015, our net income decreased to
$13.3mn for fiscal 2016 from $49.3 million in fiscal 2015, EBITDA decreased to
$36.3 million in fiscal 2016 from$70.1 million in fiscal 2015 and Adjusted EBITDA decreased to $70.9 million from
$101.2 million in fiscal 2015.



The tables below set forth, for the periods
indicated, revenue by primary geographic area based on customer location, and the percentage share of total revenue.



|                  |  | Year ended March 31, |        
|----------------- |  | -------------------- | -------
|                  |  | 2016                 |        
|                  |  | (in thousands)       |        
|India             |  | $                    | 158,843
|Europe            |  |                      | 24,367 
|North America     |  |                      | 19,865 
|Rest of the world |  |                      | 71,353 
|Total revenues    |  | $                    | 274,428



28






|                  |  | Year ended March 31, |       
|----------------- |  | -------------------- | ------
|                  |  | 2016                 |       
|India             |  |                      | 57.9  
|Europe            |  |                      | 8.9   
|North America     |  |                      | 7.2   
|Rest of the world |  |                      | 26.0  
|Total revenues    |  |                      | 100.0%



Our Competitive Strengths



We believe the following competitive strengths
position us as a leading global company in the Indian film entertainment industry.



Leading co-producer and acquirer of new
Indian film content, with an extensive film library.



As one of the leading participants in the
Indian film entertainment industry we believe our size, scale and market position will continue contributing to our growth in
India and internationally. We have established our size and scale by aggregating a film library of over 3,000 films. We have demonstrated
our leading market position by releasing, internationally or globally, Hindi language films which were among the top grossing
films in India in calendar years 2015, 2014 and 2013. We believe that we have strong relationships with the Indian creative community
and a reputation for quality productions. We set up Trinity Pictures to become what we believe to be one of India’s first
dedicated franchise studio that develops valuable intellectual property in the form of franchise films and have already commissioned
two Indo-Chinese co-production films under the Trinity Pictures.



We believe that these factors, along with our
worldwide distribution platform, will enable us to continue to attract talent and film projects of a quality that we believe is
one of the best in our industry, and build what we believe is a strong film slate for fiscal 2017 with some of the leading actors
and production houses with whom we have previously delivered our biggest hits. We believe that the combined strength of our new
releases and our extensive film library positions us well to build new strategic relationships.



Established, worldwide, multi-channel
distribution network with entry proposed into China.



We distribute our films to the Indian population
in India, the South Asian diaspora worldwide and to non-Indian consumers who view Indian films that are subtitled or dubbed in
local languages. Internationally, our distribution network extends to over 50 countries, such as the United States, the United
Kingdom and throughout the Middle East, where we distribute films to Indian expatriate populations, and to Germany, Poland, Russia,
Romania, Indonesia, Malaysia, Taiwan, Japan, South Korea, China and Arabic speaking countries, where we release Indian films that
are subtitled or dubbed in local languages. China is increasingly becoming an important market and we expect to release
selected successful films from our slate for wider release into China. One of our box office hits of fiscal 2016, Bajirao Mastaniis expected to be released in China in September 2016 in across 6,000 screens, one of the widest ever releases for
an Indian film in China. We are also planning the release of our Indo-Chinese co-productions in fiscal 2018 in India, China
and the rest of the world. Through this global distribution network, we distribute Indian entertainment content over the following
primary distribution channels — theatrical, television syndication and digital platforms. Our primarily internal distribution
network allows us greater control, transparency and flexibility over the regions in which we distribute our films which we believe
results in the direct exploitation of our films without the payment of significant commissions to sub-distributors.



Diversified revenue streams and pre-sale
strategies mitigate risk and promote cash flow generation.



Our business is driven by three major revenue
streams:

| | · | theatrical distribution;
| | - | ------------------------

| | · | television syndication; and
| | - | ---------------------------

| | · | digital
                                         distribution and ancillary products and services, including Eros Now.
| | - | ----------------------------------------------------------------------------------------------------------------------



29






In fiscal 2016, revenues from theatrical distribution
accounted for nearly 50.4% of our aggregate revenues, revenues from television syndication
accounted for 26.3% and digital distribution and ancillary revenues accounted for 23.3%,
reflecting our diversified revenue base that reduces our dependence on any single distribution channel. We bundle library titles
with new releases to maximize cash flows and we also utilize a pre-sale strategy to mitigate new production project risks by obtaining
contractual commitments to recover a portion of our capitalized film costs through the licensing of television, music and other
distribution rights prior to a film’s completion.



Television pre-sales in India are an important
factor in enhancing revenue predictability for our business and are part of our diversification strategy to mitigate risks of
cash flow generation. For fiscal 2017 we have pre sales visibility from sale of satellite television rights for among
others Housefull 3, Dishoom, Baar Baar Dekho, Rock On 2, Banjo, Ki & Ka along with some regional films. In fiscal
2016, for our three high budget Hindi films we recouped 34% to 57% of the direct production cost through television and
other pre-sales. We recouped 98% and 103% of our direct production cost of the two Tamil films released through contractual commitments
prior to the film’s releases, and we recouped 91% our direct production cost of one Telugu film released through contractual
commitments prior to the film’s release.



In addition, we further seek to reduce risk
to our business by building a diverse film slate, with a mix of films by budget, region and genre that reduces our reliance on
“hit films.” This broad-based approach also enables us to bundle old and new titles for our television and digital
distribution channels to generate additional revenues long after a film’s theatrical release period is completed. We believe
our multi-pronged approach to exploiting content through theatrical, television syndication and digital distribution channels,
our pre-sale strategies and our portfolio approach to content sourcing and exploitation mitigates our dependence on any one revenue
stream and promotes cash flow generation.



Strong and experienced management team.



Our management team has substantial industry
knowledge and expertise, with a majority of our executive officers and executive directors having been involved in the film, media
and entertainment industries for 20 or more years, and has served as a key driver of our strength in content sourcing. In particular,
several members of our management team have established personal relationships with leading talent, production companies, exhibitors
and other key participants in the Indian film industry, which have been critical to our success. Through their relationships and
expertise, our management team has also built our global distribution network, which has allowed us to effectively exploit our
content globally.



Our Strategy



Our strategy is driven by the scale and variety
of our content and the global exploitation of that content through diversified channels. Specifically, we intend to pursue the
following strategies:



Co-produce, acquire and distribute high
quality content to augment our film library including a unique dedicated franchise studio model, Trinity Pictures.



We will continue to leverage the longstanding
relationships with creative talent, production houses and other key industry participants that we have built since our founding
to source a wide variety of content. Our focus will be on investing in future slates comprised of a diverse portfolio mix ranging
from high budget global theatrical releases to lower budget movies with targeted audiences. We intend to maintain our focus on
high and medium budget films and augment our library with quality content for exploitation through our distribution channels and
explore new bundling strategies to monetize existing content.



Trinity Pictures is our new division
which was set up in 2015 with the vision to be a global content studio that creates intellectual property around powerful
character and plot-driven franchises and monetize these properties across films, merchandising, gaming amongst others.



30






To promote Eros Now, our OTT platform
as the preferred choice for online entertainment by consumers across digital platforms.



As per TRAI there are over a billion wireless
subscribers in India at the end of September 2015. The number of unique users is currently at 500 million, a penetration level
of 38% of the Indian population. The number of wireless internet users in India are likely to cross 790 million by 2020 with more
than 60% of users accessing the internet through their mobile phones. It is expected that over the next couple of years, 3G and
4G subscribers would constitute over 40% of the wireless internet subscribers base. Initiatives such as broadband rollout
and public Wi-Fi as part of the government’s Digital India campaign and the promotion of 4G data packs by leading telecoms
will only help boost the quality of digital infrastructure in India.



Eros Now, our digital
over-the-top entertainment service is increasingly focused on offering quality content including Indian films, music and
original shows, opening new markets, delivering consumer-friendly product features such as offline viewing and subtitles and
adopting a platform agnostic distribution strategy on Android and iOS platforms across mobile, tablets, cable or internet,
including deals with original equipment manufacturers (“OEMs”). Eros Now has garnered over 44 million registered
users across WAP, APP and Web at the end of fiscal 2016. While a majority of users are from India, Eros Now has registered
users in 135 different countries. Eros Now has rights to over 5,000 films, and 250,000 music tracks from 13 different labels.
Eros Now service is integrated with Bharti Airtel and Idea, India’s leading telecom operators and has struck deals with
LeEco and Micromax to pre-bundle Eros Now in smart phones to be sold in India. The focus for Eros Now is monetization and it
has a target to convert at least one million users into paid subscribers by the end of fiscal 2017. We continue to believe
that Eros Now will be a significant player within the over-the-top online Indian entertainment industry, especially given the
rapidly growing internet and mobile penetration within India.



Capitalize on positive industry trends
in the Indian market.

Propelled by the economic expansion within
India and the corresponding increase in consumer discretionary spending, the FICCI Report 2016 projects that the dynamic Indian
media and entertainment industry will grow at a 14.3% compound annual growth rate, or CAGR, from $17.4 billion in 2015 to $34.1
billion by 2020, and that the Indian film industry will grow from $2.1 billion in 2015 to $3.4 billion in 2020. India is one of
the largest film markets in the world. In 2015 the average ticket price amongst the two leading multiplex cinema chains in India
was $2.73 compared to $2.63 in 2014, a 4% increase year-on-year.



The Indian television market is the second
largest in the world after China, reaching an estimated 175 million television, or TV households in 2015, of which over 160 million
were subscribing cable and satellite households. FICCI Report 2016 projects that the Indian television industry will grow from
$8.2 billion in 2015 to $16.6 billion in 2020. The growing size of the TV industry has led television satellite networks to provide
an increasing number of channels, resulting in competition for quality feature films for home viewing in order to attract increased
advertising and subscription revenues.



Broadband and mobile platforms present growing
digital avenues to exploit content. As per the latest Telecom Regulatory Authority of India report, there are over 1 billion
wireless subscribers in India at the end of September 2015. The number of unique mobile users is currently at 500 million which
is a penetration level of approximately 38% of the Indian population. It is expected to touch around 1.3 billion by 2020, over
90% of India’s total population at that point. The number of wireless internet users in India is likely to cross 790 million
by 2020 with more than 60% of users accessing the internet through their mobile phones It was estimated that in 2015 there
will be about 180 million smartphones in India, predominantly Android-based. The pace of smartphone penetration is growing and
it is expected that by 2020, all mobile handsets being sold in India will be 4G-ready smartphones.



We will take advantage of the opportunities
presented by these trends within India to monetize our library and distribute new films through existing and emerging platforms,
including by exploring new content options for expanding our digital strategy such as filming exclusive short form content for
consumption through emerging channels such as mobile and internet streaming devices.



Further extend the distribution of our
content outside of India to new audiences.



We currently distribute our content to consumers
in more than 50 countries, including in markets where there is significant demand for subtitled and dubbed Indian themed
entertainment, such as Europe and South East Asia, as well as to markets where there is significant concentration of South Asian
expatriates, such as the Middle East, the United States and the United Kingdom.



31






Our growth from non-diaspora
international markets shows a growing appetite for Bollywood content in many new markets. One of our strongest potential
markets, China, with a market size of $6.3 billion and almost 32,000 screens, is projected to soon surpass Hollywood as the
largest film market in the world. We believe our memorandum of understanding to collaborate with China Film Corp., Shanghai
Film Group Co. Ltd. and Fudan University Press Co. Ltd. to co-produce and distribute Sino-Indian films will be an important
steps in maximizing our opportunity in China. With Trinity’s launch, the studio is also expanding into new film
markets, which includes entry into China. Two projects will be co-produced with a leading Chinese studio, based on stories
organically weaving the socio-cultural worlds of India and China. Additionally, the films will be shot in both languages. We
intend to promote and distribute our films in additional countries, and further expand in countries where we
already distribute, when we believe that demand for Indian filmed entertainment exists or the potential for such demand
exists. We have also entered into arrangements with local distributors in Taiwan, Japan, South Korea, and China to distribute
dubbed or subtitled Eros films through theatrical release, television broadcast or DVD release. Additionally, we believe that
the general population growth in India experienced over recent years may eventually lead to increasing migration of Indians
to other regions, resulting in increased demand for our films internationally.



Expand our regional Indian content offerings.



We will utilize our resources, international
reputation and distribution network to continue expanding our non-Hindi content offerings to reach the substantial Indian population
whose main language is not Hindi. While Hindi films retain a broad appeal across India, the diversity of languages within India
allows us to treat regional language markets as distinct markets where particular regional language films have a strong following.
In fiscal 2016, our Tamil and Telugu releases were 21 films as compared to 19 films in fiscal 2015. In fiscal 2016, Srimanthuduwas the second highest Telugu grossing film of all time. In fiscal 2016 we released a total of 30 regional language films
other than Hindi.



In addition to Tamil and Telugu, we also work on films in other regional languages such
as Marathi, Malayalam, Punjabi and Bengali. In fiscal 2016 Malayalam film Pathemari won a national award for Best
Malayalam Film. We intend to use our existing distribution network across India to distribute regional language films to specific
territories. Where opportunities are available and where we have the rights, we also intend to exploit re-make rights to some
of our popular Hindi movies into non-Hindi language content targeted towards these regional audiences.



Slate Profile



The success of our film distribution business
lies in our ability to acquire content. Each year, we focus on the acquisition and distribution of a diverse portfolio of Indian
language and themed films that we believe will have a wide audience appeal. For fiscal 2016, our releases included 33 new Hindi
films, of which 3 were high budget films, and 21 Tamil and Telugu language films, of which 3 were high budget films. Our typical
annual slate of new releases consists of both Hindi language films as well as films produced specifically for audiences whose main
language is not Hindi, primarily Tamil, and to a lesser extent other regional Indian languages. Our most expensive films are generally
the high and medium budget films (mainly Hindi and a few Tamil and Telugu films) that we release globally each year. Of these Hindi,
Tamil and Telugu films, we generally have four to six high budget films. The remainder of the films (mainly Hindi but also Tamil
and/or Telugu) included in each annual release slate is built around these high budget films to create a slate that will attract
varying segments of the audience, and typically includes five to thirteen medium budget films. The remainder of the slate consists
of Hindi, Tamil, Telugu and other language films of a lower budget.



We have maintained our focus on high and medium
budget Hindi films because these films typically have better production values and more recognizable stars that typically attract
larger theatrical audiences. These high and medium budget films also typically drive higher revenues from television syndication
in India. We seek to mitigate the risks associated with these higher budget films through the use of our extensive pre-sale strategies.
We have increased our focus on high and medium budget Tamil and Telugu films for similar reasons. In addition, we can release a
Tamil and Hindi film on the same date as they cater to different audiences, which allow us to effectively schedule releases for
our film portfolio and to take a greater combined share of the box office on those release dates. Our slate contained six high
budget films in fiscal 2015, of which three were Hindi, two Tamil and one was Telugu and six high budget films in fiscal 2016,
of which three were Hindi, two Tamil and one was Telugu.



Hindi Film Content. Our typical annual
slate of films is comprised of high or medium budget films in the popular comedy and romance genres, supported by lower budget
films.



32






Selected Hindi Releases in Fiscal Year 2016
(a)



|Film                   |  | Cast/(Director)                                                                          |  | Co-production/Acquisition |  | Genre           |  | Actual Monthof Release | 
|---------------------- |  | ---------------------------------------------------------------------------------------- |  | ------------------------- |  | --------------- |  | ---------------------- | 
|                       |  |                                                                                          |  |                           |  |                 |  |                        | 
|Bajrangi Bhaijaan      |  | Salman Khan, Kareena Kapoor (Kabir Khan)                                                 |  | Acquisition               |  | Drama           |  | July-15                | 
|                       |  |                                                                                          |  |                           |  |                 |  |                        | 
|Bajirao Mastani        |  | Ranveer Singh, Deepika Padukone, Priyanka Chopra (Sanjay Leela Bhansali)                 |  | Co-production             |  | Romance         |  | December-15            | 
|                       |  |                                                                                          |  |                           |  |                 |  |                        | 
|Tanu Weds Manu Returns |  | R. Madhvan, Kangana Ranaut (Anand L. Rai)                                                |  | Co-production             |  | Comedy          |  | May-15                 | 
|                       |  |                                                                                          |  |                           |  |                 |  |                        | 
|Welcome Back           |  | John Abraham, Anil Kapoor, Nana Patekar, Paresh Rawal (Anees Bazmee)                     |  | Acquisition               |  | Comedy          |  | September-15           | 
|                       |  |                                                                                          |  |                           |  |                 |  |                        | 
|Singh is Bling         |  | Akshay Kumar, Kareena Kapoor, Amy Jackson (Prabhu Deva)                                  |  | Acquisition (Overseas)    |  | Comedy          |  | October-15             | 
|                       |  |                                                                                          |  |                           |  |                 |  |                        | 
|Gabbar is Back         |  | Akshay Kumar, Kareena Kapoor                                                             |  | Acquisition (Overseas)    |  | Drama           |  | April-15               | 
|                       |  |                                                                                          |  |                           |  | Drama, Comedy   |  |                        | 
|Dil Dhadakne Do        |  | Ranveer Singh, Farhan Akhtar, Priyanka Chopra, Anushka Sharma, Anil Kapoor (Zoya Akhtar) |  | Acquisition (Overseas)    |  |                 |  | June-15                | 
|                       |  |                                                                                          |  |                           |  | Romance, Action |  |                        | 
|Hero                   |  | Sooraj Pancholi, Athiya Shetty (Nikhil Advani)                                           |  | Acquisition               |  | Drama           |  | September-15           | 
|                       |  |                                                                                          |  |                           |  |                 |  |                        | 
|Aligarh                |  | Rajkumar Rao, Manoj Bajpai (Hansal Mehta)                                                |  | Co-production             |  | Biographical    |  | February-16            | 



(a) The list of films set forth in the
table above is not a complete list of all the films released in the period by us and only covers selected Hindi film releases.
We released a total of 63 films in fiscal 2016 of which 33 were Hindi films.



Tamil, Telugu and Other Regional Film Content.In order to respond to consumer demand for regional films, we have a slate of films produced in languages other than Hindi,
such as Tamil, Telugu, Marathi, Malayalam and Punjabi.



Selected Tamil and Telugu Releases in Fiscal
Year 2016 (a)



|Film                   |  | Cast/(Director)                                |  | Co-production/Acquisition |  | Genre          |  | Actual Monthof Release | 
|---------------------- |  | ---------------------------------------------- |  | ------------------------- |  | -------------- |  | ---------------------- | 
|                       |  |                                                |  |                           |  |                |  |                        | 
|Srimanthudu (Telugu)   |  | Mahesh Babu, Shruti Haasan (Koratala Siva)     |  | Acquisition               |  | Drama          |  | August-15              | 
|                       |  |                                                |  |                           |  |                |  |                        | 
|Uttama Villain (Tamil) |  | Kamal Haasan (Ramesh Aravind)                  |  | Acquisition               |  | Comedy, Drama  |  | May-15                 | 
|                       |  |                                                |  |                           |  |                |  |                        | 
|Mass (Tamil)           |  | Suriya, Nayantara, Amy Jackson (Venkat Prabhu) |  | Acquisition               |  | Action, Comedy |  | May-15                 | 
|                       |  |                                                |  |                           |  |                |  |                        | 
|Dictator (Telugu)      |  | Balakrishna (Srivaas)                          |  | Co-production             |  | Action         |  | January-16             | 



(a) The list of films set forth in the
table above is not a complete list of all the films released in the period by us and only covers selected Tamil and Telugu film
releases. We released a total of 63 films in fiscal 2016 of which 30 were regional films other than Hindi.



33






Our typical annual slate includes between 19
to 30 Tamil films, of which 10 were global Tamil and Telugu releases in fiscal 2016 compared to 6 in fiscal 2015. Tamil films are
predominantly star-driven action or comedy films, which appeal to audiences distinct from audiences for more romance-focused Hindi
films. We believe that a Tamil or Telugu film and a Hindi film can be released simultaneously on the same date without adversely
affecting business for either film as each caters to a different audience.



We believe we can capitalize on the demand
for regional films and replicate our success with Tamil and Telugu films for other distinct regional language films, including
Marathi, Malayalam and Punjabi. Currently we have three Malayalam movies (Happy Wedding, White and Naale) in pipeline for fiscal
2017. In addition, the key Indian release dates for films, during school and other holidays, vary by region and therefore the ability
to release films on different holidays in various regions, in addition to being able to release films in different regional languages
simultaneously, expands the likely periods in which films can be successfully released. We intend to build up our portfolio of
films targeting other regional language markets gradually.



Selected Major Releases in Fiscal Year 2017(a)



|Film                               |  | Cast/(Director)                                                            |  | Production/
Co-Production/Acquisition |  | Genre              |  | Actual/ AnticipatedQuarter of Release
|---------------------------------- |  | -------------------------------------------------------------------------- |  | ------------------------------------- |  | ------------------ |  | -------------------------------------
|                                   |  |                                                                            |  |                                       |  |                    |  |                                      
|Ki & Ka                            |  | Arjun Kapoor & Kareena Kapoor / (R. Balki)                                 |  | Co Production                         |  | Drama              |  | Released Q1 FY 2017                  
|                                   |  |                                                                            |  |                                       |  |                    |  |                                      
|Sardaar Gabbar Singh (Telugu)      |  | Pawan Kalyan / (North Star / K S Ravindra)                                 |  | Co Production                         |  | Action             |  | Released Q1 FY 2017                  
|                                   |  |                                                                            |  |                                       |  |                    |  |                                      
|Nil Battey Sannata (The Classmate) |  | Swara Bhaskar / (Colour Yellow-Jar Pictures)                               |  | Co Production                         |  | Drama              |  | Released Q1 FY 2017                  
|                                   |  |                                                                            |  |                                       |  |                    |  |                                      
|24 (Tamil)                         |  | Suriya, Samantha / Studio Green / Vikram Kumar                             |  | Acquisition                           |  | Science Fiction    |  | Released Q1 FY 2017                  
|                                   |  |                                                                            |  |                                       |  |                    |  |                                      
|Housefull 3                        |  | Akshay Kumar, Riteish Deshmukh, Abhishek / (Nadiadwala / Sajid Farhad)     |  | Co Production                         |  | Comedy             |  | Released Q1 FY 2017                  
|                                   |  |                                                                            |  |                                       |  |                    |  |                                      
|Dishoom                            |  | John Abraham, Varun Dhawan, Jackie Fernandez / (Nadiadwala / Rohit Dhawan) |  | Co Production                         |  | Action             |  | Q2 FY 2017                           
|                                   |  |                                                                            |  |                                       |  |                    |  |                                      
|Happy Bhag Jayegi                  |  | Diana Penty, Abhay Deol, Jimmy Shergill                                    |  | Co Production                         |  | Romantic Comedy    |  | Q2 FY 2017                           
|                                   |  |                                                                            |  |                                       |  |                    |  |                                      
|Banjo                              |  | Riteish Deshmukh & Nargis Fakhri / (Ravi Jadhav)                           |  | Production                            |  | Drama              |  | Q2 FY 2017                           
|                                   |  |                                                                            |  |                                       |  |                    |  |                                      
|Baar Baar Dekho                    |  | Siddharth Malhotra & Katrina Kaif / (Dharma / Nitya Mehra)                 |  | Acquisition                           |  | Romantic Drama     |  | Q2 FY 2017                           
|                                   |  |                                                                            |  |                                       |  |                    |  |                                      
|Rock On 2                          |  | Farhan Akhtar, Arjun Rampal / (Excel / Shujaat Saudagar)                   |  | Acquisition                           |  | Drama              |  | Q3 FY 2017                           
|                                   |  |                                                                            |  |                                       |  |                    |  |                                      
|Chaar Sahibzaade 2 (Punjabi)       |  | 3D Animation / (Harry Baweja)                                              |  | Co Production                         |  | Animation, History |  | Q3 FY 2017                           
|                                   |  |                                                                            |  |                                       |  |                    |  |                                      
|Guru Tegh Bahadur (Punjabi)        |  | 3D Animation / (Harry Baweja)                                              |  | Acquisition                           |  | Animation, History |  | Q4 FY 2017                           

_______________

| | (a) | The list of films set forth in the table above is for illustrative purposes only, is not complete and only includes released and anticipated future releases. Due to the uncertainties involved in the development and production of films, the date of their completion can be significantly delayed, planned talent can change and, in certain circumstances, films can be cancelled or not approved by the Indian Central Board of Film Certification. See “Part I — Item 3. Key Information — D. Risk Factors — Risks Relating to Our Business — Our films are required to be certified in India by the Central Board of Film Certification.”
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



34






Seasonality



Theater attendance in India has traditionally
been highest during school holidays, national holidays and during festivals, and we typically aim to release big-budget films at
these times. This timing of releases also takes account of competitor film releases, Indian Premier League cricket matches and
the timing dictated by the film production process and as a result, our quarterly results can vary from one year to the next.



Content Development and Sourcing



We currently acquire films using two principal
methods — by acquiring rights for films produced by others, generally through a license agreement, and by co-producing films
with a production house, typically referred to as a banner, that is usually owned by a top Indian actor, director or writer, on
a project by project basis. We regularly co-produce and acquire film content from some of the leading banners in India, including
Bhansali Productions Private Limited, Colour Yellow Productions Private Limited, Nadiadwala Grandson Entertainment
Private Limited, Excel Entertainment Private Limited and Salman Khan Ventures Private Limited Regardless
of the acquisition method, over the past five years, we have typically obtained exclusive global distribution rights in all media
for a minimum period of ten to twenty years from the Indian initial theatrical release date, although the term can vary for certain
films for which we may only obtain international or only Indian distribution rights, and occasionally soundtrack or other rights
are excluded from the rights acquired. On co-produced films, we typically have exclusive distribution rights for at least 20 years,
co-own the copyright in such film in perpetuity and, after the exclusive distribution right period, share control over the further
exploitation of the film.



We believe producers bring proposed films to
us not only because of established relationships, but also because they want to leverage our proven distribution and marketing
capabilities. Our in-house creative team also directly develops film ideas and contracts with writers and directors for development
purposes. When we originate a film concept internally, we then approach appropriate banners for co-production. Our in-house creative
team also participates in the selection of our slate with other members of our management through our analysis focused on the likelihood
of the financial success of each project. Our management is extensively involved in the selection of our high budget films in particular.



Through Trinity Pictures, our franchise feature
studio, we plan to launch its first slate of films during the Fiscal 2017. Trinity Pictures, we believe is one of the first Bollywood
studios in India with a dedicated in-house team of writers (the ‘Trinity Writers’ Room’), has created over ten
original franchises since the company’s inception, out of which we expect at least four films will go into production in
fiscal year 2017 and release in fiscal year 2018. Trinity’s initial film slate lineup includes a range of character driven
franchises across budgets, genres and languages. The first Indo-China film “The Zookeeper”(working title),
written and developed in-house by Trinity Pictures to be co-produced with Chinese studio Peacock Mountain Culture &
Media Ltd, will be directed by Kabir Khan who also directed Bajrangi Bhaijaan and will be shot simultaneously in both
languages. The Company expects this film to be released in Fiscal 2018. Another Indo-China film will be co-produced with Huaxia
Film Distribution Co Ltd and which is currently titled, Love in Beijing (working title), and will be directed by Siddharth
Anand, and will be shot in both languages is also expected to be released in Fiscal 2018. Other projects includes a children’s
action franchise, live action elephant film and a buddy cop film. Trinity Pictures is in discussions with third parties to create
a digital comic book series, online gaming, animation series and merchandise for these franchise films.



Regardless of whether a film will be acquired
or co-produced, we determine the likely value to us of the rights to be acquired for each film based on a variety of factors,
including the stars cast, director, composer, script, estimated budget, genre, track record of the production house, our relationship
with the talent and historical results from comparable films. Our primary focus is on sourcing a diversified portfolio of films
expected to generate commercial success. We generally co-produce our high budget films and acquire rights to more medium and low
budget films. Our model of primarily acquiring or co-producing films rather than investing in significant in-house production
capability allows us to work on more than one production with key talent simultaneously, since the producer or co-producer takes
the lead on the time intensive process of production, allowing us to scale our film slate more effectively. The following table
summarizes typical terms included in our acquisition and co-production contracts.

35






|                     |  | Acquisition                                                                                                                                                                      |  | Co-production                                                                                                                                                                                            
|-------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Film Cost            |  | Negotiated “market value”                                                                                                                                                        |  | Actual cost of production or capped budget and 10-15% production fee                                                                                                                                     
|                     |  |                                                                                                                                                                                  |  |                                                                                                                                                                                                          
|Rights               |  | 10 years-20 years                                                                                                                                                                |  | Exclusive distribution rights for at least 20 years after which Eros shares control over the further exploitation of the film, and co-owned copyright in perpetuity, subject to applicable copyright laws
|                     |  |                                                                                                                                                                                  |  |                                                                                                                                                                                                          
|Payment Terms        |  | 10-30% upon signatureBalance upon delivery or in installments between signing and delivery                                                                                       |  | In accordance with film budget and production schedule                                                                                                                                                   
|                     |  |                                                                                                                                                                                  |  |                                                                                                                                                                                                          
|Recoupment Waterfall |  | “Gross” revenuesLess 10-20% Eros distribution fee (% of cost or gross revenues)Less print, advertising costs (actuals)Less cost of the filmNet revenues generally shared equally |  | Generally same as Acquisition except sometimes Eros also charges interest and/or a production or financing fee for the cost of capital and overhead recharges                                            



Where we acquire film rights, we pay a negotiated
fee based on our assessment of the expected value to us of the completed film. Although the timing of our payment of the negotiated
fee for an acquired film to its producer varies, typically we pay the producer between 10% and 30% of a film’s negotiated
acquisition cost upon signing the acquisition agreement, and the remainder upon delivery of the completed film or in installments
paid between signing and delivery. In addition to the negotiated fee, the producer usually receives a share of the film’s
revenue stream after we recoup a distribution fee on all revenues, the entire negotiated fee and distribution costs, including
prints and ads. After we sign an acquisition agreement, we do not exercise any control over the production process, although we
do retain complete control over the distribution rights we acquire.



For films that we co-produce, in exchange for
our commitment to finance typically 100% of the agreed-upon production budget for the film and agreed budget adjustments, we typically
share ownership of the intellectual property rights in perpetuity and secure exclusive global distribution rights for all media
for at least 20 years. After we recoup our expenses, we and the co-producers share in the proceeds of the exploitation of the intellectual
property rights. Pending determination of the actual production cost of the film, we also agree to a pre-determined production
fee to compensate the co-producer for his services, which typically ranges from 10%-15% of the total budget. We typically also
provide a share of net revenues to our co-producers. Net revenues generally means gross revenues less our distribution fee, distribution
cost and the entire amount we have paid as committed financing for production of the film. Our distribution fee varies from co-produced
film to co-produced film, but is generally either a continuing 10% to 20% fee on all revenues, or a capped amount that is calculated
as a percentage of the committed financing amount for production of the film. In some cases, net revenues also deduct an overhead
charge and an amount representing an interest charge on some or all of the committed financing amount. Typically, once we agree
with the co-producer on the script, cast and main crew including the director, the budget and expected cash flow through a detailed
shooting schedule, the co-producer takes the lead in production and execution. We normally have our executive producer on the film
to oversee the project.



We reduce financing risk for both acquired
and co-produced films by capping our obligation to pay or advance funds at an agreed-upon amount or budgeted amount. We also frequently
reduce financial risk on a film to which we have committed funds by pre-selling rights in that film.



Pre-sales give us advance information about
likely cash flows from that particular film product, and accelerate cash flow realizable from that product. Our most common pre-sale
transactions are the following:

| | · | pre-selling theatrical rights for certain geographic areas, such as theaters outside the main theater
circuits in India or certain non-Indian territories, for which we generally get nonrefundable minimum guarantees plus a share of
revenues above a specified threshold;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | pre-selling television rights in India, generally by bundling releases in a package that is licensed
to satellite television operators for a specified run; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

36






| | · | pre-selling certain music rights, including for movie soundtracks and ringtones.
| | - | --------------------------------------------------------------------------------



From time to time we also acquire specific
rights to films that have already been released theatrically. We typically do not acquire global all-media rights to such films,
but instead license limited rights to distribution channels, like television, audio and home entertainment only, or rights within
a certain geographic area. As additional rights to these films become available, we frequently seek to license them as well, and
our package of distribution rights in a particular film may therefore vary over time. We work with producers not only to acquire
or co-produce new films, but also to license from them other rights they hold that would supplement rights we hold or have previously
held related to older films in our library. In certain cases, we may not hold full sequel or re-make rights or may share these
rights with our co-producers.



Our Film Library



We currently own or license rights to films
currently comprising over 3,000 films, including recent and classic titles that span different genres, budgets and languages.
Eros Now has rights to over 5,000 films across Hindi and regional languages from Eros’s internal library as well
as third party aggregated content which it believes makes it one of the largest Indian movie offering platforms around the world.
In addition Eros Now showcases music from 13 Indian music labels and offers over 250,000 music tracks. Our film library has been
built up over more than 39 years and includes hits from across that time period, including among others Bajrangi Bhaijaan,
Bajirao Mastani, Tanu Weds Manu Returns, NH10, Badlapur, Devdas, Hum Dil De Chuke Sanam, Lage Raho Munna
Bhai, Om Shanti Om, Vicky Donor, English Vinglish, Goliyon Ki Raasleela: Ram-Leela. We have acquired
most of our film content through fixed term contracts with third parties, which may be subject to expiration or early termination.
We own the rights to the rest of our film content as co-producers or sole producer of those films. Through such acquisition and
co-production arrangements, we seek to acquire rights to 60-70 additional films each year. While we typically hold rights to exploit
our content through various distribution channels, including theatrical, television and new media formats, we may not acquire
rights to all distribution channels for our films. In particular, we do not own or license the music rights to a majority of the
films in our library. We expect to maintain more than half of the rights we presently own through at least December 31, 2025.



In an effort to reach a wide range of audiences,
we maintain rights to a diverse portfolio of films spanning various genres, generations and languages. More than 65% of the films
in our Hindi library are films produced in the last 15 years. We own or license rights to films produced in several regional languages,
including Tamil, Telugu, Kannada, Marathi, Bengali, Malayalam and Punjabi.



We treat our new releases as part of our film
library one year from the date of their initial theatrical release. We believe our extensive film library provides us with unique
opportunities for content exploitation, such as our dedicated Eros content channel carried by various cable companies outside India.
Our extensive film library provides us with a reliable source of recurring cash flow after the theatrical release period for a
film has ended. In addition, because our film library is large and diversified, we believe that we can more effectively leverage
our library in many circumstances by licensing not just single films but multiple films.



37






A summary of certain key features of our film
library rights as of March 31, 2016 follows below.



|                                                                                                                                                             |  | Hindi Films                                                                                                                        |  | Regional Language Films(excluding Kannada films)                                                                                   |  | Kannada Films                                                          
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------
|                                                                                                                                                             |  |                                                                                                                                    |  |                                                                                                                                    |  |                                                                        
|Approximate percentage of total library                                                                                                                      |  | 31%                                                                                                                                |  | 57%                                                                                                                                |  | 12%                                                                    
|                                                                                                                                                             |  |                                                                                                                                    |  |                                                                                                                                    |  |                                                                        
|Approximate percentage of co-production films                                                                                                                |  | 1%                                                                                                                                 |  | Less than 1%                                                                                                                       |  | Not applicable                                                         
|                                                                                                                                                             |  |                                                                                                                                    |  |                                                                                                                                    |  |                                                                        
|Minimum remaining term of exclusive distribution rights for total films (approximate percentage of rights expiring at the earliest in the periods indicated) |  | 2020 or earlier: 43%2021-2025: 38%2026-2030: 6%2031-2045: 3%Perpetual rights, subject to applicable copyright law limitations: 10% |  | 2020 or earlier: 54%2021-2025: 13%2026-2030: 1%2031-2045: 1%Perpetual rights, subject to applicable copyright law limitations: 31% |  | Not applicable                                                         
|                                                                                                                                                             |  |                                                                                                                                    |  |                                                                                                                                    |  |                                                                        
|Remaining term of exclusive distribution rights for co-production (approximate percentage of rights expiring earliest in the periods indicated)              |  | 2020 or earlier: 0%2021-2025: 0%2026-2030: 0%2031-2045: 0%Perpetual rights, subject to applicable copyright law limitations: 100%  |  | Perpetual rights, subject to applicable copyright law limitations: 100%                                                            |  | Perpetual rights, subject to applicable copyright law limitations: 100%
|                                                                                                                                                             |  |                                                                                                                                    |  |                                                                                                                                    |  |                                                                        
|Date of first release (by Eros or prior rights owner)                                                                                                        |  | 1943-2016                                                                                                                          |  | 1958-2016                                                                                                                          |  | *                                                                      
|                                                                                                                                                             |  |                                                                                                                                    |  |                                                                                                                                    |  |                                                                        
|Rights in major distribution channels                                                                                                                        |  | Theatrical: 23%Television syndication: 23%Digital: 88%                                                                             |  | Theatrical: 38%Television syndication: 49%Digital: 74%                                                                             |  | Digital: 100%                                                          
|                                                                                                                                                             |  |                                                                                                                                    |  |                                                                                                                                    |  |                                                                        
|Music Rights (approximate percentage of films)                                                                                                               |  | 13%                                                                                                                                |  | 19%                                                                                                                                |  | 0%                                                                     
|                                                                                                                                                             |  |                                                                                                                                    |  |                                                                                                                                    |  |                                                                        
|Production Years (approximate percentage of films produced in the periods indicated)                                                                         |  | 1943-1965: 5%1966-1990: 13%1991-2016: 82%                                                                                          |  | 1958-1965: 0%1966-1990: 3%1991-2016: 97%                                                                                           |  | *                                                                      



| | (*) | Our Kannada digital rights library was acquired in September 2010, subsequent to the production and date of first release for these films, and consequently this information is not in our records.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Distribution Network and Channels



We distribute film content primarily through
the following distribution channels:

| | · | theatrical, which includes multiplex chains and stand-alone theaters;
| | - | ---------------------------------------------------------------------

| | · | television syndication, which includes satellite television broadcasting, cable television
and terrestrial television; and
| | - | --------------------------------------------------------------------------------------------------------------------------

| | · | digital and ancillary. which primarily includes IPTV, VOD, music, inflight
                                                                                                        entertainment, home video, internet channels and Eros Now.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We generally monetize each new film we release
through an initial twelve month revenue cycle commencing after the film’s theatrical release date. Thereafter, the film becomes
part of our film library where we seek to continue to monetize the content through various platforms. The diagram below illustrates
a typical distribution timeline through the first twelve months following theatrical release of one of our films.



38






Film release first cycle timeline



Film release first cycle timeline



We currently acquire films both for global
distribution, which includes the Indian domestic market as well as international markets and for international distribution only.



Certain information regarding our initial distribution
rights to films initially released in the three fiscal years ended March 31, 2016, 2015 and 2014 is set forth below:



|                                       |  | Year ended March  31, |   
|-------------------------------------- |  | --------------------- | --
|                                       |  | 2016                  |   
|Global (India and International)       |  |                       |   
|Hindi films                            |  |                       | 27
|Regional films (excluding Tamil films) |  |                       | 6 
|Tamil films                            |  |                       | 8 
|International Only                     |  |                       |   
|Hindi films                            |  |                       | 5 
|Regional films (excluding Tamil films) |  |                       | — 
|Tamil films                            |  |                       | 10
|India Only                             |  |                       |   
|Hindi films                            |  |                       | 1 
|Regional films (excluding Tamil films) |  |                       | 5 
|Tamil films                            |  |                       | 1 
|Total                                  |  |                       | 63



“High budget” films refer to Hindi films with direct production costs in excess of $8.5 million
and Tamil and Telugu films with direct production costs in excess of $7.0 million, in each case translated at the historical average
exchange rate for the applicable fiscal year. “Low budget” films refer to Hindi, and  regional films with less
than $1.0 million in direct production costs, in each case translated at the historical average exchange rate for the applicable
fiscal year. “Medium budget” films refer to Hindi, and  regional films within the remaining range of direct
production costs.



We distribute content in over 50 countries
through our own offices located in key strategic locations across the globe, including separate offices maintained by Ayngaran
for distribution of Tamil films that we do not distribute directly, and through our distribution partners. In response to Indian
cinemas’ continued growth in popularity across the world, especially in non-English speaking markets, including Germany,
Poland, Russia, Southeast Asia and Arabic speaking countries, we offer dubbed and/or subtitled content in over 25 different languages.
We have entered into co-production deals with three Chinese film companies. In addition to our internal distribution resources,
our global distribution network includes relationships with distribution partners, sub-distributors, producers, directors and prominent
figures within the Indian film industry and distribution arena.



39






Theatrical Distribution and Marketing



Indian Theatrical Distribution. The
Indian theatrical market is comprised of both multiplex and single screen theaters which are 100% digitally equipped. In India,
the cost of distributing a digital film print is lower than the cost of distributing a digital film print in the United States.
Utilization of digital film media also provides additional protection against unauthorized copying, which enables us to capture
incremental revenue that we believe are at risk of loss through content piracy.



India is divided into 14 geographical regions
known as “Film Circuits” or “Film Territories” in the Indian Film Trade. We distribute our content in all
of the circuits either through our internal distribution offices (Mumbai, Delhi, East Punjab, Mysore, Kerala, West Bengal and Bihar)
or through sub-distributors in remaining circuits. The Film Circuits where we have direct offices comprise of a market share of
up to 75% of the India theatrical revenue. Our primarily internal distribution network allows us greater control, transparency
and flexibility over the core regions in which we distribute our films, and allows us to retain a greater portion of revenues per
picture as a result of direct exploitation instead of using sub-distributors, which requires the payment of additional fees, sub
distributor margins or revenue shares.



We entered into agreements with certain key
multiplex operators to share net box office collections for our theatrical releases with the exhibitor for a predetermined fee
of 50% of net box office collections for the first week, after which the split decreases over time.



We primarily enter into agreements on a film-by-film
and exhibitor-by-exhibitor basis; however, we also have annual agreements with some of the top national multiplex chains. 
To date, our agreements have been on terms that are no less favorable than the terms of the prior settlement agreements; however,
we cannot guarantee such terms can always be obtained.



The largest number of screens in India that
we book for a particular film are booked for the first week of theatrical release, because as a substantial portion of box office
revenues are collected in the first week of a film’s theatrical exhibition. Our agreements with pan India multiplex
operators is such that 100% of the entire first week of Eros share of revenues from all our films from such multiplexes is paid
to us within 10 days of the release.



In single screens we either obtain non-refundable
minimum guarantees / refundable advances and a revenue sharing arrangement above the minimum guarantee and with certain
smaller multiplex chains we obtain refundable advances and a revenue sharing arrangement.



Pursuant to the Cinematograph Act, Indian films
must be certified for adult viewing or general viewing by the Central Board of Film Certification, or CBFC, which looks at factors
such as the interest of sovereignty, integrity and security of India, friendly relations with foreign states, public order and
morality. Obtaining a desired certification may require us to modify the title, content, characters, storylines, themes or concepts
of a given film.



Theatrical Distribution Outside India.
Outside India, we distribute our films theatrically through our offices in Dubai, Singapore, the U.S., the United Kingdom, Australia
and Fiji and through sub-distributors. In our international markets, instead of focusing on wide releases, we select a smaller
number of theaters that play films targeted at the expatriate South Asian population or the growing international audiences for
Indian films. We generally theatrically release subtitled versions of our films internationally on the release date in India, and
dubbed versions of films in countries outside India 12-24 weeks after their initial theatrical release in India sometimes after
a long gap.



Marketing. The pre-release marketing
of a film is an integral part of our theatrical distribution strategy. Our marketing team creates marketing campaigns tailored
to market and movie, utilizing print, brand tie-ups, music pre-releases, television, print and outdoor advertising, social media
marketing on Facebook and Twitter and online advertising to generate momentum for the release of a film. We generally begin print
media public relations as soon as a film commences shooting, with full marketing efforts commencing two to three months in advance
of a film’s release date, starting with a theatrical trailer for the film promoted as part of another film currently playing
in theaters. In addition, usually between six to eight weeks before the initial Indian theatrical release date, we separately release
clips from the films featuring musical numbers. Those clips and the accompanying music tracks are separately available for purchase
and add to consumer awareness and anticipation of the upcoming film release. We also maintain a Facebook page, which supplies background
detail, chat opportunities and photos of upcoming films as well as links to our YouTube content.



We also use promotional agreements and integrated
television marketing to subsidize marketing costs and expand our marketing reach. We partner with leading consumer companies in
India which support our marketing campaigns in exchange for including their brands in promotional billboards, print ads and other
marketing materials for our new film releases. Our marketing teams also work with our film stars to coordinate promotional appearances
on popular television programming, timed to coincide with the marketing period for upcoming theatrical releases.



Our marketing efforts are primarily managed
by employees located in offices across India or in one of our international offices in Dubai, Singapore, the United States, the
United Kingdom, Australia and Fiji. Occasionally, sub-distributors manage marketing efforts in regions that do not have a dedicated
Eros or Ayngaran marketing team, using the creative aspects developed by us for our marketing campaigns. Managing marketing locally
permits us to more easily identify appropriate local advertising channels and results in more effective and efficient marketing.





40




Television Distribution



India Distribution. We believe that
the increasing television audience in India creates new opportunities for us to license our film content, and expands audience
recognition of the Eros name and film products. We license Indian film content (usually a combination of new releases and existing
films in our library), to satellite television broadcasters operating in India under agreements that generally allow them to telecast
a film over a stated period of time in exchange for a specified license fee. We have, directly or indirectly, licensed content
for major Indian television channels such as Colors, Sony, the Star Network and Zee TV.



Television pre-sales in India are an important factor in enhancing revenue predictability for our business
and are part of our diversification strategy to mitigate risks of cash flow generation. Where we do pre-sales, we negotiate a set
license fee which is payable over time with the last payment due on delivery of the film. For fiscal 2017 we have pre sales visibility
from sale of satellite rights for among others Housefull
3, Dishoom, Baar Baar Dekho, Rock On 2, Banjo, Ki & Ka along with some regional films. In fiscal 2016, for our three high
budget Hindi films we recouped 34 - 57% of the direct production cost through pre-sales. We recouped 98% and 103% of our
direct production cost of the two Tamil films released through contractual commitments prior to the films’ releases,
and we recouped 91% our direct production cost of one Telugu film released through contractual commitments prior to the films’
releases.



Our content is typically released on satellite
television three to six months after the initial theatrical release. In India there are currently six direct to home, or DTH providers.
We have offered some of our films through DTH service providers, but we have also licensed these rights with the satellite TV rights
to satellite channel providers. As the number of DTH subscribers increase in India, we anticipate that we will have an opportunity
to license directly for DTH exploitation. We have also provided content to regional cable operators. Although DTH distribution
is still relatively small in India, with Indian telecom networks and DTH platforms expanding their services, we are beginning to
see an increased interest for video on demand in India. We also sub-license some of our films for broadcast on Doordarshan, the
sole terrestrial television broadcast network, which is government owned. We are seeing increasing growth from the Indian cable
system which is predominantly digital. We believe that as the cable industry migrates towards digital technology and moves toward
consolidation, cable television licensing will represent a more significant revenue stream for our business.



International Distribution. Outside
of India, we license Indian film content for broadcasting on major channels and platforms around the world, such as Channel
4 (U.K.), CCTV (China), MBC (Middle East), TV3 (Malaysia), Bollywood Channel (Israel), RTL2 (Germany), M Channel (Thailand) and
National TV (Romania) amongst others. We also license dubbed content to Europe, Arabic-speaking countries and in Southeast
Asia and other parts of the world. Often such licenses include not just new releases, but films grouped around the same star,
director or genre. International pre-sales of television, music and other distribution rights are an important component of our
overall pre-sale strategy. We believe that our international distribution capabilities and large library of content enable us
to generate a larger portion of our revenue through international distribution.



Digital Distribution



In addition to our theatrical and television
distribution networks, we have a global network for the digital distribution of our content, which consists of full length films,
music, music videos, clips and other video content. Through our digital distribution channel we mainly monetize music assets and
distribute movies and other content primarily in IPTV, VOD (including SVOD and DTH) and online internet channels. Our film content
is distributed in original language, subtitled into local languages or dubbed, in each case as driven by consumer or regional market
preferences. With our large library of content and slate of new releases, we have sought to capitalize on changes in consumer demand
through early adoption of new formats and services, which we believe enables us to generate a larger portion of our revenue through
digital distribution than the film entertainment industry average in India.



With a significant portion of the Indian and
international population rapidly moving toward digital technology, we are increasing our focus on providing on demand services,
although the platforms and strategies differ by region. Outside of India, there is a proliferation of cable, satellite and internet
services that we supply. In addition, with the proliferation of internet users, we are increasing our online distribution presence
as well. These platforms enable us to continue to monetize a film in our library long after its theatrical release period has ended.
In addition, the speed, ease of availability and prices of digital film distribution diminish incentives for unauthorized copying
and content piracy.



41






In fiscal 2016, we acquired a controlling
stake in Techzone. Techzone is an aggregator, developer and distributor of entertainment content via mobile platforms in India.
Techzone recently started aggregation in international locations. Techzone is particularly focused on the Bollywood films and
music markets and has significant region-specific content in Tamil, Telugu, Malayalam, Bengali, Odisha. The company has relationships
and billing integration with major telecom networks in India to distribute its content and also has its own allocated “Mobile
Shortcode” 56060 by telco. Techzone makes its content available to end-users via various methods such as caller ring-back
tones (CRBT), mobile radio, short message service (SMS), wireless application protocol (WAP), Over the top (OTT) and interactive
voice response (IVR).



Techzone has an average of 25 million SMS,
WAP, IVR & OTT transactions per month which is coming across from international telecom operators and major
telecom operators in India for which it bills the customers directly through its billing platform. This excludes CRBT transactions
which are also marketed and distributed by Techzone but billed by the telecom operators directly. In a given month, a single customer
may engage in multiple transactions.



In North America, we have an agreement with
International Networks, a subsidiary of Comcast, to provide a SVOD service fully branded as ‘Eros Now’. The service
is carried on most of the major cable network providers including Comcast, Cox Communications, Cablevision and Time Warner Cable.
We provide all programming for this film and music channel and share revenues with the cable providers. We also provide content
to Amazon Digital and participate in a revenue share deal. This fiscal year, we have appointed Royalty Network Inc. and have granted
sub-publishing rights to collect revenues. In Canada, Eros has signed a Program License Agreement for various movies with Rogers
Broadcasting Limited.



On YouTube, where we have exceeded 4.3 billion
views to date since our launch in 2007 and have over 5.4 million free subscribers as of June 2016, we sell banner and pre-roll
advertisements, and share these advertising revenues with Google.



As per the latest
TRAI report, there are over 1 billion wireless subscribers in India. The number of unique mobile users is currently at 500 million
which is a penetration level of approximately 38% of the Indian population. It is expected to touch around 1.3 billion by 2020,
over 90% of India’s total population at that point. The number of wireless internet users in India are likely to cross 790
million by 2020 with more than 60% of users accessing the internet through their mobile phones. It is expected that over the next
couple of years, 3G and 4G subscribers would constitute over 40% of the wireless internet subscriber base. Big disruptive initiatives
such as broadband rollout and public Wi-Fi as part of the government’s Digital India campaign and the aggressive promotion
of 4G data packs by leading telecoms will only help boost the quality of digital infrastructure in India. It is estimated that
in 2015 there are about 180 million smartphones in India, predominantly Android-based. The pace of smartphone penetration is growing
and it is expected that by 2020, all mobile handsets being sold in India will be 4G-ready smartphones.1
(Source : KPMG – FICCI, India Media and Entertainment Industry Report 2016)



Eros Now



Eros Now, our digital over-the-top entertainment
service is increasingly focused on offering a world-class choice of content including Indian films, music and original shows,
opening new markets, delivering consumer-friendly product features such as offline viewing and subtitles and adopting a platform
agnostic distribution strategy on Android and iOS platforms across mobile, tablets, cable or internet, including deals with original
equipment manufacturers (“OEMs”). The focus for ErosNow is monetization and it has a target to convert at least one million users into paying subscribers by the end of fiscal 2017.



Registered Users and Subscribers

| | · | Eros
                                         Now continues to demonstrate strong growth, garnering over 44 million registered users
                                         across WAP, APP and Web at the end of fiscal 2016. While a dominant number of
                                         users are from India, Eros Now has registered users in 135 different countries.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The
                                         Company’s new two-tier premium pricing in India is Rs. 49 ($0.75) and Rs. 99 ($1.51)
                                         per month and is available internationally for a $7.99 (or local currency equivalent)
                                         per month.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Platform Distribution and New Markets



Eros Now entered the Malaysian market with two partnerships with the country’s telecom operators; Maxis
Berhad and U Mobile. With these partnerships, we believe Eros Now  has a first mover advantage as an Indian OTT platform
entering the growing Malaysian market,. As part of the partnership with Maxis, Eros Now will be included within a
range of Maxis’ prepaid and post-paid data plans, offering various promotions to the telcom companies 12.3 million
subscribers. The deal with U Mobile also enables the telecom’s prepaid and post-paid customers’ access to Eros Now’s
premium subscriptions, including data free promotions.



| | · | The
                                         popularity of VOD and OTT platforms has been growing in Malaysia, a country with high
                                         broadband penetration and cell phone adoption. Eros Now
                                         enters this market with these telco partnerships to offer consumers subscription to Eros
                                         Now for RM10 ($2.60) per month.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



42






| | · | In
                                         India, the Company’s first telecom integration strategy for Eros Now was with Bharti
                                         Airtel, India's largest telecom operator. Bharti Airtel recently ran a co-branded
                                         marketing campaign around Bajirao Mastani powered by Eros Now on Airtel.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Eros Now has entered into a platform and content deal with India’s third largest telecom service providers,
IDEA Cellular (“IDEA”). IDEA has recently announced the launch of 4G services across five southern states of
India, and had announced plans to expand to 750 towns in 10 service areas, by June 2016. The association with Eros Now,
will enable IDEA’s 4G customers in these markets to enjoy rich premium content from a wide library of movies, originals and
short form videos.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Original Equipment Manufacturers (OEMs) are also an integral part of Eros Now distribution strategy.
Eros Now entered into a partnership with Micromax, the second largest handset manufacturer in India and the 10th largest mobile
phone player in the world. Micromax anticipates sales of approximately 1-1.5 million of it’s smartphones every month. Eros
Now will be the only pre-installed entertainment app across all Micromax smartphones. Eros Now will also leverage Micromax’s
presence of over 150,000 retail outlets to promote and distribute its service.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Similarly,
                                         Eros Now is integrated on LeEco phones for the Indian market with a one year Eros Now
                                         subscription worth approximately $10 and $20 pre-bundled on standard and premium handsets,
                                         respectively. LeEco smart phones, LeMax and Le1S are being exclusively sold through e-commerce
                                         portal Flipkart and LeEco is running an aggressive marketing campaign in India.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Eros
                                         Now has expanded availability of the service to the Apple TV media platform and is now
                                         showcasing across Apple TV’s presence in 80 key countries including the U.S.,
                                         UK, India, Canada, Australia, and Malaysia. Subscribers can download the Eros Now app
                                         through the Apple TV App Store.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Eros Now is also available on Amazon Fire TV to users across the U.S., UK and Western Europe. Eros
Now’s content can be viewed on TV, mobile, tablet and web via Fire TV. The app, which can be easily accessed via the Amazon
Store allows users to customize content by creating personal watch lists and utilize video progression, allowing users to continue
watching content from where they previously left off. In addition, Amazon will be co-marketing the Eros Now service and promoting
the app across all relevant geographies with Amazon Fire TV. Eros Now is also integrated for the Chromecast platform.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Eros Now has extended to Android platforms via Android TV, one of the fastest growing smart TV
platforms. Earlier in the year the Company completed the integration of the Eros Now app on to the Google Nexus Player and other
2015 Android TV platforms like Sony, Sharp and Phillips with Apple, Android and Samsung platforms, Eros Now is present across three
of the top four streaming devices in the world.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Product Features

| | · | Eros Now continues to implement and introduce new and exciting product features. In fiscal
                                                                                                             2016, Eros Now launched its “Portability” feature which allows users to access their accounts and watch content
                                                                                                             across up to eight different devices. Eros Now also launched its “video progression” feature, where the platform
                                                                                                             is able to remember the point at which a user has paused or stopped viewing their content piece, and allows them to resume
                                                                                                             viewing from this point when they return, even on a different device. Eros Now content is available on High Definition
                                                                                                             quality video with multi language subtitles.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In
                                         June, Eros Now also launched offline viewing or download features across Android and
                                         iOS platforms that enable subscribers to access content even when they are not connected
                                         to the internet.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Content

| | · | Eros Now has rights to over 5,000 films across Hindi and regional languages from Eros’s
internal library as well as third party aggregated content which it believes makes it one of the largest Indian movie offering
platforms around the world. In addition, Eros Now showcases music from 13 Indian music labels and offers over 250,000 music tracks.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The database of Eros Now consist of movie premieres, including new releases in theatres some which
are big digital premieres. From March 2015, the Company premiered 26 new films out of 72 digital premieres. Some of the recent
digital premieres include Bajrangi Bhaijaan(No. 1), Prem Ratan Dhan Payo(No. 2), Bajirao Mastani (No 3)
and Tanu Weds Manu Returns(No. 4), which are the top four films of Calendar Year 2015
according to www.bollywoodhungama.com. Eros Now also premiered Pikuand Mastizaadeto name a few. Notably, Eros Now offers not just the content that it co-produces and acquires for its film business, but also
aggregates third party content from other film studios to make it a compelling consumer proposition.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



43






| | · | Eros Now has also added a series of short originals titled “Black & White” which
ranges from interviews, tete-a-tete with leading talent from the Indian film industry shot exclusively for Eros Now. This series
offers insight into the life of our customers favourite celebrities.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Cool, contemporary and edgy “Originals” that target the youth of India is an important
part of the Eros Now content strategy. Eros Now has shows such as Lostand Smoke(both thrillers) which are in production
as well as Flip (Drama) which is a collection of independent stories and is adding Siachen, the first ever reality series
to be shot on a mobile phone, to its originals’ slate. These originals are developed and follow a rigorous greenlighting
process just like films, with script, screenplay, budgeting pilot episode production, market research and testing of the pilot
episode and final production.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Physical and Other Distribution



We also distribute globally our film content
through physical formats (DVDs and Video Compact Discs, or VCDs), in hotels and on airlines, and for use on mobile networks. We
distribute and license content on physical media throughout the world, including on Blu-ray and DVDs, and in India on VCD and DVD.
In India, and to service South Asian consumers internationally, we distribute to major retail chains (such as Planet-M) and internet
platforms such as Amazon, as well as supplying local wholesalers and retailers. We also license content to third party distributors
internationally to provide content dubbed into local languages for consumption by non-South Asian audiences. We also have direct
sales to corporate customers, primarily in India, who bundle our DVDs or VCDs with their own products for promotional purposes.
This aspect of our business works on a volume basis, with the low margins being offset by large confirmed orders. We have provided
content for various mobile platforms such as Singtel and Shotformats Digital Productions.



Music



Music is integral to our films, and when we
obtain global, all-media rights in our acquired or co-produced films music rights typically are included. Film music rights are
often marketed and monetized separate from the underlying film, both before and after the release of the related films. In addition,
we act as a music publisher for third party owned music rights within India. Through our internal resources and network of licensees,
we are able to provide our consumers with music content directly, through third party platforms or through licensing deals. The
content is primarily taken from our film content and the revenues are derived from mobile rights, MP3 tracks, sold via third party
platforms such as iTunes and Rhapsody as well as streaming services such as Spotify and Rdio, digital streaming, physical CDs and
publishing/master rights licensing.



We also exploit the music publishing and master
rights we own, which involves directly licensing songs to radio and television channels in India, synchronizing of music content
to film, television and advertisers globally, as well as receiving royalties from public performance of these songs when they are
played at public events. Ancillary revenues from public performances in India are collected and paid over to us through Phonographic
Performance Limited and The Indian Performing Rights Society, which monitor, collect and distribute royalties to their members.



Intellectual Property



As our revenue is primarily generated from
commercial exploitation of our films and related content, our intellectual property rights are a critical component of our business.
Unauthorized use of intellectual property, particularly piracy of DVDs and CDs, as well as on-line piracy through unauthorized
downloads, is widespread in India and other countries, and the mechanisms for protecting intellectual property rights in India
and such other countries are not as effective as those of the United States and certain other countries. We participate directly
and through industry organizations in actions against persons who have illegally pirated our content, and we also deal with piracy
by promoting a film to ensure maximum revenues early in its release and shortening the period between the theatrical release of
a film and its legitimate availability on DVD and VCD. This is supported by the trend in the Indian market for a significant percentage
of a film’s box office receipts to be generated in the first few weeks after release. Rapid transition of consumer preference
from physical to digital modes of consumption of film and related content via on-line, mobile and digital platforms has enabled
our Eros Now business to grow, but this business faces competition from sites offering unauthorized pirated content.



The Indian Copyright Act, 1957, or the Copyright
Act, provides for registration of copyrights, transfer of ownership and licensing of copyrights and infringement of copyrights
and remedies available in that respect. The Copyright Act affords copyright protection to cinematographic films and sound recordings.
For cinematographic films, copyright is granted for a certain period of time, usually for a period of 60 years from the beginning
of the calendar year following the year in which such film is published, subsequent to which the work falls in the public domain
and any act of reproduction of the work by any person other than the author would not amount to infringement.



44






Following the issuance of the International
Copyright Order, 1999, subject to certain conditions and exceptions, certain provisions of the Copyright Act apply to nationals
of all member states of the World Trade Organization, the Berne Convention and the Universal Copyright Convention.



The Copyright Act was amended in 2012 to allow
authors of literary and musical works (which may be included as part of a cinematograph film) to retain the right to receive royalty
for the utilization of such work (other than as part of the cinematograph film).



Although the state governments in India serve
as the enforcing authorities of the Copyright Act, the Indian government serves an advisory role in assisting with enforcement
of anti-piracy measures. In December 2009, the Union Information & Broadcasting Ministry established a task force
to recommend measures to combat film, video and cable piracy, which submitted recommendations in September 2010, including:



| | · | as a condition to licenses being granted to theaters and multiplexes by district authorities, theater
and multiplex operators should be required to prohibit viewers from carrying a cam-cording device inside the theater;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | encouraging state governments to enact legislation providing for preventive detention of video
and audio pirates and bring video pirates under the Goonda Act; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | undertaking measures to ensure high fidelity in genuine DVDs to discourage the public from buying
pirated versions.
| | - | -------------------------------------------------------------------------------------------------------------------



However, these are recommendations of the task
force, and there can be no assurance that any of these recommendations will be accepted and become binding law or regulation in
a timely manner, or at all.



While copyright registration is not a prerequisite
for acquiring or enforcing such rights, registration creates a presumption favoring the ownership of the right by the registered
owner. Registration may expedite infringement proceedings and reduce delay caused due to evidentiary considerations. Neither we
nor our Indian subsidiaries currently have any registered copyrights in India. The registration of certain types of trademark is
prohibited, including where the property sought to be registered is not distinctive.



Recently, the Department of Industrial Policy
and Promotion, Ministry of Commerce and Industry, Government of India issued the National Intellectual Property Rights Policy which
aims, among other things, to stimulate intellectual property creation and protection by Indian and foreign corporates, to commercialize
intellectual property rights by exploring the feasibility of creation of an IPR exchange and to enable valuation of intellectual
property rights as intangible assets. The policy contemplates the review of existing intellectual property related laws, wherever
necessary, and states that the Indian Cinematography Act, 1952 should be suitably amended to provide for penal provisions for illegal
duplication of films.



We use a number of trademarks in our business,
all of which are owned by our subsidiaries. Our Indian subsidiaries currently own over 55 Indian registered trademarks and domain
names, which are used in their business, including the registered trademark “Eros,” “Eros International,”
“Eros Music,” and “Eros Now.” However, we have not yet received Indian trademark registration for certain
of our trademarks used in India. A majority of these registrations, and certain applications for registrations, are in the name
of our subsidiaries Eros India, Eros Films or Eros Digital Private Limited, with whom we have an informal arrangement with respect
to the use of such trademarks. The registration of any trademark in India is a time-consuming process, and there can be no assurance
that any such registration will be granted.



The Indian Trade Marks Act, 1999, or the Trademarks
Act, governs the registration, acquisition, transfer and infringement of trademarks and remedies available to a registered proprietor
or user of a trademark. The registration of a trademark is valid for a period of ten years but can be renewed in accordance with
the specified procedure.



Until recently, to obtain registration of a
trademark in multiple countries, an applicant was required to make separate applications in different languages and disburse different
fees in the respective countries. However, the Madrid Protocol enables nationals of member countries, including India, to secure
protection of trademarks by filing a single application with one fee and in one language in their country of origin. The Trademarks
Act was amended by the Trade Marks (Amendment) Act 2010, or the Trademarks Amendment Act. The Trademarks Amendment Act empowers
the Registrar of Trade Marks to deal with international applications originating from India as well as those received from the
International Bureau and to maintain a record of international registrations. This amendment also removes the discretion of the
registrar to extend the time for filing a notice of opposition of published applications and provides for a uniform time limit
of four months in all cases. Further, it simplifies the law relating to transfer of ownership of trademarks by assignment or transmission
and brings the law generally in line with international practice. Pursuant to the Madrid Protocol and the Trademarks Act, we have
obtained trademarks in Egypt, the European Community, United Arab Emirates, Australia and the United States.



45






The remedies available in the event of infringement
under the Copyright Act and the Trademarks Act include civil proceedings for damages, account of profits, injunction and the delivery
of the infringing materials to the owner of the right, as well as criminal remedies including imprisonment of the accused and the
imposition of fines and seizure of infringing materials.



Competition



The Indian film industry’s rapid growth
is changing the competitive landscape. We believe we were one of the first companies in India to create an integrated business
of sourcing new Indian film content through co-productions and acquisitions while building a valuable library of rights in existing
content and also distributing Indian film content globally across formats.



Some of our direct competitors, such as The
Walt Disney Company (“Disney”), 20th Century Fox Pictures and Viacom Studio 18, have moved toward similar models in
addition to their other business lines within the Indian entertainment industry. We also face competition from the direct or indirect
presence in India of significant global media companies, including the major Hollywood studios. Disney has acquired 100% of UTV
and Viacom has ownership interests in Viacom Studio 18, while other Hollywood studios, such as News Corporation and Sony, have
established local operations in India for film distribution, and have released a limited number of Indian films. Our primary competitors
for Indian film content in the markets outside of India are UTV, Fox, Viacom and Yash Raj Films. We believe our experience and
understanding of the Indian film market positions us well to compete with new and existing entrants to the Indian media and entertainment
sector. Rentrak reported our market share (as an average over the preceding five calendar years to 2015) as 35% of all theatrically
released Indian language films in the United Kingdom, based on gross collections — including releases by Ayngaran, our majority-owned
subsidiary, and 34% in the United States on the same basis, and from 1980 to 2013 we had the highest market share of all theatrically
released Indian language films in the United Kingdom based on gross collections in the period. Competition within the industry
is based on relationships, distribution capabilities, reputation for quality and brand recognition.



Our Film Library



We currently own or license rights to films
currently comprising over 3,000 films, including recent and classic titles that span different genres, budgets and languages.
Eros Now has rights to over 5,000 films across Hindi and regional languages from Eros’s internal library as well
as third party aggregated content which it believes makes it one of the largest Indian movie offering platforms around the world.
In addition Eros Now showcases music from 13 Indian music labels and offers over 250,000 music tracks. Our film library has been
built up over more than 39 years and includes hits from across that time period, including among others Bajrangi Bhaijaan,
Bajirao Mastani, Tanu Weds Manu Returns, NH10, Badlapur, Devdas, Hum Dil De Chuke Sanam, Lage Raho Munna
Bhai, Om Shanti Om, Vicky Donor, English Vinglish, Goliyon Ki Raasleela: Ram-Leela. We have acquired
most of our film content through fixed term contracts with third parties, which may be subject to expiration or early termination.



We own the rights to the rest of our film
content as co-producers or, sole producer of those films. Through such acquisition and co-production
arrangements, we seek to acquire rights to at least 65-70 additional films each year. While we typically hold rights to exploit
our content through various distribution channels, including theatrical, television and new media formats, we may not acquire
rights to all distribution channels for our films. In particular, we do not own or license the music rights to a majority of the
films in our library. We expect to maintain more than half of the rights we presently own through at least March 31, 2020.



In an effort to reach a wide range of audiences,
we maintain rights to a diverse portfolio of films spanning various genres, generations and languages. More than half of our library
is comprised of films first released ten or more years ago, including films released as early as the 1940s. We own or license rights
to films produced in several regional languages, including Tamil, Kannada, Marathi, Telugu, Bengali Malayalam and Punjabi.



We treat our new releases as part of our film
library one year from the date of their initial theatrical release. We believe our extensive film library provides us with unique
opportunities for content exploitation, such as our dedicated Eros content channel carried by various cable companies outside India.
Our extensive film library provides us with a reliable source of recurring cash flow after the theatrical release period for a
film has ended. In addition, because our film library is large and diversified, we believe that we can more effectively leverage
our library in many circumstances by licensing not just single films but multiple films.



46






Litigation



From time to time, we and our subsidiaries
are involved in various lawsuits and legal proceedings that arise in the ordinary course of business. The following discussion
summarizes examples of such matters. Although the results of litigation and claims cannot be predicted with certainty, we currently
believe that the final outcome of these matters will not have a material adverse effect on our business. Regardless of the outcome,
litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other
factors.



Beginning on November 13, 2015, the Company was named a defendant in five substantially similar putative
class action lawsuits filed in federal court in New Jersey and New York by purported shareholders of the Company. 
The three actions in New Jersey were consolidated, and, on May 17, 2016, were transferred to the United States District Court for
the Southern District of New York where they were then consolidated with the other two actions on May 27, 2016.  In general,
the plaintiffs alleged thatthe Company, and in some cases also Company’s management, violated federal securities
laws by overstating Company’s  financial and business results, enriching  the Company’s controlling owners
at the expense of other stockholders, and engaging in improper accounting practices.  On April 5, 2016, a lead plaintiff and
lead counsel were appointed in the now-consolidated New York action.  A single consolidated amended complaint was filed on
July 14, 2016.  The Plaintiffs have alleged that the Company and certain individual defendants -- Kishore
Lulla, Jyoti Deshpande, Andrew Heffernan, and Prem Parameswaran -- have violated the federal securities laws, specifically Sections
10(b) and 20(a) of the Exchange Act.  The amended consolidated complaint does not assert certain claims that had been asserted
in prior complaints including (1) claims for violations of Sections 11 and 15 of the Securities Act and (2) claims against certain
individual defendants, who are not now named defendants. The claims principally arise out of allegations that the Company
and the individual defendants made material misrepresentations about the success, size, and financial performance of Eros Now,
our streaming video service, and our  film library.  The Company expects to move to dismiss the consolidated
amended complaint.



Eros India and its subsidiaries are involved
in ordinary course government tax audits and assessments, which typically include assessment orders for previous tax years including
on account of disallowance of certain claimed deductions.



During the year ended March 2015, Eros received
two notices from the Commissioner of Service Tax (India) to show cause why an amount aggregating to $31 million for the period
April 1, 2009 to March 31, 2014 should not be levied on and paid on account of service tax arising on temporary transfer of copyright
services and certain other related matters. Eros has filed its objections against the notice with the authorities. Subsequently
in June 2015, Eros received assessment orders from the Commissioner of Service Tax (India) levying tax as stated above and ordering
Eros to pay an additional amount of $31 million as interest and penalties in connection with the aforesaid matters. Considering
the facts and nature of levies and the ad-interim protection for service tax levy for a certain period granted by the Honorable
High Court of Mumbai, the Group expects that the final outcome of this matter will be favorable. Accordingly, based on the assessment
made after taking appropriate legal advice, no additional liability has been recorded in Group’s consolidated financial statements.



During the year ended March 2015, Eros also received
several assessment orders and demand notices from value added tax and sales tax authorities in India for the payment of amounts
aggregating to $3 million (including interest and penalties) for certain fiscal years between April 1, 2005 and March 31, 2011.
Eros has appealed against each of these orders, and such appeals are pending before relevant tax authorities. Though there uncertainties
are inherent in the final outcome of these matters, the Company believes, based on assessment made after taking legal advice, that
the final outcome of the matters will be favorable. Accordingly, no additional liability has been recorded in Group’s consolidated
financial statements.



Eros is also named in various lawsuits challenging
its ownership of some of its intellectual property or its ability to distribute these films in India. A number of these lawsuits
seek injunctive relief restraining Eros from releasing or otherwise exploiting various films, including Om Shanti Om, Kochadaiiyaan,
Bhoot ReturnsandGoliyon Ki Rasleela-Ram-leela, Bajrangi Bhaijaan, Welcome Back, Sardar Gabbar Singh, Aligarh,
Housefull 3.



In India, private citizens are permitted to initiate criminal complaints
against companies and other individuals by filing complaints or initiating proceedings with the police. Eros and certain
executives have been named in certain criminal complaints from time to time.



If, as a result of such complaints, criminal
proceedings are initiated by the relevant authorities in India and the Company or any of its executives are found guilty in such
criminal proceedings, our executives could be subject to imprisonment as well as monetary penalties. We believe the claims brought
to date are without merit and we intend to defend them vigorously.



47






For instance, in relation to the film Goliyon
Ki Rasleela-Ram-leela,certain civil and criminal proceedings had been initiated in various local courts in India in and around
November 2013, including arrest warrants against Mr. Kishore Lulla and others involved in the making of this film, alleging that
this film disrespected religious sensibilities and seeking to restrain its release or seeking directions for a review of its film
certification. We have contested such claims in the local courts as well as by way of petitions filed by us before the Supreme
Court of India. While hearings or investigations continue in some of these proceedings, we have obtained interim orders in our
favor from the Supreme Court of India as well as certain of the local courts where such proceedings are being heard, including
stays on all criminal proceedings against Eros India, Mr. Kishore Lulla and other persons involved in the making of the film. This
film was released in November 2013.



Government Regulations



The following description is a summary of various
sector-specific laws and regulations applicable to Eros.



Material Isle of Man Regulations



Companies Regime. The Isle of
Man is an internally self-governing dependent territory of the British Crown. It is politically and constitutionally separate from
the United Kingdom and has its own legal system and jurisprudence based on English common law principles.



Isle of Man company law is largely based on
that of England and Wales. There are two separate codes of company law, embodied in the Companies Acts of 1931-2004 (commonly referred
to as the 1931 Act as the principal Act is the Companies Act 1931) and the Companies Act 2006 (commonly referred to as the 2006
Act), respectively. Our Company was incorporated on March 31, 2006 under the 1931 Act. Effective September 29, 2011, it re-registered
as a company incorporated under the 2006 Act.



The 2006 Act updates and modernizes Isle of
Man company law by introducing a new simplified corporate vehicle into Isle of Man law. The new corporate vehicle follows the international
business company model available in a number of other jurisdictions. Companies incorporated or re-registered under the 2006 Act
are governed solely by its provisions and, except in relation to liquidation and receivership, are not subject to the provisions
of the 1931 Act.



The following are some of the key characteristics
of companies incorporated under the 2006 Act:



Share Capital.Under the 2006
Act, there is no longer the concept of authorized capital. Therefore, shares may be issued with or without par value.



Dividends, Redemptions and Buy-Backs.Subject to compliance with the memorandum and articles of association, the 2006 Act allows a company to declare and pay
dividends, and to purchase, redeem or otherwise acquire its own shares subject only to meeting a solvency test set out in the 2006
Act. A company satisfies the solvency test if: (i) it is able to pay its debts as they become due in the normal course of business:
and (ii) the value of the company’s assets exceeds the value of its liabilities.



Capacity and Powers.Companies
incorporated under the 2006 Act have separate legal personality and perpetual existence. In addition, such companies have unlimited
capacity to carry on or undertake any business or activity; this is so regardless of corporate benefit and regardless of whether
or not it is in the best interests of the company to do so.



The 2006 Act specifically states that no corporate
act is beyond the capacity of a company incorporated under the 2006 Act by reason only of the fact that the relevant company has
purported to restrict its capacity in any way in its memorandum or articles or otherwise. A person who deals in good faith with
a company incorporated under the 2006 Act is entitled to assume that the directors of the company are acting without limitation.



Miscellaneous.In addition to
the foregoing, the following other points should be noted in relation to companies incorporated under the 2006 Act:



| | (a) | there are no prohibitions in relation to the company providing financial assistance for the purchase of its own shares;
| | --- | -----------------------------------------------------------------------------------------------------------------------



| | (b) | there is no differentiation between public and private companies, but a company may adopt a name ending in the words “Public Limited Company” or “public limited company” or the abbreviation “PLC” or “plc”;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | there are simple share offering/annual report requirements;
| | --- | -----------------------------------------------------------



48






| | (d) | there are reduced compulsory registry filings;
| | --- | ----------------------------------------------



| | (e) | the statutory accounting requirements are simplified; and
| | --- | ---------------------------------------------------------



| | (f) | the 2006 Act allows a company to indemnify and purchase indemnity insurance for its directors.
| | --- | ----------------------------------------------------------------------------------------------



Shareholders should note that the above list
is not exhaustive.



Exchange Controls



No foreign exchange control regulations are
in existence in the Isle of Man in relation to the exchange or remittance of sterling or any other currency from the Isle of Man
and no authorizations, approvals or consents will be required from any authority in the Isle of Man in relation to the exchange
and remittance of sterling and any other currency whether awarded by reason of a judgment or otherwise falling due and having been
paid in the Isle of Man.



Material Indian Regulations



We are subject to other Indian and international
regulations which may impact our business. In particular, the following regulations have a significant impact on our business.



Notification of Industry Status.
The Indian film industry was conferred industry status by a press release issued by the MIB on May 10, 1998.



Film Certification. The Cinematograph
Act authorizes the CBFC, in accordance with the Cinematograph (Certification) Rules, 1983, or the Certification Rules, for sanctioning
films for public exhibition in India. Under the Certification Rules, the producer of a film is required to apply in the specified
format for certification of such film, with the prescribed fee. The film is examined by an examining committee, which determines
whether the film:

| | · | is suitable for unrestricted public exhibition;
| | - | -----------------------------------------------

| | · | is suitable for unrestricted public exhibition, with a caution that the question as to whether
any child below the age of 12 years may be allowed to see the film should be considered by the parents or guardian of such child;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | is suitable for public exhibition restricted to adults;
| | - | -------------------------------------------------------

| | · | is suitable for public exhibition restricted to members of any profession or any class of persons
having regard to the nature, content and theme of the film;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | is suitable for certification in terms of the above if a specified portion or portions be excised
or modified therefrom; or
| | - | ---------------------------------------------------------------------------------------------------------------------------

| | · | that the film is not suitable for unrestricted or restricted public exhibitions, or that the film
be refused a certificate.
| | - | ---------------------------------------------------------------------------------------------------------------------------



A film will not be certified for public exhibition
if, in the opinion of the CBFC, the film or any part of it is against the interests of the sovereignty, integrity or security of
India, friendly relations with foreign states, public order, decency or morality, or involves defamation or contempt of court or
is likely to incite the commission of any offence. Any applicant, if aggrieved by any order of the CBFC either refusing to grant
a certificate or granting a certificate that restricts exhibition to certain persons only, may appeal to the Film Certification
Appellate Tribunal constituted by the Central Government in India under the Cinematograph Act.



A certificate granted or an order refusing
to grant a certificate in respect of any film is published in the Official Gazette of India and is valid throughout India for ten
years from the date of grant. Films certified for public exhibition may be re-examined by the CBFC if any complaint is received.
Pursuant to grant of a certificate, film advertisements must indicate that the film has been certified for such public exhibition.



The Central Government in India may issue directions
to licensees of cinemas generally or to any licensee in particular for the purpose of regulating the exhibition of films, so that
scientific films, films intended for educational purposes, films dealing with news and current events, documentary films or indigenous
films secure an adequate opportunity of being exhibited. The Central Government in India, acting through local authorities, may
order suspension of exhibition of a film, if it is of the opinion that any film being publicly exhibited is likely to cause a breach
of peace. Failure to comply with the Cinematograph Act may attract imprisonment and/or monetary fines.



49






Separately, the Cable Television Networks Rules,
1994 require that no film or film song, promotional material, trailer or film music video, album or their promotional materials,
whether produced in India or abroad, shall be carried through cable services unless it has been certified by the CBFC as suitable
for unrestricted public exhibition in India.



A draft Cinematograph Bill, 2013 has been prepared
by the Ministry of Information and Broadcasting and is awaiting approval.



Financing. In October 2000, the
Ministry of Finance, GOI notified the film industry as an industrial concern in terms of the Industrial Development Bank of India
Act, 1964, pursuant to which loans and advances to industrial concerns became available to the film industry.



The Reserve Bank of India, or the RBI, by circular
dated May 14, 2001, permitted commercial banks to finance up to 50.0% of total production cost of a film. Further, by an RBI circular
dated June 8, 2002, bank financing is now available even where total film production cost exceeds approximately $1.6 million. Banks
which finance film productions customarily require borrowers to assign the film’s intellectual property or music audio/video/CDs/DVDs/internet,
satellite, channel, export/international rights as part of the security for the loan, such that the banks would have a right in
negotiation of valuation of such intellectual property rights.



Labour Laws. Depending on the
nature of work and number of workers employed at any workplace, various labor related legislations may apply. Certain significant
provisions of such labour related laws are provided below.



The Employees’ Provident Fund and Miscellaneous
Provisions Act, 1952, or the EPF Act, applies to factories employing 20 or more employees and such other establishments as notified
by the Government from time to time. It requires all such establishments to be registered with the relevant Provident Fund Commissioner.
Also, such employers are required to contribute to the employees’ provident fund the prescribed percentage of the basic wages
and certain cash benefits payable to employees. Employees are also required to make equal contributions to the fund. A monthly
return is required to be submitted to the relevant Provident Fund Commissioner in addition to the maintenance of registers by employers.



Competition Act. The Competition
Act, 2002, or the Competition Act, prohibits practices that could have an appreciable adverse effect on competition in India. Under
the Competition Act, any arrangement, understanding or action, whether formal or informal, which causes or is likely to cause an
appreciable adverse effect on competition in India is void. Any agreement among competitors which directly or indirectly determines
purchase or sale prices, results in bid rigging or collusive bidding, limits or controls production, supply, markets, technical
development, investment or the provision of services, or shares the market or source of production or provision of services in
any manner, including by way of allocation of geographical area or types of goods or services or number of customers in the market,
is presumed to have an appreciable adverse effect on competition. Further, the Competition Act prohibits the abuse of a dominant
position by any enterprise either directly or indirectly, including by way of unfair or discriminatory pricing or conditions in
the sale of goods or services, using a dominant position in one relevant market to enter into, or protect, another relevant market,
and denial of market access. Further, acquisitions, mergers and amalgamations which exceed certain revenue and asset thresholds
require prior approval by the Competition Commission of India.



Under the Competition Act, the Competition
Commission has powers to pass directions/impose penalties in cases of anti-competitive agreements, abuse of dominant position and
combinations which are not in compliance with the Competition Act.



If there is a continuing non-compliance the
person may be punishable with imprisonment for a term extending up to three years or with a fine or with both as the Chief Metropolitan Magistrate, Delhi may deem fit. In case of offences committed by companies,
the persons responsible to the company for the conduct of the business of the company will be liable under the Competition Act,
except when the offense was committed without their knowledge or when they had exercised due diligence to prevent it. Where the
contravention committed by the company took place with the consent or connivance of, or is attributable to any neglect on the part
of, any director, manager, secretary or other officer of the company, such person is liable to be punished.



The Competition Act also provides that the
Competition Commission has the jurisdiction to inquire into and pass orders in relation to an anti-competitive agreement, abuse
of dominant position or a combination, which even though entered into, arising or taking place outside India or signed between
one or more non-Indian parties, but causes or is likely to cause an appreciable adverse effect in the relevant market in India.
The Competition Act was amended in 2009, and cases which were pending before the Monopolies and Restrictive Trade Practice Commission
were transferred to the Competition Commission of India.



50






Indian Takeover Regulations.
The Takeover Regulations came into effect on October 22, 2011, superseding the earlier takeover regulations. The Takeover Regulations
provide the process, timing and disclosure requirements for a public announcement of an open offer in India and the applicable
pricing norms.



Pursuant to the Takeover Regulations, a requirement
to make a mandatory open offer by an “acquirer” (together with persons acting in concert with it) for at least 26%
of the total shares of the Indian listed company, to all shareholders of such company (excluding the acquirer, persons acting in
concert with it and the parties to any underlying agreement including persons deemed to be acting in concert) is triggered, subject
to certain exemptions including transfers between promoters, if an acquirer acquires shares or voting rights in the Indian listed
company, which together with its existing holdings and those of any persons acting in concert with him entitle the acquirer and
persons acting in concert to exercise 25% or more of the voting rights in the Indian listed company; or an acquirer that holds
between 25% and the maximum permissible non-public shareholding of an Indian listed company, acquires additional voting rights
of more than 5% during a financial year; or an acquirer acquires, directly or indirectly, control over an Indian listed company,
irrespective of acquisition of shares or voting rights in the Indian listed company.



An acquisition of shares or voting rights in,
or control over, any company that would enable a person to exercise or direct the exercise of such percentage of voting rights
in, or control over, an Indian listed company, the acquisition of which would otherwise attract the obligation to make an open
offer under the Takeover Regulations will also trigger a mandatory open offer under the Takeover Regulations. Where the primary
target of the acquisition is an overseas parent of an Indian listed company and the Indian listed company represents over 80% of
a specified materiality parameter (including asset value, revenue or market capitalization) of the overseas parent company, such
acquisition would be treated as a “direct acquisition” of the Indian listed company.



Indian Companies Act. A majority
of the provisions of the Companies Act, 2013 are now in effect, bringing into effect significant changes to the Indian company
law framework, such as in the provisions related to issue of capital, disclosures, corporate governance norms, audit matters, and
related party transactions. The Companies Act, 2013 has also introduced additional requirements which do not have equivalents under
the Companies Act, 1956, including the introduction of a provision allowing the initiation of class action suits in India against
companies by shareholders or depositors, a restriction on investment by an Indian company through more than two layers of subsidiary
investment companies (subject to certain permitted exceptions), and prohibitions on advances to directors. Indian companies with
net worth, turnover or net profits of INR 5,000 million or higher during any financial year are also required to spend 2.0% of
their average net profits during the three immediately preceding financial years on activities pertaining to corporate social responsibility.
Further, the Companies Act, 2013 imposes greater monetary and other liability on Indian companies, their directors and officers
in default, for any non-compliance.



51






Differences in Corporate Law



The following chart summarizes certain material
differences between the rights of holders of our A ordinary shares and the rights of holders of the common stock of a typical
corporation incorporated under the laws of the State of Delaware that result from differences in governing documents and the laws
of Isle of Man and Delaware.



|                                         |  | Isle of Man Law                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Delaware Law                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|---------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|General Meetings                         |  | The 2006 Act does not require a company to
        hold an annual general meeting of its shareholders. Subject to anything contrary in the company’s memorandum and articles
        of association, a meeting of shareholders can be held at such time and in such place, within or outside the Isle of Man, as the
        convener of the meeting considers appropriate. Under the 2006 Act, the directors of a company (or any other person permitted by
        the company’s memorandum and articles of association) may convene a meeting of the shareholders of a company. Further, the
        directors of a company must call a meeting to consider a resolution requested in writing by shareholders holding at least 10% of
        the company’s voting rights. The Isle of Man Court may order a meeting of members to be held and to be conducted in such
        manner as the Court orders, among other things, if it is of the opinion that it is in the interests of the shareholders of the
        company that a meeting of shareholders is held.
        
        Our articles require our Board of Directors
        to convene annually a general meeting of the shareholders at such time and place, and to consider such business, as the Board of
        Directors may determine. |  | Shareholders of a Delaware corporation generally do not have the right to call meetings of shareholders unless that right is granted in the certificate of incorporation or bylaws. However, if a corporation fails to hold its annual meeting within a period of 30 days after the date designated for the annual meeting, or if no date has been designated for a period of 13 months after its last annual meeting, the Delaware Court of Chancery may order a meeting to be held upon the application of a shareholder.
|                                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Quorum Requirements for General Meetings |  | The 2006 Act provides that a quorum at a general meeting of shareholders may be fixed by the articles. Our articles provide a quorum required for any general meeting consists of shareholders holding at least 30% of the issued share capital of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | A Delaware corporation’s certificate of incorporation or bylaws can specify the number of shares that constitute the quorum required to conduct business at a meeting, provided that in no event will a quorum consist of less than one-third of the shares entitled to vote at a meeting.                                                                                                                                                                                                                                 
|                                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Board of Directors                       |  | Our articles provide that unless and until otherwise determined by our Board of Directors, the number of directors will not be less than three or more than twelve, with the exact number to be set from time to time by the Board of Directors. While there is no concept of dividing a board of directors into classes under Isle of Man law, there is nothing to prohibit a company from doing so. Consequently, under our articles, our Board of Directors is divided into three classes, each as nearly equal in number as possible and at each annual general meeting, each of the directors of the relevant class the term of which shall then expire shall be eligible for re-election to the Board of Directors for a period of three years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | A typical certificate of incorporation and bylaws would provide that the number of directors on the board of directors will be fixed from time to time by a vote of the majority of the authorized directors. Under Delaware law, a board of directors can be divided into up to three classes.                                                                                                                                                                                                                            
|                                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            



52






|                                 |  | Isle of Man Law                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | Delaware Law                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Removal of Directors             |  | Under Isle of Man law, notwithstanding anything
        in the memorandum or articles or in any agreement between a company and its directors, a director may be removed from office by
        way of shareholder resolution. Such resolution may only be passed (a) at a meeting of the shareholders called for such purposes
        including the removal of the director or (b) by a written resolution consented to by a shareholder or shareholders holding
        at least 75% of the voting rights.
        
        The 2006 Act provides that a director may
        be removed from office by a resolution of the directors if the directors are expressly given such authority in the memorandum or
        articles, but our articles do not provide this authority.           |  | A typical certificate of incorporation and bylaws provide that, subject to the rights of holders of any preferred stock, directors may be removed at any time by the affirmative vote of the holders of at least a majority, or in some instances a supermajority, of the voting power of all of the then outstanding shares entitled to vote generally in the election of directors, voting together as a single class. A certificate of incorporation could also provide that such a right is only exercisable when a director is being removed for cause (removal of a director only for cause is the default rule in the case of a classified board).                                                                                                                                                                                                                                         
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Vacancy of Directors             |  | Subject to any contrary provisions in a company’s
        memorandum or articles of association, a person may be appointed as a director (either to fill a vacancy or as an additional director)
        by a resolution of the directors or by a resolution of the shareholders.
        
        Our articles provide that any vacancy resulting
        from, among other things, removal, resignation, conviction and disqualification, may be filled by another person willing to act
        as a director by way of shareholder resolution or resolution of our Board of Directors. Any director appointed by the Board of
        Directors will hold office only until the next annual general meeting of the Company, when he will be subject to retirement or
        re-election. |  | A typical certificate of incorporation and bylaws provide that, subject to the rights of the holders of any preferred stock, any vacancy, whether arising through death, resignation, retirement, disqualification, removal, an increase in the number of directors or any other reason, may be filled by a majority vote of the remaining directors, even if such directors remaining in office constitute less than a quorum, or by the sole remaining director. Any newly elected director usually holds office for the remainder of the full term expiring at the annual meeting of shareholders at which the term of the class of directors to which the newly elected director has been elected expires.                                                                                                                                                                                    
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Interested Director Transactions |  | Under Isle of Man law, as soon as a director becomes aware of the fact that he is interested in a transaction entered into or to be entered into by the company, he must disclose this interest to the board of directors. Our articles provide that no director may participate in approval of a transaction in which he or she is interested.                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | Under Delaware law, some contracts or transactions in which one or more of a Delaware corporation’s directors has an interest are not void or voidable because of such interest provided that some conditions, such as obtaining the required approval and fulfilling the requirements of good faith and full disclosure, are met. For an interested director transaction not to be voided, either the shareholders or the board of directors must approve in good faith any such contract or transaction after full disclosure of the material facts or the contract or transaction must have been “fair” as to the corporation at the time it was approved. If board or committee approval is sought, the contract or transaction must be approved in good faith by a majority of disinterested directors after full disclosure of material facts, even though less than a majority of a quorum.
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   



53






|                                     |  | Isle of Man Law                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | Delaware Law                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------------------------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Cumulative Voting                    |  | There is no concept of cumulative voting under Isle of Man law.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | Delaware law does not require that a Delaware corporation provide for cumulative voting. However, the certificate of incorporation of a Delaware corporation may provide that shareholders of any class or classes or of any series may vote cumulatively either at all elections or at elections under specified circumstances.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Shareholder Action Without a Meeting |  | A written resolution will be passed if it is consented to in writing by shareholders holding in excess of 50% or 75% in the case of a special resolution of the rights to vote on such resolution. The consent may be in the form of counterparts, and our articles provide that, in such circumstances, the resolution takes effect on the earliest date upon which shareholders holding a sufficient number of votes to constitute a resolution of shareholders have consented to the resolution in writing. Any holder of B ordinary shares consenting to a resolution in writing is first required to certify that it is a permitted holder as defined in our articles. If any written resolution of the shareholders of the company is adopted otherwise than by unanimous written consent, a copy of such resolution must be sent to all shareholders not consenting to such resolution upon it taking effect. |  | Unless otherwise specified in a Delaware corporation’s certificate of incorporation, any action required or permitted to be taken by shareholders at an annual or special meeting may be taken by shareholders without a meeting, without notice and without a vote, if consents, in writing, setting forth the action, are signed by shareholders with not less than the minimum number of votes that would be necessary to authorize the action at a meeting at which all shares entitled to vote were present and voted. All consents must be dated. No consent is effective unless, within 60 days of the earliest dated consent delivered to the corporation, written consents signed by a sufficient number of holders to take the action are delivered to the corporation.                                                                                                    
|                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Business Combinations                |  | Under Isle of Man law, a merger or consolidation must be approved by, among other things, the directors of the company and by shareholders holding at least 75% of the voting rights. A scheme of arrangement (which includes, among other things, a sale or transfer of the assets of the company) must be approved by, among other things, the directors of the company, a 75% shareholder majority and also requires the sanction of the court.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | With certain exceptions, a merger, consolidation or sale of all or substantially all the assets of a Delaware corporation must be approved by the board of directors and a majority (unless the certificate of incorporation requires a higher percentage) of the outstanding shares entitled to vote thereon.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Interested Shareholders              |  | There are no equivalent provisions under Isle of Man law relating to interested shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  | Section 203 of the Delaware General Corporation Law generally prohibits a Delaware corporation from engaging in specified corporate transactions (such as mergers, stock and asset sales and loans) with an “interested shareholder” for three years following the time that the shareholder becomes an interested shareholder. Subject to specified exceptions, an “interested shareholder” is a person or group that owns 15% or more of the corporation’s outstanding voting stock (including any rights to acquire stock pursuant to an option, warrant, agreement, arrangement or understanding, or upon the exercise of conversion or exchange rights, and stock with respect to which the person has voting rights only), or is an affiliate or associate of the corporation and was the owner of 15% or more of the voting stock at any time within the previous three years.



54






|                                               |  | Isle of Man Law                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | Delaware Law                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|---------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | A Delaware corporation may elect to “opt out” of, and not be governed by, Section 203 through a provision in either its original certificate of incorporation or its bylaws, or an amendment to its original certificate or bylaws that was approved by majority shareholder vote. With a limited exception, this amendment would not become effective until 12 months following its adoption.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Limitations on Personal Liability of Directors |  | Under Isle of Man law, a director who vacates office remains liable under any provisions of the 2006 Act that impose liabilities on a director in respect of any acts or omissions or decisions made while that person was a director.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | A Delaware corporation may include in its certificate of incorporation provisions limiting the personal liability of its directors to the corporation or its shareholders for monetary damages for many types of breach of fiduciary duty. However, these provisions may not limit liability for any breach of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, the authorization of unlawful dividends, shares repurchases or shares barring redemptions, or any transaction from which a director derived an improper personal benefit. A typical certificate of incorporation would also provide that if Delaware law is amended so as to allow further elimination of, or limitations on, director liability, then the liability of directors will be eliminated or limited to the fullest extent permitted by Delaware law as so amended. However, these provisions would not be likely to bar claims arising under U.S. federal securities laws.
|                                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Indemnification of Directors and Officers      |  | A company may indemnify against all expenses,
        any person who is or was a party, or is threatened to be made a party to any civil, criminal, administrative or investigative proceedings
        (threatened, pending or completed), by reason of the fact that the person is or was a director of the company, or who is or was,
        at the request of the company, serving as a director or acting for another company.
        
        Any indemnity given will be void and of no
        effect unless such person acted honestly and in good faith and in what such person believed to be in the best interests of the
        company and, in the case of criminal proceedings, had no reasonable cause to believe that the conduct of such person was unlawful. |  | Under Delaware law, subject to specified limitations in the case of derivative suits brought by a corporation’s shareholders in its name, a corporation may indemnify any person who is made a party to any third party action, suit or proceeding on account of being a director, officer, employee or agent of the corporation (or was serving at the request of the corporation in such capacity for another corporation, partnership, joint venture, trust or other enterprise) against expenses, including attorney’s fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with the action, suit or proceeding through, among other things, a majority vote of directors who were not parties to the suit or proceeding (even though less than a quorum), if the person:                                                                                                                                                                                         
|                                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



55






|                 |  | Isle of Man Law                                                |  | Delaware Law                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|---------------- |  | -------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                 |  |                                                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                 |  |                                                                |  | ·     acted
        in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation or,
        in some circumstances, at least not opposed to its best interests; and
        
        ·     in
        a criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful.
        
        Delaware law permits indemnification by a
        corporation under similar circumstances for expenses (including attorneys’ fees) actually and reasonably incurred by such
        persons in connection with the defense or settlement of a derivative action or suit, except that no indemnification may be made
        in respect of any claim, issue or matter as to which the person is adjudged to be liable to the corporation unless the Delaware
        Court of Chancery or the court in which the action or suit was brought determines upon application that the person is fairly and
        reasonably entitled to indemnity for the expenses which the court deems to be proper.
        
        To the extent a director, officer, employee
        or agent is successful in the defense of such an action, suit or proceeding, the corporation is required by Delaware law to indemnify
        such person for reasonable expenses incurred thereby. Expenses (including attorneys’ fees) incurred by such persons in defending
        any action, suit or proceeding may be paid in advance of the final disposition of such action, suit or proceeding upon receipt
        of an undertaking by or on behalf of that person to repay the amount if it is ultimately determined that that person is not entitled
        to be so indemnified.
|                 |  |                                                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Appraisal Rights |  | There is no concept of appraisal rights under Isle of Man law. |  | A shareholder of a Delaware corporation participating in certain major corporate transactions may, under certain circumstances, be entitled to appraisal rights pursuant to which the shareholder may receive cash in the amount of the fair value of the shares held by that shareholder (as determined by a court) in lieu of the consideration the shareholder would otherwise receive in the transaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             



56






|                                |  | Isle of Man Law                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | Delaware Law                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Shareholder Suits               |  | The Isle of Man Court may, on application
        of a shareholder, permit that shareholder to bring proceedings in the name and on behalf of the company (including intervening
        in proceedings to which the company is a party). In determining whether or not leave is to be granted, the Isle of Man Court will
        take into account such things as whether the shareholder is acting in good faith and whether the Isle of Man Court itself is satisfied
        that it is in the interests of the company that the conduct of the proceedings should not be left to the directors or to the determination
        of the shareholders as a whole.
        
        Under Isle of Man law, a shareholder may bring
        an action against the company for a breach of a duty owed by the company to such shareholder in that capacity. |  | Under Delaware law, a shareholder may bring a derivative action on behalf of the corporation to enforce the rights of the corporation, including for, among other things, breach of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. An individual also may commence a class action suit on behalf of himself or herself and other similarly situated shareholders where the requirements for maintaining a class action under Delaware law have been met. A person may institute and maintain such a suit only if such person was a shareholder at the time of the transaction which is the subject of the suit or his or her shares thereafter devolved upon him or her by operation of law. Additionally, under established Delaware case law, the plaintiff generally must be a shareholder not only at the time of the transaction which is the subject of the suit, but also through the duration of the derivative suit. Delaware law also requires that the derivative plaintiff make a demand on the directors of the corporation to assert the corporate claim before the suit may be prosecuted by the derivative plaintiff, unless such demand would be futile. In such derivative and class actions, the court has discretion to permit the winning party to recover attorneys’ fees incurred in connection with such action.
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Inspection of Books and Records |  | Upon giving written notice, a shareholder
        is entitled to inspect and to make copies of (or obtain extracts of) the memorandum and articles and any of the registers of shareholders,
        directors and charges. A shareholder may only inspect the accounting records (and make copies or take extracts thereof) in certain
        circumstances.
        
        Our articles provide that no shareholder has
        any right to inspect any accounting record or other document of the company unless he is authorized to do so by statute, by order
        of the Isle of Man Court, by our Board of Directors or by shareholder resolution.                                                                                                                                                                                            |  | All shareholders of a Delaware corporation have the right, upon written demand, to inspect or obtain copies of the corporation’s shares ledger and its other books and records for any purpose reasonably related to such person’s interest as a shareholder.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



57






|                                 |  | Isle of Man Law                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | Delaware Law                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Amendment of Governing Documents |  | Under Isle of Man law, the shareholders of a company may, by resolution, amend the memorandum and articles of the company. The memorandum and articles of a company may authorize the directors to amend the memorandum and articles, but our memorandum and articles do not contain any such power. Our memorandum of association provides that our memorandum of association and articles of association may be amended by a special resolution of shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | Under Delaware law, amendments to a corporation’s certificate of incorporation require the approval of shareholders holding a majority of the outstanding shares entitled to vote on the amendment. If a class vote on the amendment is required by Delaware law, a majority of the outstanding stock of the class is required, unless a greater proportion is specified in the certificate of incorporation or by other provisions of Delaware law. Under Delaware law, the board of directors may amend bylaws if so authorized in the certificate of incorporation. The shareholders of a Delaware corporation also have the power to amend bylaws.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Dividends and Repurchases        |  | The 2006 Act contains a statutory solvency
        test. A company satisfies the solvency test if it is able to pay its debts as they become due in the normal course of its business
        and where the value of the company’s assets exceeds the value of its liabilities.
        
        Subject to the satisfaction of the solvency
        test and any contrary provision contained in a company’s articles, a company may, by a resolution of the directors, declare
        and pay dividends. Our articles provide that where the solvency test has been satisfied, our Board of Directors may declare and
        pay dividends (including interim dividends) out of our profits to shareholders according to their respective rights and interests
        in the profits of the company.
        
        Under Isle of Man law, a company may purchase,
        redeem or otherwise acquire its own shares for any consideration, subject to, among other things, satisfaction of the solvency
        test. |  | Delaware law permits a corporation to declare
        and pay dividends out of statutory surplus or, if there is no surplus, out of net profits for the fiscal year in which the dividend
        is declared and/or for the preceding fiscal year as long as the amount of capital of the corporation following the declaration
        and payment of the dividend is not less than the aggregate amount of the capital represented by the issued and outstanding stock
        of all classes having a preference upon the distribution of assets.
        
        Under Delaware law, any corporation may purchase
        or redeem its own shares, except that generally it may not purchase or redeem those shares if the capital of the corporation is
        impaired at the time or would become impaired as a result of the redemption. A corporation may, however, purchase or redeem capital
        shares that are entitled upon any distribution of its assets to a preference over another class or series of its shares if the
        shares are to be retired and the capital reduced.



Changes in Capital



The conditions in our articles of association
governing changes in capital are not more stringent than as required under the 2006 Act. Our articles of association provide that
our directors may, by resolution, alter our share capital. The 2006 Act subjects any reduction of share capital to the statutory
solvency test. The 2006 Act provides that a company satisfies the solvency test if it is able to pay its debts as they become due
in the normal course of the company’s business and where the value of the company’s assets exceeds the value of its
liabilities.



58






C. Organizational Structure



We conduct our global operations through our
Indian and international subsidiaries, including our majority-owned subsidiary Eros International Media Limited, or Eros India,
a public company incorporated in India and listed on the BSE Limited and National Stock Exchange of India Limited, or the Indian
Stock Exchanges. Our agent for service of process in the United States is Ken Naz, located at 550 County Avenue, Secaucus, New
Jersey.



The Founders Group holds approximately 46.68%
of our issued share capital, which comprise all of our B ordinary shares and certain A ordinary shares. Beech Investments, a company
incorporated in the Isle of Man, is owned by discretionary trusts that include Eros directors Kishore Lulla and Vijay Ahuja as
potential beneficiaries.



The following diagram summarizes the corporate
structure of our consolidated group of companies as of June 30, 2016:



59






Eros Organizational Chart (as of June
2016)







|(a) | Eros India holds at least 93% of each of its Indian subsidiaries other than Big Screen Entertainment Private Limited (India) and Colour Yellow Productions Private Limited (India).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Eros Digital Private Limited (India) holds the remaining 0.35% of Eros India’s Indian subsidiary Eros International Films Private Limited.                                         
|(c) | Ayngaran International Limited (Isle of Man) holds 51% of Ayngaran Anak Media Private Limited (India) and 100% of each of its other subsidiaries.                                  



60






D. Property, Plant and Equipment



Our properties consist primarily of studios,
office facilities, warehouses and distribution offices, most of which are located in Mumbai, India. We own our corporate and registered
offices in Mumbai and rent our remaining properties in India. Five of these leased properties are owned by members of the Lulla
family. The leases with the Lulla family were entered into at what we believe were market rates. See “Part I. — Item
7. Major Shareholders and Related Party Transactions” and “Part I — Item 3. Key Information — D. Risk Factors.
We have entered into certain related party transactions and may continue to rely on our founders for certain key development and
support activities.” We also own or lease eight properties in the United Kingdom, the United States and Dubai in connection
with our international operations outside of India. Property, plant and equipment with a net carrying amount of approximately $10.1
million (2015: $9.2 million) have been pledged to secure borrowings, and we currently do not have any significant plans to construct
new properties or expand or improve our existing properties.



The following table provides detail regarding our properties in
India and globally.



|Location                        |  | Size           |  | Primary Use              |  | Leased / Owned
|------------------------------- |  | -------------- |  | ------------------------ |  | --------------
|Mumbai, India                   |  | 13,992 sq. ft. |  | Corporate Office         |  | Owned         
|Mumbai, India                   |  | 2,750 sq. ft.  |  | Studio Premises          |  | Leased(1)     
|Mumbai, India                   |  | 8,094 sq. ft.  |  | Executive Accommodation  |  | Leased(1)     
|Mumbai, India                   |  | 17,120 sq. ft. |  | Office                   |  | Leased(1)     
|Mumbai, India                   |  | 120 sq. ft.    |  | Film Negatives Warehouse |  | Leased        
|Mumbai, India                   |  | 120 sq. ft.    |  | Film Prints Warehouse    |  | Leased        
|Mumbai, India                   |  | 2,750 sq. ft.  |  | Corporate                |  | Owned         
|Delhi, India                    |  | 600 sq. ft.    |  | Film Distribution Office |  | Leased        
|Kerala, India                   |  | 850 sq. ft.    |  | Film Distribution Office |  | Leased        
|Kolkata, India                  |  | 640 sq. ft.    |  | Film Distribution Office |  | Leased        
|Punjab, India                   |  | 438 sq. ft.    |  | Film Distribution Office |  | Leased        
|Mumbai, India                   |  | 2,926 sq. ft.  |  | DVD warehouse            |  | Leased        
|Mumbai, India                   |  | 1,600 sq. ft.  |  | Warehouse                |  | Leased        
|Mumbai, India                   |  | 1,600 sq. ft.  |  | Warehouse                |  | Leased        
|Mumbai, India                   |  | 5,000 sq. ft.  |  | Office                   |  | Leased        
|Chennai, India                  |  | 8,942 sq. ft.  |  | Corporate Office         |  | Leased        
|Delhi, India                    |  | 3,915 sq. ft.  |  | Branch Office            |  | Leased        
|Mumbai, India                   |  | 750 sq. ft.    |  | Branch Office            |  | Leased        
|Bangalore, India                |  | 5,100sq. ft.   |  | Branch Office            |  | Leased        
|Dubai, United Arab Emirates     |  | 536 sq. ft.    |  | Corporate Office         |  | Leased        
|Dubai, United Arab Emirates     |  | 747 sq. ft.    |  | Corporate Office         |  | Leased        
|Secaucus, New Jersey, U.S.      |  | 10,000 sq. ft. |  | Corporate Office         |  | Leased(1)     
|London, England                 |  | 7,549 sq. ft.  |  | DVD Warehouse            |  | Owned         
|London, England                 |  | 4,506 sq. ft.  |  | Corporate Office         |  | Leased(1)     
|Fujairah, United Arab Emirates  |  | 676 sq. ft.    |  | Corporate Office         |  | Leased        
|Fujairah, United Arab Emirates  |  | 676 sq. ft.    |  | Corporate Office         |  | Leased        
|San Francisco, California, U.S. |  | 2,315 sq. ft.  |  | Digital team             |  | Leased        



|(1) | Leased directly or indirectly from a member of the Lulla family.
|--- | ----------------------------------------------------------------



ITEM 4A. UNRESOLVED STAFF COMMENTS



Not applicable.



61






ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS



A. Operating Results



You should read the information contained in
the table below in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this
annual report. The tables set forth below with our results of operations and period over period comparisons are not adjusted for
the fluctuations in exchange rates described in “Part I — Item 3. Key Information — A. Selected Financial Data.”



Outlook



Our primary revenue streams are derived from
three channels: theatrical, television syndication and digital and ancillary. For the fiscal year ended March 31, 2016, the aggregate
revenues from theatrical, television syndication and digital and ancillary were $138.4 million, $72.1million and $63.9 million
respectively, compared to $123.1 million, $101.2 million and $59.9 million, respectively, for the fiscal year ended March 31, 2015.
In fiscal 2014, the aggregate revenue from theatrical, television syndication and digital and ancillary was $107.5 million, $80.3
million and $47.7 million, respectively.



The contribution from these three distribution
channels can fluctuate year over year based on, among other things, our mix of films and budget levels, and the size of
our television syndication deals.



The largest component of our revenue is attributable
to the theatrical distribution of our films in India. We anticipate that as additional multiplex theaters are built in India,
there will be increased opportunities to exploit our film content theatrically. We expect that this multiplex theater growth coupled
with the rise in ticket prices and the anticipated increase in the number of high budget Hindi and Tamil films in our slate will
result in increased revenue. In addition, in India, we cannot predict the share of theatrical revenue we will receive, as we currently
negotiate film-by-film and exhibitor-by-exhibitor. We set up Trinity Pictures in fiscal 2015 as a dedicated franchise studio
that develops valuable intellectual property in the form of franchise films. We believe China to be a significant market opportunity
for Indian films. As per PwC Outlook 2016, China is expected to overtake the US box office next year. China box office grew 49%
in 2015 to $6.3 billion and is expected to grow to $10.3 billion next year. In comparison the US box office is expected to contract
from $10.3 billion to $10 billion next year. Hollywood’s share of Chinese box office has slipped to 38.4% in 2015 from 45.5%
in 2014. In early 2014 China had just under 19,000 screens and by end of 2015 that number grew to almost 32,000. Overall China
is propelling Asia-Pacific’s growth (including Indonesia, Malaysia) with box office revenue across Asia-Pacific expected
to grow to $21.11 billion by 2020 and this continues to emerge as important growth markets for Bollywood. We are exploring the
release of our films in bigger markets such as China.



Increasing the number of Tamil and Telugu global releases in our film mix allows us to expand our audience
within significant regional markets. As we expand into other regional languages such as Marathi, Bengali, Punjabi and Malayalam,
we may see the composition of our film mix changing over time in order to allow us to successfully scale our business around Hindi
as well as regional language content. At the same time, the distribution window for the theatrical release of films, and the window
between the theatrical release and distribution in other channels, have each been compressing in recent years and may continue
to change. Regional films continue to be a focus area for us. Srimanthuduwas the second highest Telugu grosser of
all time. Our Malayalam film Pathemarialso won a national award for Best Malayalam Film. In fiscal 2016, our Tamil and
Telugu releases were 21 films as compared to 19 films in fiscal 2015.



A substantial portion of our revenue is also
derived from television syndication. Because of increased demand for Indian film content on television in India as the number of
direct to home, or DTH, subscribers increase and the cable industry migrates toward digital technology, we expect a significant
increase in demand for premium content such as movies and sports and a resultant increase in licensing fees payable to us by satellite
and cable television operators. However, as competitors with compelling products, including international content providers, expand
their content offerings in India, we expect competition for television syndication revenues to increase, and license fees for such
content could decrease.



Currently, the remainder of our revenue is
derived from digital distribution and ancillary products and services. With a significant portion of the Indian and international
population moving toward adoption of digital technology, we are increasing our focus on providing on-demand services. We have expanded
our digital presence with the launch of our on-demand entertainment portal Eros Now, which leverages our film and music libraries
by providing ad-supported and subscription-based streaming of film and music content via internet-enabled devices. Currently Eros
Now has registered users in 135 different countries. Eros Now has been increasingly focused on delivering product features, being
truly platform agnostic and monetizing it’s growing registered user base. We also have an ad-supported YouTube portal site
on Google that hosts an extensive collection of clips of our content. Accordingly, we anticipate that our revenue and costs associated
with digital distribution are likely to increase over time.



62






We anticipate that our costs associated with
the co-production and acquisition of film content are likely to increase over time as we continue to focus more on investing in
high budget Hindi films as well as high budget Tamil and Telugu films. In addition, increased competition in the Indian film entertainment
industry, including from international film entertainment providers such as Disney, Twentieth Century Fox and Viacom, is likely
to cause the cost of film production and acquisition to increase. In fiscal 2016, we invested $211.3 million in film content,
and in fiscal 2017, we expect to invest approximately $225.0 million in film content.



We anticipate our administrative costs will
increase as we expand our management team, especially to support the expansion of our digital businesses. In addition, our administrative
costs will increase due to the costs associated with being a U.S.-listed public company. Although aggregate spending will increase,
we do not anticipate that this will result in a material change in aggregate administrative costs as a percentage of revenue.



Critical Accounting Policies



Our consolidated financial statements are prepared
in accordance with IFRS as issued by the IASB, which requires management to make estimates, judgments and assumptions that affect
the amounts reported in the Consolidated Financial Statements and accompanying notes. Management considers the following accounting
policies to be critical because they are important to our financial condition and results of operations and require significant
judgment and estimates on the part of management in their application. The development and selection of these critical accounting
policies have been determined by our management and the related disclosures have been reviewed with the Audit Committee of our
board of directors. For a summary of all our accounting policies, see Note 3 to our audited Consolidated Financial Statements appearing
elsewhere in this Annual Report.



Use of estimates



Estimates and judgments are evaluated on a
regular basis and are based on historical experience and other factors, such as expectations of future events that are believed
to be reasonable under the present circumstances. We make estimates and assumptions concerning the future, and these estimates,
by definition, may differ materially from actual results.



Revenue



Revenue is measured by reference to the fair
value of consideration received or receivable from customers. Revenue arising from the distribution or other exploitation of films
and other content produced by third parties or by us, is recognized, net of sales taxes, when persuasive evidence of an arrangement
exists, the fees are fixed or determinable, the product is delivered or services have been rendered and collectability is reasonably
assured. Cash received and amounts invoiced in connection with contractual arrangements for which revenue is not yet recognizable
pursuant to these criteria, such as pre-sale amounts, is classified as deferred revenue. We consider the terms of each specific
arrangement to determine the appropriate accounting treatment for revenue recognition. The following additional criteria apply
to certain of our specific revenue streams:

| | · | Theatrical: We recognize revenue based on our share of third party reported box office
receipts for the measurement period. In instances where we have a minimum guarantee, we recognize that amount if due on or prior
to the measurement date, but never prior to delivery or on the release date.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Television: Revenues are recognized when the content is available for delivery. Royalty
and other revenues from premium pay television are recognized based on reporting to us by the counterparty such as a television
operator for providing programming services on mutually negotiated contractual terms.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Digital and ancillary: Where we distribute through a sub-distributor, we recognize
DVD, CD and video minimum guarantee revenues on the contract date and we recognize additional revenues as reported by third party
licensees. Provision is made for returns where applicable. Digital and ancillary revenues are recognized at the earlier of when
the content is accessed or reported by the contractual counterparty. Visual effects, production and other fees for services rendered
by us and overhead recharges are recognized in the period in which they are earned and in certain cases, the stage of production
is used to determine the proportion recognized in the period.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Intangible assets



We are required to identify and assess the
income generating life of each intangible asset. Judgment is required in making these determinations and setting an amortization
rate for such assets to match this life. We test annually whether there are any indications of impairment of our intangible assets
in accordance with IAS 36: Impairment of Assets. Management also regularly reviews and revises its estimates when necessary, which
may result in a change in the rate of amortization and/or a write down of the asset to fair value.



63






Accounting for film content under IFRS requires
management’s judgment regarding total revenues to be received on such film content and costs to be incurred throughout the
income generating life of such film or its license period, whichever is the shorter. Where we make an advance to secure film content
or the services of talent associated with a film product, we also consider the recoverability of such advance, or the likelihood
that such advance will result in a saleable asset. Judgments are also used to determine the amortization of capitalized film content
costs where management seeks to write down the capitalized cost of content in line with the expected revenues arising from the
content. For first release film content, we use a stepped method of amortization based on management’s judgment taking into
account historic and expected performance, writing off a significant portion of the capitalized cost for such films in the first
12 months of their initial commercial exploitation, and then the balance over the lesser of the term of the rights held by us and
nine years. Similar management judgment taking into account historic and expected performance is used to apply a stepped method
of amortization on a quarterly basis within the first 12 months, writing off a significant portion of the capitalized cost in the
quarter of theatrical release and the subsequent quarter. In fiscal 2009 and prior fiscal years, the balance of capitalized film
content costs were amortized over a maximum of four years rather than nine. In the case of film content that we acquire after its
initial exploitation, commonly referred to as library, amortization is spread evenly over the lesser of ten years after our acquisition
or our license period. Management’s policy is based upon factors such as historical performance of similar films, the star
power of the lead actors and actresses and others.



Management applies this method by using its
judgment to write down the capitalized cost of film content during its first 12 months of commercial exploitation and in line
with the expected revenues arising from the content over its estimated useful life. Each of these calculations requires judgments
and estimates to be made, and, as with goodwill, an unforeseen event could cause us to revise these judgments and assumptions affecting
the value of the intangible assets. There may be instances where the useful life of an asset is shortened to reflect the uncertainty
of its estimated income generating life. This is particularly the case when acquiring assets in markets that we have not previously
exploited. Impairment losses on content advances are recognized when film production does not seem viable and refund of the advance
is not probable.



Valuation of available-for-sale financial
assets.



We follow the guidance of IAS 39: Financial
Instruments: Recognition and Measurement, or IAS 39, to determine, where possible, the fair value of its available-for-sale financial
assets. This determination requires significant judgment. In making this judgment, we evaluate, among other factors, the duration
and extent to which the fair value of an investment is less than its cost and the financial health of and near-term business outlook
for the investee, including factors such as industry and sector performance, changes in technology and operational and financing
cash flow.



Derivative financial instruments



We use derivative financial instruments to
reduce its exposure to interest rate movements.



Derivatives are initially recognized at fair
value at the date the derivative contracts are entered into and are subsequently re-measured to their fair value at the end of
each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated
and effective as a hedging instrument, in which event the timing of the recognition in the profit or loss depends on the nature
of the hedge relationship.



Income taxes and deferred taxation



We are subject to income taxes in various jurisdictions.
Judgment is required in determining the worldwide provision for income taxes, taking into account management’s analysis of
future taxable income, reversing temporary differences and preparing ongoing tax planning strategies. We are subject to tax assessment
in certain jurisdiction. Significant judgment is involved in determining the provision for income taxes including judgment on whether
the tax positions are probable of being sustained in tax assessment. During the normal course of business, there are many transactions
and calculations for which the ultimate tax determination is uncertain. Judgment is also used when determining whether we should
recognize a deferred tax asset and tax credit, based on whether management considers that there is sufficient certainty in future
earnings to justify the carry forward of assets created by tax losses and tax credit. Judgment is also required when determining
whether we should recognize a deferred tax liability on undistributed earnings of subsidiaries.



Where the ultimate outcome of a transaction
is different than was initially recorded, there may be an impact on the income tax and deferred tax provisions.



64






Share-based payments



The Group is required to evaluate the terms
to determine whether share based payment is equity settled or cash settled. Judgment is required to do this evaluation. Further,
the Group is required to measure the fair value of equity settled transactions with employees at the grant date of the equity instruments.
The fair value is determined principally by using the Black Scholes model and/or Monte Carlo Simulation Models which require assumptions
regarding interest free rates, share price volatility, the expected life of an employee equity instrument and other variables.
For further discussion of the basis and assumptions used to determine fair value, see Note 26 to our audited consolidated financial
statements appearing elsewhere in this Annual Report. The aforementioned inputs entered in to the option valuation model that we
use to determine the fair value of our share awards are subjective estimates and changes to these estimates will cause the fair
value of our share-based awards and related share- based compensations expense we record to vary.



Goodwill and trade name



Our management tests annually whether goodwill
and our trade name has suffered impairment, in accordance with our accounting policies and practices. In respect of goodwill,
in accordance with IFRS rules, the recoverable amount of cash-generating units has been determined based on value in use calculations.
These calculations require estimates to be made which are based on management assumptions. However, if there is an unforeseen
event which materially affects these assumptions, such event could lead to a write down of goodwill.



While assessing any impairment of goodwill
as at March 31, 2016, the value in use was determined using a discounted cash flow method. Estimated cash flows based on
internal four year forecasts were developed using internal forecasts, extrapolated for the fifth year, and a pre-tax discount
rate of 17.8% and a terminal growth rate of 4.0% were applied. The assessment of impairment of the trade name was based
on a value in use measurement using the relief from royalty method and by then applying a pre-tax discount rate of 21.7% and a
terminal growth rate of 4.0%.



Basis of consolidation



We evaluate arrangements with special purpose
vehicles in accordance with IFRS 10: Consolidated Financial Statements, or IFRS 10, to establish how transactions with such entities
should be accounted for. This requires judgment over control such that it is exposed, or has rights, to variable returns and can
influence the returns attached to the arrangements.



Year Ended March 31, 2016 Compared to
Year Ended March 31, 2015



|                     |  | Year ended March 31, |          |      |  | As a % of revenue
|-------------------- |  | -------------------- | -------- | ---- |  | -----------------
|                     |  | 2016                 |          | 2015 |  | Change %         
|                     |  | (in thousands)       |          |      |  |                  
|Revenue              |  | $                    | 274,428  |      |  | $                
|Cost of sales        |  |                      | (172,764 | )    |  |                  
|Gross profit         |  |                      | 101,664  |      |  |                  
|Administrative costs |  |                      | (64,019  | )    |  |                  
|Operating profit     |  |                      | 37,645   |      |  |                  
|Net finance costs    |  |                      | (8,010   | )    |  |                  
|Other losses         |  |                      | (3,636   | )    |  |                  
|Profit before tax    |  |                      | 25,999   |      |  |                  
|Income tax expense   |  |                      | (12,711  | )    |  |                  
|Net income           |  | $                    | 13,288   |      |  | $                



The following table sets forth, for the period
indicated, the revenue by region of domicile of Group’s operation.



|                  |  | Year ended March 31, |         |     
|----------------- |  | -------------------- | ------- | ----
|                  |  | 2016                 |         | 2015
|                  |  | (in thousands)       |         |     
|India             |  | $                    | 159,855 |     
|Europe            |  |                      | 34,209  |     
|North America     |  |                      | 14,622  |     
|Rest of the world |  |                      | 65,742  |     
|Total revenues    |  | $                    | 274,428 |     



65






Revenue

In fiscal 2016, Eros film slate comprised 63
films of which 6 were high budget, 16 were medium budget and 41 were low budget as compared to very similar mix of 65 films in
fiscal 2015, of which 6 were high budget, 12 were medium budget and 47 were low budget.



In fiscal 2016, the Company’s slate of
63 films comprised 33 Hindi films, 19 Tamil/Telugu films and 11 regional films as compared to fiscal 2015 where its slate of 65
films comprised 45 Hindi films, 19 Tamil/Telugu films and one regional film. For the twelve months ended March 31, 2016, revenue
decreased marginally by 3.4% to $274.4 million, compared to $284.2 million for the twelve months ended March 31, 2015.



In fiscal 2016, the aggregate theatrical revenues
increased by 12.4% to $138.4 million from $123.1 million in fiscal 2015. Fiscal 2016 proved to be a successful year for the Company’s
films at the box office demonstrating the quality and robustness of its content with three out of the top four Hindi films and
seven out of the top 15 Hindi films in Calender year 2015 being Eros films. Some of our successful global releases were Bajrangi
Bhaijaan, Bajirao Mastani, Tanu Weds Manu Returns, Welcome Back, Srimanthuduand overseas releases were Dil Dhadakne Do,
Singh is Blingand Gabbar is Backreinforcing the portfolio and film mix strategy.



The aggregate revenues from television syndication
decreased by 28.8% to $72.1 million in fiscal 2016 from $101.2 million in fiscal 2015 mainly as a result of higher television
sales in India offset by lower sales in territories outside of India due to the Company’s decision to forego a portion
of their potential catalogue revenues that have relatively longer payment cycles, in order to improve days sales outstanding.



The aggregate revenues from digital, ancillary
and the newly acquired “Techzone” increased 6.7% to $63.9 million in fiscal 2016 from $59.9 million in fiscal 2015.
This is on account of contribution from Techzone and better realizations from other ancillary revenues such as music sales
and in-flight entertainment.



We derived approximately 41.7% of our fiscal
2016 revenues from the exploitation of our films in territories outside of India compared to 61.3% in Fiscal 2015. This
percentage is calculated (as required under International Financial Reporting Standards) based on revenue by region of domicile
of Group’s operation.



Revenue from India increased by 45.3
% to $159.9 million in fiscal 2016, compared to $110 million in fiscal 2015. This was account of the stronger Indian box office
collection of the Company’s movies and the better realizations with respect to television syndication revenues associated
with these movies.



Revenue from Europe increased by 15.9
% to $34.2 million in fiscal 2016, compared to $29.5 million in fiscal 2015 and North America increased 46 % to $14.6 million
in fiscal 2016, compared to $10 million in fiscal 2015. This was account of the stronger overseas box office collection of the
Company’s movies.



Revenue from rest of the world decreased by
51.2 % to $65.7 million in fiscal 2016, compared to $134.6 million in fiscal 2015. This was mainly due to lower catalogue
sales.



We also report percentage of revenue calculated
(as required under International Financial Reporting Standards) based on where the customer who entered into a contract with any
of its entities is based and not strictly on the geography of the rights being exploited or licensed. Accordingly, this may not
be reflective of the potential of any given market because it is not necessarily reflective of where the films are actually distributed.
As a result, the Company’s revenue by customer location may vary year on year. On this basis, we derived approximately 42.1%
of our Fiscal 2016 revenues from the exploitation of our films in territories outside of India compared to 61.5% in Fiscal 2015.



Cost of sales

In fiscal 2016 cost of sales increased by
10.9% to $172.8 million compared to $155.8 million in fiscal 2015. $11.0 million out of the total $17 million increase
or 65% of the increase was primarily on account of increase in film amortization costs associated with mix of the Company’s
films of fiscal 2016 as compared to fiscal 2015 as well as cumulative amortization costs of its
larger film library, and 35% of the increase was due to accrued overages to co-producers from hit films as well as an increase
in selling and distribution expenses.



66






Gross profit

In fiscal 2016gross profit decreased by 20.8% to $101.7 million, compared to $128.4 millionin fiscal 2015primarily due to lower revenue from high margin catalogue sales and higher cost of sales, mainly due to increased amortization
charge.



Net Income

In fiscal 2016 net income decreased by 73.0%
to $13.3 million, compared to $49.3 million in fiscal 2015 primarily due to lower high-margin catalogue revenues, lower gross
profit and higher administrative cost in fiscal 2016.



Adjusted EBITDA

In fiscal 2016adjusted EBITDA decreased by 29.9% to $70.9 million compared to $101.2 millionin fiscal 2015mainly due to higher theatrical revenues being offset by proportionately higher cost of sales including film amortisation costs
and relatively higher margin lower catalogue revenues.



Administrative costs

In fiscal
2016, administrative costs increased by 29.3% to $64 million compared to $49.5 million in fiscal 2015, which was attributable
to an increase in share based payment charges by 41.6% to $31.0 million in fiscal 2016 compared to $21.9 million in fiscal 2015
as well as increased personnel cost of $2.7 million on account of expansion of the Eros Now team and newly acquired“Techzone”



Net finance costs

In fiscal 2016, net finance increased by 35.6%
to $8 million, compared to $5.9 million in fiscal 2015. This was mainly due to the higher blended cost of debt during the year
with the full year retail bond costs coming in which was only partial in the previous year.



Other losses

In fiscal 2016, other losses decreased by 65.7%
to $3.6 million, compared to $10.5 million in fiscal 2015. This was primarily due to a decrease in the fair value of derivative
liability instruments not designated in a hedging relationship and net foreign exchange losses. In fiscal 2015 there was also impairment
loss on available-for-sale financial asset, while their was no such impairment in fiscal 2016



Income tax expense

The expense for income taxes was $12.7 million
and $13.2 million for the twelve months ended March 31, 2016 and 2015, respectively. The decrease for income taxes is due to lower
net profit earned in the twelve months ended March 31, 2016. Effective tax rates were 21% and 21.1% for Fiscal 2016 and 2015, respectively,
excluding non-deductible share-based payment charges and net loss on held for trading financial liabilities.



Year Ended March 31, 2015 Compared to
Year Ended March 31, 2014



|                     |  | Year ended March 31, |          |      |  | As a % of revenue
|-------------------- |  | -------------------- | -------- | ---- |  | -----------------
|                     |  | 2015                 |          | 2014 |  | Change (%)       
|                     |  | (in thousands)       |          |      |  |                  
|Revenue              |  | $                    | 284,175  |      |  | $                
|Cost of sales        |  |                      | (155,777 | )    |  |                  
|Gross profit         |  |                      | 128,398  |      |  |                  
|Administrative costs |  |                      | (49,546  | )    |  |                  
|Operating profit     |  |                      | 78,852   |      |  |                  
|Net finance costs    |  |                      | (5,861   | )    |  |                  
|Other losses         |  |                      | (10,483  | )    |  |                  
|Profit before tax    |  |                      | 62,508   |      |  |                  
|Income tax expense   |  |                      | (13,178  | )    |  |                  
|Net income           |  | $                    | 49,330   |      |  | $                



The following table sets forth, for the period
indicated, the revenue by geographic area by customer location.



|                  |  | Year ended March 31, |         |     
|----------------- |  | -------------------- | ------- | ----
|                  |  | 2015                 |         | 2014
|                  |  | (in thousands)       |         |     
|India             |  | $                    | 109,513 |     
|Europe            |  |                      | 27,146  |     
|North America     |  |                      | 19,052  |     
|Rest of the world |  |                      | 128,464 |     
|Total revenues    |  | $                    | 284,175 |     



67






Revenue

Revenue increased by 20.7%
to $284.2 million, compared to $235.5 million in fiscal 2014 (excluding the impact of foreign currency fluctuations, revenue increased 22.4%,
or $52.0 million). Our revenue growth was driven by increases in our theatrical, television syndication and digital and ancillary
revenues in fiscal 2015. The growth in our theatrical revenue reflected the increased number of high budget films and the performance
of our globally released Tamil and Telugu films, Lingaa, Kochadaiiyaan, Aagadu and Action Jackson
a Hindi film release. Television syndication revenue grew in fiscal 2015, with our high and medium budget films helping us syndicate
attractive bundles of new and library films. Digital and ancillary revenue growth reflected new release and catalog performance
together with contributions from production services. We released six high budget films in fiscal 2015 compared to four high budget
films in fiscal 2014. In fiscal 2015 we released 12 medium budget films as compared to 21 medium budget films in fiscal 2014.
In fiscal 2015 we released six high budget films of which three were Hindi and two were Tamil and one was Telugu, as compared
to fiscal 2014, in which out of four high budget films, three were Hindi, and one was Telugu, and none were Tamil.



We derived approximately 61.5% of our fiscal
2015 revenues from customers located outside of India. This percentage is calculated (as required under International Financial
Reporting Standards) based on where the customer who entered into a contract with us is located and not necessarily on the geography
of the rights being exploited or licensed. To that extent, this net revenue by customer location may not be reflective of the potential
of any given market. As a result of changes in the location of our customers, our revenue by customer location may vary year to
year.



Revenue by customer location in India decreased
6.9% to $109.5 million in fiscal 2015, compared to $117.6 million in fiscal 2014, attributable to a reduction in revenue as a result
of the translation impact due to exchange rate movement, together with the impact of changes in customer location for revenue related
to the India market but accounted for as derived outside of India. Revenue from Europe increased 22.0% to $27.1 million in fiscal
2015, compared to $22.2 million in fiscal 2014. Revenue from North America increased 35.9% to $19.1 million in fiscal 2015, compared
to $14.0 million in fiscal 2014 due to increased syndication revenues. In fiscal 2015, revenues from the rest of the world increased
57.5% to $128.5 million, compared to $81.6 million in fiscal 2014 due to increased syndication revenues and digital and ancillary
revenues.



Cost of sales

Cost of sales
increased by 17.2% or $22.8 million in fiscal 2015 to $155.8 million, compared to $132.9 million in fiscal 2014. The increase
was primarily due to an increase in film amortization costs of $17.6 million driven by a higher investment in our new release
slate as compared to fiscal 2014, along with the cumulative impact of amortization costs associated with our larger film library.
Other costs of sales, which principally consist of advertising, overages and print costs, increased by $4.9 million in fiscal
2015, reflecting increased advertising costs associated with the increase in high budget film releases in fiscal 2015 compared
to fiscal 2014, offset by reduced print and associated distribution costs due to increased usage of digital distribution methods.



Gross profit

Gross profit increased
by 25.2% or $25.9 million in fiscal 2015 to $128.4 million, compared to $102.5 million in fiscal 2014 primarily due to our improved
margins reflecting the higher than proportionate increase in revenues, relative to the lower cost of the mix of new film releases.
As a percentage of revenues, our gross profit margin increased to 45.2% in fiscal 2015 from 43.5% in fiscal 2014.



Administrative costs

Administrative
costs increased by 16.1% or $6.8 million in fiscal 2015 to $49.5 million, which was attributable to an increase of $3.5 million
in share based payment charges compared to fiscal 2014, along with $3.3 million of additional overhead in fiscal 2015, which includes
an increase in personnel cost of $0.3 million. Additional trade receivables provisions contributed to $1.8 million of the increase
in additional overhead as compared to fiscal 2014.



Net finance costs

Net finance
costs, excluding the impact of foreign currency fluctuations, decreased by 22.0% or $1.6 million due to an overall increase in
interest income resulting from higher cash levels across the group, which was due to proceeds from the follow-on offering on the
NYSE and our Retail Bond offering on the London Stock Exchange.



Other losses

Other losses increased
by 345.5% or $8.1 million in fiscal 2015 to $10.5 million, compared to $2.4 million in fiscal 2014, due to a derivative loss as
a result of changes in USD interest rate expectations of $7.8 million recognized in fiscal 2015, compared to a $5.2 million derivative
gain in fiscal 2014.



Income tax expense

Income tax expense increased by 2.6% or $0.4
million in fiscal 2015 to $13.2 million compared to $12.8 million in fiscal 2014, and our effective tax rate was 21.1% in
fiscal 2015, compared to 25.6% in fiscal 2014. Derivative gains and transaction costs relating to equity transactions are not
chargeable or deductible for income tax purposes. Our income tax expense in fiscal 2015 included $7.5 million of estimated current
tax expense and $5.7 million of estimated deferred tax expense. The change in effective rate principally reflects a change in
the pattern of the profits subject to income tax amongst our subsidiaries as compared to fiscal 2014.



68






Exchange Rates



Our reporting currency is the U.S. dollar.
Transactions in foreign currencies are translated at the exchange rate prevailing at the date of the transaction. Monetary assets
and liabilities in foreign currencies are translated into U.S. dollars at the exchange rates at the date of the applicable statement
of financial position. For the purposes of consolidation, all income and expenses are translated at the average rate of exchange
during the period covered by the applicable statement of income and assets and liabilities are translated at the exchange rate
prevailing on the date of the applicable statement of financial position. When the U.S. dollar strengthens against a foreign currency,
the value of our sales and expenses in that currency converted to U.S. dollars decreases. When the U.S. dollar weakens, the value
of our sales and expenses in that currency converted to U.S. dollars increases.



Recently, there have been periods of higher
volatility in the Indian Rupee and U.S. dollar exchange rate. This volatility is illustrated in the table below for the periods
indicated:



|               |  | Period End |  | Average(1) |  | High |  | Low  
|-------------- |  | ---------- |  | ---------- |  | ---- |  | -----
|Fiscal Year    |  |            |  |            |  |      |  |      
|2011           |  |            |  | 44.54      |  |      |  | 45.46
|2012           |  |            |  | 50.89      |  |      |  | 48.01
|2013           |  |            |  | 54.52      |  |      |  | 54.36
|2014           |  |            |  | 60.35      |  |      |  | 60.35
|2015           |  |            |  | 62.58      |  |      |  | 61.15
|2016           |  |            |  | 66.25      |  |      |  | 65.39
|Months         |  |            |  | 63.52      |  |      |  | 62.72
|April 2015     |  |            |  | 63.83      |  |      |  | 63.73
|May 2015       |  |            |  | 63.59      |  |      |  | 63.78
|June 2015      |  |            |  | 63.87      |  |      |  | 63.60
|July 2015      |  |            |  | 66.39      |  |      |  | 65.10
|August 2015    |  |            |  | 65.50      |  |      |  | 66.17
|September 2015 |  |            |  | 65.40      |  |      |  | 65.03
|October 2015   |  |            |  | 66.43      |  |      |  | 66.10
|November 2015  |  |            |  | 66.19      |  |      |  | 66.50
|December 2015  |  |            |  | 67.87      |  |      |  | 67.33
|January 2016   |  |            |  | 68.21      |  |      |  | 68.24
|February 2016  |  |            |  | 66.25      |  |      |  | 66.89
|March 2016     |  |            |  | 66.39      |  |      |  | 66.42
|April 2016     |  |            |  | 66.96      |  |      |  | 66.88
|May 2016       |  |            |  | 67.51      |  |      |  | 67.27
|June 2016      |  |            |  | 63.52      |  |      |  | 62.72



|(1) | Represents the average of the U.S. dollar to Indian Rupee exchange rates on the last day of each month during the period for all fiscal years presented, and the average of the noon buying rate for all days during the period for all months presented.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



This volatility in the Indian Rupee as compared
to the U.S. dollar and the increasing exchange rate has impacted our results of operations as shown in the table below comparing
the reported results against constant currency comparables based upon the average rate of exchange for the year ended March 31,
2016, of INR 65.43 to $1.00. In addition to the impact on gross profit, the volatility during the year ended March 31, 2016 also
led to a non-cash foreign exchange loss of $0.07 million principally on our Indian subsidiaries’ foreign currency loans in
the year ended March 31, 2016 compared to $0.9 million gain in the year ended March 31, 2015.



The following table sets forth our constant
currency revenue (a non-GAAP financial measure) for the periods indicated. Constant currency revenue is a non-GAAP financial measure.
We present constant currency revenue so that revenue may be viewed without the impact of foreign currency exchange rate fluctuations,
thereby facilitating period-to-period comparisons of business performance. Constant currency revenue is presented by recalculating
prior period’s revenue denominated in currencies other than in US dollars using the foreign exchange rate used for the latest
period. Our non-US dollar denominated revenue includes, but is not limited to, revenue denominated in Indian rupee, pound sterling
and United Arab Emirates Dirham.



|              |  | Year ended March 31, |         
|------------- |  | -------------------- | --------
|              |  | 2016                 |         
|              |  |                      |         
|              |  | Reported             |         
|Revenue       |  | $                    | 274,428 
|Cost of sales |  |                      | (172,764
|Gross Profit  |  | $                    | 101,664 



69






The percentage change for the data comparing
the constant currency amounts against the reported results referenced in the table above:



|              |  | Year ended March 31,
|------------- |  | --------------------
|              |  | 2016                
|Revenue       |  |                     
|Cost of sales |  |                     
|Gross profit  |  |                     



The Indian Rupee experienced an approximately
6.3% drop in value as compared to the U.S. dollar in fiscal 2016,
in fiscal 2015 the drop was 3.7%.



B. Liquidity and Capital Resources



Our operations and strategic objectives require
continuing capital investment, and our resources include cash on hand and cash provided by operations, as well as access to capital
from bank borrowings and access to capital markets. Management believes that cash generated by or available to us should be sufficient
to fund our capital and liquidity needs for at least the next 12 months.



This year, while the Company continued to
grow its business, the focus has also been on balance sheet and cash flow efficiencies. This was primarily on account of cash
flow from operations that increased by 98.8% from $118.0 million as of March 31, 2015 to $234.6 million as of March 31, 2016 due
to improved collection of receivables. Additionally cash outflows from investing activities amounted to $211.30
million as of March 31, 2016 from $279.2 million as of March 31, 2015. Further net debt reduced by $31.9 million to $129.1 million
as of March 31, 2016 as compared $161.0 million as of March 31, 2015.



Trade accounts receivables were $169.3 million
as of March 31, 2016 as compared to $197.8 million at March 31, 2015. This was primarily on account successful collection of outstanding
dues from the Company’s customers. As of March 31, 2016, out of the total trade receivables 34.7% was not contractually due
and only 1.7% was past due for over a year.



Our future financial and operating performance,
ability to service or refinance debt and ability to comply with covenants and restrictions contained in our debt agreements will
be subject to future economic conditions, the financial health of our customers and suppliers and to financial, business and other
factors, many of which are beyond our control. Furthermore, management believes that working capital is sufficient for our present
requirements.



|                    |  | Year ended March 31,
|------------------- |  | --------------------
|                    |  | 2016                
|                    |  | (in thousands)      
|Current assets      |  | $                   
|Current liabilities |  |                     
|Working capital     |  | $                   



The significant decrease in working capital
as at March 31, 2016 as compared to March 31, 2015, principally reflects an increase in short term borrowings on account of installments
due within one year on long term borrowings classified as short term borrowing.



Indebtedness



As of March
31, 2016, we had aggregate outstanding indebtedness of $311.9 million, and cash and cash equivalents of $182.8 million.
At March 31, 2016, the total available facilities were comprised of (i) revolving credit facilities, secured and unsecured term
loans, and vehicle loans of $191.5 million at Eros India and Eros Worldwide, (ii) secured overdraft and term loan amounting to
$47.0 million at Eros International Limited. In addition, at March 31, 2016,$1.5
million of unsecured commercial paper had been issued by Eros India, and Eros International plc
has debt of $71.9 million in relation to a retail bond offering for £50 million in October 2014 and unsecured term loan.
As at March 31, 2016, there were undrawn amounts under our facilities of $4.4 million.



70






|                                    |  | As of March 31, 2016
|----------------------------------- |  | --------------------
|                                    |  | (in thousands)      
|Eros India                          |  |                     
|Secured revolving credit facilities |  | $                   
|Secured term loans                  |  | $                   
|Unsecured commercial paper          |  | $                   
|Vehicle loans                       |  | $                   
|Unsecured other loan                |  | $                   
|Total                               |  | $                   
|Eros International plc              |  |                     
|Retail Bond                         |  | $                   
|Term Loan                           |  | $                   
|Total                               |  | $                   
|Eros International Limited          |  |                     
|Secured overdraft                   |  | $                   
|Unsecured Working Capital Loan      |  | $                   
|Total                               |  | $                   
|Eros International USA Inc.         |  |                     
|Vehicle loans                       |  | $                   
|Total                               |  | $                   
|                                    |  |                     
|Eros Worldwide                      |  |                     
|Revolving credit facility(1)        |  | $                   
|Interest swap financing facility    |  | $                   
|Total                               |  | $                   
|Total                               |  | $                   



|(1) | Borrowers under the revolving credit facility are
    Eros International Plc, Eros Worldwide FZ LLC, Eros International Limited and Eros International USA Inc.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



Certain of our borrowings and loan agreements,
including our new credit facility, contain customary covenants, including covenants that restrict our ability to incur additional
indebtedness, create or permit liens on our assets or engage in mergers and acquisitions. Such agreements also contain various
customary events of default with respect to the borrowings, including the failure to pay interest or principal when due and cross
default provisions, and, under certain circumstances, lenders may be able to require repayment of loans to Eros India or Eros Films
prior to their maturity. If an event of default occurs and is continuing, the principal amounts outstanding, together with all
accrued unpaid interest and other amounts owed may be declared immediately due and payable by the lenders. If such an event were
to occur, we would need to pursue new financing that may not be on as favorable terms as our current borrowings. We are currently
in full compliance with all of our agreements governing indebtedness.



Borrowings under
our revolving credit facility maturing in 2017 bear interest at LIBOR, or in the case of future borrowings in Euros, EURIBOR, floating
rates with margins between 1.9% and 2.9% plus mandatory cost. Borrowings under our term loan facilities, overdraft facility and
revolving credit facilities at Eros India matures between 2017 and 2021 and bear interest at fluctuating interest rates pursuant
to the relevant sanction letter governing such loans. As of March 31, 2016, our unsecured commercial paper issued by Eros India
bore discount rates between 10%and13% and has maturity
dates ranging from one month to six months of the date of issuance thereof.



We expect to renew, replace or extend our
borrowings as they reach maturity. As at March 31, 2016, we had net undrawn amounts of $4.4 million available.



71






Sources and Uses of Cash



|                                      |  | Year Ended March 31,
|------------------------------------- |  | --------------------
|                                      |  | 2016                
|                                      |  | (in thousands)      
|Net cash from operating activities    |  | $                   
|Net cash used in investing activities |  | $                   
|Net cash from financing activities    |  | $                   



Year ended March 31, 2016 Compared to
Year Ended March 31, 2015



Net cash from operating activities in fiscal
2016 was $234.6 million, compared to $118.0 million in fiscal 2015, an increase of $116.6 million, or 98.8%, primarily due to
increase in cash flow from operations, reduction in trade receivables of $28.5 million, increase in trade payables of $31.5 million
due to deferred revenue from presales and accrued overages from hit films. This also included an increase in interest paid of
$5.6 million and a decrease in income taxes paid of $4.5 million, from fiscal 2015. There was a decrease in working capital of
$51.3 million in fiscal 2016 mainly because the revolving credit facility of $123,750 million which was part of a long
term liability in fiscal 2015 was classified as a short term liability at the end of fiscal 2016.



Net cash used in investing activities in fiscal
2016 was $211.4 million, compared to $279.2 million in fiscal 2015, a decrease of $67.8 million, or 24.3%, reflecting the
change in mix of films released in fiscal 2016 and our investment in film content in future years. Our investment in film content
in fiscal 2016 was $211.3 million, compared to $276.2 million in fiscal 2015, a decrease of $64.9 million, or 23.5%. Fiscal 2015
investment in content also contained a stepped one-off investment for Eros Now content with additional funds available from the
proceeds from the UK retail bond.



Net cash from financing activities in fiscal
2016 was $7.6 million, compared to $177.6 million in fiscal 2015, a decrease of $170 million, or 95.7%, primarily because we didn’t
access the capital markets in fiscal 2016 as compared to fiscal 2015 where we had capital proceeds of $92.3 million from our follow
on equity offering in 2015 and proceeds of $77.9 million on account of issuing Retail Bond.



Year ended March 31, 2015 Compared to
Year Ended March 31, 2014



Net cash from operating activities in fiscal
2015 was $118.0 million, compared to $132.5 million in fiscal 2014, a decrease of $14.5 million, or 10.9%, which included a decrease
in interest paid of $2.7 million and an increase in income taxes paid of $5.3 million, from fiscal 2014. There was an increase
in working capital of $92.5 million in fiscal 2015 primarily due to an increase in trade receivables of $94.0 million and an increase
of $1.4 million in trade payables compared to a $34.2 million increase in trade receivables and a $0.9 million increase in trade
payables in fiscal 2014.



Net cash used in investing activities in fiscal
2015 was $279.2 million, compared to $161.0 million in fiscal 2014, an increase of $118.2 million, or 73.4%, reflecting the change
in the number and mix of films released in fiscal 2014 and our investment in film content in future years. Our investment in film
content in fiscal 2015 was $276.2 million, compared to $163.2 million in fiscal 2014, an increase of $113.0 million, or 69.2%,
reflecting a stepped investment in Eros Now as well as future slate and opportunistic catalogue acquisitions.



Net cash from financing activities in fiscal
2015 was $177.6 million, compared to $69.4 million in fiscal 2014, an increase of $108.2 million, or 155.9%, primarily attributable
to net share capital proceeds of $92.3 million from our follow on equity offering, net proceeds of short-term borrowings of $1.5
million and proceeds of net long-term borrowings of $63.6 million principally from our Retail Bond.



Capital Expenditures



In fiscal 2016, we invested $211.3 million
in film content, and in fiscal 2017 we expect to invest approximately $225 million in film content.



C. Research and development



Not applicable



72






D. Trend information



New accounting pronouncements issued but
not yet effective



Certain new standards,
interpretations and amendments to existing standards have been published that are mandatory for our accounting periods beginning
on or after April 1, 2016 or later periods. Those which are considered to be relevant to Group’s operations are set
out below.



IFRS 15 Revenue from Contracts with Customers



| | i) | In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers (“IFRS 15”).
This standard provides a single, principle-based five-step model to be applied to all contracts with customers. Guidance is provided
on topics such as the point at which revenue is recognized, accounting for variable consideration, costs of fulfilling and obtaining
a contract and various other related matters. IFRS 15 also introduced new disclosure requirements with respect to revenue.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The five steps in the model under IFRS 15 are
: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction
price; (iv) allocate the transaction price to the performance obligations in the contracts; and (v) recognize revenue when (or
as) the entity satisfies a performance obligation.

IFRS 15 replaces the following standards and
interpretations:



| | · | IAS 11 Construction Contracts
| | - | -----------------------------



| | · | IAS 18 Revenue
| | - | --------------



| | · | IFRIC 13 Customer Loyalty Programmes
| | - | ------------------------------------



| | · | IFRIC 15 Agreements for the Construction of Real Estate
| | - | -------------------------------------------------------



| | · | IFRIC 18 Transfers of Assets from Customers
| | - | -------------------------------------------



| | · | SIC-31 Revenue - Barter Transactions Involving Advertising Services
| | - | -------------------------------------------------------------------



When first applying IFRS 15, it should be applied
in full for the current period, including retrospective application to all contracts that were not yet complete at the beginning
of that period. In respect of prior periods, the transition guidance allows an option to either:



| | · | apply IFRS 15 in full to prior periods (with certain limited practical expedients being available); or
| | - | ------------------------------------------------------------------------------------------------------



| | · | retain prior period figures as reported under the previous standards, recognizing the cumulative effect of applying IFRS 15 as an adjustment to the opening balance of equity as at the date of initial application (beginning of current reporting period).
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



IFRS 15 is effective for fiscal years
beginning on or after January 1, 2018. Earlier application is permitted. The Company is currently evaluating the impact that this
new standard will have on its consolidated financial statements.



IAS 16 Property Plant and Equipment and
IAS 38 Intangible Assets



In May 2014, the IASB issued two amendments
with respect to IAS 16 Property, Plant and Equipment (“IAS 16”) and IAS 38 Intangible Assets (“IAS 38”)
dealing with acceptable methods of depreciation and amortization.



The amended IAS 16 prohibits entities
from using a revenue based depreciation method for items of property, plant and equipment. Further the amendment under IAS 38 introduces
a rebuttable presumption that revenue is not an appropriate basis for amortization of an intangible asset. However this presumption
can only be rebutted in two limited circumstances:

| | i) | the intangible is expressed as a measure of revenue i.e. when the predominant limiting factor inherent
in an intangible asset is the achievement of a contractually specified revenue threshold; or
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ii) | it can be demonstrated that revenue and the consumption of economic benefits of the intangible
assets are highly correlated. In these circumstances, revenue expected to be generated from the intangible assets can be an appropriate
basis for amortization of the intangible asset.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The amendments apply prospectively and are
effective for annual periods beginning on or after January 1, 2016, with earlier application permitted. The Company does not believe
that this amendment will have a material impact on its consolidated financial statements.



73






IFRS 9 Financial Instruments



In July 2014, the IASB finalized and issued
IFRS 9 – Financial Instruments. IFRS 9 replaces IAS 39 “Financial instruments: recognition and measurement, the
previous Standard which dealt with the recognition and measurement of financial instruments in its entirety upon the former’s
effective date.



The Key requirements of IFRS 9:



| | · | Replaces IAS 39’s measurement categories with the following three categories:
| | - | -----------------------------------------------------------------------------



|• |  | fair value through profit or loss
|- |  | ---------------------------------



|• |  | fair value through other comprehensive income
|- |  | ---------------------------------------------



|• |  | amortized cost
|- |  | --------------



| | · | Eliminates the requirement for separation of embedded derivatives from hybrid financial assets, the classification requirements to be applied to the hybrid financial asset in its entirety.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Requires an entity to present the amount of change in fair value due to change in entity’s own credit risk in other comprehensive income.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------



| | · | Introduces new impairment model, under which the “expected” credit loss are required to be recognized as compared to the existing “incurred” credit loss model of IAS 39.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Fundamental changes in hedge accounting by introduction of new general hedge accounting model which:
| | - | ----------------------------------------------------------------------------------------------------



|• |  | Increases the eligibility of hedged item and hedging instruments;
|- |  | -----------------------------------------------------------------



|• |  | Introduces a more principles–based approach to assess hedge effectiveness.
|- |  | --------------------------------------------------------------------------



IFRS 9 is effective for annual periods beginning
on or after January 1, 2018.



Earlier application is permitted provided that
all the requirements in the Standard are applied at the same time with two exceptions:



| | · | The requirement to present changes in the fair value of a liability due to changes in own credit risk may be applied early in isolation;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------



| | · | Entity may choose as its accounting policy choice to continue to apply hedge accounting requirements of IAS 39 instead of new general hedge accounting model as provided in IFRS 9.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Company is currently evaluating the impact
of this new standard on its consolidated financial statements.



IFRS 16 Leases



In January 2016, IASB has issued a new
standard, IFRS 16 “Leases”. The new standard sets out the principles for recognition, measurement, presentation and
disclosure of leases for both parties to a contract i.e. the lessee and the lessor. The standard provides a single lessee accounting
model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or the underlying
asset has a low value. Lessors continue to classify leases as operating or finance. IFRS 16 supersedes IAS 17 ‘Leases’
and related interpretations and is effective for periods beginning on or after 1 January 2019, with earlier adoption permitted
in IFRS 15 ‘Revenue from Contracts with Customers’ has also been applied.

The Company is currently evaluating the impact
that this new standard will have on its consolidated financial statements.



IAS 12 Income Taxes



In January 2016, the IASB issued amendments
to IAS 12 – “Income taxes” to clarify the following:

| | · | the carrying value of an asset does not limit the estimation of probable future taxable profits.
| | - | ------------------------------------------------------------------------------------------------

| | · | estimates for future taxable profits exclude tax deductions resulting from the reversal of deductible
temporary differences.
| | - | ----------------------------------------------------------------------------------------------------------------------------

74






| | · | an entity assesses a deferred tax asset in combination with other deferred tax assets. Where tax
law restricts the utilization of tax losses, an entity would assess a deferred tax asset in combination with other deferred tax
assets of the same type. The amendments are effective for annual periods beginning on or after January 1, 2017. Earlier application
is permitted.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Company does not believe that
this amendment will have a material impact on its consolidated financial statements.



IAS 7 Statement of Cash Flows



In January 2016, the IASB issued amendments
in IAS 7- “Statement of Cash Flows” to clarify and improve information provided to users of financial statements about
an entity’s financing activities.

The IASB requires that the following
changes in liabilities arising from financing activities to be disclosed (to the extent necessary):

| | · | changes from financing cash flows;
| | - | ----------------------------------

| | · | changes arising from obtaining and losing control of subsidiaries or other businesses;
| | - | --------------------------------------------------------------------------------------

| | · | the effect of changes of foreign exchange rates;
| | - | ------------------------------------------------

| | · | changes in fair values; and
| | - | ---------------------------

| | · | other changes.
| | - | --------------

The amendments are effective for annual
periods beginning on or after January 1, 2017. Earlier application is permitted. Entities need not present comparative information
when they first apply the amendments.

The Company is currently evaluating the effect
of this amendment on its consolidated financial statements



IFRS 2 Share-based Payment



In June 2016, the IASB issued amendments
to IFRS 2 – “Share-based Payment” to clarify the accounting for certain types of share-based payment transactions:

The amendments, which were developed
through the IFRS Interpretations Committee, provide requirements on the accounting for the following:

| | · | the effects of vesting and non-vesting conditions on the measurement of cash-settled share-based
payments;
| | - | ----------------------------------------------------------------------------------------------------------

| | · | share-based payment transactions with a net settlement feature for withholding tax obligations;
and
| | - | ---------------------------------------------------------------------------------------------------

| | · | a modification to the terms and conditions of a share-based payment that changes the classification
of the transaction from cash-settled to equity-settled
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------

The amendments are effective for annual
periods beginning on or after January 1, 2018. Earlier application is permitted.

The Company does not believe that this amendment
will have a material impact on its consolidated financial statements.



75






Quarterly Financial Information



The table below presents our selected unaudited
quarterly results of operations for the four quarters in the fiscal year ended March 31, 2016. This information should be read
together with our consolidated financial statements and related notes included elsewhere in this annual report. We have prepared
the unaudited financial data for the quarters presented on the same basis as our audited consolidated financial statements. The
historical quarterly results presented below are not necessarily indicative of the results that may be expected for any future
quarters or periods.



|                                         |  | Three Months Ended    
|---------------------------------------- |  | ----------------------
|                                         |  | June 30, 2015         
|                                         |  | (dollars in thousands)
|Selected Quarterly Results of Operations |  |                       
|Revenue                                  |  | $                     
|Cost of sales                            |  |                       
|Gross profit                             |  |                       
|Administrative costs                     |  |                       
|Operating profit                         |  |                       
|Net finance costs                        |  |                       
|Other losses                             |  |                       
|(Loss)/profit before tax                 |  |                       
|Income tax expense                       |  |                       
|Net (loss)/income                        |  | $                     
|                                         |  |                       
|OTHER NON-GAAP MEASURES                  |  |                       
|EBITDA(1)                                |  | $                     
|Adjusted EBITDA (1)                      |  | $                     
|                                         |  |                       
|OPERATING DATA                           |  |                       
|High budget film releases(2)             |  |                       
|Medium budget film releases(2)           |  |                       
|Low budget film releases(2)              |  |                       
|Total new film releases(2)               |  |                       



|(1) | We use EBITDA and Adjusted EBITDA as supplemental financial measures. EBITDA is defined by us as net income before interest expense, income tax expense and depreciation and amortization (excluding amortization of capitalized film content and debt issuance costs).  Adjusted EBITDA is defined as EBITDA adjusted for impairments of available-for-sale financial assets, profit/loss on held for trading liabilities (including profit/loss on derivatives), transaction costs relating to equity transactions and share based payments.  EBITDA, as used and defined by us, may not be comparable to similarly-titled measures employed by other companies and is not a measure of performance calculated in accordance with GAAP. EBITDA should not be considered in isolation or as a substitute for operating income, net income, cash flows from operating investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP.  EBITDA and Adjusted EBITDA provide no information regarding a company’s capital structure, borrowings, interest costs, capital expenditures and working capital movement or tax position.  However, our management team believes that EBITDA and Adjusted EBITDA are useful to an investor in evaluating our results of operations because these measures:
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | are widely used by investors to measure a company’s operating performance without regard
to items excluded from the calculation of such term, which can vary substantially from company to company depending upon accounting
methods and book value of assets, capital structure and the method by which assets were acquired, among other factors;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | help investors to evaluate and compare the results of our operations from period to period by removing
the effect of our capital structure from our operating structure; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | are used by our management team for various other purposes in presentations to our board of directors
as a basis for strategic planning and forecasting.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------



76






There are significant limitations to using
EBITDA and Adjusted EBITDA as a measure of performance, including the inability to analyze the effect of certain recurring and
non-recurring items that materially affect our net income or loss, the lack of comparability of results of operations of different
companies and the different methods of calculating EBITDA and Adjusted EBITDA reported by different companies.



The following table sets forth the reconciliation
of our net income to EBITDA and Adjusted EBITDA:



|                                                          |  | Three Months Ended
|--------------------------------------------------------- |  | ------------------
|                                                          |  | June 30, 2015     
|                                                          |  | (in thousands)    
|Net (loss)/income                                         |  | $                 
|Income tax expense                                        |  |                   
|Net finance costs                                         |  |                   
|Depreciation                                              |  |                   
|Amortization(a)                                           |  |                   
|EBITDA                                                    |  |                   
|Impairment of available-for-sale financial assets         |  |                   
|Share based payments(b)                                   |  |                   
|Net loss/(gain) on held for trading financial liabilities |  |                   
|Transaction costs relating to equity transactions         |  |                   
|Adjusted EBITDA                                           |  | $                 

| | a) | Includes only amortization of intangible assets other than intangible content assets.
| | -- | -------------------------------------------------------------------------------------

| | b) | Consists of compensation costs recognized with respect to all outstanding plans and all other equity
settled instruments.
| | -- | -------------------------------------------------------------------------------------------------------------------------

|2) | Includes films that were released by us directly and licensed by us for release.
|-- | --------------------------------------------------------------------------------



Our revenues and operating results are significantly
affected by the timing, number and breadth of our theatrical releases and their budgets, the timing of television syndication agreements,
and our amortization policy for the first 12 months of commercial exploitation for a film. The timing of releases is determined
based on several factors. A significant portion of the films we distribute are delivered to Indian theaters at times when theater
attendance has traditionally been highest, including school holidays, national holidays and the festivals. This timing of releases
also takes into account competitor film release dates, major cricket events in India and film production schedules. Significant
holidays and festivals, such as Diwali, Eid and Christmas, occur during July to December each year, and the Indian Premier League
cricket season generally occurs during April and May of each year. The Tamil New Year, called Pongal, falls in January each year
making the quarter ending March an important one for Tamil releases.



In the four quarters ended March 31, 2016,
revenue fluctuations primarily reflected the timing of major theatrical releases, with our highest quarterly revenues of $98.8
million in the three months ended September 30, 2015 as a result of the high budget theatrical releases of three high budget films
Bajrangi Bhaijaan (Hindi), Welcome Back (Hindi) and Srimanthdu (Telugu). The quarterly release schedule of
new films led to the lowest quarterly revenues of $50.0 million in the three months ended June 30, 2015. The fluctuations in other
losses reflect the changes in mark to market values of our interest derivative liabilities.



Our quarterly results can vary from one year
to the next, and the results of one quarter are not necessarily indicative of results for the next or any future quarter. Our revenue
and operating results are therefore seasonal in nature due to the impact on income of the timing of new releases as well as timing
and quantum of catalogue revenues



E. Off-Balance Sheet Arrangements



From time to time, to satisfy our filmed content
purchase contracts, we obtain guarantees or other contractual arrangements, such as letters of credit, as support for our payment
obligations.



As of March 31, 2016, the Group has provided
certain stand-by letters of credit amounting to $96.0 million (2015: $96.2 million) which are in the nature of performance guarantees
issued while entering into film co-production contracts and are valid until funding obligations under these contracts are met.
These guarantees, issued in connection with outstanding content commitments, have varying maturity dates.



77






In addition, the Group issued financial guarantees
amounting to $2.4 million (2015: $3.0 million) in the ordinary course of business, having varying maturity dates up to the next
12 months. The Group is only called upon to satisfy a guarantee when the guaranteed party fails to meet its obligations.



The Group did not earn any fee to provide such
guarantees. It does not anticipate any liability on these guarantees as it expects that most of these will expire unused.



F. Contractual Obligations



We have commitments under certain firm contractual
arrangements, or firm commitments, to make future payments. These firm commitments secure future rights to various assets and services
to be used in the normal course of our operations. The following table summarizes our firm commitments as of March 31, 2016.



|                                                  |  | As of March 31, 2016
|------------------------------------------------- |  | --------------------
|                                                  |  | Total               
|                                                  |  | (in thousands)      
|Recorded Contractual Obligations                  |  |                     
|Debt                                              |  | $                   
|                                                  |  |                     
|Unrecorded Contractual Obligations                |  |                     
|Operating leases                                  |  |                     
|Film entertainment rights purchase obligations(1) |  |                     
|Interest payments on debt (2)                     |  |                     
|Total                                             |  |                     



| | (1) | The amounts disclosed as Film entertainment rights purchase obligations are mutually agreed terms
and are presently disclosed on best estimate basis.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | The amounts shown in the table include future interest payments on variable and fixed rate debt
at current interest rates ranging from 1.8% to 13%.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------



G. Safe Harbor



See “Special Note Regarding Forward-Looking
Statements” at the beginning of this Annual Report on Form 20-F.



78






ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES



A. Directors and Executive Officers



Our Board of Directors consists of nine directors.



The following table sets forth the name, age
(as at June 30, 2016) and position of each of our directors and executive officers as at the date hereof.



|Name                       |  | Age |  | Position/s                                                           
|-------------------------- |  | --- |  | ---------------------------------------------------------------------
|Directors                  |  |     |  |                                                                      
|Kishore Lulla              |  | 54  |  | Director, Executive Chairman                                         
|Jyoti Deshpande            |  | 45  |  | Director, Group Chief Executive Officer, Managing Director           
|Vijay Ahuja                |  | 59  |  | Director, Vice Chairman                                              
|Sunil Lulla                |  | 52  |  | Director, Executive Vice Chairman                                    
|Naresh Chandra(1)(2)(3)(4) |  | 81  |  | Director, Chairman of Remuneration Committee and Nomination Committee
|Dilip Thakkar(1)(2)(3)(4)  |  | 79  |  | Director, Chairman of Audit Committee                                
|David Maisel(1)            |  | 54  |  | Director                                                             
|Rishika Lulla              |  | 29  |  | Director                                                             
|Rajeev Misra(1)            |  | 54  |  | Director                                                             
|Senior Management          |  |     |  |                                                                      
|Prem Parameswaran          |  | 47  |  | President of North America & Group Chief Financial Officer           
|Mark Carbeck               |  | 44  |  | Chief Corporate & Strategy Officer                                   
|Pranab Kapadia             |  | 44  |  | President of Europe and Africa Operations                            
|Surender Sadhwani          |  | 60  |  | President of Middle East Operations                                  
|Ken Naz                    |  | 57  |  | President of US – Film Distributions                                 



|(1) | Independent director                
|--- | ------------------------------------
|(2) | Member of the Audit Committee       
|(3) | Member of the Remuneration Committee
|(4) | Member of the Nomination Committee  



Summarized below is relevant biographical information
covering at least the past five years for each of our directors and executive officers.



Directors



Mr. Kishore Lulla
is a director and our Chairman. Mr. Lulla received a bachelor’s degree in Arts from Mumbai University. He has over 30 years
of experience in the media and film industry. He is a member of the British Academy of Film and Television Arts and Young Presidents’
Organization and also a board member for the School of Film at the University of California, Los Angeles. He has been honored
at the Asian Business Awards 2007 and the Indian Film Academy Awards 2007 for his contribution in taking Indian cinema global.
In 2010, Mr. Lulla was awarded the Entrepreneur of the Year at the GG2 Leadership and Diversity Awards and in 2015 was honored
by the Asia Society Southern California. As our Chairman, he has been instrumental in expanding our presence in the United Kingdom,
the U.S., Dubai, Australia, Fiji and other international markets. He served as our Chief Executive Officer from June 2011 until
May 2012 and has served as a director since 2005. Mr. Kishore Lulla is the father of Mrs. Rishika Lulla Singh, the brother
of Mr. Sunil Lulla and a cousin of Mr. Vijay Ahuja and Mr. Sadhwani.



Ms. Jyoti Deshpande is a director and
our Group Chief Executive Officer and Managing Director. She had worked with us from 2001 until May 2011 when she resigned from
our Board and served as a Consultant to the Company until November 2011 in connection with preparation for our initial public offering
in the U.S. She rejoined the Company in her former Group CEO/MD position on June 22, 2012. With a degree in Commerce and Economics
and an MBA from Mumbai University, Ms. Deshpande has over 23 years of experience in Indian media and entertainment across advertising,
media consulting, television and film. Ms. Deshpande has been a key member of the Eros leadership team since 2001 and was instrumental
in our initial public offering on AIM in 2006, Eros India’s listing on the Indian Stock Exchanges in 2010 and our initial
public offering on the NYSE in November 2013. Ms. Deshpande was featured in the list of Most Powerful Women in Business by Fortune
India and Business Today in 2015.



79






Mr. Vijay Ahuja is a director and our
Vice Chairman. Mr. Ahuja received a bachelor’s degree in commerce from Mumbai University. Mr. Ahuja co-founded our United
Kingdom business in 1988 and has since played an important role in implementing our key international strategies, helping expand
our business to its present scale by making a significant contribution to our development in the South East Asian markets, such
as Singapore, Malaysia, Indonesia and Hong Kong. Mr. Ahuja has served as a director since April 2005. Mr. Ahuja is a cousin of
Mr. Kishore Lulla and Mr. Sunil Lulla.



Mr. Sunil Lulla is a director and is
Executive Vice Chairman and Managing Director of Eros India. He received a bachelor’s degree in commerce from Mumbai University.
Mr. Lulla has over 21 years of experience in the media industry. Mr. Lulla has valuable relationships with talent in the Indian
film industry and has been instrumental in our expansion into distribution in India as well as home entertainment and music. He
has served as a director since 2005 and led our growth within India for many years before being appointed Executive Vice Chairman
and Managing Director of Eros India in February 2010. Mr. Sunil Lulla is the brother of Mr. Kishore Lulla, uncle of Mrs. Lulla
Singh and the cousin of Mr. Ahuja and Mr. Sadhwani.



Mrs. Rishika Lulla Singh is a director
and the CEO of Eros Digital, which covers all of the digital initiatives for Eros including Eros Now. Mrs. Lulla Singh has been
instrumental in spearheading the creation, and development distribution of Eros Now within India and internationally. She graduated
from the School Of Oriental and African Studies with a BA in South Asian Studies and Management and completed a postgraduate study
at the UCLA School of Theatre, Film and Television. With over five years of experience in over-the-top platforms and content, Mrs.
Lulla Singh has been a key contributor in driving the growth and penetration of Eros Now, both with technological developments
and relationship management to stimulate platform penetration. She was recently named Young Entrepreneur of the Year by the 2016
Asian Business Awards. Mrs. Lulla Singh is the daughter of Mr. Kishore Lulla and the niece of Mr. Sunil Lulla. She has served as
director since November 2014.



Mr. Naresh Chandra is a director. Mr.
Chandra received a master’s degree in Science from Allahabad University. A former civil servant, he joined the Indian Administrative
Services in 1956 and has served as Chief Secretary in the State of Rajasthan, Commonwealth Secretariat Advisor on Export Industrialization
and Policy in Colombo (Sri Lanka), Advisor to the Governor of Jammu and Kashmir and Secretary to the Ministries of Water Resources,
Defense, Home and Justice in the Government of India. In December 1990, he became Cabinet Secretary, the highest post in the Indian
civil service. In 1992, he was appointed Senior Advisor to the Prime Minister of India. He served as the Governor of the state
of Gujarat in 1995-1996 and Ambassador of India to the United States of America in 1996-2001. In 2007, he chaired the Government
of India’s Committee on Corporate Audit and Governance, the Committee on Private Companies and Limited Liability Partnerships
and the Committee on Civil Aviation Policy, and he was honored with the Padma Vibhushan, a high civilian award. Mr. Chandra serves
as director of seven other Indian companies and one foreign company. He has served as a director since July 2007.



Mr. Dilip Thakkaris a director. Mr.
Thakkar received a degree in Commerce and Law from Mumbai University. A practicing chartered accountant since 1961, Mr. Thakkar
has significant financial experience. He is a senior partner of Jayantilal Thakkar & Co. Chartered Accountants and a member
of the Institute of Chartered Accountants in India. In 1986 he was appointed by the Reserve Bank of India as a member of the Indian
Advisory Board for HSBC Bank and the British Bank of the Middle East for a period of eight years. He is the former President of
the Bombay Chartered Accountants’ Society and was then Chairman of its International Taxation Committee. Mr. Thakkar serves
as a non-executive director of seven other listed public limited companies in India and seven foreign companies. He has served
as a director since April 2006.



Mr. David Maisel is a director. Mr.
Maisel has been an Advisor to Rovio, the owners of Angry Birds, since 2011, and is the Executive Producer of the Angry Birds feature
film which released in May 2016. Mr. Maisel is also a Director at Gaiam, a NASDAQ listed company. Prior to this he served in senior
executive positions with Marvel Entertainment from 2003 until 2010, where he conceived and spearheaded the creation of Marvel Studios,
the launch of the “Iron Man” franchise, and Marvel’s 2010 sale to The Walt Disney Company. At Marvel, he was Chairman
of Marvel Studios and also in the Office of the Chief Executive for its parent company, Marvel Entertainment. He was also
the Executive Producer of “Iron Man,” “The Incredible Hulk,” “Iron Man 2,” “Thor,”
and “Captain America: The First Avenger.” Prior to Marvel, Mr. Maisel served in senior executive positions at Endeavor
Talent Agency, The Walt Disney Company, Creative Artists Agency, Chello Broadband, and The Boston Consulting Group. He is a graduate
of Harvard Business School and Duke University. He has served as a director since November 2014



Mr. Rajeev Misra is a director. Mr.
Misra was recently appointed head of Strategic Finance for SoftBank group. Prior to this appointment, Mr. Misra was a Senior Managing
Director at Fortress Investment Group where he was the head of European investments. Previously, he served as Group Managing Director
for UBS in London and was responsible for leverage finance, global credit, commercial real estate and emerging markets. Mr. Misra
also spent 17 years in various senior leadership roles at Deutsche Bank and Merrill Lynch. Mr. Misra holds an MBA from the Sloan
School of Management at Massachusetts Institute of Technology and a Master’s degree in Computer Science and Bachelor’s
degree in Mechanical Engineering from the University of Pennsylvania. He has served as a director since December 2014.



80






Senior Management



Mr. Prem Parameswaranis our Group Chief
Financial Officer and President of Eros International’s North America operations. Mr. Parameswaran joined Eros with over
23 years of experience in investment banking, advising clients in the global telecommunications, media and technology sector, including
on mergers and acquisitions and public, private equity and debt financings. Mr. Parameswaran most recently served as the Global
Head of Media and Telecommunications Investment Banking at Jefferies LLC. Prior to Jefferies, he was the Americas Head of Media
& Telecom at Deutsche Bank and also previously worked at both Goldman Sachs and Salomon Brothers. Mr. Parameswaran graduated
from Columbia University and received an MBA from Columbia Business School. Mr. Parameswaran joined us in June 2015.



Mr. Mark Carbeck is our Chief Corporate
& Strategy Officer, with management responsibility for Investor Relations, Group M&A and Corporate Finance.  Mr. Carbeck
was formerly a Director in Citigroup’s Investment Banking Division in London, having joined the firm in New York in 1997.
 Most recently Mr. Carbeck led the European Media investment banking coverage efforts at Citigroup and has deep media industry
knowledge and strong relationships with major United Kingdom and international media companies. Mr. Carbeck graduated from the
University of Chicago in 1994 with a Bachelor’s degree in History. Mr. Carbeck joined us in April 2014.



Mr. Pranab Kapadia is President Marketing
& Distribution of our UK, Europe and Africa Operations. Mr. Kapadia received a Master’s degree in Management Studies
(MMS) from Bombay University, majoring in Finance. He has over 20 years of experience in the Indian TV & Film Industry,
previously having served with Zee Network for 10 years as Head of Operations & Programming (Europe) and later as Business
Head of Adlabs Films (U.K.) Limited for one year. Mr Kapadia brings with him significant insight and a strong understanding of
the entertainment needs of South Asians internationally. He joined us in 2007.



Mr. Surender Sadhwani is our President
of Middle East Operations. Mr. Sadhwani received a post graduate degree in commerce from University of Madras in 1980. He has 22
years of experience in the banking industry through his work with Andhra Bank in Chennai. In addition, Mr. Sadhwani spent several
years in finance and account management for Hartmann Electronics in their Dubai office. He joined our Middle East operations in
April 2004 and was promoted to President of Middle East Operations in April 2006. Mr. Sadhwani is a cousin of Mr. Kishore Lulla
and Mr. Sunil Lulla.



Mr. Ken Naz is our President of
Americas Film Distributions. Mr. Naz has over 30 years of experience in media and entertainment. Mr Naz brings with him vast experience
from both Bollywood as well as Hollywood film distribution and exhibition experience. He has been a key speaker at countless
events, festivals Inc Harvard University. In the early 1970s, Mr. Naz worked in the Indian film distribution and exhibition business
in Canada. He obtained his business education at a Toronto University before joining Cineplex Odeon Cinemas in the business development
department and later served as head of operations of “A Theater Near You.” Mr. Naz joined us in 1997 and was
instrumental in setting up our U.S. office to service markets in the United States, Canada and other parts of North and South
America.



B. Compensation



Compensation of senior executive
officers and directors is determined by the Remuneration Committee of our Board of Directors. The Remuneration Committee reviews
the performance of our directors and each of our executive officers and sets the scale and structure of their compensation. Where
required, the Remuneration Committee engages the services of external companies for the purposes of benchmarking of executive
remuneration or such other remuneration related matter. As part of its role of overseeing the scale and structure of the compensation
paid to our executive officers, the Remuneration Committee approves their service agreements with our subsidiaries and any bonus
paid by our subsidiaries to such officers. The current members of the Remuneration Committee are two of our non-executive directors,
Naresh Chandra and Dilip Thakkar.



In determining the scale and structure of the
compensation for executive directors and senior executives, the Remuneration Committee takes into account the need to offer a competitive
compensation structure to attract and maintain a skilled and experienced management team. The Remuneration Committee creates competitive
compensation programs by reviewing market data and setting compensation at levels comparable to those at our competitors. We believe
that a compensation program with a strong performance based element is a prerequisite to obtaining our performance and growth objectives.



The main components of the compensation for
our executive officers are a base salary, share awards, annual bonus and stock options.



The Remuneration Committee reviews these three
compensation components in light of individual performance of the executive officers, external market data and reports provided
by outside experts or advisors. For information about service contracts entered into by us, or our subsidiaries, and certain of
our executives, see “Part I — Item 6. Directors, Senior Management and Employees — C. Board Practices.”



The compensation of our non-executive directors
is set by our board of directors as a whole, after consulting with outside experts or advisors.

81






The following tables and footnotes show the remuneration of each
of our directors for fiscal 2016:



|                    |  | Year ended March 31,
|------------------- |  | --------------------
|                    |  | 2016 Salary         
|                    |  | (in thousands)      
|Kishore Lulla       |  | $                   
|Jyoti Deshpande     |  |                     
|Vijay Ahuja         |  |                     
|Sunil Lulla(2)      |  |                     
|Naresh Chandra      |  |                     
|DilipThakkar        |  |                     
|Michael Kirkwood(3) |  |                     
|David Maisel        |  |                     
|Rishika Lulla Singh |  |                     
|Rajeev Misra        |  |                     
|Total               |  | $                   



|(1) | Health insurance, except for Sunil Lulla (see Note (2) below).                                                                                  
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | (1)	Sunil Lulla’s fiscal 2016 compensation consisted of the following (Indian Rupees translated to U.S. dollars at a rate of INR 64.5 per $1.00)



|Particulars for Mr Sunil Lulla        |  | INR |             | USD
|------------------------------------- |  | --- | ----------- | ---
|Basic salary                          |  |     | 1,32,00,000 |    
|Incentive compensation                |  |     | 58,56,400   |    
|Reimbursements car/entertainment etc. |  |     | 24,39,600   |    
|Medical reimbursement                 |  |     | 15,000      |    
|Special pay                           |  |     | 1,71,23,400 |    
|Company rent accommodation            |  |     | 3,600,000   |    
|Director’s fees                       |  |     | —           |    
|Total India                           |  |     | 42,234,400  |    
|Salary from Eros International Plc    |  |     |             |    
|Total salary                          |  |     |             |    



|(3) | Michael Kirkwood ceased being a Director on December 1, 2014.
|--- | -------------------------------------------------------------



The total compensation paid to our executive officers in fiscal
2016 was $17.0 million (2015: $15.8 million).



The following table and footnotes show the cost recognized in fiscal
2016 in respect to all outstanding plans and by grant of shares, which are all equity settled instruments, to our directors is
as follows:



|                    |  | September 18,2013 |       | June 5, 2014 |  | Option 2014 |     | IPO India  Plan |  | JSOP |       | June 25, 2015 |  | Management Scheme |    | June 09, 2015 |  | Total
|------------------- |  | ----------------- | ----- | ------------ |  | ----------- | --- | --------------- |  | ---- | ----- | ------------- |  | ----------------- | -- | ------------- |  | -----
|                    |  | (in thousands)   
|Kishore Lulla       |  | $                 | —     |              |  | $           | 342 |                 |  | $    | —     |               |  | $                 | —  |               |  |      
|Jyoti Deshpande     |  |                   | 3,817 |              |  |             | 228 |                 |  |      | —     |               |  |                   | 28 |               |  |      
|Sunil Lulla         |  |                   | —     |              |  |             | 253 |                 |  |      | —     |               |  |                   | —  |               |  |      
|Dilip Thakkar       |  |                   | —     |              |  |             | —   |                 |  |      | —     |               |  |                   | —  |               |  |      
|Naresh Chandra      |  |                   | —     |              |  |             | —   |                 |  |      | —     |               |  |                   | —  |               |  |      
|David Maisel        |  |                   | —     |              |  |             | —   |                 |  |      | 1,214 |               |  |                   | —  |               |  |      
|Rishika Lulla Singh |  |                   | —     |              |  |             | 127 |                 |  |      | —     |               |  |                   | —  |               |  |      
|Rajeev Misra        |  |                   | —     |              |  |             | —   |                 |  |      | —     |               |  |                   | —  |               |  |      
|Total               |  | $                 | 3,817 |              |  | $           | 950 |                 |  | $    | 1,214 |               |  | $                 | 28 |               |  |      



82






The awards made in fiscal 2016 comprised of
share and option awards. In its meeting dated June 9, 2015, the Board of Directors approved the following grants/awards:



580,000 ‘A’ ordinary shares were
granted to certain executive directors with a fair market value of $21.34 per shares subject to continued employment, these awards
with Nil exercise price vest equally over a period of three years with the first 25% vesting six months from the grant date. These
shares are yet to be issued.



Subject to continued employment, these awards
with Nil exercise price, vest over a period of three years



|                    | Number ofshares
|------------------- | ---------------
|Kishore Lulla       | 200,000        
|Sunil Lulla         | 160,000        
|Jyoti Deshpande     | 160,000        
|Rishika Lulla Singh | 60,000         



500,000 'A' ordinary share options were granted
to a non-executive director with a fair market value of $8.44 per option. Subject to continued employment, these options with $18.00
exercise price, vest annually in five equal tranches beginning June 9, 2016. The charge for the grant has been accrued under ‘Management
Scheme’.



On June 25, 2015, the Company received $5,400,000
in respect of an issue of 300,000 ‘A’ ordinary shares at $18.00 per share to a non-executive director. These shares
were issued on July 16, 2015.



On June 9, 2015, 10,000 ‘A’ ordinary
shares each were awarded to two non- executive directors at fair market value of $21.34 per share. Subject to continued employment,
these awards vest on June 9, 2016. These shares were issued on February 2, 2016.



The remuneration committee in its meeting
held on June 28, 2016 recommended that the Board of Directors approve share awards of 160,000 A ordinary shares to Jyoti Deshpande,
200,000 A ordinary shares to Kishore Lulla, 160,000 A ordinary shares to Sunil Lulla and 100,000 A ordinary shares to Rishika
Lulla Singh for no consideration. One third of these share awards will vest annually in tranches beginning on June 28,
2016, subject to continued employment.



The details of the remaining awards in the
year to directors are shown in the following table:



|Name         |  | Plane                                  |  | Date of Grant |  | Number of  shares Granted for Fiscal 2015 |  | Grant Date Fair Value ($) |  | Expiration Date
|------------ |  | -------------------------------------- |  | ------------- |  | ----------------------------------------- |  | ------------------------- |  | ---------------
|Rajeev Misra |  | Management Scheme (staff share grant ) |  | June 9, 2015  |  | 500,000                                   |  | $8.44                     |  | June 9, 2020   



Eros India Incentive Compensation



Pursuant to a resolution of its board of directors
dated November 11, 2011 and a resolution of its shareholders dated December 29, 2011, Eros India approved payment of an incentive
bonus to Kishore Lulla and Sunil Lulla for services to Eros India of up to 1% of the net profits of Eros India in accordance with
applicable India law. Any such incentive bonus shall be payable only as determined by the Board of Directors of Eros India from
time to time. Kishore Lulla is eligible for this incentive bonus for a period of three years, until October 31, 2017. Sunil Lulla
is eligible for this incentive bonus for the remainder of his tenure in office. The Remuneration Committee will take into account
any of these incentive bonuses paid to Kishore Lulla or Sunil Lulla when making compensation determinations for each of them.



83






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:



|                                      |  | Year ended March 31
|------------------------------------- |  | -------------------
|                                      |  | 2016               
|                                      |  | (in thousands)     
|IPO India Plan                        |  | $                  
|JSOP Plan                             |  |                    
|Option award scheme 2012              |  |                    
|2014 Share Plan                       |  |                    
|2015 Share Plan                       |  |                    
|Other share option awards             |  |                    
|Management scheme (staff share grant) |  |                    
|                                      |  | $                  



Joint Stock Ownership Plan



In April 2012, the Company established a controlled
trust called the Eros International Plc Employee Benefit Trust (“JSOP Trust”). The JSOP Trust purchased 2,000,164 shares
of the Company out of funds borrowed from the Company and repayable on demand. The Company’s Board, Nomination and Remuneration
Committee recommends to the JSOP Trust certain employees, officers and key management personnel, to whom the JSOP Trust will be
required to grant shares from its holdings at nominal price. Such shares are then held by the JSOP Trust and the scheme is referred
to as the “JSOP Plan.” The shares held by the JSOP Trust are reported as a reduction in stockholders’ equity
and termed as ‘JSOP reserves’.



On August 4, 2015, the Company’s Employee
Benefit Trust entered into a Joint ownership deed (the “2015 JSOP deed”) with certain employees in respect of 380,000‘A’
ordinary shares. These options were issued at a strike price of $24.00 and fair market value of $15.66. Subject to continued employment
and market conditions set out in the 2015 JSOP deed, these options vest in May 2017.



The movement in the shares held by the JSOP Trust is given below:



|                                           |  | Year ended March 31
|------------------------------------------ |  | -------------------
|                                           |  | 2016               
|Shares held at the beginning of the period |  |                    
|Shares exercised/lapsed                    |  |                    
|Shares held at the end of the period       |  |                    



Employee Stock Option Plans



A summary of the general terms of the grants under stock option
plans and stock awards are as follows:



|                          |  | Range of  exercise prices
|------------------------- |  | -------------------------
|IPO India Plan            |  |                          
|IPO Plan – June 2006      |  |                          
|JSOP Plan                 |  |                          
|Option award scheme 2012  |  |                          
|2014 Share Plan           |  |                          
|2015 Share Plan           |  |                          
|Other share option awards |  |                          



Employees covered under the stock option plans
are granted an option to purchase shares of the Company at the respective exercise prices, subject to requirement of vesting conditions
(generally service conditions). These options generally vest in tranches over a period of one to five years from the date of grant.
Upon vesting, the employees can acquire one share for every option. The maximum contractual term for these stock option plans ranges
between two to ten years.



84






The activity in these stock option plans is summarized below:





|                                         |  |                           |  | Year ended March 31 | 
|---------------------------------------- |  | ------------------------- |  | ------------------- | 
|                                         |  |                           |  | 2016                | 
|                                         |  | Name of
    Plan          |  | Numberofshares      | 
|                                         |  |                           |  |                     | 
|Outstanding at the beginning of the year |  | IPO India Plan            |  | 1,437,400           | 
|Granted                                  |  |                           |  | 966,009             | 
|Exercised                                |  |                           |  | (180,920)           | 
|Forfeited and lapsed                     |  |                           |  | (26,274)            | 
|Outstanding at the end of the year       |  |                           |  | 2,196,215           | 
|Exercisable at the end of the year       |  |                           |  | 632,566             | 
|                                         |  |                           |  |                     | 
|Outstanding at the beginning of the year |  | IPO Plan June 2006        |  | 62,438              | 
|Granted                                  |  |                           |  | —                   | 
|Exercised                                |  |                           |  | —-                  | 
|Forfeited and lapsed                     |  |                           |  | —-                  | 
|Outstanding at the end of the year       |  |                           |  | 62,438              | 
|Exercisable at the end of the year       |  |                           |  | 62,438              | 
|                                         |  |                           |  |                     | 
|Outstanding at the beginning of the year |  | JSOP Plan                 |  | 1,723,657           | 
|Granted                                  |  |                           |  | 380,000             | 
|Exercised                                |  |                           |  | (573,262)           | 
|Forfeited and lapsed                     |  |                           |  | (290,900)           | 
|Outstanding at the end of the year       |  |                           |  | 1,239,495           | 
|Exercisable at the end of the year       |  |                           |  | 617,450             | 
|                                         |  |                           |  |                     | 
|Outstanding at the beginning of the year |  | Option award scheme 2012  |  | 674,045             | 
|Granted                                  |  |                           |  | —                   | 
|Exercised                                |  |                           |  | —                   | 
|Forfeited and lapsed                     |  |                           |  | —                   | 
|Outstanding at the end of the year       |  |                           |  | 674,045             | 
|Exercisable at the end of the year       |  |                           |  | 224,682             | 
|                                         |  |                           |  |                     | 
|Outstanding at the beginning of the year |  | 2014 Share Plan           |  | 230,000             | 
|Granted                                  |  |                           |  | 600,000             | 
|Exercised                                |  |                           |  | —                   | 
|Forfeited and lapsed                     |  |                           |  | (56,251)            | 
|Outstanding at the end of the year       |  |                           |  | 773,749             | 
|Exercisable at the end of the year       |  |                           |  | 96,664              | 
|                                         |  |                           |  |                     | 
|Outstanding at the beginning of the year |  | 2015 Share Plan           |  | 200,000             | 
|Granted                                  |  |                           |  | 105,000             | 
|Exercised                                |  |                           |  | —                   | 
|Forfeited and lapsed                     |  |                           |  | (22,500)            | 
|Outstanding at the end of the year       |  |                           |  | 282,500             | 
|Exercisable at the end of the year       |  |                           |  | 72,708              | 
|                                         |  |                           |  |                     | 
|Outstanding at the beginning of the year |  | Other share option awards |  | 500,000             | 
|Granted                                  |  |                           |  | 500,000             | 
|Exercised                                |  |                           |  | —                   | 
|Forfeited and lapsed                     |  |                           |  | —                   | 
|Outstanding at the end of the year       |  |                           |  | 1,000,000           | 
|Exercisable at the end of the year       |  |                           |  | 100,000             | 



85






The following table summarizes information about outstanding stock
options:



|                          |  |  | Year ended March 31                 | 
|------------------------- |  |  | ----------------------------------- | 
|                          |  |  | 2016                                | 
|Name of Plan              |  |  | Weightedaverageremaininglife(Years) | 
|IPO India Plan            |  |  | 4.10                                | 
|IPO Plan June 2006        |  |  | 0.25                                | 
|JSOP Plan                 |  |  | 5.93                                | 
|Option award scheme 2012  |  |  | 5.83                                | 
|2014 Share Plan           |  |  | 6.88                                | 
|2015 Share Plan           |  |  | 5.91                                | 
|Other share option awards |  |  | 5.75                                | 



The following table summarizes information about inputs to the fair
valuation model for options granted during the year:



|                                                                |  | IPO India Plan |               | JSOP(4) |  | 2014 Share plan |               | 2015  Share plan
|--------------------------------------------------------------- |  | -------------- | ------------- | ------- |  | --------------- | ------------- | ----------------
|Expected volatility(1)(2)                                       |  |                | 35% - 75%     |         |  |                 | 42            | %               
|Option life (Years)                                             |  |                | 5.00 - 7.00   |         |  |                 | 10.00         |                 
|Dividend yield                                                  |  |                | 0             | %       |  |                 | 0             | %               
|Risk free rate                                                  |  |                | 7.74% - 8.50% |         |  |                 | 0.43% - 2.82% |                 
|Range of fair value of the granted options at the grant date(3) |  |                | INR 284 – 380 |         |  |                 | $15.66        |                 



|(1) | The expected volatility in respect of the IPO India Plan is based on Eros International Media Limited’s historic volatility.                                                                                  
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The expected volatility of all other options is based on the historic share price volatility of the Company over time periods comparable to the time from the grant date to the maturity dates of the options.
|(3) | The fair value of options under the JSOP Plan was measured using a Monte-Carlo simulation models. Fair value of options granted under all other schemes is measured using a Black Scholes model.              
|(4) | Options under the JSOP Plan are subject to service and performance conditions as set out in the JSOP deed                                                                                                     



Management Scheme (staff share grant)



On September 9, 2014, 36,000 ‘A’ ordinary
shares were issued to certain independent directors at $15.97 per share based on the closing market price on June 5, 2014.



On October 21, 2014, 116,730 ‘A’ ordinary
shares were awarded to certain employees at $17.07 per share based on the closing market price on such date. These shares are restricted
and vest over a period of three years on a pro-rata basis. 34,760 shares have since been issued.



On June 5, 2014, the Board of Directors approved
a grant of 525,000 ‘A’ ordinary share awards with a fair market value of $14.95 per option, to certain executive
directors and members of senior management. These awards vest subject to certain share price conditions being met on or before
May 31, 2015 and the employee remaining in service until May 31, 2015. As at March 31, 2016 except for 30,000 share awards, all
shares have been issued.



In June 2015, 300,000 ‘A’ ordinary
shares awards were granted to the Group CFO with a fair market value of $21.34 per share. Subject to continued employment, these
awards with nominal value exercise price vest annually in three tranches beginning June 9, 2016. As at March 31, 2016, these shares
are yet to be issued.



86






Additionally, on June 9, 2015, the Board of
Directors approved a grant of 580,000 ‘A’ ordinary shares to certain executive directors with a fair market value of
$21.34 per shares subject to continued employment, these awards with Nil exercise price vest equally over a period of three years
with the first 25% vesting six months from the grant date. The shares are yet to be issued as at March 31, 2016.



None of the above grants have been forfeited
during the period. The charge for these grants have been accrued under ‘Management scheme’ (Staff share grant) and
‘2014 Share Plan’.



On September 4, 2015 the Company entered
in to an employment exit agreement with an employee pursuant to which the board approved a grant of 20,000 ‘A’ ordinary
share awards with Nil exercise price and a fair market value of $33.66 per share. The shares are yet to be issued as at March
31, 2016.



On September 18, 2013, 1,676,645 ‘A’
ordinary shares were issued to our CEO and Managing Director at $4.02 per share based on the closing market price on such date.
These shares are restricted and vest over a period of three years on a pro-rata basis.



In June 2015, 300,000 ‘A’ ordinary
shares awards were granted to the non-executive director with a fair market value of $21.34 per share. Subject to continued employment,
these awards with the exercise price of $18. These shares were issued on July 16, 2015



On June 9, 2015, 10,000 ‘A’ ordinary
shares each were awarded to two non-executive directors and a consultant with par value exercise price and a fair market value
of $21.34 per share. Subject to continued employment, these awards vest on June 9, 2016. These shares were issued on February 2,
2016.



JOINT SHARE OWNERSHIP RESERVE



|                             |  | (in thousands) |        
|---------------------------- |  | -------------- | -------
|Balance at April 1, 2015     |  | $              | (24,474
|Issue out of treasury shares |  |                | 7,307  
|Balance at March 31, 2016    |  | $              | (17,167



The Joint share ownership reserve
represents the cost of shares issued by Eros International Plc and held by the JSOP Trust to satisfy the requirements of the Joint
Share Ownership Plan (see Note 26).  On June 5, 2014, the Board approved discretionary vesting of 20% of the applicable JSOP
shares. In the current year 573,262 (2015: 80,704) ‘A’ ordinary shares held by the JSOP Trust were issued to eligible
employees.



The number of shares held by the
JSOP Trust at March 31, 2016 was 1,346,198 ‘A’ ordinary shares (2015: 1,919,460 Ordinary ‘A’ shares).



C. Board Practices



All directors hold
office until the expiration of their term of office, their resignation or removal from office for gross negligence or criminal
conduct by a resolution of our shareholders or until they cease to be directors by virtue of any provision of law or they are disqualified
by law from being directors or they become bankrupt or make any arrangement or composition with their creditors generally or they
become of unsound mind. The term of office of the directors is divided into three classes:

| | · | Class I, whose term will expire at the annual general meeting to be held in fiscal 2018;
| | - | ----------------------------------------------------------------------------------------

| | · | Class II, whose term will expire at the annual general meeting to be held in fiscal 2016;
and
| | - | ---------------------------------------------------------------------------------------------

| | · | Class III, whose term will expire at the annual general meeting to be held in fiscal 2017.
| | - | ------------------------------------------------------------------------------------------



Our directors for fiscal 2016 are classified
as follows:

| | · | Class I: Kishore Lulla, Naresh Chandra and David Maisel;
| | - | --------------------------------------------------------

| | · | Class II: Jyoti Deshpande, Vijay Ahuja and Rajeev Misra; and
| | - | ------------------------------------------------------------

| | · | Class III: Sunil Lulla, Dilip Thakkar and Rishika Lulla Singh.
| | - | --------------------------------------------------------------



87






Governance Standards



We are subject to NYSE listing standards. However,
as a foreign private issuer, we will be exempt from complying with certain corporate governance requirements of the NYSE applicable
to a U.S. issuer. Under NYSE rules applicable to us, we only need to:

| | · | establish an independent audit committee that has responsibilities set out in the NYSE rules;
| | - | ---------------------------------------------------------------------------------------------

| | · | provide prompt certification by our chief executive officer of any material non-compliance with
any corporate governance rules of the NYSE;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------

| | · | provide periodic (annual and interim) written affirmations to the NYSE with respect to our corporate
governance practices; and
| | - | ------------------------------------------------------------------------------------------------------------------------------

| | · | include in our annual reports a brief description of significant differences between our corporate
governance practices and those followed by U.S. companies.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------



We are currently in compliance with the current
applicable NYSE corporate governance requirements for foreign private issuers.



Indemnification Agreements



We have entered into indemnification agreements
with our directors and our officers that require us to indemnify, to the extent permitted by law, our officers and directors against
liabilities that may arise by reason of their status or service as officers and directors and to pay expenses incurred by them
as a result of any proceeding against them as to which they could be indemnified. We believe that these provisions are necessary
to attract and retain qualified persons as directors and executive officers.



Service Contracts and Letters of Appointment



Kishore Lulla has entered into a service agreement with Eros Network Limited to provide services to
us and our subsidiaries. The service agreements  is terminable by either party with 12 months’ written notice. Eros
Network Limited may terminate the agreement immediately in certain circumstances, including upon certain types of misconduct or
upon paying the executive an amount equivalent to his basic salary (inclusive of any bonus and benefits) for a twelve month period.
The service agreements expire automatically upon the executive’s 65th birthday. The service agreements provide for private
medical insurance and 25 paid vacation days per year. Upon termination, compensation will be paid for any accrued but untaken holiday.
The executive receive a basic gross annual salary, reviewed annually, and is entitled to participate in any current share
option schemes and bonus schemes applicable to their positions maintained by the employing company. The agreement contains
a confidentiality provision and non-competition and non-solicitation provisions that restrict the executive for a period of six
to twelve months after termination.



Kishore Lulla also executed a letter of appointment
for service as one of our directors. Under the terms of the letter of appointment, Mr. Lulla received an annual fee of $93,750.
In connection with our initial public offering, this letter of appointment was terminated, and for so long as Mr. Lulla is our
executive officer, he will not receive compensation as a director.



On February 17, 2016, with effect from
April 1, 2016, Kishore Lulla’s employment contract was transferred to Eros Digital FZ LLC at a gross annual salary of
$1,133,000 and all other employments contracts were terminated. All other conditions of the employment contracts remain the same.



Sunil Lulla, our director, has entered into
an employment agreement with Eros India pursuant to which he serves as Executive Vice Chairman of Eros India. Sunil Lulla is entitled
to receive a basic gross annual salary, as well as medical insurance and certain other benefits and perquisites. Eros India may
terminate the agreement upon thirty days’ notice if certain events occur, including a material breach of the agreement by
Mr. Lulla. The agreement contains a confidentiality provision that restricts Mr. Lulla during the term of his employment and for
a period of two years following termination and a non-competition provision that restricts him during the term of his employment.



88






Jyoti Deshpande, our director, has entered
into an employment contract with us pursuant to which she serves as Chief Executive Officer and Managing Director and is entitled
to receive a gross base annual salary, private medical insurance and other standard benefits and is eligible to participate in
any share option scheme and/or bonus scheme maintained from time to time and applicable to her position. In addition, Ms. Deshpande
was issued 1,676,645 “A” ordinary shares on September 18, 2013, of which an equal percentage of shares are
restricted for one, two and three years from the date of issuance. In addition, on November 18, 2013, Ms. Deshpande received 181,818
A ordinary shares as part of a contractual arrangement valued at $2.0 million based on the $11.00 initial public offering. The
employment agreement is for an initial period of three years commencing September 1, 2013 and will continue thereafter until terminated
by either party upon not less than 12 months’ prior written notice. We may, however, terminate the agreement immediately
in certain circumstances, including upon certain types of misconduct or upon paying Ms. Deshpande an amount equal to her base
salary for a 12 month period or remaining term of her employment, whichever is greater.



There are certain conditions under which if
the agreement is terminated before September 1, 2016, Ms. Deshpande may be required to surrender all or part of the shares issued
to her under this agreement. The agreement expires automatically upon Ms. Deshpande’s 65th birthday. The agreement contains
a confidentiality provision and non-competition and non-solicitation provisions that restrict Ms. Deshpande for a period of six
to twelve months following termination. Ms. Deshpande, who is also a director on the board of Eros India, has a contract with
Eros India that entitles her to a gross basic salary and Ms. Deshpande has options to purchase up to 571,160 shares of Eros India
at $1.14 per share with a 3-year vesting period commencing from July 16, 2013.



Ms. Deshpande also owns 142,790 shares of Eros
India that came from previously vested options that she exercised.



On February 17, 2016, with effect from
April 1, 2016, it was agreed in a letter agreement between Eros International Plc, Eros Digital FZ LLC and Ms. Deshpande that
she would receive a gross annual salary of $700,000 from Eros International Plc and $100,000 from Eros Digital FZ LLC. Ms. Deshpande’s
service agreement with Eros International Limited would stand terminated as of April 1, 2016 and her ongoing agreement with Eros
International Media Limited remains unchanged.



Vijay Ahuja, our director and Vice Chairman,
entered into a service agreement with Eros International Pte Ltd to provide services to us and our subsidiaries. The service agreement
is terminable by either party with twelve months’ written notice. Eros International Pte Ltd may terminate the agreement
immediately in certain circumstances, including upon certain types of misconduct or upon paying the executive an amount equivalent
to his basic salary for a twelve month period. The agreement shall automatically terminate on his 65th birthday. Mr. Ahuja receives
a basic gross annual salary and is entitled to participate in any bonus scheme and/or option scheme applicable to his position.
The agreement contains a confidentiality provision and non-competition and non-solicitation provisions that restrict Mr. Ahuja
for a period of six months following termination.



Mrs. Rishika Lulla Singh, our director, has
entered into a service agreement on July 3, 2015 with Eros Digital FZ LLC, pursuant to which she serves as the Chief Executive
Officer and an executive director of Eros Digital FZ LLC which provides her with an annual salary of $148,456. The employment
agreement is for a term of three years and is terminable by either party by giving 12 months written notice. On February 17,
2016 with effect from April 1, 2016, an amended and restated service agreement was executed with Ms Rishika Lulla Singh by Eros
Digital FZ LLC which entitles her to a gross annual salary of $320,000.



Our non-executive directors, Naresh Chandra,
who also serves as Chairman of Eros India, and Dilip Thakkar, have entered into letters of appointment with us that provide them
with annual fees of $78,125 for service as a director of Eros International Plc.
The appointments are for an initial period of one year, from July 2007 and April 2006 respectively, and thereafter are terminable
by either the non-executive director or by us with three months’ written notice, or by us immediately in the case
of fraud. From April 1 2016, this fee has been increased to $95,000 per annum.



It was resolved at a board meeting held on
June 28, 2016 that Dilip Thakkar and Naresh Chandra both be entitled to annual fees of $95,000 with retrospective effect from fiscal 2017.



Mr. David Maisel, our director, has entered
into a service agreement with us, pursuant to which he serves as a non-executive director, which provides him with an annual fee
of $89,075. The service agreement is terminable by either party with 30 days written
notice. The service agreement is for a term of five years and three months from November 2014. Mr. Maisel was granted options to
purchase up to 500,000 A ordinary shares at $18.88 as part of his service agreement, such options vest in five equal tranches commencing
in November 2015. There are certain conditions under which, if the agreement is terminated before the relevant vesting date, the
unvested options lapse.



Mr. Rajeev Misra, our director, has
entered into a service agreement with us on June 17, 2015, pursuant to which he serves as a non-executive director. The service
agreement is terminable by either party with 30 days written notice. The service agreement is for a term of five years and three
months from December 1, 2014. Mr. Misra was granted options to purchase up to 500,000 A ordinary shares at $18.00 as part of his
service agreement, such options vest in five equal tranches commencing June 2015. There are certain conditions under which, if
the agreement is terminated before the relevant vesting date, the unvested options lapse.



89






Mr. Prem Parameswaran, our Group Chief Financial
Officer and President North America, has entered into a employment agreement with us on May 26, 2015 which provides him with an
annual salary of $450,000. The employment agreement is for a term of three years and is terminable by either party by giving 12
months written notice. Mr. Parameswaran is also entitled to 300,000 A ordinary shares at $0.45 per share as part of his employment
agreement, these shares are restricted, but will cease to be so in three equal tranches from May 2016. Mr Parameswaran was also
granted options to purchase up to 300,000 A ordinary shares at $18.30 as part of his employment agreement, such options vest in
three equal annual tranches commencing in June 2016.



Mr Mark Carbeck, our Chief Corporate and Strategy Officer and Mr. Pranab Kapadia, our President of
Europe and Africa Operations, have both entered into service agreements with Eros International Limited to provide
services to us and certain of our subsidiaries. The service agreements are terminable by either party with three months’
written notice. Eros International Ltd may terminate the agreement immediately in certain circumstances, including upon certain
types of misconduct or upon paying the executive an amount equivalent to his basic salary for a three month period. Mr. Carbeck
and Mr Kapadia receive a basic gross annual salary and are  entitled to participate in any current bonus scheme applicable
to their positions. The agreement contains a confidentiality provision and non-competition and non-solicitation provisions
that restrict the executive for a period of twelve months following termination.



Board Committees



We currently have an Audit Committee, Remuneration
Committee and Nomination Committee, whose responsibilities are summarized below. We believe that the composition of these committees
meet the criteria for independence under, and the functioning of these committees comply with the requirements of, the SOX Act,
the rules of the NYSE and the SEC rules and regulations applicable to us.



Audit Committee



Our board of directors has adopted a written
charter under which our Audit Committee operates. This charter sets forth the duties and responsibilities of our Audit Committee,
which, among other things, include: (i) monitoring our and our subsidiaries’ accounting and financial reporting processes,
including the audits of our financial statements and the integrity of the financial statements; (ii) monitoring our compliance
with legal and regulatory requirements; (iii) assessing our external auditor’s qualifications and independence; and (iv)
monitoring the performance of our internal audit function and our external auditor. A copy of our Audit Committee charter is available
on our website at www.erosplc.com. Information contained in our website is not a part of, and is not incorporated
by reference into, this annual report.



The current members of our Audit Committee
are Messrs. Thakkar (Chair) and Chandra. The Audit Committee met four times during fiscal 2016. Our board of directors has determined
that each of the members of our Audit Committee is independent.



Remuneration Committee



Our board of directors has adopted a written
charter under which our Remuneration Committee operates. This charter sets forth the duties and responsibilities of our Remuneration
Committee, which, among other things, include assisting our Board of Directors in establishing remuneration policies and practices.
A copy of our Remuneration Committee charter is available on our website at www.erosplc.com. Information contained in our
website is not a part of, and is not incorporated by reference into, this annual report.



The current members of our Remuneration Committee
are Messrs. Chandra (Chair) and Thakkar. The Remuneration Committee met three times during fiscal 2016. Our board of directors
has determined that each of the members of our Remuneration Committee is independent.



Nomination Committee



Our board of directors has adopted a written
charter under which our Nomination Committee operates. This charter sets forth the duties and responsibilities of our Nomination
Committee, which, among other things, include recommending to our Board of Directors candidates for election at the annual meeting
of shareholders and performing a leadership role in shaping the Company’s corporate governance policies. A copy of our Nomination
Committee charter is available on our website at www.erosplc.com. Information contained in our website is not a part of,
and is not incorporated by reference into, this annual report.



The current members of our Nomination Committee
are Messrs. Chandra (Chair) and Thakkar. The Nomination Committee is an ad hoc committee and met once during fiscal 2016. Our board
of directors has determined that each of the members of our Nomination Committee is independent.



90






D. Employees



As of March 31, 2016, we had 544 employees,
with 487 employees based in India, and the remainder employed by our international subsidiaries. All are full time employees or
contractors. Our employees are not unionized. We believe that our employee relations are good.



E. Share Ownership



The following table
sets forth information with respect to the beneficial ownership of our ordinary shares as at June 30, 2016 by each of our directors
and all our directors and executive officers as a group. As used in this table, beneficial ownership means the sole or shared power
to vote or direct the voting or to dispose of or direct the sale of any security. A person is deemed to be the beneficial owner
of securities that can be acquired within 60 days upon the exercise of any option, warrant or right. Ordinary shares subject to
options, warrants or rights that are currently exercisable or exercisable within 60 days are deemed outstanding for computing the
ownership percentage of the person holding the options, warrants or rights, but are not deemed outstanding for computing the ownership
percentage of any other person. The amounts and percentages as at June 30, 2016 are based on an aggregate of 57,911,718 ordinary
shares outstanding as at that date.



|                                                |  | Number of A Ordinary Shares Beneficially Owned |           | Number of B Ordinary Shares Beneficially Owned
|----------------------------------------------- |  | ---------------------------------------------- | --------- | ----------------------------------------------
|Directors                                       |  | Number of Shares of A                          |           | Percent of Class                              
|Executive Officers                              |  |                                                |           |                                               
|Kishore Lulla(1)                                |  |                                                | 2,075,071 |                                               
|Jyoti Deshpande(2)                              |  |                                                | 2,189,611 |                                               
|Vijay Ahuja(3)                                  |  |                                                | —         |                                               
|Sunil Lulla                                     |  |                                                | *         |                                               
|Dilip Thakkar                                   |  |                                                | *         |                                               
|Naresh Chandra                                  |  |                                                | *         |                                               
|David Maisel                                    |  |                                                | *         |                                               
|Rishika Lulla Singh                             |  |                                                | *         |                                               
|Rajeev Misra(7)                                 |  |                                                | 818,449   |                                               
|Executive Officers                              |  |                                                |           |                                               
|Kishore Lulla(1)                                |  |                                                | 2,075,071 |                                               
|Jyoti Deshpande(2)                              |  |                                                | 2,189,611 |                                               
|Vijay Ahuja(3)                                  |  |                                                | —         |                                               
|Sunil Lulla                                     |  |                                                | *         |                                               
|Rishika Lulla Singh                             |  |                                                | *         |                                               
|Prem Paramsewaran                               |  |                                                | *         |                                               
|Mark Carbeck                                    |  |                                                | *         |                                               
|Pranab Kapadia                                  |  |                                                | *         |                                               
|Surender Sadhwani                               |  |                                                | *         |                                               
|Ken Naz                                         |  |                                                | *         |                                               
|All directors and executive officers as a group |  |                                                | 5,083,131 |                                               



|*   | Represents less than 1%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Kishore Lulla’s interest in certain of his shares is by virtue of his holding ownership interest in and being a potential beneficiary of discretionary trusts that hold our shares and serving as trustee of the Eros Foundation, a U.K. registered charity that holds our shares.                                                                                                                                                                                                                                                                                              
|(2) | Jyoti Deshpande’s
    interest in certain of her shares is by virtue of her prior existing shareholding vested options received as compensation
    and the 1,676,645 of our shares which she was issued on September 18, 2013 under her employment agreement. Ms Deshpande
    received a further 181,818 A ordinary shares as part of a contractual arrangement and sold 300,000 shares in July 2014 as
    part of our follow on equity offering. Ms Deshpande received 90,000 and 160,000 A ordinary shares in 2015 and 2016
    as part of executive director share awards.
|(3) | Vijay Ahuja’s interest in shares is by virtue of his being a potential beneficiary of discretionary trusts that hold our shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                



91






Kishore Lulla and Vijay Ahuja, by virtue of
their holdings of B ordinary shares have different voting rights to the other Directors. Each A ordinary share is entitled to one
vote on all matters upon which the ordinary shares are entitled to vote, and each B ordinary share is entitled to ten votes. In
order to vote at any meeting of shareholders, a holder of B ordinary shares will first be required to certify that it is a permitted
holder as defined in our articles.



Options to purchase ‘A’ ordinary
from the Company are granted from time to time to directors, officers and employees of the Company on terms and conditions acceptable
to the Board of Directors.



The following table provides the JSOP Plan
details with respect to the directors and officers



|Name                |  | Number of  ‘A’ ordinary  Shares Options |         | Date of  Grant |  | Exercise 
Price  ($USD) |             | Expiration  Date
|------------------- |  | --------------------------------------- | ------- | -------------- |  | ----------------------- | ----------- | ----------------
|Rishika Lulla Singh |  |                                         | 242,034 |                |  |                         | August 2014 |                 
|Pranab Kapadia      |  |                                         | 132,013 |                |  |                         | April 2012  |                 
|Surender Sadhwani   |  |                                         | 130,000 |                |  |                         | August 2015 |                 



The following table provides option details with respect to the
directors and officers.



|Name               |  | Number of  ‘A’ ordinary  Shares Options |         | Date of  Grant |  | Exercise 
Price  ($USD) |                                                    | Expiration  Date
|------------------ |  | --------------------------------------- | ------- | -------------- |  | ----------------------- | -------------------------------------------------- | ----------------
|Prem Parameswaran  |  |                                         | 300,000 |                |  |                         | June
                                         2015 |                 
|Rajeev Misra       |  |                                         | 500,000 |                |  |                         | June 2015                                          |                 
|Surender Sadhwani  |  |                                         | 674,045 |                |  |                         | September 2014                                     |                 
|David Maisel       |  |                                         | 500,000 |                |  |                         | February 2015                                      |                 
|Ken Naz            |  |                                         | 20,813  |                |  |                         | June 2006                                          |                 
|Mark Carbeck       |  |                                         | 70,000  |                |  |                         | February 2015                                      |                 
|Jyoti Deshpande(1) |  |                                         | 20,813  |                |  |                         | June 2006                                          |                 



|(1) |  | In addition Jyoti Deshpande also has 571,160 share options in Eros International Media Limited by virtue of the IPO India Plan. The options have a three year vesting period commencing July 16, 2013, with an exercise price of $1.14.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY
TRANSACTIONS



A. Major Shareholders



The following table and accompanying footnotes
provide information regarding the beneficial ownership of our ordinary shares as of June 30, 2016 with respect to each person or
group who beneficially owned 5% or more of our issued ordinary shares.



Beneficial ownership, which is determined in
accordance with the rules and regulations of the SEC, means the sole or shared power to vote or direct the voting or dispose or
direct the disposition of our ordinary shares. The number of our ordinary shares beneficially owned by a person includes ordinary
shares issuable with respect to options or similar convertible securities held by that person that are exercisable or convertible
within 60 days of June 30, 2016.



The number of shares and percentage beneficial
ownership of A ordinary shares below is based on 57,911,718 issued ordinary shares as of June 30, 2016.



92






Except as otherwise indicated in the footnotes
to the table, shares are owned directly or indirectly with sole voting and investment power, subject to applicable marital property
laws.



|                                   |  | Number of A Ordinary Shares Beneficially Owned |           | Number of B Ordinary Shares Beneficially Owned
|---------------------------------- |  | ---------------------------------------------- | --------- | ----------------------------------------------
|Major shareholders                 |  | Number of A Shares                             |           | Percent of Class                              
|Kishore Lulla(1)                   |  |                                                | 2,075,071 |                                               
|Vijay Ahuja(2)                     |  |                                                | —         |                                               
|Beech Investments(3)               |  |                                                | —         |                                               
|Capital Research Global Investors  |  |                                                | 4,709,740 |                                               
|Fullerton Investments              |  |                                                | 3,000,000 |                                               
|Dalton Investments                 |  |                                                | 2,937,178 |                                               
|Jyoti Deshpande                    |  |                                                | 2,189,611 |                                               
|Paradice Investment Management LLC |  |                                                | 1,988,368 |                                               
|Jupiter Asset Management           |  |                                                | 1,659,028 |                                               



|(1) | Kishore Lulla’s interest in certain of his shares is by virtue of his holding ownership interest in and being a potential beneficiary of discretionary trusts that hold our shares and serving as trustee of the Eros Foundation, a U.K. registered charity that holds our shares.                                                                                                                                                                                                                                                                                                                                                 
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Vijay Ahuja’s interests in shares are by virtue of being potential beneficiaries of discretionary trusts that hold our shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(3) | Beech Investments Limited, c/o SG Hambros Trust Company (Channel Islands) Limited, 18 Esplanade, St Helier, Jersey, JE4 8RT. Beech Investments, a company incorporated in the Isle of Man, is owned by discretionary trusts that include Eros directors Kishore Lulla and Vijay Ahuja as beneficiaries. The shares currently held by Beech Investments Limited are being held as B ordinary shares, but will convert into A ordinary shares (pursuant to Section 22.1 of the Articles of Association) upon being transferred to a person who is not a Permitted Holder (as defined in Section 22.1 of the Articles of Association).

The following
summarizes the significant changes in the percentage ownership held by our major shareholders during the past three years:

| | · | Prior to our listing on the NYSE on November 18, 2013 the interests of all our major shareholders
were in ordinary GBP 0.10 shares.
| | - | -----------------------------------------------------------------------------------------------------------------------------------

| | · | Jyoti
                                         Deshpande’s interest in certain of her shares is by virtue of her prior existing
                                         shareholding vested options received as compensation and the 1,676,645 of our shares
                                         which she was issued on September 18, 2013 under her employment agreement. Ms
                                         Deshpande received a further 181,818 A ordinary shares as part of a contractual arrangement
                                         and sold 300,000 shares in July 2014 as part of our follow on equity offering. Ms
                                         Deshpande received 90,000 and 160,000 A ordinary shares in 2015 and 2016 as part
                                         of executive director share awards.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Capital Research Global Investors reported its percentage ownership of our ordinary shares to be
14.7% (based on the then number of our ordinary shares reported as outstanding at that time) in a Schedule 13G/A filed with the
Commission on February 16, 2016.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Fullerton Fund Management Company Ltd reported its percentage ownership of our ordinary shares
to be 9.94% (based on the then number of our ordinary shares reported as outstanding at that time) in a Schedule 13G filed with
the Commission on February 17, 2015.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Dalton Investments reported its percentage ownership of our ordinary shares to be 9.2% (based on
the then number of our ordinary shares reported as outstanding at that time) in a Schedule 13D filed with the Commission on December
8, 2015.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Paradice Investment Management LLC reported its percentage ownership of our ordinary shares to
be 6.20% (based on the then number of our ordinary shares reported as outstanding at that time) in a Schedule 13G/A filed with
the Commission on February 9, 2016.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Jupiter Asset Management Ltd reported its percentage ownership of our ordinary shares to be 5.14%
(based on the then number of our ordinary shares reported as outstanding at that time) in a Schedule 13G/A filed with Commission
on February 12, 2016.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Kishore Lulla, Vijay Ahuja and Beech
Investments Limited, by virtue of their holdings of B class shares have different voting rights to the other major shareholders.
Each A ordinary share is entitled to one vote on all matters upon which the ordinary shares are entitled to vote, and each B ordinary
share is entitled to ten votes. In order to vote at any meeting of shareholders, a holder of B ordinary shares will first be required
to certify that it is a permitted holder as defined in our articles.



93






As of March 31, 2016, approximately 30,264,993
of our A ordinary shares, representing 91.9% of our outstanding A ordinary shares, were held by a total of 6 record holders with
addresses in the United States. Computershare, N.A., the depositary, has advised us that, as of March 31, 2016, approximately 52.2%
of our total outstanding ordinary shares in the form of 30,256,422 A ordinary shares, were held of record by DTC, the Depository
Trust Company, under the nominee name of Cede & Co., on behalf of DTC participants. The number of beneficial owners of our
A ordinary shares in the United States is likely to be much larger than the number of record holders of our A ordinary shares in
the United States.



B. Related Party Transactions



The following is a description of transactions
since April 1, 2012 to which we have been a party, in which the amount involved in the transaction exceeded or will exceed $120,000,
and in which any of our directors, executive officers or beneficial holders of more than 5% of our issued share capital had or
will have a direct or indirect material interest.



Family Relationships



Mr. Kishore Lulla, our director and Chairman, is the brother of Mr. Sunil Lulla, and father of Mrs. Rishika
Lulla Singh, each of whom are directors, and a cousin of Mr. Vijay Ahuja, our director and Vice Chairman, and of Mr. Surender Sadhwani,
our President of Middle East Operations. Mr. Sunil Lulla is the brother of Mr. Kishore Lulla, uncle to Mrs. Lulla Singh, and a
cousin of Mr. Ahuja and Mr. Sadhwani. Mr. Ahuja is a cousin of Mr. Kishore Lulla and Mr. Sunil Lulla. Mrs Lulla Singh is the daughter
of Mr Kishore Lulla and niece of Mr Sunil Lulla. Mr. Sadhwani is a cousin of Mr. Kishore Lulla and Mr. Sunil Lulla. Mr. Arjan Lulla,
our founder, is the father of Mr. Kishore Lulla and Mr. Sunil Lulla, grandfather of Mrs. Lulla Singh, uncle of Mr. Ahuja
and Mr. Sadhwani and an employee of Redbridge Group Ltd., is the Honorary President of Eros and a director of our subsidiary Eros
Worldwide. Mrs. Manjula Lulla, the wife of Mr. Kishore Lulla, respectively, is an employee of our subsidiary. Ms Ridhima
Lulla, is the daughter of Mr Kishore Lulla and an employee of our subsidiary. Mrs Krishika Lulla is the wife of Mr
Sunil Lulla and an employee of Eros India.



Leases



Pursuant to a lease agreement that expires
on March 31, 2016, the lease requires Eros International Media Limited to pay $5,000 each month under this lease. Eros International
Media Limited leases apartments for studio use at Kailash Plaza, 3rd Floor, Opp. Laxmi Industrial Estate, Andheri (W), Mumbai,
from Manjula K. Lulla, the wife of Kishore Lulla. The lease was renewed on April 1, 2016 for a further period of one year on the
same terms.



Pursuant to a lease agreement that expired
on September 30, 2015, the lease requires Eros International Media Limited to pay $5,000 each month under this lease. Eros International
Media Limited leases for use as executive accommodations the property Aumkar Bungalow, Gandhi Gram Road, Juhu, Mumbai, from Sunil
Lulla. The lease was renewed on October 1, 2015 for a further period of three years on the same terms.



Pursuant to a lease agreement that expires
on January 4, 2020, Eros International Media Limited leases office premise for studio use at Supreme Chambers, 5th Floor, Andheri
(W), Mumbai from Kishore and Sunil Lulla. Beginning January 2015, the lease requires Eros International Media Limited to pay $60,000
each month under this lease.



Pursuant to a lease agreement that expires
on April 1, 2020, the real estate property at 550 County Avenue, Secaucus, New Jersey, from 550 County Avenue Property Corp, a
Delaware corporation owned by Beech Investments and of which our President of Americas Operations Ken Naz serves as a Director.
The lease commenced on April 1, 2015, and required the Group to pay $11,000 each month. The lease was renewed on April 1,
2015 for a further period of five years on the same terms. This is a non-cancellable lease.



Pursuant to a lease agreement that expires
in March 2018, including renewal periods, the Group leases for U.K. corporate offices, the real property at 13 Manchester Square,
London from Linecross Limited, a U.K. company owned indirectly by a discretionary trust of which Kishore Lulla is a potential beneficiary.
The current lease commenced on November 19, 2009 and requires the Group to pay $148,000 each quarter.



Honorary Appointment of Mr. Arjan Lulla



Pursuant to an agreement the Group entered
into with Redbridge Group Ltd. on June 27, 2006, the Group agreed to pay an annual fee set each year of $300,000, $325,000
and $339,000 in the respective years ended March 31, 2016, 2015 and 2014, for the services of Arjan Lulla, the father
of Kishore Lulla and Sunil Lulla, grandfather of Rishika Lulla Singh, uncle of Vijay Ahuja and Surender Sadhwani and an employee
of Redbridge Group Ltd towards services as honorary life president. Redbridge Group Ltd. is an entity owned indirectly by a discretionary
trust of which Kishore Lulla is a potential beneficiary.



94






Lulla Family Transactions



The Group has engaged in transactions with
NextGen Films Pvt. Ltd., an entity owned by the husband of Puja Rajani, sister of Kishore Lulla and Sunil Lulla, each of which
involved the purchase and sale of film rights. In the year ended March 31, 2016 NextGen Films Pvt. Ltd. sold film rights $2,728,000
(2015: $23,550,000, 2014: $12,483,000) to the Group, and purchased film rights, including production services, of $NIL (2015 $275,000
and 2014: $3,923,000).



The Group also engaged in transactions with
Everest Entertainment Pvt. Ltd. entity owned by the brother of Manjula K. Lulla, wife of Kishore Lulla, each of which involved
the purchase and sale of film rights. In March 31, 2016, Everest Entertainment Pvt. Ltd. sold film rights of $Nil (2015: $408,000
and 2014: $700) to the Group, and did not purchase any film rights from the Group in years ended March 31, 2016, 2015 and 2014.



Mrs. Manjula Lulla, the wife of Kishore Lulla, is an employee of
Eros International Limited-UK and is entitled to a salary of $154,000 per annum.(2015:$167,000, 2014:$158,000) Mrs. Krishika
Lulla, the wife of Sunil Lulla, is an employee of Eros India and is entitled to a salary of $138,000 per annum.(2015:$115,542,
2014:$25,000) Ms. Riddhima Lulla, the daughter of Kishore Lulla, is an employee of Eros International Limited and is entitled
to a salary of $38,000 per annum.(2015:$10,100, 2014:Nil).



Relationship Agreement



Both we and our subsidiaries, including Eros
India, acquire rights in Indian movies. Under a 2009 Relationship Agreement among Eros India, Eros Worldwide and us, certain intellectual
property rights and all distribution rights and all digital rights for Indian films (other than Tamil films) outside of the territories
of India, Nepal and Bhutan held by the Eros India Group are assigned exclusively to Eros Worldwide. Eros Worldwide in turn is entitled
to assign its rights to us and to other entities within the Eros group of companies, excluding the Eros India Group and Ayngaran
and its subsidiaries, or the Eros International Group.



Eros Worldwide provides a lump sum minimum
guaranteed fee to the Eros India Group for each Indian film (other than a Tamil film) assigned to it by Eros India under the Relationship
Agreement, in a fixed payment equal to 30% of the production cost of such film, including all costs incurred in connection with
the acquisition, pre-production, production or post-production of such film, plus an amount equal to 30% of such fixed payment.
We refer to these payments collectively as the Minimum Guaranteed Fee. Eros Worldwide is also required to reimburse the Eros India
Group for 130% of certain pre-approved distribution expenses in connection with such film. In addition, 30% of the gross proceeds
received by the Eros International Group from exploitation of such films, after certain amounts are retained by the Eros International
Group, are payable over to the Eros India Group.



No share of gross proceeds from an Indian film
is payable by the Eros International Group to the Eros India Group until the Eros International Group has received and retained
an amount equal to the Minimum Guaranteed Fee, a 20% fee on all gross proceeds outside the territories of India, Nepal and Bhutan,
including gross proceeds related to the exploitation of related film ancillary rights, and 100% of the distribution expenses incurred
by the Eros International Group or for which Eros Worldwide has provided reimbursement to the Eros India Group.



Under the 2009 Relationship Agreement, the
Eros India Group also assigns to Eros Worldwide all non-film music publishing rights. The non-film music publishing rights are
the exclusive right to exploit, outside of the territories of India, Nepal and Bhutan, music compositions and performances held
by the Eros India Group, other than such music publishing rights related to an Indian film (other than a Tamil film). Eros Worldwide
is entitled to assign its non-film music publishing rights to us and the other entities within the Eros International Group. For
such non-film music publishing rights, Eros Worldwide agrees to pay the Eros India Group 75% of the gross proceeds received related
to such non-film music publishing rights, after certain amounts are retained by Eros International Group. Eros Worldwide is also
required to reimburse the Eros India Group for 130% of certain pre-approved distribution expenses in connection with such non-film
music publishing rights. No share of gross proceeds is payable by the Eros International Group to the Eros India Group until the
Eros International Group has received and retained 100% of its distribution expenses incurred in connection with such non-film
music publishing rights or for which Eros Worldwide has provided reimbursement to the Eros India Group. The initial term of the
2009 Relationship Agreement expired in December 2014. Upon expiration, the agreement provides that it will be automatically renewed
for successive two year terms unless terminated by any party by 90 days’ written notice on or before commencement of any
renewal term. The relationship agreement was accordingly extended for a further period of two years on February 13, 2014.



Eros Foundation



Prior to our listing on the NYSE in November
2013, we issued the equivalent of 282,949 A ordinary shares to the Eros Foundation, a U.K. registered charity, for no consideration.
Such shares were granted by our Remuneration Committee to Mr. Kishore Lulla as compensation, each of whom directed the issuance
of such shares to the Eros Foundation. Mr. Kishore Lulla and his wife, Mrs. Manjula K. Lulla, are trustees, but not beneficiaries,
of the foundation.



95






C. Interests of Experts and Counsel



Not applicable.



ITEM 8. FINANCIAL INFORMATION



A. Consolidated Statements and Other Financial Information



Please see “Part III — Item 18.
Financial Statements” for a list of the financial statements filed as part of this Annual Report on Form 20-F.



B. Significant Changes



On August 1, 2015, Eros’ subsidiary Eros
International Media Limited (“EIML”) acquired 100% of the shares and voting interests in Techzone. The
Company expects that this acquisition will enable the Group to utilize Techzone’s billing integration and distribution
across major telecom operators in India and will complement its existing Eros Now service.



In accordance with the terms of the agreement
between the parties, EIML issued 900,970 equity shares to the shareholders Techzone at an acquisition date fair
value of INR 586 ($9.16) per share, calculated on the basis of traded share price of EIML on the date of acquisition. EIML
has made an advance of $2.5 million to Techzone prior to the acquisition to provide working capital.



Acquisition related cost of $106,300 has been
included in “Administrative cost” in the consolidated statements of income.



Pending completion of valuation of
assets, including intangible assets, the purchase price has been allocated on a preliminary basis to net assets based on initial
estimates. As a result, values attributed to specified assets and liabilities including goodwill and other intangible assets
may change. Finalization of the purchase price allocation is expected to be completed by July 31, 2016.



The following table summarizes the preliminary
allocation of the purchase price:



|                                  |  | As at August 1, 2015
|--------------------------------- |  | --------------------
|                                  |  | (in thousands)      
|Current assets                    |  |                     
|Cash                              |  | $                   
|Trade and other receivables       |  |                     
|Non-current assets                |  |                     
|Deferred tax assets               |  |                     
|Property, plant and equipment     |  |                     
|Purchase price pending allocation |  |                     
|Other non-current assets          |  |                     
|Current liabilities               |  |                     
|Trade and other payables          |  |                     
|Short-term borrowings             |  |                     
|Non-Current borrowings            |  |                     
|Long-term borrowings              |  |                     
|Other long term liabilities       |  |                     



The trade receivables comprise gross contractual
amounts due of $2.6 million and the Company, based on its best estimate at the acquisition date, expects to collect the entire
amount.



Impact of the acquisition on the results
of the Company



The acquisition of Techzone contributed $4.3
million to the Company’s consolidated revenue and a loss of $0.2 million to the Company’s profit for the year ended
March 31, 2016.



Had the acquisition occurred on 1 April 2015,
consolidated revenue and profit after tax for the year would have been $278.7 million and $13.4 million respectively.



96






ITEM 9. THE OFFER AND LISTING



A. Offer and Listing Details



The high and low last reported sale prices
for our shares for the periods indicated are as shown below. We note that the periods are split between when Eros International
was listed on the Alternative Investment Market (“AIM”) and when it was listed on the New York Stock Exchange (“NYSE”)
on November 13, 2013. With respect to the trading prices on AIM, the prices are adjusted to reflect the one-for-three reverse stock
split, which occurred on November 18, 2013, and a translation from British Pound Sterling to U.S. dollars based on the prevailing
exchange rate between the British Pound Sterling and the U.S. dollar at the time of the applicable trade. Amounts on the NYSE share
price table below are for the period November 18, 2013 to May 31, 2016; and on the AIM share price table, for the period 1 April
2010 to November 18, 2013, only.



|                    |  | Price per share on NYSE
|------------------- |  | -----------------------
|                    |  | High                   
|Fiscal year:        |  |                        
|2014                |  | $                      
|2015                |  | $                      
|2016                |  | $                      
|Fiscal Quarter:     |  |                        
|First quarter 2016  |  | $                      
|Second quarter 2016 |  | $                      
|Third quarter  2016 |  | $                      
|Fourth quarter 2016 |  | $                      
|Month:              |  |                        
|April 2015          |  | $                      
|May 2015            |  | $                      
|June 2015           |  | $                      
|July 2015           |  | $                      
|August 2015         |  | $                      
|September 2015      |  | $                      
|October 2015        |  | $                      
|November 2015       |  | $                      
|December 2015       |  | $                      
|January 2016        |  | $                      
|February 2016       |  | $                      
|March 2016          |  | $                      
|April 2016          |  | $                      
|May 2016            |  | $                      



|                     |  | Price per share on AIM
|-------------------- |  | ----------------------
|                     |  | High                  
|Fiscal year:         |  |                       
|2011                 |  | $                     
|2012                 |  | $                     
|2013                 |  | $                     
|Fiscal Quarter:      |  |                       
|First quarter 2013   |  | $                     
|Second quarter  2013 |  | $                     
|Third quarter  2013  |  | $                     
|Fourth quarter  2013 |  | $                     
|First quarter 2014   |  | $                     
|Second quarter 2014  |  | $                     
|Month:               |  |                       
|October 2013         |  | $                     
|November 2013        |  | $                     



Our closing price on AIM on November 13, 2013 was $11.18.



97






B. Plan of Distribution



Not applicable.



C. Markets



Our shares are listed on the NYSE under the symbol “EROS.”



D. Selling Shareholders



Not applicable.



E. Dilution



Not applicable.



F. Expenses of the Issue



Not applicable.



ITEM 10. ADDITIONAL INFORMATION



A. Share Capital



Not applicable.



B. Memorandum and Articles of Association



Eros International Plc was incorporated in
the Isle of Man on March 31, 2006 under the 1931 Act, as a public company limited by shares and effective as of September 29, 2011,
was de-registered under the 1931 Act and re-registered as a company limited by shares under the 2006 Act. We maintain our registered
office at Fort Anne, Douglas, Isle of Man IM1 5PD; our principal executive office in the U.S. is at 550 County Avenue, Secaucus,
New Jersey 07094.



At March 31, 2016, Eros International plc has
authorized share capital of 58,372,679 A ordinary shares at a par value of GBP 0.30 per share, of which 32,949,314 is issued share
capital, and authorized share capital of 24,960,654 B ordinary shares at a par value of GBP 0.30 per share, of which 24,960,654
is entirely issued and outstanding.



Our activities are regulated by our Memorandum
and Articles of Association. We adopted revised Articles of Association by special resolution of our shareholders passed on April
24, 2012. The material provisions of our revised Articles of Association are described below. In addition to our Memorandum and
Articles of Association, our activities are regulated by (among other relevant legislation) the 2006 Act. Our Memorandum of Association
states our company name, that we are a company limited by shares, that our registered office is at Fort Anne, Douglas, Isle of
Man IM1 5PD, that our registered agent is Cains Fiduciaries Limited and that neither the memorandum of association nor the articles
of association may be amended except pursuant to a resolution approved by a majority of not less than three-fourths of such members
as, being entitled so to do, vote in person or by proxy at the general meeting at which such resolution is proposed. Below is a
summary of some of the provisions of our Articles of Association. It is not, nor does it purport to be, complete or to identify
all of the rights and obligations of our shareholders.



The summary is qualified in its entirety by
reference to our Articles of Association. See “Part III — Item 19. Exhibits — Exhibit 1.1” and “Part
III — Item 19. Exhibits — Exhibit 1.2.”



The following is a description of the material
provisions of our articles of association, ordinary shares and certain provisions of Isle of Man law. This summary does not purport
to be complete and is qualified in its entirety by reference to our Articles of Association, See “Part III - Item 19.



98






Board of Directors



Under our Articles of Association, the 2006
Act and the committee charters and governance policies adopted by our board of directors, our board of directors controls our business
and actions. Our board of directors consists of between three and twelve directors and will be divided into three staggered classes
of directors of the same or nearly the same number. At each annual general meeting, a class of directors will be elected for a
three-year term to succeed the directors of the same class whose terms are then expiring. No director may participate in any approval
of a transaction in which he or she is interested. The directors receive a fee determined by our board of directors for their services
as directors and such fees are distinct from any salary, remuneration or other amounts that may be payable to the directors under
our articles.



However, any director who is also one of our
subsidiaries’ officers is not entitled to any such director fees but may be paid a salary and/or remuneration for holding
any employment or executive office, in accordance with the articles. Our directors are entitled to be repaid all reasonable expenses
incurred in the performance of their duties as directors. There is no mandatory retirement age for our directors.



Our articles provide that the quorum necessary
for the transaction of business may be determined by our board of directors and, in the absence of such determination, is the majority
of the members of our board of directors. Subject to the provisions of the 2006 Act, the directors may exercise all the powers
of the Company to borrow money, guarantee, indemnify and to mortgage or charge our assets.



Ordinary Shares



Dividends



Holders of our A ordinary shares and B
ordinary shares whose names appear on the register on the date on which a dividend is declared by our board of directors are entitled
to such dividends according to the shareholders’ respective rights and interests in our profits and subject to the satisfaction
of the solvency test contained in the 2006 Act. Any such dividend is payable on the date declared by our board of directors, or
on any other date specified by our board of directors. Under the 2006 Act, a company satisfies the solvency test if (a) it
is able to pay its debts as they become due in the normal course of its business and (b) the value of its assets exceeds the
value of its liabilities. Under certain circumstances, if dividend payments are returned to us undelivered or left uncashed, we
will not be obligated to send further dividends or other payments with respect to such ordinary shares until that shareholder notifies
us of an address to be used for the purpose. In the discretion of our board of directors, all dividends unclaimed for a period
of twelve months may be invested or otherwise used by our board of directors for our benefit until claimed (and we are not a trustee
of such unclaimed funds) and all dividends unclaimed for a period of twelve years after having become due for payment may be forfeited
and revert to us.



Voting Rights



Each A ordinary share is entitled to one
vote on all matters upon which the ordinary shares are entitled to vote, and each B ordinary share is entitled to ten votes. In
order to vote at any meeting of shareholders, a holder of B ordinary shares will first be required to certify that it is a permitted
holder as defined in our articles.



General Meetings



Unless unanimously approved by all shareholders
entitled to attend and vote at the meeting, all general meetings for the approval of a resolution appointing a director may be
convened by our board of directors with at least 21 days’ notice (excluding the date of notice and the date of the general
meeting), and any other general meeting may be convened by our Board of Directors with at least 14 days’ notice (excluding
the date of notice and the date of the general meeting). A quorum required for any general meeting consists of shareholders holding
at least 30% of our issued share capital. The concept of “ordinary,” “special” and “extraordinary”
resolutions is not recognized under the 2006 Act, and resolutions passed at a meeting of shareholders only require the approval
of shareholders present in person or by proxy, holding in excess of 50% of the voting rights exercised in relation thereto. However,
as permitted under the 2006 Act, our articles of association incorporate the concept of a “special resolution” (requiring
the approval of shareholders holding 75% or more of the voting rights exercised in relation thereto) in relation to certain matters,
such as directing the management of our business (subject to the provisions of the 2006 Act and our articles), sanctioning a transfer
or sale of the whole or part of our business or property to another company (pursuant to the relevant section of the 1931 Act)
and allocating any shares or other consideration among the shareholders in the event of a winding up.



Rights to Share in Dividends



Our shareholders have the right to a proportionate
share of any dividends we declare.



99






Limitations on Right to Hold Shares



Our board of directors may determine that any
person owning shares (directly or beneficially) constitutes a “prohibited person” and is not qualified to own shares
if such person is in breach of any law or requirement of any country and, as determined solely by our board of directors, such
ownership would cause a pecuniary or tax disadvantage to us, another shareholder or any of our other securities. Our board of directors
may direct the prohibited person to transfer the shares to another person who is not a prohibited person. Any such determination
made or action taken by our board of directors is conclusive and binding on all persons concerned, although in the event of such
a transfer, the net proceeds of the sale of the relevant shares, after payment of our costs of the sale, shall be paid by us to
the previous registered holders of such shares or, if reasonable inquiries failed to disclose the location of such registered holders,
into a trust account at a bank designated by us, the associated costs of which shall be borne by such trust account. A prohibited
person would have the right to apply to the Isle of Man court if he or she felt that our board of directors had not complied with
the relevant provisions of our articles of association.



Our articles also identify certain “permitted
holders” of B ordinary shares. Any B ordinary shares transferred to a person other than a permitted holder will, immediately
upon registration of such transfer, convert automatically into A ordinary shares. In addition, if, at any time, the aggregate number
of B ordinary shares in issue constitutes less than 10% of the aggregate number of A ordinary shares and B ordinary shares in issue,
all B ordinary shares in issue will convert automatically into A ordinary shares on a one-for-one basis.



Untraceable Shareholders



Under certain circumstances, if any payment
with respect to any ordinary shares has not been cashed and we have not received any communications from the holder of such ordinary
shares, we may sell such ordinary shares after giving notice in accordance with procedures set out by our articles to the holder
of the ordinary shares and any relevant regulatory authority.



Action Required to Change Shareholder
Rights or Amend Our Memorandum or Articles of Association



All or any of the rights attached to any class
of our ordinary shares may, subject to the provisions of the 2006 Act, be amended either with the written consent of the holders
of 75% of the issued shares of that class or by a special resolution passed at a general meeting of the holders of shares of that
class. Furthermore, our memorandum and articles of association may be amended by a special resolution of the holders of 75% of
the issued shares.



Liquidation Rights



On a return of capital on winding up, assets
available for distribution among the holders of ordinary shares will be distributed among holders of our ordinary shares on a pro
rata basis. If our assets available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed
so that the losses are borne by our shareholders proportionately.



Minority Shareholder Protections



Under the 2006 Act, if a shareholder believes
that the affairs of the company have been or are being conducted in a manner that is unfair to such shareholder or unfairly prejudicial
or oppressive, the shareholder can seek a range of court remedies including winding up the company or setting aside decisions in
breach of the 2006 Act or the company’s memorandum and articles of association. Further, if a company or a director of a
company breaches or proposes to breach the 2006 Act or its memorandum or articles of association, then, in response to a shareholder’s
application, the Isle of Man Court may issue an order requiring compliance with the 2006 Act or the memorandum or articles of association;
alternatively, the Isle of Man Court may issue an order restraining certain action to prevent such a breach from occurring.



The 2006 Act also contains provisions that
enable a shareholder to apply to the Isle of Man court for an order directing that an investigation be made of a company and any
of its associated companies.



Anti-takeover Effects of Our Dual Class Structure



As a result of our dual class structure, the
Founders Group and our executives and employees will have significant influence over all matters requiring shareholder approval,
including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its
assets. This concentrated control could discourage others from initiating any potential merger, takeover or other change of control
transaction that other shareholders may view as beneficial.

100






C. Material Contracts



We have not entered into any material contracts
other than in the ordinary course of business and other than those described in “Part I —Item 4.—Information
on the Company” or elsewhere in this Annual Report on Form 20-F.



D. Exchange Controls



No foreign exchange control regulations are
in existence in the Isle of Man in relation to the exchange or remittance of sterling or any other currency from the Isle of Man
and no authorizations, approvals or consents will be required from any authority in the Isle of Man in relation to the exchange
and remittance of sterling and any other currency whether awarded by reason of a judgment or otherwise falling due and having been
paid in the Isle of Man.



E. Taxation



Summary of Material Indian Tax Considerations



The discussion contained herein is based on
the applicable tax laws of India as in effect on the date hereof and is subject to possible changes in Indian law that may come
into effect after such date. The information set forth below is intended to be a general discussion only. Prospective investors
should consult their own tax advisers as to the consequences of purchasing the A ordinary shares, including, without limitation,
the consequences of the receipt of dividend and the sale, transfer or disposition of the ordinary shares.



Based on the fact that we are considered for
tax purposes as a company domiciled abroad, any dividend income in respect of ordinary shares will not be subject to any withholding
or deduction in respect of Indian income tax laws. Pursuant to amendments to the Indian Income Tax Act, 1961, income arising directly
or indirectly through the sale of a capital asset, including any share or interest in a company or entity registered or incorporated
outside India, will be liable to tax in India, if such share or interest derives, directly or indirectly, its value substantially
from assets located in India, whether or not the seller of such share or interest has a residence, place of business, business
connection, or any other presence in India, if, on the specified date, the value of such assets (i) represents at least 50% of
the value of all assets owned by the company or entity, and (ii) exceeds the amount of 100 million rupees. However, the impact
of the above indirect transfer provisions would need to be separately evaluated under the tax treaty scenario.



Further, dividend payments to us by our Indian
subsidiaries are subject to withholding of dividend distribution tax in India, at an effective rate of 20.3%, including applicable
cess and surcharge.



An equalization levy or EL in respect of e-commerce
transactions has been introduced in India with effect from June 1, 2016. EL is to be deducted in respect of payments towards “specified
services” (in excess of INR 100,000). A “Specified service” means online advertisement, any provision for digital
advertising space or any other facility or service for the purpose of online advertisement and includes any other service as may
be notified. Deduction of EL at the rate of six per cent (on a gross basis) is the responsibility of Indian residents / non-residents
having a permanent establishment or PE in India on payments to non-residents (not having a PE in India). Consequently, if a non-resident
(not having a PE in India) earns income towards a “specified service” which is chargeable to EL, then the same would
be exempt in the hands of non-resident company.



The concept of Place of Effective Management
or POEM has also been introduced with effect from April 1, 2017 for the purpose of determining the tax residence of overseas
companies in India. The POEM is defined to mean a place where key management and commercial decisions that are necessary for the
conduct of the business of an entity as a whole are in substance made. This could have significant impact on the foreign companies
holding board meeting(s) in India, having key managerial personnel located in India, having regional headquarters located in India,
etc. In the event the POEM of a foreign company is considered to be situated in India and consequently, it becomes tax resident
in India, its global income would be taxable in India (even if it is not earned in India).



Pursuant to the Finance Act, 2015, the central
government is empowered to levy a Swachh Bharat Cess or SBC on all or any of the taxable services at the rate of 2% of the value
of taxable services. Pursuant to a notification by the central government, an SBC of 0.5% of the value of the taxable services
is to be levied on all taxable services with effect from November 15, 2015. Further, according to the frequently asked questions
in connection with SBC issued by Central Board of Excise and Customs, since SBC is not integrated in the CENVAT credit chain, the
credit of SBC will not be permitted. Further, SBC cannot be paid by utilizing credit of any other duty or tax and will have to
be paid in cash. Accordingly, SBC will be a cost to taxpayers. Pursuant to the Finance Act, 2016, the central government has also
imposed a new levy by way of Krishi Kalyan Cess or KKC with effect from June1, 2016, on all or any of the taxable services at the
rate of 0.5% of the value of taxable services. The credit of KKC paid on input services is permitted to be used for payment of
the proposed cess leviable on taxable services provided by a service provider. The levy of SBC along with KKC has increased the
effective rate of service tax to 15% with effect from June 1, 2016.



101






The Government of India has also proposed a
national goods and services tax or GST regime, which would replace most of the indirect taxes on goods and services, such as central
excise duty, service tax, countervailing duty of customs duty, special additional duty of customs, central sales tax, state value
added tax, surcharge and excise, entry tax, state level entertainment taxes currently being levied and collected by the central
and state governments in India. However, the basic duty of customs would continue to be levied. The Government of India has recently
released a model GST law.



Further, the General Anti Avoidance Rules or
GAAR will come into effect from April 1, 2017. GAAR provisions are intended to restrict “impermissible avoidance arrangements,”
which would be any arrangement, the main purpose or one of the main purposes of which is to obtain a tax benefit and which satisfy
at least one of the following tests: (i) creation of rights, or obligations, not ordinarily created between persons dealing at
arm’s-length; (ii) resulting, directly or indirectly, in misuse or abuse of provisions of the Income Tax Act, 1961; (iii)
lacking, or is deemed to be lacking, commercial substance, in whole or in part; or (iv) is entered into or carried out by means,
or in a manner, not ordinarily employed for bona fide purposes. If GAAR provisions are invoked, Indian tax authorities would
have wider powers, including denial of tax benefit or a benefit under a tax treaty.



Additionally, in relation to transfer pricing,
pursuant to the Finance Act, 2016, a three tiered transfer pricing documentation structure was introduced in India, consisting
of a master file, a local file and a country-by-country report. Such a structure is in line with the recommendations contained
in the action plan on the Base Erosion and Profit Shifting or BEPS project issued by the Organization of Economic Cooperation and
Development or OECD in October 2015.



Summary of Material Isle of Man Tax Considerations



Tax residence in the Isle of Man



We are resident for taxation purposes in the
Isle of Man by virtue of being incorporated in the Isle of Man.



Capital taxes in the Isle of Man



The Isle of Man has a regime for the taxation
of income, but there are no taxes on capital gains, stamp taxes or inheritance taxes in the Isle of Man. No Isle of Man stamp duty
or stamp duty reserve tax will be payable on the issue or transfer of, or any other dealing in, the A ordinary shares.



Zero rate of corporate income tax in
the Isle of Man



The Isle of Man operates a zero rate of tax
for most corporate taxpayers, including the Company. Under the regime, the Company will technically be subject to Isle of Man taxation
on its income, but the rate of tax will be zero; there will be no required withholding by the Company on account of Isle of Man
tax in respect of dividends paid by the Company.



The Company will be required to pay an annual
return fee of £380 (US $495) per year.



Isle of Man probate



In the event of death of a sole, individual
holder of the A ordinary shares, an Isle of Man probate fee or administration may be required, in respect of which certain fees
will be payable to the Isle of Man government, subject to the fee. Currently the maximum fee, where the value of an estate exceeds
£1,000,000 (US $1,300,000) is approximately £8,000 (US $10,400).



Summary of Material United States Federal
Income Tax Considerations



The following summary describes the material
United States federal income tax consequences associated with the acquisition, ownership and disposition of our shares as of the
date hereof. The discussion set forth below is applicable only to U.S. Holders (as defined below) and does not purport to be a
comprehensive description of all tax considerations that may be relevant to a particular person’s decision to acquire the
shares.



Except where noted, this summary applies only
to a U.S. Holder that holds shares as capital assets for United States federal income tax purposes. As used herein, the term “U.S.
Holder” means a beneficial owner of a share that is for United States federal income tax purposes:

| | · | an individual citizen or resident of the United States;
| | - | -------------------------------------------------------

| | · | a corporation (or other entity treated as a corporation for United States federal income tax purposes)
created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

102






| | · | an estate the income of which is subject to United States federal income taxation regardless of
its source; or
| | - | --------------------------------------------------------------------------------------------------------------

| | · | a trust if it (1) is subject to the primary supervision of a court within the United States and
one or more United States persons have the authority to control all substantial decisions of the trust or (2) has a valid election
in effect under applicable United States Treasury regulations to be treated as a United States person.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



This summary does not describe all of the United
States federal income tax consequences applicable to you if you are subject to special treatment under the United States federal
income tax laws, including if you are a broker, a dealer or trader in securities or currencies, a financial institution, a regulated
investment company, a real estate investment trust, a cooperative, an insurance company, a pension plan, a tax-exempt entity, a
person holding our shares as part of a hedging, integrated or conversion transaction, a constructive sale, a wash sale or a straddle,
a person liable for alternative minimum tax, a person who owns or is deemed to own 10% or more of our voting stock, a person holding
our shares in connection with a trade or business conducted outside of the United States, a partnership or other pass-through entity
for United States federal income tax purposes, a U.S. expatriate or a person whose “functional currency” for United
States federal income tax purposes is not the United States dollar. The discussion below is based upon the provisions of the United
States Internal Revenue Code of 1986, as amended (the “Code”), and regulations (including proposed regulations), rulings
and judicial decisions thereunder as of the date hereof, and such authorities may be replaced, revoked or modified, possibly with
retroactive effect, so as to result in United States federal income tax consequences different from those discussed below.



If a partnership holds our shares, the tax
treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If you are a
partnership holding our shares or a partner of a partnership holding our shares, you should consult your tax advisors as to the
particular United States federal income tax consequences of acquiring, holding and disposing of the shares.



This discussion does not contain a detailed
description of all the United States federal income tax consequences to you in light of your particular circumstances and does
not address estate and gift taxes or the effects of any state, local or non-United States tax laws. If you are considering the
purchase, ownership or disposition of our A ordinary shares, you should consult your own tax advisors concerning the United States
federal income tax consequences to you in light of your particular situation as well as any other consequences to you arising under
U.S. federal, state and local laws and the laws of any other applicable taxing jurisdiction in light of your particular circumstances.



Taxation of Distributions



Subject to the passive foreign investment company,
or PFIC, rules discussed below, the gross amount of distributions on the shares will be taxable as dividends to the extent paid
out of our current or accumulated earnings and profits, as determined under United States federal income tax principles. Because
we do not expect to keep track of earnings and profits in accordance with United States federal income tax principles, you should
expect that a distribution in respect of the A ordinary shares will generally be treated and reported as a dividend to you. Such
dividend income will be includable in your gross income as ordinary income on the day actually received by you or on the day received
by your nominee or agent that holds the shares on your behalf. Such dividends will not be eligible for the dividends received deduction
allowed to corporations in respect of dividends received from other U.S. corporations under the Code.



With respect to non-corporate U.S. Holders,
certain dividends received from a qualified foreign corporation may be subject to reduced rates of taxation. A foreign corporation
is treated as a qualified foreign corporation with respect to dividends paid by that corporation on shares that are readily tradable
on an established securities market in the United States. Our A ordinary shares are listed on the NYSE and we expect such shares
to be considered readily tradable on an established securities market. However, even if the shares are readily tradable on an established
securities market in the United States, we will not be treated as a qualified foreign corporation if we are a PFIC for the taxable
year in which we pay a dividend or were a PFIC for the preceding taxable year. Non-corporate holders that do not meet a minimum
holding period requirement during which they are not protected from a risk of loss or that elect to treat the dividend income as
“investment income” pursuant to Section 163(d)(4) (B) of the Code will not be eligible for the reduced rates of taxation
regardless of our status as a qualified foreign corporation. For this purpose, the minimum holding period requirement will not
be met if a share has been held by a holder for 60 days or less during the 121-day period beginning on the date which is 60 days
before the date on which such share becomes ex-dividend with respect to such dividend, appropriately reduced by any period in which
such holder is protected from risk of loss. In addition, the rate reduction will not apply to dividends if the recipient of a dividend
is obligated to make related payments with respect to positions in substantially similar or related property. This disallowance
applies even if the minimum holding period has been met. You should consult your own tax advisors regarding the availability of
the reduced tax rate on dividends in light of your particular circumstances.



103






Subject to certain conditions and limitations
imposed by United States federal income tax rules relating to the availability of the foreign tax credit, some of which vary depending
upon the U.S. Holder’s circumstances, any foreign withholding taxes on dividends will be treated as foreign taxes eligible
for credit against your United States federal income tax liability. The application of the rules governing foreign tax credits
depends on the particular circumstances of each U.S. Holder. The limitation on foreign taxes eligible for credit is calculated
separately with respect to specific classes of income. For purposes of calculating the foreign tax credit, dividends paid on the
A ordinary shares will be treated as income from sources outside the United States and will generally constitute “passive
category income.” Further, in certain circumstances, you will not be allowed a foreign tax credit for foreign taxes imposed
on certain dividends paid on the shares if you:

| | · | have held shares for less than a specified minimum period during which you are not protected from
risk of loss, or
| | - | ------------------------------------------------------------------------------------------------------------------

| | · | are obligated to make certain payments related to the dividends.
| | - | ----------------------------------------------------------------



The rules governing the foreign tax credit
are complex and involve the application of rules that depend on your particular circumstances. You are urged to consult your tax
advisors regarding the availability of the foreign tax credit under your particular circumstances.



Passive Foreign Investment Company



Based on the composition of our income and
valuation of our assets, we do not believe we will be a PFIC for United States federal income tax purposes for the 2016 taxable
year, and we do not expect to become one in the future. However, because PFIC status is an annual factual determination that cannot
be made until after the close of each taxable year and depends on the composition of a company’s income and assets and the
market value of its assets from time to time, there can be no assurance that we will not be a PFIC for any taxable year.



In general, a non-United States corporation
will be treated as a PFIC for U.S. federal income tax purposes for any taxable year in which:

| | · | at least 75% of its gross income is passive income (the “income” test), or
| | - | --------------------------------------------------------------------------

| | · | at least 50% of the value (determined based on a quarterly average) of its gross assets is attributable
to assets that produce, or are held for the production of, passive income (the “asset” test).
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



For this purpose, passive income generally
includes dividends, interest, royalties and rents (except for certain royalties and rents derived from the active conduct of a
trade or business), certain gains from commodities and securities transactions and the excess of gains over losses from the disposition
of assets which produce passive income.



If we own, directly or indirectly, at least
25% (by value) of the stock of another corporation, we will be treated, for purposes of the PFIC tests described above, as directly
owning our proportionate share of the other corporation’s assets and receiving our proportionate share of the other corporation’s
income.



If we are a PFIC for any taxable year during
which you hold our shares, you will be subject to special tax rules with respect to any “excess distribution” received
and any gain realized from a sale or other disposition, including a pledge, of shares, unless you make a “mark-to-market”
election as discussed below.



Distributions you receive in a taxable year
that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years
or your holding period for the shares ( before the current taxable year) and gain realized on disposition of the A ordinary shares
will be treated as excess distributions. Under these special tax rules:

| | · | the excess distribution or gain will be allocated ratably over your holding period for your A ordinary
shares,
| | - | --------------------------------------------------------------------------------------------------------------

| | · | the amount allocated to the current taxable year, and any taxable year prior to the first taxable
year in which we were a PFIC, will be treated as ordinary income, and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | the amount allocated to each other year will be subject to tax at the highest applicable tax rate
in effect for corporations or individuals, as appropriate, for that taxable year and the interest charge generally applicable to
underpayments of tax will be imposed on the resulting tax attributable to each such year.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The tax liability for amounts allocated to
years prior to the year of an “excess distribution,” (including a disposition) cannot be offset by any net operating
losses for such years, and gains (but not losses) realized on the sale of the shares cannot be treated as capital and will be subject
to the “excess distribution” regime described above, even if you hold the shares as capital assets.



104






In addition, as explained above non-corporate
U.S. Holders will not be eligible for reduced rates of taxation on any dividends received from us if we are a PFIC in our taxable
year in which such dividends are paid or in the preceding taxable year.



You will be required to file Internal Revenue
Service Form 8621(a) annually if the aggregate value of all your directly owned PFIC shares on the last day of the year is $25,000
or more ($50,000 on a joint return) or if you are deemed to own indirectly more than $5,000 in value of any PFIC shares owned by
us; (b) you receive distributions on the A ordinary shares or realize any gain on the disposition of the A ordinary shares if you
held our A ordinary shares in any year in which we were classified as a PFIC, or (c) you have made a mark-to market election (as
described below) and other reporting requirements may apply.



If we are a PFIC for any taxable year during
which a U.S. Holder holds our A ordinary shares and any of our non-United States subsidiaries is also a PFIC, a U.S. Holder would
be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of
these rules.



Under these circumstances, a U.S. Holder would
be subject to United States federal income tax on (i) a distribution on the shares of a lower-tier PFIC and (ii) a disposition
of shares of a lower-tier PFIC, both as if such U.S. Holder directly held the shares of such lower-tier PFIC. You are urged to
consult your tax advisors about the application of the PFIC rules to any of our subsidiaries.



In certain circumstances, in lieu of being
subject to the excess distribution rules discussed above, you may make an election to include gain on the stock of a PFIC as ordinary
income under a mark-to-market method, provided that such stock is regularly traded in other than de minimis quantities for at least
15 days during each calendar quarter on a qualified exchange, as defined in applicable U.S. Treasury Regulations. Our A ordinary
shares are listed on the NYSE and we expect such shares to be “regularly traded” for purposes of the mark-to-market
election.



If you make an effective mark-to-market election,
you will include in each year that we are a PFIC, as ordinary income the excess of the fair market value of your A ordinary shares
at the end of the year over your adjusted tax basis in the A ordinary shares. You will be entitled to deduct as an ordinary loss
in each such year the excess of your adjusted tax basis in the A ordinary shares over their fair market value at the end of the
year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election.



If you make an effective mark-to-market election,
any gain you recognize upon the sale or other disposition of your A ordinary shares in a year in which we are a PFIC will be treated
as ordinary income. Any loss will be treated as ordinary loss, but only to the extent of the net amount of previously included
income as a result of the mark-to-market election.



Your adjusted tax basis in the shares will
be increased by the amount of any income inclusion and decreased by the amount of any deductions under the mark-to-market rules.
If you make a mark-to-market election, it will be effective for the taxable year for which the election is made and all subsequent
taxable years unless the A ordinary shares are no longer regularly traded on a qualified exchange or the Internal Revenue Service
consents to the revocation of the election.



A mark-to-market election should be made by
filing IRS Form 8621 in the first taxable year during which the U.S. Holder held the A ordinary shares and in which we are a PFIC.
A mark-to-market election would not be available with respect to a subsidiary PFIC of ours that a U.S. Holder is deemed to own
for the purposes of the PFIC rules; accordingly, a U.S. Holder would not be able to mitigate certain of the adverse U.S. “excess
distribution” federal income tax consequences of its deemed ownership of stock in our subsidiary PFICs by making a mark-to-market
election. You are urged to consult your tax advisor about the availability of the mark-to-market election and whether making the
election would be advisable in your particular circumstances.



Alternatively, holders of PFIC shares can sometimes
avoid the rules described above by electing to treat such PFIC as a “qualified electing fund” under Section 1295 of
the Code. However, this option is not available to you because we do not intend to comply with the requirements, or furnish you
with the information, necessary to permit you to make this election.



You are urged to consult your tax advisors
concerning the United States federal income tax consequences of holding A ordinary shares if we are considered a PFIC in any taxable
year.



Sale or Other Disposition of A Ordinary
Shares



For United States federal income tax purposes,
you will recognize taxable gain or loss on any sale or exchange or other taxable disposition of a A ordinary share in an amount
equal to the difference between the amount realized for the share and your tax basis in the A ordinary share, in each case as determined
in United States dollars. Subject to the discussion above under “Passive Foreign Investment Company,” such gain or
loss will be capital gain or loss. Capital gains of non-corporate U.S. Holders derived with respect to capital assets held for
more than one year are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations.



105






Any gain or loss recognized by you will generally
be treated as United States source gain or loss for U.S. foreign tax credit purposes. You are encouraged to consult your tax advisor
regarding the availability of the U.S. foreign tax credit in your particular circumstances.



Information Reporting and Backup Withholding



In general, information reporting will apply
to distributions in respect of our A ordinary shares and the proceeds from the sale, exchange or redemption of our A ordinary shares
that are paid to you within the United States or through certain U.S.-related financial intermediaries, unless you are an exempt
recipient. Backup withholding may apply to such payments if you fail to (i) provide a taxpayer identification number or (ii) certify
that you are not subject to backup withholding. U.S. Holders who are required to establish their exemption from backup withholding
must provide such certification on Internal Revenue Service Form W-9. U.S. Holders should consult their tax advisors regarding
the application of the United States information reporting and backup withholding rules.



Backup withholding is not an additional tax.
Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your United States federal
income tax liability provided the required information is timely furnished to the Internal Revenue Service.



Certain U.S. Holders who hold “specified
foreign financial assets,” including shares of a non-U.S. corporation that are not held in an account maintained by a U.S.
“financial institution,” the aggregate value of which exceeds $50,000 (or other applicable amount) during the tax year,
may be required to attach to their tax returns for the year IRS Form 8938 containing certain specified information.



Medicare Tax



Certain U.S. Holders that are individuals,
estates or trusts will be subject to an additional 3.8% tax on all or a portion of their “net investment income,” which
may include all or a portion of their dividends and net gains from the disposition of shares. Special rules apply to stock in a
PFIC. If you are a U.S. Holder that is an individual, estate or trust, you should consult your tax advisors regarding the applicability
of this tax to your income and gains in respect of your investment in the A ordinary shares.



F. Dividends and Paying Agents



Not applicable.



G. Statement by Experts



Not applicable.



H. Documents on Display



Publicly filed documents concerning our company
which are referred to in this annual report may be inspected and copied at the public reference facilities maintained by the Commission
at 100 F Street, N.E., Washington, D.C. 20549. Copies of these materials can also be obtained from the Public Reference Room at
the Commission’s principal office, 100 F Street, N.E., Washington D.C. 20549, after payment of fees at prescribed rates.



The Commission maintains a website at www.sec.gov
that contains reports, proxy and information statements and other information regarding registrants that make electronic filings
through its Electronic Data Gathering, Analysis, and Retrieval, or EDGAR, system. We have made all our filings with the Commission
using the EDGAR system.



I. Subsidiary Information



For more information on our subsidiaries, please
see “Part I — Item 4. Information on the Company — C. Organizational Structure.”



106






ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK



We are exposed to financial risks, including interest rate risk,
foreign currency risk and equity risk:



Interest Rate Risk



We are exposed to interest rate risk because
our subsidiaries borrow funds at both fixed and floating interest rates. The risk is managed by maintaining an appropriate mix
between fixed, capped and floating rate borrowings, and by the use of interest rate swap contracts and forward interest rate contracts.
Hedging activities are evaluated to align with interest rate views to ensure the most cost effective hedging strategies are applied.



We entered into an interest rate swap contract
in fiscal 2012 related to our borrowings with an interest cap with a notional value of $100 million. Two written floor contracts
each with $100 million notional value were also entered into in fiscal 2012. The effect of these instruments, which are still valid,
in combination is that the maximum cash outflow is 6% although the written floors mean that should market rates fall below the
floor rate, then the interest charged would be twice the floor rate, although never exceeding 6%.



Under the interest swap contracts, we have
agreed to exchange the difference between fixed and floating rate interest amounts calculated on an agreed notional principal amount.
Such contracts enable us to mitigate the risk of changing interest rates on the cash flow of issued variable rate debt. The fair
value of interest rate derivatives which comprise derivatives at fair value through profit and loss is determined at the present
value of future cash flows estimated and discounted based on the applicable yield curves derived from quoted interest rates.



Foreign Currency Risk



We operate throughout the world with significant
operations in India, the British Isles, the United States and the United Arab Emirates. As a result, we face both translation and
transaction currency risks which are principally mitigated by matching foreign currency revenues and costs wherever possible.



A majority of our revenues are denominated
in U.S. dollars, Indian Rupees and British Pounds Sterling, which are matched where possible to our costs so that these act as
an automatic hedge against foreign currency exchange movements.



We have to date not entered into any currency
hedging transactions, and we have managed foreign currency exposure to date by seeking to match foreign currency inflows and outflows
to the extent possible.



A uniform decrease of 10% in exchange rates
against all foreign currencies in position as of March 31, 2016 would have decreased our net income by approximately $3.9 million.
An equal and opposite impact would be experienced in the event of an increase by a similar percentage. Our sensitivity to foreign
currency has increased during the year ended March 31, 2016 as a result of an increase in the percentage of liabilities denominated
in foreign currency over the comparative period. As of March 31, 2016, 48% of our borrowings are denominated in foreign currency.



In management’s opinion, the sensitivity
analysis is not representative of the inherent foreign exchange risk because the exposure at the end of the reporting period does
not reflect the exposure during the year.



Equity Risk



We are exposed to market risk relating to
changes in the market value of our investments, which we hold for purposes other than trading. We invest in equity instruments
of private companies for operational and strategic business reasons. These securities may be subject to significant fluctuations
in fair market value due to volatility in the industries in which they operate. As at March 31, 2016, the aggregate value of all
such equity investments was $30.1 million. For further discussion of our investments see Note 17 to our audited Consolidated
Financial Statements appearing elsewhere in this Annual Report.



107






ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES



A. Debt Securities



Not applicable.



B. Warrants and Rights



Not applicable.



C. Other Securities



Not applicable.



D. American Depository Shares



Not applicable.



108






PART II



ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND
DELINQUENCIES



None.



ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS
OF SECURITY HOLDERS AND USE OF PROCEEDS



Not applicable.



ITEM 15. CONTROLS AND PROCEDURES



As required by Rules 13a-15(e) and 15d-15(e)
under the Exchange Act, management has evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer,
the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report. Disclosure
controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in
the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified
in the rules and forms of the Commission. Disclosure controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Exchange Act
is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate
to allow timely decisions regarding our required disclosure.



Based on the foregoing, our Chief Executive
Officer and Chief Financial Officer have concluded that, as at March 31, 2016, our disclosure controls and procedures were
effective and provide a reasonable level of assurance.



Management’s Report on Internal Control
over Financial Reporting



Management is responsible for establishing
and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
Act.



Internal control over financial reporting refers
to a process designed by, or under the supervision of, our Group Chief Executive Officer and Group Chief Financial Officer and
effected by our Board of Directors, management and other personnel, to provide reasonable assurance to our management and Board
of Directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles and includes those policies and procedures that:

| | · | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of our assets;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------

| | · | provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are
being made only in accordance with authorizations of our management and members of our Board of Directors; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of our assets that could have a material effect on our financial statements.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Because of its inherent limitations, internal
control over financial reporting may not prevent or detect all misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate due to changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.



Management
assessed the effectiveness of internal control over financial reporting as at March 31, 2016, based on the criteria established
in 2013Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on the above criteria, and as a result of this assessment, management concluded that, as at March 31,
2016, our internal control over financial reporting was effective in providing reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles.



This annual report does not include an attestation
report of our independent registered public accounting firm regarding internal controls over financial reporting because the Jumpstart
Our Business Startups Act provides an exemption from such requirement as we qualify as an emerging growth company.



109






Changes in Internal Control over Financial Reporting



During the period covered by this report, no
changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) promulgated
under the Exchange Act), have occurred that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.



ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT



Our Audit Committee members are Messrs. Dilip
Thakkar (Chairman) and Naresh Chandra. Each of Messrs. Thakkar and Chandra are an independent director pursuant to the applicable
rules of the Commission and the NYSE. See “Part I — Item 6. Directors, Senior Management and Employees — A. Directors
and Executive Officers” for the experience and qualifications of the members of the Audit Committee. Our Board of Directors
has determined that Mr. Thakkar qualifies as an “audit committee financial expert” as defined in Item 16A of Form 20-F.



ITEM 16B. CODE OF ETHICS



We have adopted a written Code of Business
Ethics and Conduct that is applicable to all of our directors, senior management and employees. We have posted the code on our
website at www.erosplc.com. Information contained in our website does not constitute a part of this annual report. We will
also make available a copy of the Code of Business Ethics and Conduct to any person, without charge, if a written request is made
to Investor Relations at our offices at 13 Manchester Square, London W1 U3PP, United Kingdom.



ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND
SERVICES



Principal Accountant Fees and Services



Grant Thornton India LLP has served as our
independent public accountant for the fiscal years ended March 31, 2016, 2015 and 2014. The following table shows the fees we paid
or accrued for the audit and other services provided by Grant Thornton India LLP and associated entities for the years ended March
31, 2016, 2015 and 2014.



|                   |  | Fiscal
|------------------ |  | ------
|                   |  | 2016  
|Audit fees         |  | $     
|Audit-related fees |  |       
|Tax fees           |  |       



Notes:



Audit fees. This category consists of
fees billed for the audit of financial statements, quarterly review of financial statements and other audit services, which are
normally provided by the independent auditors in connection with statutory and accounting matters that arose during, or as a result
of, the audit or the review of interim financial statements and include the group audit; comfort letters and consents; attest services;
and assistance with and review of documents filed with the Commission.



Audit-related fees. This category consists
of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our
financial statements or that are traditionally performed by the external auditor, and include service tax certifications.



Tax fees.This category includes fees
billed for tax audits.



Audit Committee Pre-approval Process



Our Audit Committee reviews and pre-approves
the scope and the cost of all audit and permissible non-audit services performed by our independent auditor. All of the services
provided by Grant Thornton India LLP and associated entities during the last fiscal year have been pre-approved by our Audit Committee.



110






ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS
FOR AUDIT COMMITTEES



As permitted by the rules of the U.S. Securities
and Exchange Commission, our audit committee is currently comprised of two non-executives. We believe that our reliance on this
exemption from the listing standards for audit committees does not materially adversely affect the ability of our audit committee
to act independently.



ITEM 16E. PURCHASES OF EQUITY SECURITIES
BY THE ISSUER AND AFFILIATED PURCHASERS



Neither we, nor any affiliated purchaser, made
any purchase of our equity securities in fiscal 2016.



ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING
ACCOUNTANT



Not applicable.



ITEM 16G. CORPORATE GOVERNANCE



We have posted our Corporate Governance Guidelines
on our website at www.erosplc.com. Information contained on our website does not constitute a part of this annual report.



The table below summarizes
the composition of our committees during the year.



|               |  | AuditCommittee |  | RemunerationCommittee |  | NominationCommittee
|-------------- |  | -------------- |  | --------------------- |  | -------------------
|               |  |                |  |                       |  |                    
|Naresh Chandra |  | Member         |  | Chairman              |  | Chairman           
|Dilip Thakkar  |  | Chairman       |  | Member                |  | Member             



Each of Messrs. Chandra and Thakkar
satisfies the “independence” requirements of the NYSE listing standards and the “independence” requirements
of Rule 10A-3 of the Exchange Act. Messrs. Kirkwood and Coote also satisfied these requirements during their tenure.



As our shares are listed on the NYSE, we are
subject to the NYSE listing standards. We believe that our corporate governance practices do not differ in any significant way
from those required to be followed by issuers incorporated in the United States under the NYSE listing standards, except that the
Dodd-Frank Wall Street Reform and Consumer Protection Act generally provides shareholders of United States public companies with
the right to cast three types of votes: (i) an advisory vote to approve the compensation of the named executive officers, (ii)
an advisory vote on the frequency with which shareholders should be entitled to cast votes on the company’s executive compensation,
and (iii) an advisory vote to approve certain payments made in connection with an acquisition, merger or other specified corporate
transaction. We, as a foreign private issuer, are not subject to these requirements and we do not adopt any such voting practices.



As a foreign private issuer, we are exempt
from the rules under the Exchange Act governing the furnishing and content of proxy statements, and our directors, senior management
and principal shareholders are exempt from the reporting and “short-swing profit” recovery provisions contained in
Section 16 of the Exchange Act.



ITEM 16H. MINE SAFETY DISCLOSURE



Not applicable.



111








ITEM 17. FINANCIAL STATEMENTS



See “Part III — Item 18. Financial Statements”
for a list of our consolidated financial statements included elsewhere in this annual report.



ITEM 18. FINANCIAL STATEMENTS



The following statements are filed as part of this annual report,
together with the report of the independent registered public accounting firm:



|· | Report of Independent Registered Public Accounting Firm Grant Thornton India LLP                 
|- | -------------------------------------------------------------------------------------------------
|  |                                                                                                  
|· | Consolidated Statements of Financial Position as at March 31, 2016 and 2015                      
|  |                                                                                                  
|· | Consolidated Statements of Income for the years ended March 31, 2016, 2015 and 2014              
|  |                                                                                                  
|· | Consolidated Statements of Comprehensive Income for the years ended March 31, 2016, 2015 and 2014
|  |                                                                                                  
|· | Consolidated Statements of Changes in Equity for the years ended March 31, 2016, 2015 and 2014   
|  |                                                                                                  
|· | Consolidated Statements of Cash Flows for the years ended March 31, 2016, 2015 and 2014          
|  |                                                                                                  
|· | Notes to Consolidated Financial Statements                                                       







112






ITEM 19. EXHIBITS



The following exhibits are filed as part of this annual report:



|ExhibitNumber | Title                                                                                                                                                                                                                                                       |  |    
|------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---
|1.1           | Memorandum of Association                                                                                                                                                                                                                                   |  | (c)
|1.2           | Articles of Association                                                                                                                                                                                                                                     |  | (c)
|2.1           | Form of A Share Certificate                                                                                                                                                                                                                                 |  | (d)
|4.1           | Relationship Agreement, dated as of December 16, 2009, between Eros International Media Limited, the Company and Eros Worldwide FZ-LLC                                                                                                                      |  | (b)
|4.2           | Shareholders’ Agreement, dated as of January 13,2007, between Eros Multimedia Private Limited and The Group and Big Screen Entertainment Private Limited                                                                                                    |  | (b)
|4.3           | Shareholders’ Agreement for Ayngaran International Limited, dated as of July 11,2007                                                                                                                                                                        |  | (b)
|4.4           | Employment Agreement of Sunil Lulla as Executive Vice Chairman of Eros International Medial Limited, dated September 29, 2009                                                                                                                               |  | (b)
|4.5           | Service Agreement of Prem Parameswaran as Chief Financial Officer and President of North America and Group Chief Financial Officer, dated May 26, 2015                                                                                                      |  | (f)
|4.6           | Service Agreement of Kishore Lulla, dated February 17, 2016                                                                                                                                                                                                 |  | (a)
|4.7           | Service Agreement of Vijay Ahuja as Vice Chairman and President (International) dated June 27, 2006                                                                                                                                                         |  | (b)
|4.8           | Rules of the Eros International Plc Bonus Share Plan Unapproved Option Scheme 2006, dated May 17, 2006                                                                                                                                                      |  | (b)
|4.9           | Credit Facility, dated January 5, 2012, between Eros International Plc, Citibank, N.A., London Branch, Lloyds TSB Bank Plc and the Royal Bank of Scotland Plc, with Lloyds TSB Bank Plc as Facility Agent, in the original principal amount of $125 million |  | (b)
|4.10          | Increase Confirmation, dated January 12, 2012, from UBS AG, Singapore Branch, to Lloyds TSB Bank Plc as Facility Agent and Eros International Plc                                                                                                           |  | (b)
|4.11          | IPO Plan Form of Option Agreement                                                                                                                                                                                                                           |  | (d)
|4.12          | Eros International Media Pvt. Ltd. ESOP 2009                                                                                                                                                                                                                |  | (c)
|4.13          | Form of Joint Share Ownership Deed Measured By Total Share Return                                                                                                                                                                                           |  | (c)
|4.14          | Form of Joint Share Ownership Deed Measured By Super Total Share Return                                                                                                                                                                                     |  | (c)
|4.15          | Form of Joint Share Ownership Deed Measured By Earnings Per Share                                                                                                                                                                                           |  | (c)
|4.16          | Employee Benefit Trust Deed                                                                                                                                                                                                                                 |  | (c)
|4.17          | Form of Option Agreement for Option Awards Approved April 17, 2012                                                                                                                                                                                          |  | (d)
|4.18          | Service Agreement of Jyoti Deshpande as Group Chief Executive Officer and Managing Director of Eros International Plc, date September 5, 2013                                                                                                               |  | (e)
|4.19          | Letter agreement for Employment between Eros International PLC, Eros Digital FZ LLC and Jyoti Deshpande dated February 17, 2016.                                                                                                                            |  | (a)
|4.20          | Employment Agreement of Jyoti Deshpande as Executive Director of Eros International Media Limited, dated August 29, 2013                                                                                                                                    |  | (d)





113








|ExhibitNumber | Title                                                                                                                                                                    |  |    
|------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---
|4.21          | Service Agreement of Vijay Ahuja as Executive Director of Eros International Pte Ltd, dated April 1, 2013                                                                |  | (d)
|4.22          | Service Agreement of Pranab Kapadia as President – Europe & Africa of Eros International Ltd., dated December 1, 2007                                                    |  | (d)
|4.23          | Amended and Restated Service Agreement of Rishika Lulla Singh as Chief Executive Officer – Eros Digital FZ LLC, dated February 17, 2016                                  |  | (a)
|4.24          | Service Agreement of Mark Carbeck as Chief Corporate and Strategy Officer, dated  April 3, 2014                                                                          |  | (a)
|4.25          | Service Agreement of David Maisel as Non-Executive Director, dated February 13, 2015                                                                                     |  | (f)
|4.26          | Service Agreement of Rajeev Misra as Non-Executive Director, dated June 17, 2015                                                                                         |  | (f)
|4.27          | Form of 2014 Option Agreement for Option Awards                                                                                                                          |  | (f)
|4.28          | Form of 2015 Option Agreement for Option Awards                                                                                                                          |  | (f)
|4.29          | Trust Deed constituting the £50 million 6.50% Bonds due 2021, dated October 15, 2014                                                                                     |  | (f)
|4.30          | Amended Credit Agreement, between Eros International Plc, Citibank, N.A., London Branch, Lloyds TSB Bank Plc and the Royal Bank of Scotland Plc, dated February 12, 2015 |  | (f)
|4.31          | Form of Increase Confirmation, dated July 31, 2013, from HSBC Bank Plc to Lloyds TSB Bank Plc as Facility agent and Eros International Plc                               |  | (d)
|8.1           | Subsidiaries of Eros International Plc                                                                                                                                   |  | (a)
|12.1          | Certification of Principal Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a)                                                                                        |  | (a)
|12.2          | Certification of Principal Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a)                                                                                        |  | (a)
|13.1          | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350                                                                                          |  | (a)
|13.2          | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350                                                                                          |  | (a)
|15.2          | Consent to Use of Federation of Indian Chambers of Commerce and Industry – KPMG Indian Media and Entertainment Industry Reports                                          |  | (a)

___________________

|(a) | Filed herewith                                                                                                                                                                       
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Previously filed on March 30, 2012 as an exhibit to the Company’s Registration Statement on Form F-1 (File No. 333-180469) and incorporated herein by reference.                     
|(c) | Previously filed on April 24, 2012 as an exhibit to Amendment No. 1 to the Company’s Registration Statement on Form F-1 (File No. 333-180469) and incorporated herein by reference.  
|(d) | Previously filed on October 29, 2013 as an exhibit to Amendment No. 5 to the Company’s Registration Statement on Form F-1 (File No. 333-180469) and incorporated herein by reference.
|(e) | Previously filed on November 5, 2013 as an exhibit to Amendment No. 6 to the Company’s Registration Statement on Form F-1 (File No. 333-180469) and incorporated herein by reference.
|(f) | Previously filed on July 8, 2015 as an exhibit to the Company’s Annual Report on Form 20-F and incorporated herein by reference.                                                     



114






SIGNATURES



The registrant hereby certifies that it meets all of
the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual
report on its behalf.





|Date: July 26, 2016 | EROS INTERNATIONAL PLC
|------------------- | ----------------------
|                    |                       
|                    | By:                   
|                    | Name:                 
|                    | Title:                





115




EROS INTERNATIONAL PLC

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS





|Report of Independent Registered Public Accounting Firm Grant Thornton India LLP                  | F-2 
|------------------------------------------------------------------------------------------------- | ----
|Consolidated Statement of Financial Position as of March 31, 2016 and 2015                        | F-3 
|Consolidated Statements of Income for the Years Ended March 31, 2016, 2015 and 2014               | F-4 
|Consolidated Statements of Comprehensive Income for the Years Ended March 31, 2016, 2015 and 2014 | F-5 
|Consolidated Statements of Cash Flows for the Years Ended March 31, 2016, 2015 and 2014           | F-6 
|Consolidated Statements of Changes in Equity for the Years Ended March 31, 2016, 2015 and 2014    | F-7 
|Notes to the Consolidated Financial Statements                                                    | F-10



F-1









REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



Board of Directors and Shareholders

Eros International PLC

We have audited the accompanying consolidated
statements of financial position of Eros International PLC and subsidiaries (the “Company”) as of March 31, 2016 and
2015, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the
three years in the period ended March 31, 2016. These financial statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not
engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration
of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of Eros International PLC and subsidiaries
as of March 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years in the period
ended March 31, 2016, in conformity with International Financial Reporting Standards, as issued by the International Accounting
Standards Board.



/s/ Grant Thornton India LLP



Mumbai, India

July 26, 2016





F-2






EROS INTERNATIONAL PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT MARCH 31, 2016 AND 2015



|                                                                |  |      |  | As at March 31 |          
|--------------------------------------------------------------- |  | ---- |  | -------------- | ---------
|                                                                |  | Note |  | 2016           |          
|                                                                |  |      |  | (in thousands) |          
|ASSETS                                                          |  |      |  |                |          
|Non-current assets                                              |  |      |  |                |          
|Property, plant and equipment                                   |  | 13   |  | $              | 10,686   
|Goodwill                                                        |  | 14   |  |                | 1,878    
|Purchase price pending allocation                               |  | 4    |  |                | 5,561    
|Intangible assets — trade name                                  |  | 14   |  |                | 14,000   
|Intangible assets — content                                     |  | 15   |  |                | 795,139  
|Intangible assets — others                                      |  | 16   |  |                | 2,546    
|Available-for-sale financial assets                             |  | 17   |  |                | 30,147   
|Trade and other receivables                                     |  | 19   |  |                | 9,521    
|Deferred tax assets                                             |  | 11   |  |                | 167      
|Other non-current assets                                        |  |      |  |                | 3,512    
|Total non-current assets                                        |  |      |  | $              | 873,157  
|                                                                |  |      |  |                |          
|Current assets                                                  |  |      |  |                |          
|Inventories                                                     |  | 18   |  | $              | 287      
|Trade and other receivables                                     |  | 19   |  |                | 188,361  
|Current tax receivable                                          |  |      |  |                | 238      
|Cash and cash equivalents                                       |  | 21   |  |                | 182,774  
|Restricted deposits                                             |  |      |  |                | 1,822    
|Total current assets                                            |  |      |  |                | 373,482  
|                                                                |  |      |  |                |          
|Total assets                                                    |  |      |  | $              | 1,246,639
|                                                                |  |      |  |                |          
|LIABILITIES                                                     |  |      |  |                |          
|Current liabilities                                             |  |      |  |                |          
|Trade and other payables                                        |  | 20   |  | $              | 65,178   
|Short-term borrowings                                           |  | 23   |  |                | 219,275  
|Current tax payable                                             |  |      |  |                | 6,234    
|Total current liabilities                                       |  |      |  | $              | 290,687  
|                                                                |  |      |  |                |          
|Non-current liabilities                                         |  |      |  |                |          
|Long-term borrowings                                            |  | 23   |  | $              | 92,630   
|Other long term liabilities                                     |  |      |  |                | 536      
|Derivative financial instruments                                |  | 24   |  |                | 22,850   
|Deferred tax                                                    |  | 11   |  |                | 30,842   
|Total non-current liabilities                                   |  |      |  | $              | 146,858  
|                                                                |  |      |  |                |          
|Total liabilities                                               |  |      |  | $              | 437,545  
|                                                                |  |      |  |                |          
|EQUITY                                                          |  |      |  |                |          
|Share capital                                                   |  | 25   |  | $              | 30,793   
|Share premium                                                   |  |      |  |                | 356,865  
|Reserves                                                        |  |      |  |                | 423,151  
|Other components of equity                                      |  | 28   |  |                | (53,310  
|JSOP reserve                                                    |  | 27   |  |                | (17,167  
|Equity attributable to equity holders of Eros International Plc |  |      |  | $              | 740,332  
|                                                                |  |      |  |                |          
|Non-controlling interest                                        |  |      |  |                | 68,762   
|Total equity                                                    |  |      |  | $              | 809,094  
|Total liabilities and shareholder’s equity                      |  |      |  | $              | 1,246,639



The accompanying notes form an integral part
of these financial statements.

F-3






EROS INTERNATIONAL PLC

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED MARCH 31, 2016,
2015 AND 2014



|                                         |  |      |  | Year ended March 31                      |         
|---------------------------------------- |  | ---- |  | ---------------------------------------- | --------
|                                         |  | Note |  | 2016                                     |         
|                                         |  |      |  | (in thousands, except per share amounts) |         
|Revenue                                  |  | 5    |  | $                                        | 274,428 
|Cost of sales                            |  |      |  |                                          | (172,764
|Gross profit                             |  |      |  |                                          | 101,664 
|Administrative cost                      |  |      |  |                                          | (64,019 
|Operating profit                         |  |      |  |                                          | 37,645  
|Financing cost                           |  | 8    |  |                                          | (13,719 
|Finance income                           |  | 8    |  |                                          | 5,709   
|Net finance cost                         |  | 8    |  |                                          | (8,010  
|Other losses                             |  | 9    |  |                                          | (3,636  
|Profit before tax                        |  |      |  |                                          | 25,999  
|Income tax expense                       |  | 10   |  |                                          | (12,711 
|Profit for the year                      |  |      |  | $                                        | 13,288  
|Attributable to:                         |  |      |  |                                          |         
|Equity holders of Eros International Plc |  |      |  | $                                        | 3,797   
|Non-controlling interest                 |  |      |  |                                          | 9,491   
|                                         |  |      |  | $                                        | 13,288  
|Earnings per share (cents)               |  |      |  |                                          |         
|Basic earnings per share                 |  | 12   |  |                                          | 6.6     
|Diluted earnings per share               |  | 12   |  |                                          | 5.2     



The accompanying notes form an integral part
of these financial statements.



F-4






EROS INTERNATIONAL PLCCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED MARCH 31, 2016,
2015 AND 2014



|                                                                   |  |      |  | Year ended March 31                      |        
|------------------------------------------------------------------ |  | ---- |  | ---------------------------------------- | -------
|                                                                   |  | Note |  | 2016                                     |        
|                                                                   |  |      |  | (in thousands, except per share amounts) |        
|Profit for the year                                                |  |      |  | $                                        | 13,288 
|Other comprehensive income:                                        |  |      |  |                                          |        
|Items that will not be subsequently reclassified to profit or loss |  |      |  |                                          |        
|Revaluation of property (net of tax)                               |  |      |  |                                          | 399    
|                                                                   |  |      |  |                                          |        
|Items that will be subsequently reclassified to profit or loss     |  |      |  |                                          |        
|Exchange differences on translating foreign operations             |  |      |  |                                          | (12,993
|Reclassification of cash flow hedge to income statement            |  |      |  |                                          | 804    
|Impairment loss on available-for-sale financial assets             |  |      |  |                                          | —      
|Total other comprehensive (loss) for the year                      |  |      |  | $                                        | (11,790
|Total comprehensive income for the period, net of tax              |  |      |  | $                                        | 1,498  
|                                                                   |  |      |  |                                          |        
|Attributable to                                                    |  |      |  |                                          |        
|Equity holders of Eros International Plc                           |  |      |  |                                          | (5,632 
|Non-controlling interest                                           |  |      |  |                                          | 7,130  



The accompanying notes form an integral part of these financial statements.



F-5






EROS INTERNATIONAL PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED MARCH 31, 2016,
2015 AND 2014

|                                                                                         |  |      |  | Year ended March 31 |         
|---------------------------------------------------------------------------------------- |  | ---- |  | ------------------- | --------
|                                                                                         |  | Note |  | 2016                |         
|                                                                                         |  |      |  | (in thousands)      |         
|Cash flow from operating activities                                                      |  |      |  |                     |         
|Profit before tax                                                                        |  |      |  | $                   | 25,999  
|Adjustments for:                                                                         |  |      |  |                     |         
|Depreciation                                                                             |  | 13   |  |                     | 1,154   
|Share based payment                                                                      |  | 26   |  |                     | 30,992  
|Amortization of intangible film and content rights                                       |  | 15   |  |                     | 128,303 
|Amortization of other intangible assets                                                  |  | 16   |  |                     | 1,131   
|Other non-cash items                                                                     |  | 29   |  |                     | 4,562   
|Net finance costs                                                                        |  | 8    |  |                     | 8,010   
|Movement in trade and other receivables                                                  |  |      |  |                     | 19,690  
|Movement in inventories                                                                  |  |      |  |                     | 189     
|Movement in trade and other payables                                                     |  |      |  |                     | 31,457  
|(Gain)/loss on sale of property, plant and equipment                                     |  |      |  |                     | (3      
|Cash generated from operations                                                           |  |      |  |                     | 251,484 
|Interest paid                                                                            |  |      |  |                     | (12,536 
|Income taxes paid                                                                        |  |      |  |                     | (4,349  
|Net cash generated from operating activities                                             |  |      |  | $                   | 234,599 
|                                                                                         |  |      |  |                     |         
|Cash flows from investing activities                                                     |  |      |  |                     |         
|Advance given to an undertaking                                                          |  | 4    |  | $                   | —       
|Purchase of available for sale investment                                                |  |      |  |                     | (230    
|Purchase of property, plant and equipment                                                |  |      |  |                     | (1,702  
|Proceeds from disposal of property, plant and equipment                                  |  |      |  |                     | 56      
|Proceeds from/(investment in) restricted deposits held with banks                        |  |      |  |                     | 76      
|Acquisition of cash and cash equivalent in subsidiary                                    |  |      |  |                     | 263     
|Purchase of intangible film rights and content rights                                    |  |      |  |                     | (211,253
|Purchase of other intangible assets                                                      |  |      |  |                     | (1,500  
|Interest received                                                                        |  |      |  |                     | 2,935   
|Net cash used in investing activities                                                    |  |      |  | $                   | (211,355
|                                                                                         |  |      |  |                     |         
|Cash flows from financing activities                                                     |  |      |  |                     |         
|Proceeds from issue of share capital, net of transaction costs                           |  |      |  | $                   | 5,414   
|Proceeds from issue of shares by subsidiary                                              |  |      |  |                     | 137     
|Proceeds from issue out of treasury shares                                               |  |      |  |                     | 6,294   
|Proceeds from/(repayment of) short term debt with maturity less than three months (net)  |  |      |  |                     | 1,918   
|Proceeds from short term debt                                                            |  |      |  |                     | 79,695  
|Repayment of short term debt                                                             |  |      |  |                     | (72,746 
|Proceeds from long term debt, net of transaction costs of $139 (2015: $1,909,2014: $Nil) |  |      |  |                     | 13,847  
|Repayment of long term debt                                                              |  |      |  |                     | (26,962 
|Net cash generated from financing activities                                             |  |      |  | $                   | 7,597   
|                                                                                         |  |      |  |                     |         
|Net increase in cash and cash equivalents                                                |  |      |  |                     | 30,841  
|                                                                                         |  |      |  |                     |         
|Effects of exchange rate changes on cash and cash equivalents                            |  |      |  |                     | (1,731  
|Cash and cash equivalents at beginning of year                                           |  |      |  |                     | 153,664 
|Cash and cash equivalents at the end of year                                             |  |      |  | $                   | 182,774 



During the year ended March 31, 2016, the Company's
subsidiary, Eros International Media Limited, issued 900,970 equity shares as consideration for the acquisition of Universal
Power Systems Private Limited (“Techzone”). See Note 4 for details.





The accompanying
notes form an integral part of these financial statements.

F-6




EROS INTERNATIONAL PLC

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED MARCH 31, 2016



|                                                                                       |                |        |                     |   | Other components of equity |  | Reserves                     |          |                    |   |                |  |                           |       |               |  
|-------------------------------------------------------------------------------------- | -------------- | ------ | ------------------- | - | -------------------------- |  | ---------------------------- | -------- | ------------------ | - | -------------- |  | ------------------------- | ----- | ------------- | -
|                                                                                       | Sharecapital   |        | Sharepremiumaccount |   | Currencytranslationreserve |  | Availablefor saleinvestments |          | Revaluationreserve |   | Hedgingreserve |  | Reverseacquisitionreserve |       | Mergerreserve |  
|                                                                                       | (in thousands) |       
|Balance as of April 1, 2015                                                            | $              | 30,622 |                     | $ | 345,385                    |  | $                            | (50,048  | )                  | $ | 6,622          |  | $                         | 1,528 |               | $
|                                                                                       |                |        |                     |   |                            |  |                              |          |                    |   |                |  |                           |       |               |  
|Profit for the year                                                                    |                | —      |                     |   | —                          |  |                              | —        |                    |   | —              |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |  |                              |          |                    |   |                |  |                           |       |               |  
|Other comprehensive income/(loss) for the year                                         |                | —      |                     |   | —                          |  |                              | (10,561) |                    |   | —              |  |                           | 328   |               |  
|                                                                                       |                |        |                     |   |                            |  |                              |          |                    |   |                |  |                           |       |               |  
|Total comprehensive income/(loss) for the year                                         |                | —      |                     |   | —                          |  |                              | (10,561) |                    |   | —              |  |                           | 328   |               |  
|                                                                                       |                |        |                     |   |                            |  |                              |          |                    |   |                |  |                           |       |               |  
|Issue of shares, net of transaction costs of Nil (refer Note 25)                       |                | 153    |                     |   | 5,302                      |  |                              | —        |                    |   | —              |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |  |                              |          |                    |   |                |  |                           |       |               |  
|Share based compensation                                                               |                | 18     |                     |   | 7,191                      |  |                              | —        |                    |   | —              |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |  |                              |          |                    |   |                |  |                           |       |               |  
|Issue out of Treasury Shares (Refer Note 27)                                           |                | —      |                     |   | (1,013)                    |  |                              | —        |                    |   | —              |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |  |                              |          |                    |   |                |  |                           |       |               |  
|Changes in ownership interests in subsidiaries that do not result in a loss of control |                | —      |                     |   | —                          |  |                              | —        |                    |   | —              |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |  |                              |          |                    |   |                |  |                           |       |               |  
|Balance as of March 31, 2016                                                           | $              | 30,793 |                     | $ | 356,865                    |  | $                            | (60,609) |                    | $ | 6,622          |  | $                         | 1,856 |               | $



The accompanying notes form an integral part
of these financial statements.



F-7






EROS INTERNATIONAL PLC

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED MARCH 31, 2015



|                                                                                       |                |        |                     |   | Other components of equity |   | Reserves                     |         |                    |   |                |  |                           |       |               |  
|-------------------------------------------------------------------------------------- | -------------- | ------ | ------------------- | - | -------------------------- | - | ---------------------------- | ------- | ------------------ | - | -------------- |  | ------------------------- | ----- | ------------- | -
|                                                                                       | Sharecapital   |        | Sharepremiumaccount |   | Currencytranslationreserve |   | Availablefor saleinvestments |         | Revaluationreserve |   | Hedgingreserve |  | Reverseacquisitionreserve |       | Mergerreserve |  
|                                                                                       | (in thousands) |       
|                                                                                       |                |       
|Balance as of April 1, 2014                                                            | $              | 26,322 |                     | $ | 223,333                    |   | $                            | (43,858 | )                  | $ | 5,802          |  | $                         | 1,528 |               | $
|                                                                                       |                |        |                     |   |                            |   |                              |         |                    |   |                |  |                           |       |               |  
|Profit for the year                                                                    |                | —      |                     |   | —                          |   |                              | —       |                    |   | —              |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |   |                              |         |                    |   |                |  |                           |       |               |  
|Other comprehensive income/(loss) for the year                                         |                | —      |                     |   | —                          |   |                              | (6,190  | )                  |   | 820            |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |   |                              |         |                    |   |                |  |                           |       |               |  
|Total comprehensive income/(loss) for the year                                         |                | —      |                     |   | —                          |   |                              | (6,190  | )                  |   | 820            |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |   |                              |         |                    |   |                |  |                           |       |               |  
|Issue of shares, net of transaction costs of $6,057 (refer Note 25)                    |                | 4,026  |                     |   | 106,001                    |   |                              | —       |                    |   | —              |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |   |                              |         |                    |   |                |  |                           |       |               |  
|Issue out of treasury shares (refer Note 27)                                           |                | —      |                     |   | (143                       | ) |                              | —       |                    |   | —              |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |   |                              |         |                    |   |                |  |                           |       |               |  
|Share based compensation                                                               |                | 274    |                     |   | 16,194                     |   |                              | —       |                    |   | —              |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |   |                              |         |                    |   |                |  |                           |       |               |  
|Changes in ownership interests in subsidiaries that do not result in a loss of control |                | —      |                     |   | —                          |   |                              | —       |                    |   | —              |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |   |                              |         |                    |   |                |  |                           |       |               |  
|Balance as of March 31, 2015                                                           | $              | 30,622 |                     | $ | 345,385                    |   | $                            | (50,048 | )                  | $ | 6,622          |  | $                         | 1,528 |               | $



The accompanying notes form an integral part
of these financial statements.



F-8






EROS INTERNATIONAL PLC

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED MARCH 31, 2014



|                                                                                       |                |        |                     |   | Other components of equity |  | Reserves                     |         |                    |   |                |  |                           |       |               |  
|-------------------------------------------------------------------------------------- | -------------- | ------ | ------------------- | - | -------------------------- |  | ---------------------------- | ------- | ------------------ | - | -------------- |  | ------------------------- | ----- | ------------- | -
|                                                                                       | Sharecapital   |        | Sharepremiumaccount |   | Currencytranslationreserve |  | Availablefor saleinvestments |         | Revaluationreserve |   | Hedgingreserve |  | Reverseacquisitionreserve |       | Mergerreserve |  
|                                                                                       | (in thousands) |       
|Balance as of April 1, 2013                                                            | $              | 22,653 |                     | $ | 159,547                    |  | $                            | (32,742 | )                  | $ | 5,802          |  | $                         | 1,528 |               | $
|                                                                                       |                |        |                     |   |                            |  |                              |         |                    |   |                |  |                           |       |               |  
|Profit for the year                                                                    |                | —      |                     |   | —                          |  |                              | —       |                    |   | —              |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |  |                              |         |                    |   |                |  |                           |       |               |  
|Other comprehensive income/(loss) for the year                                         |                | —      |                     |   | —                          |  |                              | (11,116 | )                  |   | —              |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |  |                              |         |                    |   |                |  |                           |       |               |  
|Total comprehensive income/(loss) for the year                                         |                | —      |                     |   | —                          |  |                              | (11,116 | )                  |   | —              |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |  |                              |         |                    |   |                |  |                           |       |               |  
|Issue of shares                                                                        |                | 3,437  |                     |   | 47,171                     |  |                              | —       |                    |   | —              |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |  |                              |         |                    |   |                |  |                           |       |               |  
|Dividend paid by a subsidiary                                                          |                | —      |                     |   | —                          |  |                              | —       |                    |   | —              |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |  |                              |         |                    |   |                |  |                           |       |               |  
|Share based compensation                                                               |                | 232    |                     |   | 16,615                     |  |                              | —       |                    |   | —              |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |  |                              |         |                    |   |                |  |                           |       |               |  
|Changes in ownership interests in subsidiaries that do not result in a loss of control |                | —      |                     |   | —                          |  |                              | —       |                    |   | —              |  |                           | —     |               |  
|                                                                                       |                |        |                     |   |                            |  |                              |         |                    |   |                |  |                           |       |               |  
|Balance as of March 31, 2014                                                           | $              | 26,322 |                     | $ | 223,333                    |  | $                            | (43,858 | )                  | $ | 5,802          |  | $                         | 1,528 |               | $



The accompanying notes form an integral part
of these financial statements.



F-9






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



|1 | NATURE OF OPERATIONS, GENERAL INFORMATION AND BASIS OF PREPARATION
|- | ------------------------------------------------------------------



Eros International Plc (“Eros” or the “Company”)
and its subsidiaries’ (together with Eros, the “Group”) principal activities include the acquisition, co-production
and distribution of Indian films and related content. Eros International Plc is the Group’s ultimate parent company. It is
incorporated and domiciled in the Isle of Man. The address of Eros International Plc’s registered office is Fort Anne, Douglas, Isle
of Man IM1 5PD.



The consolidated financial statements of the Group have been prepared
in accordance with International Financial Reporting Standards (“IFRSs”), as issued by the International Accounting
Standards Board. The financial statements have been prepared on accrual basis and under the historical cost convention on a going
concern basis, with the exception of revaluation of certain properties and certain financial instruments that have been measured
at fair value as required by relevant IFRSs.



The Group’s accounting policies as set out below have been
applied consistently throughout the Group to all the periods presented, unless otherwise stated. The financial statements of each
of the Company’s subsidiaries are measured using the currency of the primary economic environment in which these entities
operate (i.e the functional currency). The consolidated financial statements are presented in US Dollars (USD) which is the presentation
currency of the Company and has been rounded off to the nearest thousands.



The financial statements for the year ended March 31, 2016
were approved by the Eros Board of Directors and authorized for issue on July 26, 2016.



|2 | GOING CONCERN
|- | -------------



The Group meets its day to day working capital requirements and
funds its investment in content primarily through a variety of banking arrangements and cash generated from operations. Under the
terms of such banking arrangements the Group is able to draw down in the local currencies of its operating businesses. The net
foreign currency monetary assets and liabilities position at March 31, 2016 and 2015 are shown in Note 30.



The borrowings (as set out in Note 23) are subject to individual
covenants which vary but include provisions such as a fixed charge over certain assets, total available facilities against statement
of financial position value, net debt against earnings before interest, income, tax expense, depreciation, certain impairments
and amortization (“EBITDA”), certain financial ratios (such as a leverage ratio and fixed cover ratio), and a negative
pledge that restricts the Group’s ability to incur liens, security interests or similar encumbrances or arrangements on its
assets. The Group is cash generating before capital expenditures and is in full compliance with the covenants contained in its
existing debt facilities.



The Group is exposed to uncertainties arising from the global economic
climate and also in the markets in which it operates. Market conditions could lead to lower than anticipated demand for the Group’s
products and services and exchange rate volatility could also impact reported performance. Management has considered the impact
of these and other uncertainties and factored them into their financial forecasts and assessment of covenant headroom. The Group’s
forecasts and projections, taking account of reasonably possible changes in trading performance (and available mitigating actions),
show that the Group will be able to operate within the expected limits of the facilities and provide headroom against the covenants
for the foreseeable future. For this reason, Management continues to adopt the going concern basis in preparing the financial statements.



|3 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|- | ------------------------------------------



|3.1. | Overall Considerations
|---- | ----------------------



The significant accounting policies that have been used in the preparation
of these consolidated financial statements are summarized below. Financial statements are subject to the application of significant
accounting estimates and judgments. These are summarized in Note 36.

F-10






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



|3.2. | Basis of Consolidation
|---- | ----------------------



The Group financial statements consolidate results of the Company
and entities controlled by the Company and its subsidiary undertakings. Control exists when the Company has existing rights that
give the Company the current ability to direct the activities which affect the entity’s returns; the Company is exposed to
or has rights to a return which may vary depending on the entity’s performance; and the Company has the ability to use its
powers to affect its own returns from its involvement with the entity.



Unrealized gains on transactions between the Group and its subsidiaries
are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the
accounting policies adopted by the Group.



Business combinations are accounted for under the purchase method.
The purchase method involves the recognition at fair value of all identifiable assets and liabilities, including contingent liabilities
of the subsidiary, at the acquisition date, regardless of whether or not they were recorded in the financial statements of the
subsidiary prior to acquisition. On initial recognition, the assets and liabilities of the subsidiary are included in the consolidated
statement of financial position at their fair values, which are also used as the bases for subsequent measurement in accordance
with the Group accounting policies. Transaction costs that the company incurs in connection with a business combination such as
finder’s fees, legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred. Goodwill
is stated after separating out identifiable intangible assets. Goodwill represents the excess of acquisition cost over the fair
value of the Group’s share of the identifiable net assets of the acquired subsidiary at the date of acquisition.



Changes in controlling interest in a subsidiary that do not result
in gaining or losing control are not business combinations as defined by IFRS 3. The Group adopts the “equity transaction
method” which regards the transaction as a realignment of the interests of the different equity holders in the Group. Under
the equity transaction method an increase or decrease in the Group’s ownership interest is accounted for as follows:

| | · | the non-controlling component of equity is adjusted to reflect the non-controlling interest revised share of the net carrying
value of the subsidiaries net assets;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | the difference between the consideration received or paid and the adjustment to non-controlling interests is debited or credited
to a different component of equity — merger reserves;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | no adjustment is made to the carrying amount of goodwill or the subsidiaries’ net assets as reported in the consolidated
financial statements; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------

| | · | no gain or loss is reported in the income statement.
| | - | ----------------------------------------------------



|3.3. | Segment Reporting
|---- | -----------------



IFRS 8 Operating Segments (“IFRS 8”) requires operating
segments to be identified on the same basis as is used internally for the review of performance and allocation of resources by
the Group chief executive officer. The revenues of films are earned over various formats; all such formats are functional activities
of filmed entertainment and these activities take place on an integrated basis. The management team reviews the financial information
on an integrated basis for the Group as a whole, with respective heads of business for each region and in accordance with IFRS
8, the Company provides a geographical split as it considers that all activities fall within one segment of business which is filmed
entertainment. The management team also monitors performance separately for individual films or for at least 12 months after the
theatrical release. Certain resources such as publicity and advertising, and the cost of a film are also reviewed globally.



Eros has identified four geographic areas, consisting of its main
geographic areas (India, North America and Europe), together with the rest of the world.



|3.4. | Revenue
|---- | -------



Revenue is recognized, net of sales related taxes, when persuasive
evidence of an arrangement exists, the fees are fixed or determinable, the product is delivered or services have been rendered
and collectability is reasonably assured. The Group considers the terms of each arrangement to determine the appropriate accounting
treatment.



F-11






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



The following additional criteria apply in respect of various revenue
streams within filmed entertainment:

| | · | Theatrical — Contracted minimum guarantees are recognized on the theatrical release date. The Group’s share
of box office receipts in excess of the minimum guarantee is recognized at the point they are notified to the Group.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Television — License fees received in advance which do not meet all the above criteria are included in deferred
income until the above criteria is met.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Other — DVD, CD and video distribution revenue is recognized on the date the product is delivered or if licensed
in line with the above criteria. Provision is made for physical returns where applicable. Digital and ancillary media revenues
are recognized at the earlier of when the content is accessed or declared. Visual effects, production and other fees for services
rendered by the Group and overhead recharges are recognized in the period in which they are earned and in certain cases, the stage
of production is used to determine the proportion recognized in the period.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.5. | Goodwill
|---- | --------



Goodwill represents the excess of the consideration transferred
in a business combination over the fair value of the Group’s share of the identifiable net assets acquired. Goodwill is carried
at cost less accumulated impairment losses. Gain on bargain purchase is recognized immediately after acquisition in the consolidated
income statement.



|3.6. | Intangible Assets
|---- | -----------------



Non-Current Intangible assets acquired by the Group are stated at
cost less accumulated amortization less impairment loss, if any, except those acquired as part of a business combination, which
are shown at fair value at the date of acquisition less accumulated amortization less impairment loss, if any (film production
cost and content advances are transferred to film and content rights at the point at which content is first exploited). “Eros”
(the “Trade name”) is considered to have an indefinite life because of the institutional nature of the corporate brand
name, its proven ability to maintain market leadership and the Group’s commitment to develop, enhance and retain its value.
The carrying value is reviewed at least annually for impairment and adjusted to recoverable amount if required.



Content



Investments in films and associated rights, including acquired rights
and distribution advances in respect of completed films, are stated at cost less amortization less provision for impairment. Costs
include production costs, overhead and capitalized interest costs net of any amounts received from third party investors. A charge
is made to write down the cost of completed rights over the estimated useful lives, writing off more in year one which recognizes
initial income flows and then the balance over a period of up to nine years, except where the asset is not yet available for exploitation.
The average life of the assets is the lesser of 10 years or the remaining life of the content rights. The amortization charge is
recognized in the income statement within cost of sales. The determination of useful life is based upon Management’s judgment
and includes assumptions on the timing and future estimated revenues to be generated by these assets, which are summarized in Note 36.3.



Others



Other intangible assets, which comprise internally generated and
acquired software used within the Group’s digital, home entertainment and internal accounting activities, are stated at cost
less amortization less provision for impairment. A charge is made to write down the cost of completed rights over the estimated
useful lives except where the asset is not yet available for exploitation. The average life of the assets is the lesser of 3 years
or the remaining life of the asset. The amortization charge is recognized in the income statement within administrative expenses
as stated below



|                           |  | Life of asset | Rate ofamortization% straight lineper annum | 
|-------------------------- |  | ------------- | ------------------------------------------- | 
|Internally generatedassets |  | 3 years       | 33                                          | 
|Other applications         |  | 3 - 6 years   | 17 - 33                                     | 



F-12






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



Subsequent expenditure



Expenditure on capitalized intangible assets subsequent to the original
expenditure is included only when it increases the future economic benefits embodied in the specific asset to which it relates.



Internally generated assets



An internally generated intangible asset arising from the Group’s
software development activities that is expected to be completed is recognized only if all the following criteria are met:

| | · | an asset is created that can be identified (such as software and new processes);
| | - | --------------------------------------------------------------------------------

| | · | it is probable that the asset created will generate future economic benefits; and
| | - | ---------------------------------------------------------------------------------

| | · | the development cost can be measured reliably.
| | - | ----------------------------------------------



When these criteria are met and there are appropriate resources
to complete development, the expenditure is capitalized at cost. Where these criteria are not met development expenditure is recognized
as an expense in the period in which it is incurred. Internally generated intangible assets are amortized over their useful economic
life from the date that they start generating future economic benefits.



|3.7. | Impairment Testing of Goodwill, Other Intangible Assets and Property, Plant and Equipment.
|---- | ------------------------------------------------------------------------------------------



For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash flows (cash-generating units). As a result, some assets are
tested individually for impairment and some are tested at the cash-generating unit level. Goodwill is allocated to those cash-generating
units that are expected to benefit from synergies of the related business combination and represent the lowest level within the
Group at which Management monitors the related cash flows.



Goodwill and Trade names are tested for impairment at least annually.
All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable.



An impairment loss is recognized for the amount by which the asset’s
or cash-generating unit’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of fair value,
reflecting market conditions less costs to sell, and value in use based on an internal discounted cash flow evaluation. Impairment
losses recognized for cash-generating units, to which goodwill has been allocated, are credited initially to the carrying amount
of goodwill. Any remaining impairment loss is charged pro rata to the other assets in the cash generating unit.



Film and content rights are stated at the lower of unamortized cost
and estimated recoverable amounts. In accordance with IAS 36 Impairment of Assets, film content costs are assessed for indication
of impairment on a library basis as the nature of the Group’s business, the contracts it has in place and the markets it
operates in do not yet make an ongoing individual film evaluation feasible with reasonable certainty. Impairment losses on content
advances are recognized when film production does not seem viable and refund of the advance is not probable.



With the exception of goodwill, all assets are subsequently reassessed
for indications that an impairment loss previously recognized may no longer exist.



|3.8. | Property, Plant & Equipment
|---- | ---------------------------



Property, plant and equipment are stated at historical cost less
accumulated depreciation and impairment. Land and freehold buildings are shown at what Management believes to be their fair value,
based on, among other things, periodic but at least triennial valuations by an external independent valuer, less subsequent depreciation
for freehold buildings. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount
of the asset and the net amount is restated to the revalued amount. Increases in the carrying amount arising on revaluation of
freehold land and buildings are credited to other reserves in shareholders’ equity. Decreases that offset previous increases
are charged against other reserves.



F-13






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



Depreciation is provided to write off the cost of all property,
plant and equipment to their residual value as stated below:



|                                   |  | Life of Asset |  | Rate ofdepreciation% straight lineper annum | 
|---------------------------------- |  | ------------- |  | ------------------------------------------- | 
|Freehold Building                  |  | 10 years      |  | 2-10                                        | 
|Furniture & Fixtures and Equipment |  | 5 years       |  | 15-20                                       | 
|Vehicles and Plant & Machinery     |  | 3-5 years     |  | 20-30                                       | 



Material residual value estimates are updated as required, but at
least annually, whether or not the asset is revalued.



Advance paid towards the acquisition or improvement of property
and equipment not ready for use before the reporting date are disclosed as capital work in progress.



|3.9. | Inventories
|---- | -----------



Inventories primarily comprise of music CDs and DVDs, and are valued
at the lower of cost and net realizable value. Cost in respect of goods for resale is defined as purchase price, including appropriate
labor costs and other overhead costs. Cost in respect of raw materials is purchase price.



Purchase price is assigned using a weighted average basis. Net realizable
value is defined as anticipated selling price or anticipated revenue less cost to completion.



|3.10. | Cash and Cash Equivalents
|----- | -------------------------



Cash and cash equivalents include cash in hand, deposits held at
call with banks, other short-term highly liquid investments which are readily convertible into known amounts of cash and are subject
to insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities on the statement
of financial position.



|3.11. | Restricted Deposits held with Banks
|----- | -----------------------------------



Deposits held with banks as security for overdraft facilities are
included in restricted deposits held with bank.



|3.12. | Borrowings
|----- | ----------



Borrowings are recognized initially at fair value, net of transaction
costs incurred. Borrowings are subsequently stated at amortized cost with any difference between the proceeds (net of transaction
costs) and the redemption value recognized in the income statement within Finance costs over the period of the borrowings using
the effective interest method. Finance costs in respect of film productions and other assets which take a substantial period of
time to get ready for use or for exploitation are capitalized as part of the asset.



Borrowings are classified as current liabilities unless the Group
has an unconditional right to defer settlement of the liability for at least 12 months after the statement of financial position
date.



|3.13. | Financial Instruments
|----- | ---------------------



Financial assets and financial
liabilities are recognized when a Group entity becomes party to the contractual provisions of the instrument.



Financial assets and liabilities
are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial
assets or liabilities (other than financial assets and liabilities at fair value through profit and loss) are added to or deducted
from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss are
recognized immediately in profit or loss. Financial assets and financial liabilities are
offset against each other and the net amount reported in the consolidated statement of financial position if, and only if, there
is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or
to realize the assets and settle the liabilities simultaneously.



F-14






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



A financial instrument is held for trading if:

| | · | it has been acquired principally for the purpose of selling/repurchasing it in the near term;                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | · | on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent pattern of short-term profit taking; or
| | · | it is a derivative that is not designated in a hedging relationship.                                                                                                         



The fair value of financial instruments denominated in a foreign
currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. The foreign
exchange component forms part of its fair value gain or loss. Therefore for financial instruments that are classified as fair value
through profit and loss, the exchange component is recognized in profit and loss through “other losses.”



|3.14. | Financial Assets
|----- | ----------------



Financial assets are divided into the following categories:

| | · | financial assets at fair value through profit and loss;
| | - | -------------------------------------------------------
| | · | loans and receivables;                                 
| | · | held-to-maturity investments; and                      
| | · | available-for-sale financial assets.                   



Financial assets are assigned to the different categories by Management
on initial recognition, depending on the nature and purpose of the financial assets. The designation of financial assets is re-evaluated
at every reporting date at which a choice of classification or accounting treatment is available.



Loans and receivables



Loans and receivables are non-derivative financial assets with fixed
or determinable payments that are not quoted in an active market. Loans and receivables (including trade and other receivables,
bank and cash balances) are measured subsequent to initial recognition at amortized cost using the effective interest method, less
provision for impairment. Any change in their value through impairment or reversal of impairment is recognized in the income statement.



Provision against trade receivables is made when there is objective
evidence that the Group will not be able to collect all amounts due to it in accordance with the original terms of those receivables.
The amount of the write-down is determined as the difference between the asset’s carrying amount and the present value of
estimated future cash flows.



Held-to-maturity investments



Held-to-maturity investments are non-derivative financial assets
with fixed or determinable payments and fixed maturities that the Group’s management has the positive intention and ability
to hold to maturity.



Available-for-sale financial assets



Available-for-sale financial assets include non-derivative financial
assets that are either designated as such or do not qualify for inclusion in any of the other categories of financial assets. All
financial assets within this category are measured subsequently at fair value, with changes in fair value recognized in other comprehensive
income. Gains and losses arising from investments classified as available-for-sale are recognized in the income statement when
they are sold or when the investment is impaired.



In the case of impairment of available-for-sale assets, any loss
previously recognized in other comprehensive income is transferred to the income statement. Impairment losses recognized in the
income statement on equity instruments are not reversed through the income statement. Impairment losses recognized previously on
debt securities are reversed through the income statement when the increase can be related objectively to an event occurring after
the impairment loss was recognized in the income statement.



F-15






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



Where the Group consider that fair value can be reliably measured
the fair values of financial instruments that are not traded in an active market are determined by using valuation techniques.
The Group applies its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing
at each statement of financial position date. Available-for-sale equity instruments that do not have a quoted price in an active
market and whose fair value cannot be reliably measured are measured at cost less impairment at the end of each reporting period.



An assessment for impairment is undertaken at least at each statement
of financial position date.



A financial asset is de-recognized only where the contractual rights
to the cash flows from the asset expire or the financial asset is transferred and that transfer qualifies for de-recognition. A
financial asset is transferred if the contractual rights to receive the cash flows of the asset have been transferred or the Group
retains the contractual rights to receive the cash flows of the asset but assumes a contractual obligation to pay the cash flows
to one or more recipients. A financial asset that is transferred qualifies for de-recognition if the Group transfers substantially
all the risks and rewards of ownership of the asset, or if the Group neither retains nor transfers substantially all the risks
and rewards of ownership but does transfer control of that asset.



|3.15. | Financial Liabilities
|----- | ---------------------



Financial liabilities are classified as either ‘financial
liabilities at fair value through profit or loss’ or ‘other financial liabilities’. Financial liabilities are
subsequently measured at amortized cost using the effective interest method or at fair value through profit or loss.



Financial liabilities are classified as at fair value through profit
or loss when the financial liability is held for trading such as a derivative, except for a designated and effective hedging instrument,
or if upon initial recognition it is thus designated to eliminate or significantly reduce measurement or recognition inconsistency
or it forms part of a contract containing one or more embedded derivatives and the contract is designated as fair value through
profit or loss.



Financial liabilities at fair value through profit or loss are stated
at fair value. Any gains or losses arising of held for trading financial liabilities are recognized in profit or loss. Such gains
or losses incorporate any interest paid and are included in the “other gains and losses” line item.



Other financial liabilities (including borrowing and trade and other
payables) are subsequently measured at amortized cost using the effective interest method.



The effective interest method is a method of calculating the amortized
cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate
that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part
of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability,
or (where appropriate) a shorter period, to the net carrying amount on initial recognition.



A financial liability is derecognized only when the obligation is
extinguished, that is, when the obligation is discharged or cancelled or expires. Changes in liabilities’ fair value that
are reported in profit or loss are included in the income statement within finance costs or finance income.



|3.16. | Derivative Financial Instruments
|----- | --------------------------------



The Group uses derivative financial instruments (“derivatives”)
to reduce its exposure to interest rate movements.



Derivatives are initially recognized at fair value at the date the
derivative contracts are entered into and are subsequently re-measured to their fair value at the end of each reporting period.
The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging
instrument, in which event the timing of the recognition in the profit or loss depends on the nature of the hedge relationship.



At the inception of the hedge relationship, the Group documents
the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy
for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents
whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item attributable
to the hedged risk.



F-16






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



Cash flow hedging



The effective portion of changes in the fair value of derivatives
that are designated and qualify as cash flow hedges is recognized in other comprehensive income and accumulated under the heading
of other reserves. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss, and is included
in the ‘other gains and losses’ line item.



Amounts previously recognized in other comprehensive income and
accumulated in equity are reclassified to profit or loss in the periods when the hedged item is recognized in profit or loss, in
the same line of the consolidated income statement as the recognized hedged item. However, when the hedged forecast transaction
results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously recognized in
other comprehensive income and accumulated in equity are transferred from equity and included in the initial measurement of the
cost of the non-financial asset or non-financial liability.



Cash flow hedge accounting is discontinued when the Group revokes
the hedging relationship, when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies
for hedge accounting. Any gain or loss recognized in other comprehensive income and accumulated in equity at that time remains
in equity and is recognized when the forecast transaction is ultimately recognized in profit or loss. When a forecast transaction
is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in profit or loss.



|3.17. | Provisions
|----- | ----------



Provisions are recognized when the Group has a present legal or
constructive obligation as a result of a past event, it is more likely than not that an outflow of resources will be required to
settle the obligations and can be reliably measured. Provisions are measured at Management’s best estimate of the expenditure
required to settle the obligations at the statement of financial position date and are discounted to present value where the effect
is material.



|3.18. | Leases
|----- | ------



Leases in which significantly all the risks and rewards incidental
to ownership are not transferred to the lessee are classified as operating leases. Payments under such leases are charged to the
income statement on a straight line basis over the period of the lease.



|3.19. | Taxation
|----- | --------



Taxation on profit and loss comprises current tax and deferred tax.
Tax is recognized in the income statement except to the extent that it relates to items recognized directly in equity or other
comprehensive income in which case it is recognized in equity or other comprehensive income.



Current tax is provided at amounts expected to be paid (or recovered)
using the tax rates and laws that have been enacted at the statement of financial position date along with any adjustment relating
to tax payable in previous years.



Deferred income tax is provided in full, using the liability method,
on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated
financial statements. Deferred income tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws
that have been enacted or substantively enacted at the statement of financial position date and are expected to apply when the
related deferred income tax asset is realized or the deferred income tax liability is settled in the appropriate territory.



Deferred tax in respect of undistributed earnings of subsidiaries
is recognized except where the Group is able to control the timing of the reversal of the temporary difference and that the temporary
difference will not reverse in the foreseeable future. Deferred income tax assets are recognized to the extent that it is probable
that future taxable profit will be available against which temporary differences can be utilized.



Deferred tax assets and deferred tax liabilities are offset if,
and only if the Group has a legally enforceable right to set off current tax assets against current tax liabilities and the deferred
tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable
entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize
the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities
or assets are expected to be settled or recovered.

F-17






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



|3.20. | Employee Benefits
|----- | -----------------



The Group operates defined contribution pension plans and healthcare
and insurance plans on behalf of its employees. The amounts due are all expensed as they fall due.



In accordance with IFRS 2 Share Based Payments, the fair value of
shares or options granted is recognized as personnel costs with a corresponding increase in equity. The fair value is measured
at the grant date and spread over the period during which the recipient becomes unconditionally entitled to payment unless forfeited
or surrendered.



The fair value of share options granted is measured using the Black
Scholes model or a Monte-Carlo simulation model, each taking into account the terms and conditions upon which the grants are made.
At each statement of financial position date, the Group revises its estimate of the number of equity instruments expected to vest
as a result of non-market-based vesting conditions. The amount recognized as an expense is adjusted to reflect the revised estimate
of the number of equity instruments that are expected to become exercisable, with a corresponding adjustment to equity reserves.
None of the Group plans feature any options for cash settlements.



Upon exercise of share options, the proceeds received net of any
directly attributable transaction costs up to the nominal value of the shares are allocated to share capital with any excess being
recorded as share premium.



|3.21. | Foreign Currencies
|----- | ------------------



Transactions in foreign currencies are translated at the rates of
exchange prevailing on the dates of the transactions. Monetary assets and liabilities in foreign currencies are translated at the
prevailing rates of exchange at the statement of financial position date. Non-monetary items that are measured at historical cost
in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary items that are measured
at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.



Any exchange differences arising on the settlement of monetary items
or on translating monetary items at rates different from those at which they were initially recorded are recognized in the income
statement in the period in which they arise. Non-monetary items carried at fair value that are denominated in foreign currencies
are translated at rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms
of historical cost in a foreign currency are not retranslated.



The assets and liabilities in the financial statements of foreign
subsidiaries and related goodwill are translated at the prevailing rate of exchange at the statement of financial position date.
Income and expenses are translated at the monthly average rate. The exchange differences arising from the retranslation of the
foreign operations are recognized in other comprehensive income and taken in to the “currency translation reserve”
in equity. On disposal of a foreign operation the cumulative translation differences (including, if applicable, gains and losses
on related hedges) are transferred to the income statement as part of the gain or loss on disposal.



|3.22. | Transactions Costs Relating to Equity Transactions
|----- | --------------------------------------------------



The Group defers costs in issuing or acquiring its own equity instruments
to the extent they are incremental costs directly attributable to an equity transaction that otherwise would have been avoided.
 Such costs are accounted for as a deduction from equity (net of any related income tax benefit) upon completion of the equity
transaction. The costs of an equity transaction which is abandoned is recognized as an expense.



3.23.   Earnings per share



Basic earnings per share is computed using the weighted average
number of ordinary shares outstanding during the period. Diluted earnings per share is computed by considering the impact of the
potential issuance of ordinary shares, using the treasury stock method, on the weighted average number of shares outstanding during
the period except where the results would be anti-dilutive.

F-18






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



|3.24. | Equity
|----- | ------



Equity comprises the following components:

| | · | Share capital – this represents the nominal value of equity shares;
| | - | -------------------------------------------------------------------

| | · | Share premium – this represents the excess over nominal value of the fair value of consideration received for equity
shares, net of expenses of the share issue;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Joint Share Ownership Reserve – this represents the cost of shares of Eros held by the JSOP trust, consolidated as a
part of the Group and treated as treasury shares; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Non-Controlling Interests – this represents amounts attributable to non-controlling interests as a result of their interests
in subsidiary undertakings.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------

Other components of equity, which
comprises of the following components:

| | · | Currency translation reserve – this represents the differences arising from translation of investments in overseas subsidiaries;
| | - | --------------------------------------------------------------------------------------------------------------------------------

| | · | Available-for-sale investments – this represents fair value movement net of impairment loss, if any, recognized since
the date of acquisition of investments;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Revaluation reserve – this represents the fair value movement of land and buildings measured on a fair value basis; and
| | - | -----------------------------------------------------------------------------------------------------------------------

| | · | Hedging reserve – this represents effective portion of change in fair value of derivative instruments designated in a
cash flow hedge relationship.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------

Reserves, which comprises of the
following components:

| | · | Reverse acquisition reserve – this represents the difference between the required total of the Group’s equity instruments
and the reported equity of the legal parent;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Merger reserve – this represents the gain/loss recognized as a result of a change in parent undertakings ownership interest
in a subsidiary undertaking without loss of control; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Retained earnings – this represents undistributed earnings of the Group.
| | - | ------------------------------------------------------------------------



|4. | ACQUISITION
|-- | -----------



On August 1, 2015, Eros’ subsidiary Eros
International Media Limited (“EIML”) acquired 100% of the shares and voting interests in Techzone. The Company expects
that this acquisition will enable the Group to utilize Techzone’s billing integration and distribution across major telecom
operators in India and will complement its existing Eros Now service.



In accordance with the terms of the agreement
between the parties, EIML issued 900,970 equity shares to the shareholders of Techzone at an acquisition date fair value of INR
586 ($9.16) per share, calculated on the basis of traded share price of EIML on the date of acquisition. EIML has made an advance
of $2.5 million to Techzone prior to the acquisition to provide working capital.



Acquisition related cost of $106,300 has been included in “Administrative
cost” in the consolidated statements of income.



Pending completion of valuation of assets,
including intangible assets, the purchase price has been allocated on a preliminary basis to net assets based on initial estimates.
As a result, values attributed to specified assets and liabilities including goodwill and other intangible assets may change. Finalization
of the purchase price allocation is expected to be completed by July 31, 2016.



F-19






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



The following table summarizes the preliminary
allocation of the purchase price:



|                                  |  | As at August
    1, 
    2015
|--------------------------------- |  | -----------------------------
|                                  |  | (in thousands)               
|                                  |  |                              
|Current assets                    |  |                              
|Cash                              |  | $                            
|Trade and other receivables       |  |                              
|Non-current assets                |  |                              
|Deferred tax assets               |  |                              
|Property, plant and equipment     |  |                              
|Purchase price pending allocation |  |                              
|Other non-current assets          |  |                              
|Current liabilities               |  |                              
|Trade and other payables          |  |                              
|Short-term borrowings             |  |                              
|Non-Current borrowings            |  |                              
|Long-term borrowings              |  |                              
|Other long term liabilities       |  |                              



The trade receivables comprise gross contractual amounts due of
$2.6 million and the Company, based on its best estimate at the acquisition date, expects to collect the entire amount.



Impact of the acquisition on the results of the Company



The acquisition of Techzone contributed $4.3
million to the Company’s consolidated revenue and a loss of $0.2 million to the Company’s profit for the year ended
March 31, 2016.



Had the acquisition occurred on 1 April 2015, consolidated revenue
and profit after tax for the year would have been $278.7 million and $13.4 million respectively.



|5 | BUSINESS SEGMENTAL DATA
|- | -----------------------



The Group acquires, co-produces and distributes Indian films in
multiple formats worldwide. Film content is monitored and strategic decisions around the business operations are made based on
the film content, whether it is new release or library. Hence, Management identifies only one operating segment in the business,
film content. We distribute our film content to the Indian population in India, the South Asian diaspora worldwide and to non-Indian
consumers who view Indian films that are subtitled or dubbed in local languages. As a result of these distribution activities,
Eros has identified four geographic markets: India, North America, Europe and the Rest of the world.



Revenues are presented based on the region of domicile and by customer
location:



|                                                   |  | Year ended March 31 |        
|-------------------------------------------------- |  | ------------------- | -------
|                                                   |  | 2016                |        
|                                                   |  | (in thousands)      |        
|Revenue by region of domicile of Group’s operation |  |                     |        
|India                                              |  | $                   | 159,855
|Europe                                             |  |                     | 34,209 
|North America                                      |  |                     | 14,622 
|Rest of the world                                  |  |                     | 65,742 
|Total Revenue                                      |  | $                   | 274,428



Revenue of $35,869,000 (2015: $80,267,000 and 2014: $54,466,000)
from the United Arab Emirates is included within Rest of the world and revenue of $34,209,000 (2015: $29,528,000 and 2014: $20,996,000)
from the United Kingdom is included under Europe in the above table.

F-20






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



|                                                     |  | Year ended March 31 |        
|---------------------------------------------------- |  | ------------------- | -------
|                                                     |  | 2016                |        
|                                                     |  | (in thousands)      |        
|Revenue by region of domicile of customer’s location |  |                     |        
|India                                                |  | $                   | 158,843
|Europe                                               |  |                     | 24,367 
|North America                                        |  |                     | 19,865 
|Rest of the world                                    |  |                     | 71,353 
|Total Revenue                                        |  | $                   | 274,428



Revenue of $61,546,000 (2015: $103,786,000 and 2014: $45,636,000)
from the United Arab Emirates is included within Rest of the world and revenue of $22,755,000 (2015: $26,426,000 and 2014: $14,975,000)
from United Kingdom is included under Europe in the above table.



For the year ended March 31, 2016, March 31, 2015 and March 31,
2014, no customers accounted for more than 10% of the Group’s total revenues. In each year no revenue arose in the Isle of
Man.



|                     |  | India          |         |  | North America |   |     | Europe |  |   | Rest of the World | 
|-------------------- |  | -------------- | ------- |  | ------------- | - | --- | ------ |  | - | ----------------- | 
|                     |  | (in thousands) |        
|Assets               |  |                |         |  |               |   |     |        |  |   |                   | 
|As of March 31, 2016 |  | $              | 350,078 |  |               | $ | 22  |        |  | $ | 30,694            | 
|As of March 31, 2015 |  | $              | 281,019 |  |               | $ | 653 |        |  | $ | 24,224            | 



Segment assets of $371,955,000 (2015: $330,719,000) in the
United Arab Emirates is included under Rest of the world and segment assets of $30,694,000 (2015: $24,224,000) in the United Kingdom
is included under Europe in the above table. In each year, there were no segment assets in the Isle of Man.



|6 | PERSONNEL COSTS
|- | ---------------



|                                             |  | Year ended March 31 |       
|-------------------------------------------- |  | ------------------- | ------
|                                             |  | 2016                |       
|                                             |  | (in thousands)      |       
|Salaries                                     |  | $                   | 14,616
|Social security and other employment charges |  |                     | 771   
|Salaries and other charges                   |  |                     | 15,387
|Share based compensation                     |  |                     | 30,992
|Pension charges                              |  |                     | 35    
|                                             |  | $                   | 46,414



|                            |  | Year ended March 31 |       
|--------------------------- |  | ------------------- | ------
|Key Management Compensation |  | 2016                |       
|                            |  | (in thousands)      |       
|Salaries                    |  | $                   | 5,250 
|Share based compensation    |  |                     | 20,916
|Pension charges             |  |                     | 35    
|                            |  | $                   | 26,201



F-21






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



|7 | PROFIT FOR THE YEAR
|- | -------------------



Profit for the year is arrived at after the following are charged
to the income statement:



|                                              |  | Year ended March 31 |        
|--------------------------------------------- |  | ------------------- | -------
|                                              |  | 2016                |        
|                                              |  | (in thousands)      |        
|Depreciation of property, plant and equipment |  | $                   | 1,154  
|Amortization of other intangible assets       |  |                     | 1,131  
|Amortization of film and content rights       |  |                     | 128,303
|Operating lease rentals                       |  |                     | 1,965  



|8 | NET FINANCE COSTS
|- | -----------------



|                                                                                                     |  | Year ended March 31 |       
|---------------------------------------------------------------------------------------------------- |  | ------------------- | ------
|                                                                                                     |  | 2016                |       
|                                                                                                     |  | (in thousands)      |       
|Interest on borrowings                                                                               |  | $                   | 22,644
|Reclassification of cash flow hedge to income statement                                              |  |                     | 804   
|Total interest expense for financial liabilities not classified at fair value through profit or loss |  |                     | 23.448
|Capitalized interest on filmed content                                                               |  |                     | (9,729
|Total finance costs                                                                                  |  |                     | 13,719
|Less: Interest income                                                                                |  |                     |       
|Bank deposits                                                                                        |  |                     | (5,709
|Total finance income                                                                                 |  |                     | (5,709
|                                                                                                     |  |                     |       
|                                                                                                     |  | $                   | 8,010 



For the year ended March 31, 2016, the capitalization rate
of interest was 6.9% (2015: 5.9%and 2014: 7.4%).



|9 | OTHER LOSSES
|- | ------------



|                                                            |  | Year ended March 31 |      
|----------------------------------------------------------- |  | ------------------- | -----
|                                                            |  | 2016                |      
|                                                            |  | (in thousands)      |      
|(Gains)/losses on disposal of property, plant and equipment |  | $                   | (3   
|Net foreign exchange losses/(gains)                         |  |                     | 73   
|Net loss/(gain) on held for trading financial liabilities   |  |                     | 3,566
|Transaction costs relating to equity transactions           |  |                     | —    
|Impairment loss on available-for-sale financial assets      |  |                     | —    
|                                                            |  | $                   | 3,636



The net loss on held for trading financial liabilities in the years
ended March 31, 2016, 2015 and 2014 principally relate to derivative instruments not designated in a hedging relationship.



In the year ended March 31, 2015, the Company incurred $6,118,000
towards the issue of ‘A’ ordinary shares in a follow-on offering on the NYSE and sale of certain existing shares.
In the year ended March 31, 2014, the Company incurred $13,583,000 towards the issue and listing of the ‘A’ ordinary
shares of the Company on the NYSE and contemporaneous delisting on AIM. As the transaction costs incurred relate to more than
one transaction, the Company allocated these costs in proportion to the number of existing shares listed on NYSE and the number
of shares newly issued. Transaction costs of $Nil (2015: $61,000, 2014: 8,169,000) attributed towards sale/listing of
existing shares are recorded in profit or loss and as a result, $Nil (2015: $6,057,000, 2014: 5,414,000) was recorded in equity.

F-22






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



|10 | INCOME TAX EXPENSE
|-- | ------------------



|                                                  |  | Year ended March 31 |       
|------------------------------------------------- |  | ------------------- | ------
|                                                  |  | 2016                |       
|                                                  |  | (in thousands)      |       
|Current tax expense                               |  | $                   | 8,161 
|Origination and reversal of temporary differences |  |                     | 4,550 
|Provision for income taxes                        |  | $                   | 12,711



Reconciliation of tax charge



|                                                                  |  | Year ended March 31 |       
|----------------------------------------------------------------- |  | ------------------- | ------
|                                                                  |  | 2016                |       
|                                                                  |  | (in thousands)      |       
|Profit before tax                                                 |  | $                   | 25,999
|Income tax expense at tax rates applicable to individual entities |  |                     | 10,785
|Tax effect of:                                                    |  |                     |       
|Changes in tax rates on temporary differences brought forward     |  |                     | 718   
|Items not deductible for tax                                      |  |                     | 1,131 
|Others                                                            |  |                     | 77    
|Income tax expense                                                |  | $                   | 12,711



|11 | DEFERRED TAX ASSETS AND LIABILITIES
|-- | -----------------------------------



Changes in deferred tax assets and liabilities



|                                     |  | Year ended March 31, 2016 |        
|------------------------------------ |  | ------------------------- | -------
|                                     |  | Opening Balance           |        
|                                     |  | (in thousands)            |        
|Deferred tax assets:                 |  |                           |        
|Minimum alternate tax carry-forward  |  | $                         | 14,246 
|Property, plant and equipment        |  |                           | 151    
|Others                               |  |                           | 768    
|Total deferred tax asset             |  | $                         | 15,165 
|Deferred tax liabilities             |  |                           |        
|Property, plant and equipment        |  |                           | (240   
|Intangible assets                    |  |                           | (41,753
|Others                               |  |                           | (107   
|Total deferred tax liability         |  | $                         | (42,100
|                                     |  |                           |        
|Net deferred tax (liability) / asset |  | $                         | (26,935
|As at March 31, 2016                 |  |                           |        
|Deferred tax asset                   |  |                           |        
|Deferred tax liability               |  |                           |        



F-23






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



|                                     |  | Year ended March 31, 2015 |        
|------------------------------------ |  | ------------------------- | -------
|                                     |  | Opening Balance           |        
|                                     |  | (in thousands)            |        
|Deferred tax assets:                 |  |                           |        
|Minimum alternate tax carry-forward  |  | $                         | 11,681 
|Property, plant and equipment        |  |                           | 77     
|Others                               |  |                           | 1,880  
|Total deferred tax asset             |  | $                         | 13,638 
|Deferred tax liabilities             |  |                           |        
|Property, plant and equipment        |  | $                         | (311   
|Intangible assets                    |  |                           | (35,457
|Others                               |  |                           | (53    
|Total deferred tax liability         |  | $                         | (35,821
|                                     |  |                           |        
|Net deferred tax (liability) / asset |  | $                         | (22,183
|As at March 31, 2015                 |  |                           |        
|Deferred tax asset                   |  |                           |        
|Deferred tax liability               |  |                           |        



|                                     |  | Year ended March 31, 2014 |        
|------------------------------------ |  | ------------------------- | -------
|                                     |  | Opening Balance           |        
|                                     |  | (in thousands)            |        
|Deferred tax assets:                 |  |                           |        
|Business loss carry forwards         |  | $                         | 383    
|Expenses deductible in future years  |  |                           | 17     
|Minimum alternate tax carry- forward |  |                           | 9,661  
|Property, plant and equipment        |  |                           | 122    
|Others                               |  |                           | 1,879  
|Total deferred tax asset             |  | $                         | 12,062 
|Deferred tax liabilities             |  |                           |        
|Property, plant and equipment        |  | $                         | (310   
|Intangible assets                    |  |                           | (29,969
|Others                               |  |                           | (53    
|Total deferred tax liability         |  | $                         | (30,332
|                                     |  |                           |        
|Net deferred tax asset / (liability) |  | $                         | (18,270
|As at March 31, 2014                 |  |                           |        
|Deferred tax asset                   |  |                           |        
|Deferred tax liability               |  |                           |        



Deferred tax is calculated in full on all temporary differences
under the liability method using the local tax rate of the country in which the timing difference occurs.



Deferred tax assets have been recognized on the basis that there
is sufficient certainty of profitability to utilize the available losses and tax credits. Deferred tax liabilities to the extent
of $34,400,000 (2015: $33,900,000) have not been provided on the undistributed earnings of subsidiaries as Eros is able to control
the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future.



Eros International Media Limited is liable to pay Minimum Alternate
Tax (“MAT”) under the Indian Income tax laws. The tax paid under MAT provisions can be carried forward and set-off
against future income tax liabilities computed under normal tax provisions within a period of ten years, and has been treated as
a deferred tax asset.



Except for $1,009,773 (2015: Nil, 2014: Nil) relating to
tax on revaluation of freehold building, no amount has been recognized in other comprehensive income. No amounts relating to tax
have been recognized directly in equity.

F-24






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



|12 | EARNINGS PER SHARE
|-- | ------------------



|                                                                                               |  | 2016                                                           |            |  | 2015    |   |            | 2014  | 
|---------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------- | ---------- |  | ------- | - | ---------- | ----- | 
|                                                                                               |  | Basic                                                          |            |  | Diluted |   |            | Basic | 
|                                                                                               |  | (in thousands, except number of shares and earnings per share) |           
|Earnings                                                                                       |  |                                                                |            |  |         |   |            |       | 
|Earnings attributable to the equity holders of the parent                                      |  | $                                                              | 3,797      |  |         | $ | 3,797      |       | 
|Potential dilutive effect related to share based compensation scheme in subsidiary undertaking |  |                                                                | —          |  |         |   | (732       | )     | 
|Adjusted earnings attributable to equity holders of the parent                                 |  | $                                                              | 3,797      |  |         | $ | 3,065      |       | 
|Number of shares                                                                               |  |                                                                |            |  |         |   |            |       | 
|Weighted average number of shares                                                              |  |                                                                | 57,731,839 |  |         |   | 57,731,839 |       | 
|Potential dilutive effect related to share based compensation scheme                           |  |                                                                | —          |  |         |   | 1,304,185  |       | 
|Adjusted weighted average number of shares                                                     |  |                                                                | 57,731,839 |  |         |   | 59,036,024 |       | 
|Earnings per share                                                                             |  |                                                                |            |  |         |   |            |       | 
|Earnings attributable to the equity holders of the parent per share (cents)                    |  |                                                                | 6.6        |  |         |   | 5.2        |       | 



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. All share and per share data provided herein gives effect to the three-for-one stock
split conversion that occurred in November 2013, retroactively.



The Company excludes options with exercise prices that are greater
than the average market price from the calculation of diluted EPS because their effect would be anti-dilutive. In the year ended
March 31, 2016, 602,500 shares were not included in diluted earnings per share (2015: 630,000, 2014: Nil).

F-25






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



|13 | PROPERTY, PLANT AND EQUIPMENT
|-- | -----------------------------



|                                                |  | Year ended March 31, 2016 |      
|----------------------------------------------- |  | ------------------------- | -----
|                                                |  | Land and Building         |      
|                                                |  | (in thousands)            |      
|Opening net carrying amount                     |  | $                         | 8,292
|Exchange difference                             |  |                           | (518 
|Revaluation                                     |  |                           | 1,410
|Additions on account of acquisition of Techzone |  |                           | —    
|Others                                          |  |                           | —    
|Disposals                                       |  |                           | —    
|Adjustment of depreciation on disposal          |  |                           | —    
|Depreciation charge                             |  |                           | (416 
|Balance as at March 31, 2016                    |  | $                         | 8,768
|Capital work-in-progress                        |  |                           |      
|Net carrying value as at March 31, 2016         |  |                           |      



|                                        |  | As at March 31, 2016 |       
|--------------------------------------- |  | -------------------- | ------
|                                        |  | (in thousands)       |       
|Cost or valuation                       |  | $                    | 11,749
|Accumulated depreciation                |  |                      | (2,981
|Net carrying amount                     |  | $                    | 8,768 
|Capital work-in-progress                |  |                      |       
|Net carrying value as at March 31, 2016 |  |                      |       



|                                       |  | Year ended March 31, 2015 |      
|-------------------------------------- |  | ------------------------- | -----
|                                       |  | Land and Building         |      
|                                       |  | (in thousands)            |      
|Opening net carrying amount            |  | $                         | 8,978
|Exchange difference                    |  |                           | (269 
|Additions                              |  |                           | —    
|Disposals                              |  |                           | —    
|Adjustment of depreciation on disposal |  |                           | —    
|Depreciation charge                    |  |                           | (417 
|Closing net carrying amount            |  | $                         | 8,292



|                         |  | As at March 31, 2015 |       
|------------------------ |  | -------------------- | ------
|                         |  | (in thousands)       |       
|Cost or valuation        |  | $                    | 10,934
|Accumulated depreciation |  |                      | (2,642
|Net carrying amount      |  | $                    | 8,292 



Property, Plant and Equipment with a net carrying amount of $10,118,000
(2015: $9,184,000) have been pledged to secure borrowings (see Note 23).



Land and buildings were revalued as at March 31, 2016 by independent
valuers on the basis of market value. Fair values were estimated based on recent market transactions, which were then adjusted
for specific conditions relating to the land and buildings. As at March 31, 2016, had land and buildings of the Group been
carried at historical cost less accumulated depreciation, their carrying amount would have been $5,726,000 (2015: $6,309,000)



Capital work-in-progress of $620,000 (2015: Nil) primarily related
to leasehold improvement cost in Company’s leased premises.

F-26






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



|14 | GOODWILL AND TRADE NAME
|-- | -----------------------



|                             |  | Goodwill       |       |  | Trade Name |  
|---------------------------- |  | -------------- | ----- |  | ---------- | -
|                             |  | (in thousands) |      
|Balance as at March 31, 2016 |  | $              | 1,878 |  |            | $
|Balance as at March 31, 2015 |  | $              | 1,878 |  |            | $



Goodwill has been assessed for impairment at the Group level as
the Group is considered as one single cash generating unit and represents the lowest level at which the goodwill is monitored for
internal management purposes.



The recoverable amount of the cash generating unit has been determined
based on value in use. Value in use has been determined based on future cash flows after considering current economic conditions
and trends, estimated future operating results, growth rates and anticipated future economic conditions.



As of March 31, 2016, for assessing impairment of goodwill, value
in use is determined using discounted cash flow method. The estimated cash flows for a period of four years were developed using
internal forecasts, extrapolated for the fifth year, and a pre-tax discount rate of 17.8% and terminal growth rate of 4%.



As of March 31, 2016, for assessing the impairment of the trade
name, value in use is determined using the relief from royalty method based on a Royalty rate of 3% on the estimated total revenue
for a period of four years, extrapolated for the fifth year, and, a pre-tax discount rate of 21.7% and terminal growth rate of
4%.



Management believes that any reasonably possible change in the key
assumptions would not cause the carrying amount to exceed the recoverable amount of the cash generating unit.



|15 | INTANGIBLE CONTENT ASSETS
|-- | -------------------------



|                           |  | Gross Content Assets |           |  | Accumulated Amortization |   |          | Content Assets | 
|-------------------------- |  | -------------------- | --------- |  | ------------------------ | - | -------- | -------------- | 
|                           |  | (in thousands)       |          
|As at March 31, 2016       |  |                      |           |  |                          |   |          |                | 
|Film and content rights    |  | $                    | 1,158,737 |  |                          | $ | (652,651 | )              | 
|Content advances           |  |                      | 284,817   |  |                          |   | —        |                | 
|Film productions           |  |                      | 4,236     |  |                          |   | —        |                | 
|Non-current content assets |  | $                    | 1,447,790 |  |                          | $ | (652,651 | )              | 
|                           |  |                      |           |  |                          |   |          |                | 
|As at March 31, 2015       |  |                      |           |  |                          |   |          |                | 
|Film and content rights    |  | $                    | 1,027,878 |  |                          | $ | (548,920 | )              | 
|Content advances           |  |                      | 236,285   |  |                          |   | —        |                | 
|Film productions           |  |                      | 3,971     |  |                          |   | —        |                | 
|Non-current content assets |  | $                    | 1,268,134 |  |                          | $ | (548,920 | )              | 



F-27






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



Changes in the content assets are as follows:



|                                                            |  | Year ended March 31 |         
|----------------------------------------------------------- |  | ------------------- | --------
|                                                            |  | 2016                |         
|                                                            |  | (in thousands)      |         
|Film productions                                            |  |                     |         
|Opening balance                                             |  | $                   | 3,971   
|Additions                                                   |  |                     | 3,887   
|Exchange difference                                         |  |                     | (231    
|Transfer from/(to) other content assets                     |  |                     | (3,391  
|Closing balance                                             |  | $                   | 4,236   
|                                                            |  |                     |         
|Content advances                                            |  |                     |         
|Opening balance                                             |  | $                   | 236,285 
|Additions (net of impairment loss of $2,545 (2015: $3,431)) |  |                     | 217,621 
|Exchange difference                                         |  |                     | (7,588  
|Transfer (to)/from film productions                         |  |                     | —       
|Transfer to film and content rights                         |  |                     | (161,501
|Closing balance                                             |  | $                   | 284,817 
|                                                            |  |                     |         
|Film and content rights                                     |  |                     |         
|Opening balance                                             |  | $                   | 4,78,958
|Amortization                                                |  |                     | (128,303
|Exchange difference                                         |  |                     | (9,461  
|Transfer from other content assets                          |  |                     | 164,892 
|Closing balance                                             |  | $                   | 506,086 



Impairment loss on content advances relate to amounts advanced,
to the extent not considered recoverable, for prospective film productions that are not being developed further or not considered
viable.



Film and content rights with a carrying amount of $207,412,000
(2015: $266,372,000) have been pledged to secure borrowings (see Note 23).



|16 | OTHER INTANGIBLE ASSETS
|-- | -----------------------



Other intangibles comprise of internally generated software used
within the Group’s digital and home entertainment activities.



The changes in other intangible assets are as follows:





|                                                 |  | Year ended March 31, 2016        |      
|------------------------------------------------ |  | -------------------------------- | -----
|                                                 |  | (in
    thousands)               |      
|                                                 |  | Internally
     Generated Assets |      
|Opening net carrying amount as on March 31, 2015 |  | $                                | 1,581
|Exchange difference                              |  |                                  | —    
|Additions                                        |  |                                  | 1,500
|Amortization charge                              |  |                                  | (896 
|Closing net carrying amount as on March 31, 2016 |  | $                                | 2,185



F-28






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



|                                         |  | As at March 31, 2016 |       
|---------------------------------------- |  | -------------------- | ------
|                                         |  | (in thousands)       |       
|                                         |  |                      |       
|Cost or valuation as on March 31, 2016   |  | $                    | 3,854 
|Accumulated amortization                 |  |                      | (1,669
|Net carrying amount as on March 31, 2016 |  | $                    | 2,185 



|                                                 |  | Year ended March 31, 2015 |      
|------------------------------------------------ |  | ------------------------- | -----
|                                                 |  | (in
    thousands)        |      
|                                                 |  | InternallyGeneratedAssets |      
|Opening net carrying amount as on March 31, 2014 |  | $                         | 589  
|Exchange difference                              |  |                           | —    
|Additions                                        |  |                           | 1,221
|Disposals                                        |  |                           | —    
|Adjustment of amortization on disposal           |  |                           | —    
|Amortization charge                              |  |                           | (229 
|Closing net carrying amount as on March 31, 2015 |  | $                         | 1,581



|                                         |  | As at March 31, 2015 |      
|---------------------------------------- |  | -------------------- | -----
|                                         |  | (in thousands)       |      
|                                         |  |                      |      
|Cost or valuation as on March 31, 2015   |  | $                    | 2,354
|Accumulated amortization                 |  |                      | (773 
|Net carrying amount as on March 31, 2015 |  | $                    | 1,581



Other intangible assets with a carrying amount of $375,000
(2015: $89,000) have been pledged to secure borrowings (see Note 23).



|17 | AVAILABLE-FOR-SALE FINANCIAL ASSETS
|-- | -----------------------------------



|                                     |  | As at March 31 |       
|------------------------------------ |  | -------------- | ------
|                                     |  | 2016           |       
|                                     |  | (in thousands) |       
|Valuable Technologies Limited        |  | $              | 11,097
|LMB Holdings Limited                 |  |                | 16,800
|Valuable Innovations Private Limited |  |                | 2,020 
|Culture Trip                         |  |                | 230   
|                                     |  | $              | 30,147



Eros acquired an interest in Valuable Technologies Limited (“Valuable”)
in the year ended March 31, 2009. Valuable manages and operates a number of companies within media and entertainment,
technology and infrastructure. These companies include UFO Moviez, the leading provider of Digital projection solutions for cinemas
in India, Boxtech which is involved with digital movie rentals, and Impact whose business is theatrical ticketing and sales data.
As at March 31, 2016, Eros owns 7.21% of Valuable’s equity. In the year ended March 31, 2016, due to the range of potential
outcomes in valuing Valuable, the Board was unable to give, with reasonable certainty, a fair value in the absence of detailed
financial and/or valuation related information. Management has therefore held it at cost which equates to the fair value recognized
in the year ended March 31, 2012.



Acacia Investments Holdings Limited (“Acacia”) is a
dormant holding company and owns 24% of L.M.B Holdings Limited (“LMB”) which through its subsidiaries operates satellite
television channels, such as B4U Music, B4U Movies and the Movie House Channel. As of March 31, 2016 and prior, the Group
had no Board representation, no involvement in policy decision making, did not provide input in respect of technical know-how and
had no material contract with LMB or its subsidiaries nor did they have the power to exert significant influence. As a result Management
has historically concluded, throughout the ownership of the investment, that they did not exert any significant influence over
LMB. Due to the range of potential outcomes in valuing LMB, the Board was unable to give, with reasonable certainty, a fair value.
Management has therefore held it at cost which equates to the fair value recognized in the year ended March 31, 2012.



F-29






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



In April 2010, Eros acquired a 1.27% interest in Valuable Innovations
Private Limited (“Valuable Innovations”) at a total cost of $2,020,000.  An entity related to Valuable Technologies,
Valuable Innovations houses new technology and patents of the Valuable group entities and develops related products.  In the
year ended March 31, 2016, due to the range of potential outcomes in valuing Valuable Innovations Private Limited, the Board was
unable to give, with reasonable certainty, a fair value in the absence of detailed financial and/or valuation related information.
Management has therefore held it at cost.



In July 2015, Eros acquired a 2% stake
in The Cultural Trip (‘‘TCT’’), a website which is a global platform for local culture, showcasing the
best art, culture, food and travel for every country in the world. The acquisition of stake
in TCT has been classified as Available-for-sale investment and has been recognized at the transaction price of $230,050. Subsequently,
on June 3, 2016 this investment was sold at a price of $287,781.



Investments in these unquoted equity instruments are not held for
trading. Instead, they are held for medium or long-term strategic purpose.



|18 | INVENTORIES
|-- | -----------



|                 |  | As at March 31 |    
|---------------- |  | -------------- | ---
|                 |  | 2016           |    
|                 |  | (in thousands) |    
|Goods for resale |  | $              | 287
|                 |  | $              | 287



During the year ended March 31, 2016, inventory of $354,000
(2015: $776,000) was recognized in the income statement as an expense. In each year none of the expense was as a result of
the write down of inventories. Inventories with a carrying amount of $593,000 (2015: $316,000) have been pledged as security
for certain of the Group’s borrowings (see Note 23).



|19 | TRADE AND OTHER RECEIVABLES
|-- | ---------------------------



|                                        |  | As at March 31 |        
|--------------------------------------- |  | -------------- | -------
|                                        |  | 2016           |        
|                                        |  | (in thousands) |        
|Trade accounts receivables              |  | $              | 169,413
|Trade accounts receivables reserve      |  |                | (130   
|Trade accounts receivables net          |  | $              | 169,283
|                                        |  |                |        
|Other receivables                       |  |                | 18,493 
|Prepaid charges                         |  |                | 1,071  
|Unbilled revenue                        |  |                | 9,035  
|Trade and other receivables             |  | $              | 197,882
|                                        |  |                |        
|Current Trade and other receivables     |  |                | 188,361
|Non-Current Trade and other receivables |  |                | 9,521  
|                                        |  | $              | 197,882



The age of financial assets that are past due but not impaired were
as follows:



|                                                    |  | As at March 31 |        
|--------------------------------------------------- |  | -------------- | -------
|                                                    |  | 2016           |        
|                                                    |  | (in thousands) |        
|Not more than three months                          |  |                | 38,593 
|More than three months but not more than six months |  |                | 41,448 
|More than six months but not more than one year     |  |                | 27,594 
|More than one year                                  |  |                | 2,882  
|                                                    |  | $              | 110,517



F-30






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



The Company factored accounts receivable amounting to $39,026,540
(2015: $Nil) as of March 31, 2016. The cash proceeds from these arrangements are reflected as operating activities. The cost of
factoring is immaterial.



During the year ended March 31, 2015, terms of certain trade and
other receivables that were past due but not impaired had been renegotiated for commercial reasons. As at March 31, 2016, the carrying
amounts of the such receivable was $1,268,625 (2015: $31,230,000).



The movements in the trade accounts receivables reserve are as follows:



|                    |  | Year ended March 31 |       
|------------------- |  | ------------------- | ------
|                    |  | 2016                |       
|                    |  | (in thousands)      |       
|At April 1          |  | $                   | 250   
|Provisions          |  |                     | 1,315 
|Amounts written off |  |                     | (1,435
|At March 31         |  | $                   | 130   



The carrying amount of trade accounts receivables and other receivables
are considered a reasonable approximation of fair value. Trade and other receivables with a net carrying amount of $42,672,000
(2015: $35,958,000) have been pledged to secure borrowings (see Note 23).



|20 | TRADE AND OTHER PAYABLES
|-- | ------------------------



|                                          |  | As at March 31 |       
|----------------------------------------- |  | -------------- | ------
|                                          |  | 2016           |       
|                                          |  | (in thousands) |       
|Trade accounts payable                    |  | $              | 15,496
|Accruals and other payables               |  |                | 41,379
|Value added taxes and other taxes payable |  |                | 8,303 
|                                          |  | $              | 65,178



The Group considers that the carrying amount of trade accounts payable,
accruals and other payables approximate their fair value.



|21 | CASH AND CASH EQUIVALENTS
|-- | -------------------------



Cash and cash equivalents consist of cash on hand and balance with
banks. Cash and cash equivalents included in the statement of cash flows comprise the following amounts in the statement of financial
position.



|                               |  | As at March 31 |        
|------------------------------ |  | -------------- | -------
|                               |  | 2016           |        
|                               |  | (in thousands) |        
|Cash at bank and in hand       |  | $              | 100,276
|Short term deposits with banks |  |                | 82,498 
|                               |  | $              | 182,774



|22 | OPERATING LEASES
|-- | ----------------



The Group leases various offices and warehouses under non-cancellable
operating lease agreements. The minimum lease rentals to be paid under non-cancellable operating leases at March 31 were as
follows:



|                         |  | As at March 31 |      
|------------------------ |  | -------------- | -----
|                         |  | 2016           |      
|                         |  | (in thousands) |      
|Within one year          |  | $              | 647  
|Within two to five years |  |                | 1,376
|                         |  | $              | 2,023



F-31






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



|23 | BORROWINGS
|-- | ----------



An analysis of long-term borrowings is shown in the table below.



|                                         |  | Nominal                                |  |          |  | As at March 31 |         
|---------------------------------------- |  | -------------------------------------- |  | -------- |  | -------------- | --------
|                                         |  | Interest Rate                          |  | Maturity |  | 2016           |         
|                                         |  |                                        |  |          |  | (in thousands) |         
|Asset backed borrowings                  |  |                                        |  |          |  |                |         
|Vehicle Loan                             |  | 10 -12%                                |  | 2017-21  |  | $              | 260     
|Term Loan                                |  | BPLR+1.8 - 2.75%                       |  | 2016-17  |  |                | 6,244   
|Term Loan                                |  | BPLR+2.75%                             |  | 2017-18  |  |                | 1,579   
|Term Loan                                |  | BPLR+2.55 – 3.4%                       |  | 2020-21  |  |                | 12,945  
|Term Loan                                |  | BPLR+2.85%                             |  | 2019-20  |  |                | 7,932   
|                                         |  |                                        |  |          |  | $              | 28,960  
|Unsecured borrowings                     |  |                                        |  |          |  |                |         
|Retail bond                              |  | 6.5%                                   |  | 2021-22  |  | $              | 71,901  
|Revolving facility                       |  | LIBOR +1.90%- 2.90% and Mandatory Cost |  | 2016-17  |  |                | 123,750 
|Other borrowings                         |  | 10.5%                                  |  | 2021-22  |  |                | 6,933   
|                                         |  |                                        |  |          |  | $              | 202,584 
|                                         |  |                                        |  |          |  |                |         
|Nominal value of borrowings              |  |                                        |  |          |  | $              | 231,544 
|Cumulative effect of unamortized costs   |  |                                        |  |          |  |                | (2,109  
|Installments due within one year         |  |                                        |  |          |  |                | (136,805
|Long-term borrowings — at amortized cost |  |                                        |  |          |  | $              | 92,630  



In October 2014, Eros completed an offering of 6.50% Retail Bonds
(due 2021) on the London Stock Exchange (“LSE”), raising £50,000,000 (USD $77,930,000) in total proceeds net
of transaction cost of approximately £1.2 million ($1,791,000). Interest on these bonds is payable biannually on April 15
and October 15 each year.



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



Analysis of short-term borrowings



|                                                         |  | Nominal           |  | As at March 31 |        
|-------------------------------------------------------- |  | ----------------- |  | -------------- | -------
|                                                         |  | interest rate (%) |  | 2016           |        
|                                                         |  |                   |  | (in thousands) |        
|Asset backed borrowings                                  |  |                   |  |                |        
|Export credit, bill discounting and overdraft            |  | BPLR+1-3.5%       |  | $              | 20,716 
|Export credit and overdraft                              |  | LIBOR+3.5%        |  |                | 26,586 
|                                                         |  |                   |  | $              | 47,302 
|Unsecured borrowings                                     |  |                   |  |                |        
|Commercial paper                                         |  | 10.0% 13.0%       |  |                | 1,511  
|Other short term loan                                    |  | 1.75% - 2.6%      |  |                | 32,871 
|Other short term loan                                    |  | 12.75%            |  |                | 786    
|Installments due within one year on long-term borrowings |  |                   |  |                | 136,805
|Short-term borrowings - at amortized cost                |  |                   |  | $              | 219,275



Fair value of the long term borrowings as at March 31,
2016 is $195,924,000 (2015: $233,450,000). Fair values of long-term financial liabilities except retail bonds have been determined
by calculating their present values at the reporting date, using fixed effective market interest rates available to the Companies
within the Group. As at March 31, 2016, the fair value of retail bond amounting to $47,922,000 has been determined using quoted
prices from the LSE. Carrying amount of short term borrowings approximates fair value.

F-32






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



|24 | DERIVATIVE FINANCIAL INSTRUMENTS
|-- | --------------------------------



|                       |  | As of March 31 |  
|---------------------- |  | -------------- | -
|                       |  | 2016           |  
|                       |  | Current        |  
|                       |  | (in thousands) |  
|Derivative assets      |  | $              | —
|Derivative liabilities |  | $              | —



The above interest rate derivative instruments are not designated
in a hedging relationship. They are carried at fair value through profit or loss.



|25 | ISSUED SHARE CAPITAL
|-- | --------------------



|                                                                 |  | Number of Shares |            |  | GBP            | 
|---------------------------------------------------------------- |  | ---------------- | ---------- |  | -------------- | 
|                                                                 |  |                  |            |  | (in thousands) | 
|Authorized                                                       |  |                  |            |  |                | 
|Ordinary shares of 30p each at March 31, 2016 and March 31, 2015 |  |                  | 83,333,333 |  |                | 



|                                           |  | Number of Shares       |            |  | USD                    | 
|------------------------------------------ |  | ---------------------- | ---------- |  | ---------------------- | 
|Allotted, called up and fully paid         |  | A Ordinary  30p Shares |            |  | B Ordinary  30p Shares | 
|As at March 31, 2014                       |  |                        | 23,519,340 |  |                        | 
|Issue of shares on July 15, 2014           |  |                        | 6,675,000  |  |                        | 
|Issue of shares on July 23, 2014           |  |                        | 112,445    |  |                        | 
|Issue of shares on September 9, 2014       |  |                        | 36,000     |  |                        | 
|Issue of shares on November 24, 2014       |  |                        | 331,551    |  |                        | 
|Issue of shares on November 25, 2014       |  |                        | 668,449    |  |                        | 
|Issue of shares on December 1, 2014        |  |                        | 487,500    |  |                        | 
|Issue of shares on January 16, 2015        |  |                        | 18,600     |  |                        | 
|Issue of shares on March 10, 2015          |  |                        | 133,603    |  |                        | 
|As at March 31, 2015                       |  |                        | 31,982,488 |  |                        | 
|Issue of shares on July 16, 2015           |  |                        | 300,000    |  |                        | 
|Issue of shares on August 18, 2015         |  |                        | 3,500      |  |                        | 
|Issue of shares in February 2016           |  |                        | 57,860     |  |                        | 
|Issue of shares in March 2016              |  |                        | 10,900     |  |                        | 
|Transfer of B Ordinary to A Ordinary share |  |                        | 594,566    |  |                        | 
|                                           |  |                        |            |  |                        | 
|As at March 31, 2016                       |  |                        | 32,949,314 |  |                        | 



On July 9, 2014, Eros completed a follow-on offering on the NYSE
of 6,787,445 shares at a price of $14.50 per share, raising $92.3 million in new capital (net of transaction costs of $6.1 million).
These shares were subsequently issued on July 15, 2014 and July 23, 2014, as stated above.



On September 9, 2014, 36,000 ‘A’ ordinary shares were
issued at $15.97 per share to fulfill an award to certain non-executive Directors.



On September 23, 2014 and November 17, 2014, the Company received
$10,000,000 and $6,193,000 in respect of a prospective issue of ‘A’ ordinary shares. 331,551 and 668,449 shares were
subsequently issued on November 24, 2014 and November 25, 2014 at $14.96 and $18.68 per share. The shareholder was subsequently
appointed as a non-executive Director on December 1, 2014.



F-33






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS





On June 5, 2014, the Board of Directors had
approved a grant of 525,000 ‘A’ ordinary share awards with a fair market value of $14.95 per share,
to certain executive directors and members of senior management. These awards vest subject to certain share price conditions being
met on or before May 31, 2015 and the employee remaining in service until May 31, 2015. On fulfillment of share price condition,
487,500 restricted shares were issued on December 1, 2014.  All these awards have since vested. As at March 31, 2016
except for 30,000 share awards, all shares have been issued.



Effective November 30, 2014, Eros India entered into an employment
exit agreement with an employee pursuant to which the Board approved a grant of 18,600 ‘A’ ordinary share awards.
The shares were issued on January 16, 2015 and recorded at $21.53 per share, the closing price at the effective date of the settlement
agreement.



On March 10, 2015, the Company received $1,469,633 in respect of
the exercise of 133,603 ‘A’ ordinary share options. These shares were issued on May 8, 2015.



On June 25, 2015, the Company received
$5,400,000 in respect of an issue of 300,000 ‘A’ ordinary shares at $18.00 per share to a non-executive director.
These shares were issued on July 16, 2015.



On June 9, 2015, 10,000 ‘A’ ordinary
shares each were awarded to two non- executive directors and a consultant with par value exercise price and a fair market value
of $21.34 per share. Subject to continued employment, these awards vest on June 9, 2016. These shares were issued on February
2, 2016 with restriction.



On October 21, 2014, 116,730 ‘A’
ordinary shares were awarded to certain employees with Nil value exercise price and a fair market value of $17.07 per share. These
shares are restricted and vests equally over a period of three years. On various dates in February and March 2016, 34,760 shares
were issued to employees.



As at March 31, 2016, none of the awards were forfeited.



Pursuant to the articles of association of the Company, B Ordinary
shares held by permitted holders (will convert to A Ordinary shares upon being transferred to a person who is not a permitted
holder. On December 1, 2015, a permitted holder of 594,566 B Ordinary shares transferred shares to a non-permitted holder leading
to their conversion.



|26 | 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:



|                                      |  | Year ended March 31 |       
|------------------------------------- |  | ------------------- | ------
|                                      |  | 2016                |       
|                                      |  | (in thousands)      |       
|IPO India Plan                        |  | $                   | 1,736 
|JSOP Plan                             |  |                     | 2,696 
|Option award scheme 2012              |  |                     | 1,610 
|2014 Share Plan                       |  |                     | 2,361 
|2015 Share Plan                       |  |                     | 932   
|Other share option awards             |  |                     | 894   
|Management scheme (staff share grant) |  |                     | 20,763
|                                      |  | $                   | 30,992



F-34






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



Joint Stock Ownership Plan



In April 2012, the Company established a controlled trust called
the Eros International Plc Employee Benefit Trust (“JSOP Trust”). The JSOP Trust purchased 2,000,164 shares of the
Company out of funds borrowed from the Company and repayable on demand. The Company’s Board, Nomination and Remuneration
Committee recommends to the JSOP Trust certain employees, officers and key management personnel, to whom the JSOP Trust will be
required to grant shares from its holdings at nominal price. Such shares are then held by the JSOP Trust and the scheme is referred
to as the “JSOP Plan.” The shares held by the JSOP Trust are reported as a reduction in stockholders’ equity
and termed as ‘JSOP reserves’.



On August 4, 2015, the Company’s Employee
Benefit Trust entered into a Joint ownership deed (the “2015 JSOP deed”) with certain employees in respect of 380,000’A’
ordinary shares. These options were issued at a strike price of $24.00 and fair market value of $15.66. Subject to continued employment
and market conditions set out in the 2015 JSOP deed, these options vest in May 2017.



The movement in the shares held by the JSOP Trust is given below:



|                                           |  | Year ended March 31 |          
|------------------------------------------ |  | ------------------- | ---------
|                                           |  | 2016                |          
|Shares held at the beginning of the period |  |                     | 1,919,460
|Shares exercised/lapsed                    |  |                     | (573,262 
|Shares held at the end of the period       |  |                     | 1,346,198



Employee Stock Option Plans



A summary of the general terms of the grants under stock option
plans and stock awards are as follows:



|                          |  | Range ofexercise prices
|------------------------- |  | -----------------------
|IPO India Plan            |  | INR10 – 175            
|IPO Plan – June 2006      |  | GBP 5.28               
|JSOP Plan                 |  | $11.00 – 24.00         
|Option award scheme 2012  |  | $11.00                 
|2014 Share Plan           |  | $14.97–  18.50         
|2015 Share Plan           |  | $7.40 – 33.12          
|Other share option awards |  | $18–  $18.88           



Employees covered under the stock option plans are granted an option
to purchase shares of the Company at the respective exercise prices, subject to requirement of vesting conditions (generally service
conditions). These options generally vest in tranches over a period of one to five years from the date of grant. Upon vesting,
the employees can acquire one share for every option. The maximum contractual term for these stock option plans ranges between
two to ten years.



F-35






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



The activity in these stock option plans is summarized below:



|                                         |  |                           |  | Year ended March 31
|---------------------------------------- |  | ------------------------- |  | -------------------
|                                         |  |                           |  | 2016               
|                                         |  | Name of Plan              |  | Numberofshares     
|Outstanding at the beginning of the year |  | IPO India Plan            |  | 1,437,400          
|Granted                                  |  |                           |  | 966,009            
|Exercised                                |  |                           |  | (180,920)          
|Forfeited and lapsed                     |  |                           |  | (26,274)           
|Outstanding at the end of the year       |  |                           |  | 2,196,215          
|Exercisable at the end of the year       |  |                           |  | 632,566            
|                                         |  |                           |  |                    
|Outstanding at the beginning of the year |  | IPO Plan June 2006        |  | 62,438             
|Granted                                  |  |                           |  | —                  
|Exercised                                |  |                           |  | —-                 
|Forfeited and lapsed                     |  |                           |  | —-                 
|Outstanding at the end of the year       |  |                           |  | 62,438             
|Exercisable at the end of the year       |  |                           |  | 62,438             
|                                         |  |                           |  |                    
|Outstanding at the beginning of the year |  | JSOP Plan                 |  | 1,723,657          
|Granted                                  |  |                           |  | 380,000            
|Exercised                                |  |                           |  | (573,262)          
|Forfeited and lapsed                     |  |                           |  | (290,900)          
|Outstanding at the end of the year       |  |                           |  | 1,239,495          
|Exercisable at the end of the year       |  |                           |  | 617,450            
|                                         |  |                           |  |                    
|Outstanding at the beginning of the year |  | Option award scheme 2012  |  | 674,045            
|Granted                                  |  |                           |  | —                  
|Exercised                                |  |                           |  | —                  
|Forfeited and lapsed                     |  |                           |  | —                  
|Outstanding at the end of the year       |  |                           |  | 674,045            
|Exercisable at the end of the year       |  |                           |  | 224,682            
|                                         |  |                           |  |                    
|Outstanding at the beginning of the year |  | 2014 Share Plan           |  | 230,000            
|Granted                                  |  |                           |  | 600,000            
|Exercised                                |  |                           |  | —                  
|Forfeited and lapsed                     |  |                           |  | (56,251)           
|Outstanding at the end of the year       |  |                           |  | 773,749            
|Exercisable at the end of the year       |  |                           |  | 96,664             
|                                         |  |                           |  |                    
|Outstanding at the beginning of the year |  | 2015 Share Plan           |  | 200,000            
|Granted                                  |  |                           |  | 105,000            
|Exercised                                |  |                           |  | —                  
|Forfeited and lapsed                     |  |                           |  | (22,500)           
|Outstanding at the end of the year       |  |                           |  | 282,500            
|Exercisable at the end of the year       |  |                           |  | 72,708             
|                                         |  |                           |  |                    
|Outstanding at the beginning of the year |  | Other share option awards |  | 500,000            
|Granted                                  |  |                           |  | 500,000            
|Exercised                                |  |                           |  | —                  
|Forfeited and lapsed                     |  |                           |  | —                  
|Outstanding at the end of the year       |  |                           |  | 1,000,000          
|Exercisable at the end of the year       |  |                           |  | 100,000            



F-36






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



The following table summarizes information about outstanding stock
options:



|                          |  |  | Year ended March 31                 | 
|------------------------- |  |  | ----------------------------------- | 
|                          |  |  | 2016                                | 
|Name of Plan              |  |  | Weightedaverageremaininglife(Years) | 
|IPO India Plan            |  |  | 4.10                                | 
|IPO Plan June 2006        |  |  | 0.25                                | 
|JSOP Plan                 |  |  | 5.93                                | 
|Option award scheme 2012  |  |  | 5.83                                | 
|2014 Share Plan           |  |  | 6.88                                | 
|2015 Share Plan           |  |  | 5.91                                | 
|Other share option awards |  |  | 5.75                                | 



The following table summarizes information about inputs to the fair
valuation model for options granted during the year:



|                                                                | IPO 
India Plan |  | JSOP(4)       |  | 2014Share plan |  | 2015Share plan
|--------------------------------------------------------------- | --------------- |  | ------------- |  | -------------- |  | --------------
|Expected volatility(1)(2)                                       | 35% - 75%       |  | 42%           |  | 40%            |  | 40% - 60%     
|Option life (Years)                                             | 5.00 - 7.00     |  | 10.00         |  | 4.50 - 5.25    |  | 10.00         
|Dividend yield                                                  | 0%              |  | 0%            |  | 0%             |  | 0%            
|Risk free rate                                                  | 7.74% - 8.50%   |  | 0.43% - 2.82% |  | 0.67% - 1.70%  |  | 0.24% - 1.46% 
|Range of fair value of the granted options at the grant date(3) | INR 284 – 380   |  | $15.66        |  | $6.9 – 8.44    |  | $2.7 - 13.10  



|(1) | The expected volatility in respect of the IPO India Plan is based on Eros International Media Limited’s historic volatility.                                                                                  
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | The expected volatility of all other options is based on the historic share price volatility of the Company over time periods comparable to the time from the grant date to the maturity dates of the options.
|(3) | The fair value of options under the JSOP Plan was measured using a Monte-Carlo simulation models. Fair value of options granted under all other schemes is measured using a Black Scholes model.              
|(4) | Options under the JSOP Plan are subject to service and performance conditions as set out in the JSOP deed                                                                                                     



Management Scheme (staff share grant)



On September 9, 2014, 36,000 ‘A’ ordinary shares
were issued to certain independent directors at $15.97 per share based on the closing market price on June 5, 2014.



On October 21, 2014, 116,730 ‘A’ ordinary shares
were awarded to certain employees with Nil value exercise price and a fair market value of $17.07 per share based on the
closing market price on such date. These shares are restricted and vest over a period of three years on a pro-rata basis. 34,760
shares have since been issued.



On June 5, 2014, the Board of Directors approved
a grant of 525,000 ‘A’ ordinary share awards with a fair market value of $14.95 per option, to certain executive
directors and members of senior management. These awards vest subject to certain share price conditions being met on or before
May 31, 2015 and the employee remaining in service until May 31, 2015. As at March 31, 2016 except for 30,000 share
awards, all shares have been issued.



In June 2015, 300,000 ‘A’ ordinary
shares awards were granted to the Group CFO with a fair market value of $21.34 per share. Subject to continued employment, these
awards with nominal value exercise price vest annually in three tranches beginning June 9, 2016. As at March 31, 2016, these shares
are yet to be issued.



F-37






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



Additionally, on June 9, 2015, the Board of
Directors approved a grant of 580,000 ‘A’ ordinary shares to certain executive directors with a fair market value of
$21.34 per shares subject to continued employment, these awards with Nil exercise price vest equally over a period of three years
with the first 25% vesting six months from the grant date. The shares are yet to be issued as at March 31, 2016.



None of the above grants have been forfeited
during the period. The charge for these grants have been accrued under ‘Management scheme’ (Staff share grant) and
‘2014 Share Plan’.



On September 4, 2015 the company entered in
to an employment exit agreement with an employee pursuant to which the board approved a grant of 20,000 ‘A’ ordinary
share awards with Nil exercise price and a fair market value of $33.66 per share. The shares are yet to be issued as at March 31,
2016.



On September 18, 2013, 1,676,645 ‘A’
ordinary shares were issued to our CEO and Managing Director at $4.02 per share based on the closing market price on such date.
These shares are restricted and vest over a period of three years on a pro-rata basis.



In June 2015, 300,000 ‘A’ ordinary
shares awards were granted to the non-executive director with a fair market value of $21.34 per share. Subject to continued employment,
these awards with the exercise price of $18. These shares were issued on July 16, 2015



On June 9, 2015, 10,000 ‘A’ ordinary
shares each were awarded to two non-executive directors and a consultant with par value exercise price and a fair market value
of $21.34 per share. Subject to continued employment, these awards vest on June 9, 2016. These shares were issued on February 2,
2016.



|27 | JOINT SHARE OWNERSHIP RESERVE
|-- | -----------------------------



|                             |  | (in thousands) |         
|---------------------------- |  | -------------- | --------
|Balance at April 1, 2015     |  | $              | (24,474 
|Issue out of treasury shares |  |                | 7,307   
|Balance at March 31, 2016    |  | $              | (17,167)



The Joint share ownership reserve represents the cost
of shares issued by Eros International Plc and held by the JSOP Trust to satisfy the requirements of the Joint Share Ownership
Plan (see Note 26).  On June 5, 2014, the Board approved discretionary vesting of 20% of the applicable JSOP shares. In the
current year 573,262 (2015: 80,704) ‘A’ ordinary shares held by the JSOP Trust were issued to eligible employees.



The number of shares held by the JSOP Trust at March
31, 2016 was 1,346,198 ‘A’ ordinary shares (2015: 1,919,460 Ordinary ‘A’ shares).

F-38






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



|28 | OTHER COMPONENTS OF EQUITY
|-- | --------------------------



|                               |  | As at March 31 (in thousands) |       
|------------------------------ |  | ----------------------------- | ------
|                               |  | 2016                          |       
|Movement in Hedging reserve:   |  |                               |       
|Opening balance                |  | $                             | (1,983
|Reclassified to profit or loss |  |                               | 804   
|Closing balance                |  | $                             | (1,179



|Movement in revaluation reserve:                                |  |   |       |  |  |   |       |  |  |   |       | 
|--------------------------------------------------------------- |  | - | ----- |  |  | - | ----- |  |  | - | ----- | 
|Opening balance                                                 |  | $ | 1,528 |  |  | $ | 1,528 |  |  | $ | 1,528 | 
|Gain recognized on revaluation of property, plant and equipment |  |   | 328   |  |  |   | —     |  |  |   | —     | 
|Closing balance                                                 |  | $ | 1,856 |  |  | $ | 1,528 |  |  | $ | 1,528 | 



|Movement in Available for sale fair value reserve:                |  |   |         |   |  |   |         |   | 
|----------------------------------------------------------------- |  | - | ------- | - |  | - | ------- | - | 
|Opening balance                                                   |  | $ | 6,622   |   |  | $ | 5,802   |   | 
|Impairment loss on available-for-sale financial assets            |  |   | —       |   |  |   | 820     |   | 
|Closing balance                                                   |  | $ | 6,622   |   |  | $ | 6,622   |   | 
|                                                                  |  |   |         |   |  |   |         |   | 
|Movement in Foreign Currency Translation Reserves                 |  |   |         |   |  |   |         |   | 
|Opening balance                                                   |  | $ | (50,048 | ) |  | $ | (43,858 | ) | 
|Other comprehensive loss due to translation of foreign operations |  |   | (10,561 | ) |  |   | (6,190  | ) | 
|Closing balance                                                   |  | $ | (60,609 | ) |  | $ | (50,048 | ) | 
|                                                                  |  |   |         |   |  |   |         |   | 
|Total Other Components of Equity                                  |  | $ | (53,310 | ) |  | $ | (43,881 | ) | 



|29 | SIGNIFICANT NON-CASH EXPENSES
|-- | -----------------------------



Significant non-cash expenses, except loss on sale of assets, share
based compensation, depreciation and amortization were as follows:



|                                                          |  | As at March 31 |       
|--------------------------------------------------------- |  | -------------- | ------
|                                                          |  | 2016           |       
|                                                          |  | (in thousands) |       
|Net loss/(gain) on held for trading financial liabilities |  | $              | 3,566 
|Impairment loss on available-for-sale financial assets    |  |                | —     
|Provisions for trade and other receivables                |  |                | 1,315 
|Impairment loss on content advances                       |  |                | 2,545 
|Unrealized foreign exchange (gain)/loss                   |  |                | (2,864
|                                                          |  | $              | 4,562 



|30 | FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
|-- | -----------------------------------------



The Group has established objectives concerning the holding and
use of financial instruments. The underlying basis of these objectives is to manage the financial risks faced by the Group.



Formal policies and guidelines have been set to achieve these objectives.
The Group does not enter into speculative arrangements or trade in financial instruments and it is the Group’s policy not
to enter into complex financial instruments unless there are specific identified risks for which such instruments help mitigate
uncertainties.



Management of Capital Risk and Financial Risk



The Group manages its capital to ensure that entities in the Group
will be able to continue as a going concern while maximizing the return to shareholders through the optimization of the debt and
equity balance. The capital structure of the Group consists of debt, which includes the borrowings, cash and cash equivalents
and equity attributable to equity holders of Eros, comprising issued capital, reserves and retained earnings as disclosed in Notes
21, 23 and 25 and the consolidated statement of changes in equity.



F-39






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



The gearing ratio at the end of the reporting period was as follows:



|                                                                  |  | As at March 31 |        
|----------------------------------------------------------------- |  | -------------- | -------
|                                                                  |  | 2016           |        
|                                                                  |  | (in thousands) |        
|Debt (net of debt issuance cost of $2,109,000 (2015: $2,940,000)) |  | $              | 311,905
|Cash and cash equivalents                                         |  |                | 182,774
|Net debt                                                          |  |                | 129,131
|Equity                                                            |  |                | 809,094
|Net debt to equity ratio                                          |  |                | 16.0%  



Debt is defined as long and short-term borrowings (excluding derivatives).
Equity includes all capital and reserves of the Group that are managed as capital.



Categories of financial instruments



|                                                                    |  | 2016           |         |  | 2015 |  
|------------------------------------------------------------------- |  | -------------- | ------- |  | ---- | -
|                                                                    |  | (in thousands) |        
|Financial assets                                                    |  |                |         |  |      |  
|Available-for-sale investments                                      |  | $              | 30,147  |  |      | $
|Other financial assets(1)                                           |  |                | 377,312 |  |      |  
|                                                                    |  | $              | 407,459 |  |      | $
|Financial liabilities at amortized cost                             |  |                |         |  |      |  
|Trade payables excluding value added tax and other tax payables     |  | $              | 56,875  |  |      | $
|Borrowings                                                          |  |                | 311,905 |  |      |  
|Financial Liabilities at fair value through profit or loss          |  |                |         |  |      |  
|Derivatives at fair value through profit or loss - held for trading |  |                | 22,850  |  |      |  
|                                                                    |  | $              | 391,630 |  |      | $



(1) Other financial assets include loans and receivables, excluding
prepaid charges and statutory receivables, and includes cash and cash equivalents and restricted deposits held with banks.



Financial risk management objectives



Based on the operations of the Group throughout the world, Management
considers that the key financial risks that it faces are credit risk, currency risk, liquidity risk and interest rate risk. The
objectives under each of these risks are as follows:

| | · | credit risk: minimize the risk of default and concentration.
| | - | ------------------------------------------------------------

| | · | currency risk: reduce exposure to foreign exchange movements principally between U.S. dollar, Indian Rupee and GBP.
| | - | -------------------------------------------------------------------------------------------------------------------

| | · | liquidity risk: ensure adequate funding to support working capital and future capital expenditure requirements.
| | - | ---------------------------------------------------------------------------------------------------------------

| | · | interest rate risk: mitigate risk of significant change in market rates on the cash flow of issued variable rate debt.
| | - | ----------------------------------------------------------------------------------------------------------------------



Credit Risk



The Group’s credit risk is principally attributable to its
trade receivables, advances financial guarantees and cash balances. As a number of the Group’s trading activities require
third parties to report revenues due to the Group this risk is not limited to the initial agreed sale or advance amounts. The amounts
shown within the statement of financial position in respect of trade receivables and advances are net of allowances for doubtful
debts based upon objective evidence that the Group will not be able to collect all amounts due.



F-40






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



Trading credit risk is managed on a country by country basis by
the use of credit checks on new clients and individual credit limits, where appropriate, together with regular updates on any changes
in the trading partner’s situation. In a number of cases trading partners will be required to make advance payments or minimum
guarantee payments before delivery of any goods. The Group reviews reports received from third parties and in certain cases as
a matter of course reserve the right within the contracts it enters into to request an independent third party audit of the revenue
reporting.



The credit risk on cash balances and derivative financial instruments
is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.



The Group from time to time will have significant concentration
of credit risk in relation to individual theatrical releases, television syndication deals or music licenses. This risk is mitigated
by contractual terms which seek to stagger receipts and/or the release or airing of content. As at March 31, 2016, 54.2%
(2015: 56%) of trade account receivables were represented by the top five debtors. The maximum exposure to credit risk is that
shown within the statement of financial position. The maximum credit exposure on financial guarantees given by the Group for various
financial facilities is described in Note 31.



As at March 31, 2016, the Group did not hold any material
collateral or other credit enhancements to cover its credit risks associated with its financial assets.



Currency Risk



The Group operates throughout the world with significant operations
in India, the British Isles, the United States of America and the United Arab Emirates. As a result it faces both translation and
transaction currency risks which are principally mitigated by matching foreign currency revenues and costs wherever possible.



The Group’s major revenues are denominated in U.S. Dollars, Indian
Rupees and British pounds sterling which are matched where possible to its costs so that these act as an automatic hedge against
foreign currency exchange movements.



The Group has identified that it will need to utilize hedge transactions
to mitigate any risks in movements between the U.S. Dollar and the Indian Rupee and has adopted an agreed set of principles
that will be used when entering into any such transactions. No such transactions have been entered into to date and the Group has
managed foreign currency exposure to date by seeking to match foreign currency inflows and outflows as much as possible. Details
of the foreign currency borrowings that the Group uses to mitigate risk are shown within Interest Risk disclosures.



As at the statement of financial position date there were no outstanding
forward foreign exchange contracts. The Group adopts a policy of borrowing where appropriate in the local currency as a hedge against
translation risk. The table below shows the Group’s net foreign currency monetary assets and liabilities position in the
main foreign currencies, translated to USD equivalents, as at the year-end:



|                     |  |     |         |   | Net Balance    | 
|-------------------- |  | --- | ------- | - | -------------- | 
|                     |  | USD |         |   | GBP            | 
|                     |  |     |         |   | (in thousands) | 
|As at March 31, 2016 |  |     | (12,578 | ) |                | 
|As at March 31, 2015 |  |     | 10,420  |   |                | 



The above exposure to foreign currency arises where a consolidated
entity holds monetary assets and liabilities denominated in a currency different to the functional currency of that entity.



A uniform decrease of 10% in exchange rates against all foreign
currencies in position as of March 31, 2016 would have decreased in the Company’s net income before tax by approximately
$3,947,000 (2015: gain of $731,000 and 2014: gain of $1,007,000). An equal and opposite impact would be experienced in the event
of an increase by a similar percentage.



Our sensitivity to foreign currency has increased during the year
ended March 31, 2016 as a result of an increase in liabilities compared to assets denominated in foreign currency over the
comparative period. In Management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange
risk because the exposure at the end of the reporting period does not reflect the exposure during the year.



F-41






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



Liquidity Risk



The Group manages liquidity risk by maintaining adequate reserves
and agreed committed banking facilities. Management of working capital takes account of film release dates and payment terms agreed
with customers.



An analysis of short-term and long-term borrowings is set out in
Note 23. Set out below is a maturity analysis for non-derivative and derivative financial liabilities. The amounts disclosed are
based on contractual undiscounted cash flows. The table includes both interest and principal cash flows. To the extent that interest
flows are floating rate, the undiscounted amount is derived from interest rates as at March 31, in each year.



|                                 |  | Total          |         |  | Less than 1 year |   |         | 1-3 years |  |   | 3-5 years |  |  | More than  5 years |      
|-------------------------------- |  | -------------- | ------- |  | ---------------- | - | ------- | --------- |  | - | --------- |  |  | ------------------ | -----
|                                 |  | (in thousands) |         |  |                  |  
|As at March 31, 2016             |  |                |         |  |                  |   |         |           |  |   |           |  |  |                    |      
|Borrowing principal payments     |  | $              | 311,905 |  |                  | $ | 219,275 |           |  | $ | 11,865    |  |  | $                  | 7,135
|Borrowing interest payments      |  |                | 37,458  |  |                  |   | 12,873  |           |  |   | 12,152    |  |  |                    | 9,937
|Derivative financial instruments |  |                | 22,850  |  |                  |   | —       |           |  |   | —         |  |  |                    | —    
|Trade and other payables         |  |                | 65,178  |  |                  |   | 65,178  |           |  |   | —         |  |  |                    | —    



|                                 |  | Total          |         |  | Less than 1 year |   |        | 1-3 years |  |   | 3-5 years |  |  | More than  5 years |      
|-------------------------------- |  | -------------- | ------- |  | ---------------- | - | ------ | --------- |  | - | --------- |  |  | ------------------ | -----
|                                 |  | (in thousands) |         |  |                  |  
|As at March 31, 2015             |  |                |         |  |                  |   |        |           |  |   |           |  |  |                    |      
|Borrowing principal payments     |  | $              | 314,670 |  |                  | $ | 96,397 |           |  | $ | 136,608   |  |  | $                  | 4,867
|Borrowing interest payments      |  |                | 41,908  |  |                  |   | 9,963  |           |  |   | 14,928    |  |  |                    | 9,985
|Derivative financial instruments |  |                | 19,284  |  |                  |   | —      |           |  |   | —         |  |  |                    | —    
|Trade and other payables         |  |                | 29,453  |  |                  |   | 29,453 |           |  |   | —         |  |  |                    | —    



At March 31, 2016, the Group had facilities available of $318,391,000
(2015: $318,409,000) and had net undrawn amounts of $4,377,000 (2015: $800,000) available.



In addition, the Group has issued financial guarantees amounting
to $2,373,000 (2015: $3,014,000) in the ordinary course of business, having maturity dates up to the next 12 months. The
Group did not earn any fees to provide such guarantees. It does not anticipate any liability on these guarantees as it expects
that most of these will expire unused.



Interest Rate Risk



The Group is exposed to interest rate risk because entities in the
Group borrow funds at both fixed and floating interest rates. The risk is managed by maintaining an appropriate mix between fixed,
capped and floating rate borrowings, and by the use of interest rate swap contracts and forward interest rate contracts. Hedging
activities are evaluated to align with interest rate views to ensure the most cost effective hedging strategies are applied.



F-42






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



Currency, Maturity and Nature of Interest Rate of the Nominal
Value of Borrowings



|                                |  | As at March 31                     |        
|------------------------------- |  | ---------------------------------- | -------
|                                |  | 2016                               |        
|                                |  | (in thousands, except percentages) |        
|Currency                        |  |                                    |        
|U.S. Dollar                     |  | $                                  | 163,209
|Great British Pounds Sterling   |  |                                    | 93,458 
|Indian Rupees                   |  |                                    | 55,238 
|Total                           |  | $                                  | 311,905
|                                |  |                                    |        
|Maturity                        |  |                                    |        
|Due before one year             |  | $                                  | 219,275
|Due between one and three years |  |                                    | 11,865 
|Due between four and five years |  |                                    | 7,135  
|Due after five years            |  |                                    | 73,630 
|                                |  | $                                  | 311,905
|Nature of rates                 |  |                                    |        
|Fixed interest rate             |  | $                                  | 164,647
|Floating rate                   |  |                                    | 147,258
|Total                           |  | $                                  | 311,905



During the current year, the interest exposure was managed through
an interest cap on $100 million entered into in 2012. Two written floor contracts each with $100 million notional value were also
entered into in 2012.



The effect of these instruments in combination is that the maximum
cash outflow is 6% although the written floors mean that should market rates fall below the floor rate, then the interest charged
would be twice the floor rate, although never exceeding 6%. $100 million of the debt facility is classified as floating interest
rate borrowings as at March 31, 2016 and 2015.



The sensitivity analysis assumes a parallel shift of 100 basis points
interest rate across all yield curves. This calculation also assumes that the change occurs at the statement of financial position
date and has been calculated based on risk exposures outstanding as at that date. The period end balances are not necessarily representative
of the average debt outstanding during the period.



At 1% increase in underlying bank rates would lead to decrease in
the Company’s net income before tax by $2,721,000 for the year ended March 31, 2016 (2015: $397,000) on net income.
An equal and opposite impact would be felt if rates fell by 1%.



This analysis assumes that all other variables, in particular foreign
currency rates, remain constant.



Under the interest swap contracts, we have agreed to exchange the
difference between fixed and floating rate interest amounts calculated on an agreed notional principal amount. Such contracts enable
us to mitigate the risk of changing interest rates on the cash flow of issued variable rate debt.



The fair value of interest rate derivatives which comprise derivatives
at fair value through profit and loss is determined as the present value of future cash flows estimated and discounted based on
the applicable yield curves derived from quoted interest rates.



Financial instruments — disclosure of fair value measurement
level



Disclosures of fair value measurements are grouped into the following
levels:

| | · | Level 1 fair value measurements derived from unadjusted quoted prices in active markets for identical assets or liabilities;
| | - | ----------------------------------------------------------------------------------------------------------------------------

| | · | Level 2 fair value measurements derived from inputs, other than quoted prices included within Level 1, that are observable
for the asset or liability, either directly (as prices) or indirectly (derived from prices); and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Level 3 fair value measurements derived from valuation techniques that include inputs for the asset or liability that are not
based on observable market data.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------



F-43






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



The table below presents assets and liabilities measured at
fair value on a recurring basis, which are all category level 2:



|                                             |  |                                                 |  | As at March 31, 2016                                                                         |  |                                                                                 
|-------------------------------------------- |  | ----------------------------------------------- |  | -------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------
|                                             |  |                                                 |  | (in thousands)                                                                               |  |                                                                                 
|Description of type of financial assets      |  | Gross amount ofrecognized financial assets      |  | Gross amount of recognizedfinancial liabilities offset in thestatement of financial position |  | Net amounts financial assetspresented in the statementof financial position     
|Derivative assets                            |  | 200                                             |  | (200)                                                                                        |  | —                                                                               
|Total                                        |  | 200                                             |  | (200)                                                                                        |  | —                                                                               
|                                             |  |                                                 |  |                                                                                              |  |                                                                                 
|Description of type of financial liabilities |  | Gross amount ofrecognized financial liabilities |  | Gross amount of recognizedfinancial assets offset in thestatement of financial position      |  | Net amounts financial liabilitiespresented in the statementof financial position
|Derivative liabilities                       |  | (23,050)                                        |  | 200                                                                                          |  | (22,850)                                                                        
|Total                                        |  | (23,050)                                        |  | 200                                                                                          |  | (22,850)                                                                        



|                                             |  |                                                 |  | As at March 31, 2015                                                                         |  |                                                                                 
|-------------------------------------------- |  | ----------------------------------------------- |  | -------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------
|                                             |  |                                                 |  | (in thousands)                                                                               |  |                                                                                 
|Description of type of financial assets      |  | Gross amount ofrecognized financial assets      |  | Gross amount of recognizedfinancial liabilities offset in thestatement of financial position |  | Net amounts financial assetspresented in the statementof financial position     
|Derivative assets                            |  | 1,056                                           |  | (1,056)                                                                                      |  | —                                                                               
|Total                                        |  | 1,056                                           |  | (1,056)                                                                                      |  | —                                                                               
|                                             |  |                                                 |  |                                                                                              |  |                                                                                 
|Description of type of financial liabilities |  | Gross amount ofrecognized financial liabilities |  | Gross amount of recognizedfinancial assets offset in thestatement of financial position      |  | Net amounts financial liabilitiespresented in the statementof financial position
|Derivative liabilities                       |  | (20,340)                                        |  | 1,056                                                                                        |  | (19,284)                                                                        
|Total                                        |  | (20,340)                                        |  | 1,056                                                                                        |  | (19,284)                                                                        



Financial assets and liabilities subject to offsetting enforceable
master netting arrangements or similar agreements as at March 31, 2016 are as follows:



|                         |  | As at March 31,2016   |          
|------------------------ |  | --------------------- | ---------
|                         |  | (in thousands)        |          
|                         |  | Average contract rate |          
|2012 Interest Rate Cap   |  |                       | 6%       
|2012 Interest Rate Floor |  |                       | 0.5% - 3%
|2012 Interest Rate Floor |  |                       | 0.5% - 3%
|Total                    |  |                       |          



None of the above derivative instruments is designated in a hedging
relationship. A loss of $3,566,000 (2015: $7,801,000) in respect of the above derivative instruments has been recognized in
the income statement within other losses. Fair value of interest rate derivative involving interest rate options is estimated as
the present value of the estimated future cash flows based on observable yield curves using an option pricing model.



Reconciliation of Level 3 fair value measurements of financial assets



|                     |  | Available for sale of financial assets |       
|-------------------- |  | -------------------------------------- | ------
|                     |  | (in thousands)                         |       
|                     |  |                                        |       
|As at March 31, 2015 |  | $                                      | 29,917
|As at March 31, 2016 |  | $                                      | 30,147



F-44






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



Other losses include an impairment loss on available-for-sale financial
assets amounting to $Nil (2015: $1,307,000). The loss includes a fair value decline of $Nil (2015: $820,000) which was previously
recognized in other comprehensive income.



In July 2015, Eros acquired a 2% stake in TCT, a website which
is a global platform for local culture, showcasing the best art, culture, food and travel for every country in the world. The
acquisition of stake in TCT has been classified as Available-for-Sale investment and recognized at the transaction price of $230,050.
Subsequently, on June 3, 2016, the company sold this investment for $287,781 recording a gain of $57,786 in the income statement.



There were no transfers between any Levels in any of the years.



|31 | CONTRACTUAL OBLIGATIONS AND COMMITMENTS
|-- | ---------------------------------------



Eros’ material contractual obligations are comprised of contracts
related to content commitments.



|                     |  | Total          |        
|-------------------- |  | -------------- | -------
|                     |  | (in thousands) |        
|As at March 31, 2016 |  | $              | 218,541
|As at March 31, 2015 |  | $              | 260,573



The Group has provided certain stand-by letters of credit amounting
to $96,033,000 (2015: $96,196,000) which are in the nature of performance guarantees issued while entering into film co-production
contracts and are valid until funding obligations under these contracts are met. These guarantees, issued in connection with the
aforementioned content commitments, and included in the table above have varying maturity dates and are expected to fall due within
a period of one to three years.



In addition, the Group has issued financial guarantees amounting
to $2,373,000 (2015: $3,014,000) in the ordinary course of business, and included in the table above, having varying maturity dates
up to the next 12 months. The Group is only called upon to satisfy a guarantee when the guaranteed party fails to meet its
obligations. The Group did not earn any fee to provide such guarantees. It does not anticipate any liability on these guarantees
as it expects that most of these will expire unused.



Operating lease commitments are disclosed in Note 22.



|32 | CONTINGENT LIABILITIES
|-- | ----------------------



| | 1. | Beginning
                                         on November 13, 2015, Eros International Plc was named a defendant in five substantially
                                         similar putative class action lawsuits filed in federal court in New Jersey and New York
                                         by purported shareholders of the Company. The three actions in New Jersey were
                                         consolidated, and, on May 17, 2016, were transferred to the United States District Court
                                         for the Southern District of New York where they were then consolidated with the other
                                         two actions on May 27, 2016. In general, the plaintiffs allege that the Company,
                                         and in some cases also Company’s management, violated federal securities
                                         laws by overstating Company’s financial and business results, enriching
                                         the Company’s controlling owners at the expense of other stockholders, and
                                         engaging in improper accounting practices. On April 5, 2016, a lead plaintiff
                                         and lead counsel were appointed in the now-consolidated New York action. A single consolidated
                                         amended complaint was filed on July 14, 2016. The Plaintiffs have alleged that the
                                         Company and certain individual defendants -- Kishore Lulla, Jyoti Deshpande, Andrew Heffernan,
                                         and Prem Parameswaran -- have violated the federal securities laws, specifically Sections
                                         10(b) and 20(a) of the Exchange Act.  The amended consolidated complaint does not
                                         assert certain claims that had been asserted in prior complaints including (1) claims
                                         for violations of Sections 11 and 15 of the Securities Act and (2) claims against certain
                                         individual defendants, who are now not named defendants. The claims principally arise
                                         out of allegations that the Company and the individual defendants made material misrepresentations
                                         about the success, size, and financial performance of Eros Now, our streaming video service,
                                         and our film library. The Company expects to move to dismiss the consolidated amended
                                         complaint. Given the uncertainty inherent in these matters, based on assessment made
                                         after taking appropriate legal advice, the Company does not believe that the ultimate
                                         outcome of this matter will be unfavorable. Accordingly, no liability has been recorded
                                         in Group’s consolidated financial statements..
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | In Fiscal 2015, Eros received two notices from the Commissioner of Service Tax (India) to show
cause why an amount aggregating to $29 million for the period April 1, 2009 to March 31, 2014 should not be levied on and paid
on account of service tax arising on temporary transfer of copyright services and certain other related matters. Eros has filed
its objections against the notice with the authorities. Subsequently in June 2015, Eros received assessment orders from the Commissioner
of Service Tax (India) levying tax as stated above and ordering Eros to pay an additional amount of $29 million as interest and
penalties in connection with the aforesaid matters. On September 3, 2015, the Company filed an appeal against the said order before
the authorities. In April 2016, Eros, received a show cause notice from the Commissioner of Service Tax on similar grounds amount
aggregating to $1 million for the period 1 April 2014 to 31 March 2015. Considering the facts and nature of levies and the ad-interim
protection for service tax levy for a certain period granted by the Honorable High Court of Mumbai, the Group expects that the
final outcome of this matter will be favorable. Accordingly, based on the assessment made after taking appropriate legal advice,
no additional liability has been recorded in Group’s consolidated financial statements.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-45






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



| | 3. | In Fiscal 2015, Eros received several assessment orders and demand notices from value added tax and sales tax authorities in
India for the payment of amounts aggregating to $3 million (including interest and penalties) for certain fiscal years between
April 1, 2005 and March 31, 2011. Eros has appealed against each of these orders, and such appeals are pending before relevant
tax authorities. Though there uncertainties are inherent in the final outcome of these matters, the Company believes, based on
assessment made after taking legal advice, that the final outcome of the matters will be favorable. Accordingly, no additional
liability has been recorded in Group’s consolidated financial statements.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | From time to time, Eros is involved in legal proceedings arising in the ordinary course of its
business, typically intellectual property litigation and infringement claims related to the company’s feature films and other
commercial activities, which could cause it to incur expenses or prevent it from releasing a film. While the resolution of these
matters cannot be predicted with certainty, the Group does not believe, based on current knowledge or information available, that
any existing legal proceedings or claims are likely to have a material and adverse effect on its financial position, results of
operations or cash flows.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



There were no other material ongoing litigations at March 31, 2016
and March 31, 2015.



|33 | RELATED PARTY TRANSACTIONS
|-- | --------------------------



|                               |  |             |                |  | As atMarch 31,2016                   |   |     | As atMarch 31,2015 | 
|------------------------------ |  | ----------- | -------------- |  | ------------------------------------ | - | --- | ------------------ | 
|                               |  | Details of  |                |  | (in thousands except in notes below) |  
|                               |  | Transaction |                |  | Liability                            |   |     | Asset              | 
|Red Bridge Ltd.                |  |             | President fees |  |                                      | $ | 201 |                    | 
|550 County Avenue              |  |             | Rent/Deposit   |  |                                      |   | 355 |                    | 
|Line Cross Limited             |  |             | Rent/Deposit   |  |                                      |   | 882 |                    | 
|NextGen Films Pvt Ltd.         |  |             | Purchase/Sale  |  |                                      |   | —   |                    | 
|Everest Entertainment Pvt. Ltd |  |             | Purchase/Sale  |  |                                      |   | —   |                    | 
|Lulla Family                   |  |             | Rent/Deposit   |  |                                      |   | 187 |                    | 
|Lulla Family                   |  |             | Salary         |  |                                      |   | 25  |                    | 



Pursuant to a lease agreement that expires on March 31, 2016, the
lease requires Eros International Media Limited to pay $5,000 each month under this lease. Eros International Media Limited leases
apartments for studio use at Kailash Plaza, 3rd Floor, Opp. Laxmi Industrial Estate, Andheri (W), Mumbai, from Manjula K. Lulla,
the wife of Kishore Lulla. The lease was renewed on April 1, 2016 for a further period of one year on the same terms.



Pursuant to a lease agreement that expired on September 30, 2015,
the lease requires Eros International Media Limited to pay $5,000 each month under this lease. Eros International Media Limited
leases for use as executive accommodations the property Aumkar Bungalow, Gandhi Gram Road, Juhu, Mumbai, from Sunil Lulla. The
lease was renewed on October 1, 2015 for a further period of three years on the same terms.



Pursuant to a lease agreement that expires on January 4, 2020, Eros
International Media Limited leases office premise for studio use at Supreme Chambers, 5th Floor, Andheri (W), Mumbai from Kishore
and Sunil Lulla. Beginning January 2015, the lease requires Eros International Media Limited to pay $60,000 each month under this
lease.



Pursuant to a lease agreement that expires on April 1, 2020, the
real estate property at 550 County Avenue, Secaucus, New Jersey, from 550 County Avenue Property Corp, a Delaware corporation owned
by Beech Investments and of which our President of Americas Operations Ken Naz serves as a Director. The lease commenced on April 1,
2015, and required the Group to pay $11,000 each month. The lease was renewed on April 1, 2015 for a further period of five years
on the same terms. This is a non-cancellable lease



Pursuant to a lease agreement that expires in March 2018, including
renewal periods, the Group leases for U.K. corporate offices, the real property at 13 Manchester Square, London from Linecross
Limited, a U.K. company owned indirectly by a discretionary trust of which Kishore Lulla is a potential beneficiary. The current
lease commenced on November 19, 2009 and requires the Group to pay $148,000 each quarter.



F-46






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



Pursuant to an agreement the Group entered into with Redbridge Group
Ltd. on June 27, 2006, the Group agreed to pay an annual fee set each year of $300,000, $325,000 and $339,000in the respective
years ended March 31, 2016, 2015 and 2014, for the services of Arjan Lulla, the father of Kishore Lulla and Sunil Lulla, grandfather
of Rishika Lulla Singh, uncle of Vijay Ahuja and Surender Sadhwani and an employee of Redbridge Group Ltd. The agreement makes
Arjan Lulla honorary life president and provides for services including attendance at Board meetings, entrepreneurial leadership
and assistance in setting the Group’s strategy. Redbridge Group Ltd. is an entity owned indirectly by a discretionary trust
of which Kishore Lulla is a potential beneficiary.



The Group has engaged in transactions with NextGen Films Pvt. Ltd.,
an entity owned by the husband of Puja Rajani, sister of Kishore Lulla and Sunil Lulla, each of which involved the purchase and
sale of film rights. In the year ended March 31, 2016 NextGen Films Pvt. Ltd. sold film rights $2,728,000 (2015: $23,550,000,
2014$12,483,000) to the Group, and purchased film rights, including production services, of $Nil (2015: $275,000 and 2014:
$3,923,000).



The Group also engaged in transactions with Everest Entertainment
Pvt. Ltd. entity owned by the brother of Manjula K. Lulla, wife of Kishore Lulla, which is involved in the purchase and sale of
film rights. In March 31, 2016, Everest Entertainment Pvt. Ltd. sold film rights of $Nil (2015: $408,000 and 2014: $700)
to the Group.



Mrs. Manjula Lulla, the wife of Kishore Lulla, is an employee of
Eros International Limited-UK and is entitled to a salary of $154,000 per annum (2015: $167,000, 2014: $158,000). Mrs.
Krishika Lulla, the wife of Sunil Lulla, is an employee of Eros India and is entitled to a salary of $138,000 per annum (2015:
$115,542, 2014: $25,000). Ms. Riddhima Lulla, the daughter of Kishore Lulla, is an employee of entity and is entitled to a salary
of $38,000 per annum (2015: $10,100).



All of the amounts outstanding are unsecured and will be settled
in cash.



As at March 31, 2016, the Group has provided performance guarantee
to a bank amounting to $32,500,000 (2015: $32,500,000) in connection with funding commitments. under film co-production agreements
with NextGen Films Pvt. Ltd and having varying maturity dates up to the next 12 months.  The Group did not earn any fee
to provide such guarantees. It does not anticipate any liability on these guarantees as it expects that most of these will expire
unused. These amounts are included in content commitments under Note 31 above.



|34 | MAJOR CONSOLIDATED ENTITIES
|-- | ---------------------------



|                                          |  | Date           |  | Country ofIncorporation |  | % of votingrights held | 
|----------------------------------------- |  | -------------- |  | ----------------------- |  | ---------------------- | 
|Copsale Limited                           |  | June 2006      |  | BVI                     |  | 100.00                 | 
|Eros Australia Pty Limited                |  | June 2006      |  | Australia               |  | 100.00                 | 
|Eros International Films Pvt. Limited     |  | June 2006      |  | India                   |  | 100.00                 | 
|Eros International Limited                |  | June 2006      |  | U.K.                    |  | 100.00                 | 
|Eros International Media Limited          |  | June 2006      |  | India                   |  | 74.40                  | 
|Eros International USA Inc                |  | June 2006      |  | U.S.                    |  | 100.00                 | 
|Eros Music Publishing Limited             |  | June 2006      |  | U.K.                    |  | 100.00                 | 
|Eros Network Limited                      |  | June 2006      |  | U.K.                    |  | 100.00                 | 
|Eros Pacific Limited                      |  | June 2006      |  | Fiji                    |  | 100.00                 | 
|Eros Worldwide FZ-LLC                     |  | June 2006      |  | UAE                     |  | 100.00                 | 
|Big Screen Entertainment Pvt. Limited     |  | January 2007   |  | India                   |  | 64.00                  | 
|Ayngaran International Limited            |  | October 2007   |  | IOM                     |  | 51.00                  | 
|Ayngaran International Media Pvt. Limited |  | October 2007   |  | India                   |  | 51.00                  | 
|Ayngaran International UK Limited         |  | October 2007   |  | U.K.                    |  | 51.00                  | 
|EyeQube Studios Pvt. Limited              |  | January 2008   |  | India                   |  | 99.99                  | 
|Acacia Investments Holdings Limited       |  | April 2008     |  | IOM                     |  | 100.00                 | 
|Ayngaran Anak Media Pvt. Limited          |  | October 2008   |  | India                   |  | 51.00                  | 
|Belvedere Holdings Pte. Ltd.              |  | March 2010     |  | Singapore               |  | 100.00                 | 
|Eros International Pte Ltd.               |  | August 2010    |  | Singapore               |  | 100.00                 | 
|Digicine Pte. Limited                     |  | March 2012     |  | Singapore               |  | 100.00                 | 
|Colour Yellow Productions Pvt. Limited    |  | May 2014       |  | India                   |  | 50.00                  | 
|Eros Digital FZ LLC                       |  | September 2015 |  | UAE                     |  | 100.00                 | 
|Universal Power Systems Private Limited   |  | August 2015    |  | India                   |  | 100.00                 | 



F-47






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



All of the companies were involved with the distribution of film
content and associated media. All the companies are indirectly owned with the exception of Eros Network Limited, Eros Worldwide
FZ-LLC and Eros International Pte Ltd.



During Fiscal 2016, Group shareholding of Eros International Media
Ltd (EIML) reduced to 73.54% subsequent to the exercise of ESOP by the employees and issuance of shares to the promoters of Techzone.



In addition to the above the Eros International Plc Employee Benefit
Trust, a Jersey based Trust has been consolidated as it is a fully controlled Trust.



|35 | NON-CONTROLLING INTERESTS
|-- | -------------------------



Details of subsidiary that have material non-controlling interests



The Group has a number of subsidiaries held directly and indirectly
which operate and are incorporated around the world. Note 34 to the financial statements lists details of the major consolidated
entities and the interests in these subsidiaries. The non-controlling interests that are material to the Group relate to Eros International
Media Limited whose principal place of business is in India.



The table below shows the summarized financial information of Eros
International Media Limited whereas at March 31, 2016, non-controlling interests held an economic interest by virtue of shareholding
of 26.46% (March 2015: 25.60%). This summarized financial information represents amounts before inter-company eliminations.



|                                                                     |  | Year ended March 31 |         
|-------------------------------------------------------------------- |  | ------------------- | --------
|                                                                     |  | 2016                |         
|                                                                     |  | (in thousands)      |         
|Current assets                                                       |  | $                   | 38,162  
|Non-current assets                                                   |  |                     | 324,848 
|Current liabilities                                                  |  |                     | 122,497 
|Non-current liabilities                                              |  |                     | 60,491  
|Equity attributable to owners of the Group                           |  |                     | 132,390 
|Equity attributable to non-controlling interests                     |  | $                   | 47,632  
|                                                                     |  |                     |         
|Revenue                                                              |  | $                   | 182,167 
|Expenses                                                             |  |                     | (164,905
|Profit for the year                                                  |  | $                   | 17,262  
|Profit attributable to the owners of the Group                       |  | $                   | 12,694  
|Profit attributable to non-controlling interests                     |  | $                   | 4,568   
|                                                                     |  |                     |         
|Other comprehensive income attributable to the owners of the Group   |  | $                   | (7,004  
|Other comprehensive income attributable to non-controlling interests |  |                     | (2,520  
|Other comprehensive income during the year                           |  | $                   | (9,524  
|Total comprehensive income attributable to the owners of the Group   |  |                     | 5,691   
|Total comprehensive income attributable to non-controlling interests |  |                     | 2,047   
|Total comprehensive income during the year                           |  | $                   | 7,738   
|                                                                     |  |                     |         
|Net cash inflow from operating activities                            |  | $                   | 153,829 
|Net cash outflow from investing activities                           |  |                     | (131,263
|Net cash inflow from financing activities                            |  |                     | (24,071 
|Net cash (outflow)/inflow                                            |  | $                   | (1,505  



No dividends were paid to non-controlling interests during the year
(2015: $Nil).

F-48






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



|36 | SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS
|-- | ----------------------------------------------



Estimates and judgments are evaluated on a regular basis and are
based on historical experience and other factors, such as expectations of future events that are believed to be reasonable under
the present circumstances.



The Group makes estimates and assumptions concerning the future.
These estimates, by definition, will rarely equal the related actual results. The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the financial year are highlighted
below:



|36.1. | Goodwill and Trade name
|----- | -----------------------



The Group tests annually whether goodwill and trade name
have suffered impairment, in accordance with its accounting policy. The recoverable amount of cash-generating units has been determined
based on value in use calculations. We use market related information and estimates (generally risk adjusted discounted cash flows)
to determine value in use. Cash flow projections take into account past experience and represent management’s best estimate
about future developments. Key assumptions on which management has based its determination of fair value less costs to sell value
in use includes estimated growth rates, weighted average cost of capital and tax rates. These estimates, includes the methodology
used, can have a material impact on the respective values and ultimately the amount of any goodwill and tradename impairment.



|36.2. | Basis of Consolidation
|----- | ----------------------



The Group evaluates arrangements with special purpose vehicles in
accordance with of IFRS 10 – Consolidated Financial Statements to establish how transactions with such entities should be
accounted for. This requires a judgment over control such that it is exposed, or has rights, to variable returns and can influence
the returns attached to the arrangements.



|36.3. | Intangible Assets
|----- | -----------------



The Group is required to identify and assess the useful life of
intangible assets and determine their income generating life. Judgment is required in determining this and then providing an amortization
rate to match this life as well as considering the recoverability or conversion of advances made in respect of securing film content
or the services of talent associated with film production.



Accounting for the film content requires Management’s judgment
as it relates to total revenues to be received and costs to be incurred throughout the life of each film or its license period,
whichever is the shorter. These judgments are used to determine the amortization of capitalized film content costs. The Group uses
a stepped method of amortization on first release film content writing off more in year one which recognizes initial income flows
and then the balance over a period of up to nine years. In the case of film content that is acquired by the Group after its initial
exploitation, commonly referred to as Library, amortization is spread evenly over the lesser of 10 years or the license period.
Management’s policy is based upon factors such as historical performance of similar films, the star power of the lead actors
and actresses and others. Management regularly reviews, and revises when necessary, its estimates, which may result in a change
in the rate of amortization and/or a write down of the asset to the recoverable amount.



The Group tests annually whether intangible assets have suffered
any impairment, in accordance with the accounting policy. These calculations require judgments and estimates to be made, and, as
with Goodwill, in the event of an unforeseen event these judgments and assumptions would need to be revised and the value of the
intangible assets could be affected. There may be instances where the useful life of an asset is shortened to reflect the uncertainty
of its estimated income generating life. This is particularly the case when acquiring assets in markets that the Group has not
previously exploited.



|36.4. | Valuation of Available-for-Sale Financial Assets
|----- | ------------------------------------------------



The Group follows the guidance of IAS 39 – Financial Instruments:
Recognition and Measurement to determine, where possible, the fair value of its available-for-sale financial assets. This determination
requires significant judgment. In making this judgment, the Group evaluates, among other factors, the duration and extent to which
the fair value of an investment is less or more than its cost; the financial health of and near-term business outlook for the investee,
including factors such as industry and sector performance, changes in technology and operational and financing cash flow.

F-49






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



|36.5. | Income Taxes and Deferred Taxation
|----- | ----------------------------------



The Group is subject to income taxes in various jurisdictions. Judgment
is required in determining the worldwide provision for income taxes. We are subject to tax assessment in certain jurisdictions.
Significant judgement is involved in determining the provision for income taxes including judgement on whether the tax positions
are probable of being sustained in tax assessments.



Judgment is also required when determining whether
the Group should recognize a deferred tax asset, based on whether Management considers there is sufficient certainty in future
earnings to justify the carry forward of assets created by tax losses and tax credits. Judgment is also required when determining
whether the Group should recognize a deferred tax liability on undistributed earnings of subsidiaries. Where the ultimate outcome
is different than that which was initially recorded there will be an impact on the income tax and deferred tax provisions.



|36.6. | Share Based Payments
|----- | --------------------



The Group is required to evaluate the terms to determine whether
share based payment is equity settled or cash settled. Judgment is required to do this evaluation. Further, the Group is required
to measure the fair value of equity settled transactions with employees at the grant date of the equity instruments. The fair value
is determined principally by using the Black Scholes model and/or Monte Carlo Simulation Models which require assumptions regarding
risk free interest rates, share price volatility, the expected term and other variables. The basis and assumptions used in these
calculations are disclosed within Note 26. The aforementioned inputs entered in to the option valuation model that we use to determine
the fair value of our share awards are subjective estimates and changes to these estimates will cause the fair value of our share-based
awards and related share- based compensations expense we record to vary.



|37 | ADOPTION OF NEW AND REVISED STANDARDS
|-- | -------------------------------------



|37.1. | Standards, Interpretations and Amendments to Published Standards that are not yet effective
|----- | -------------------------------------------------------------------------------------------

Certain new standards, interpretations
and amendments to existing standards have been published that are mandatory for our accounting periods beginning on or after April 1,
2016 or later periods. Those which are considered to be relevant to Group’s operations are set out below.



| | i) | In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers (“IFRS 15”). This standard provides
a single, principle-based five-step model to be applied to all contracts with customers. Guidance is provided on topics such as
the point at which revenue is recognized, accounting for variable consideration, costs of fulfilling and obtaining a contract and
various other related matters. IFRS 15 also introduced new disclosure requirements with respect to revenue.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The five steps in the model under IFRS 15 are : (i) identify
the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price;
(iv) allocate the transaction price to the performance obligations in the contracts; and (v) recognize revenue when (or as) the
entity satisfies a performance obligation.



IFRS 15 replaces the following standards and interpretations:



| | · | IAS 11 “Construction Contracts”
| | - | -------------------------------

| | · | IAS 18 “Revenue”
| | - | ----------------

| | · | IFRIC 13 “Customer Loyalty Programmes”
| | - | --------------------------------------

| | · | IFRIC 15 “Agreements for the Construction of Real Estate”
| | - | ---------------------------------------------------------

| | · | IFRIC 18 “Transfers of Assets from Customers”
| | - | ---------------------------------------------

| | · | SIC-31 “Revenue -Barter Transactions Involving Advertising Services”
| | - | --------------------------------------------------------------------



F-50






EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



When first applying IFRS 15, it should be applied in full
for the current period, including retrospective application to all contracts that were not yet complete at the beginning of that
period. In respect of prior periods, the transition guidance allows an option to either:



| | · | apply IFRS 15 in full to prior periods (with certain limited practical expedients being available); or
| | - | ------------------------------------------------------------------------------------------------------

| | · | retain prior period figures as reported under the previous standards, recognizing the cumulative effect of applying IFRS 15
as an adjustment to the opening balance of equity as at the date of initial application (beginning of current reporting period).
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In April 2016, the IASB issued amendments to IFRS 15,
clarifying some requirements and providing additional transitional relief for companies. The amendments do not change the underlying
principles of IFRS 15 but clarify how those principles should be applied. The amendments clarify how to:



| | · | apply identify a performance obligation (the promise to transfer a good or a service to a customer) in a contract;
| | - | ------------------------------------------------------------------------------------------------------------------

| | · | accounting for licenses of intellectual property; and
| | - | -----------------------------------------------------

| | · | determine whether a company is a principal (the provider of a good or service) or an agent (responsible for arranging for the
good or service to be provided)
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------

IFRS 15 is effective for fiscal years beginning on or
after January 1, 2018. Earlier application is permitted. The Company is currently evaluating the impact that this new standard
will have on its consolidated financial statements.



| | ii) | In May 2014, the IASB issued two amendments with respect to IAS 16 “Property, Plant and Equipment” (“IAS
16”) and IAS 38 “Intangible Assets” (“IAS 38”) dealing with acceptable methods of depreciation and
amortization.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The amended IAS 16 prohibits entities from using a revenue
based depreciation method for items of property, plant and equipment. Further the amendment under IAS 38 introduces a rebuttable
presumption that revenue is not an appropriate basis for amortization of an intangible asset. However this presumption can only
be rebutted in two limited circumstances:



| | i) | the intangible is expressed as a measure of revenue i.e. when the predominant limiting factor inherent in an intangible asset
is the achievement of a contractually specified revenue threshold; or
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ii) | it can be demonstrated that revenue and the consumption of economic benefits of the intangible assets are highly correlated.
In these circumstances, revenue expected to be generated from the intangible assets can be an appropriate basis for amortization
of the intangible asset.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The amendments apply prospectively and are effective for
annual periods beginning on or after January 1, 2016, with earlier application permitted. The Company does not believe that this
amendment will have a material impact on its consolidated financial statements.



| | iii) | In July 2014, the IASB finalized and issued IFRS 9 – Financial Instruments (“IFRS 9”). IFRS 9 replaces IAS
39 “Financial instruments: recognition and measurement, the previous Standard which dealt with the recognition and measurement
of financial instruments in its entirety upon the former’s effective date.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Key requirements of IFRS 9:

| | i. | Replaces IAS 39’s measurement categories with the following three categories:
| | -- | -----------------------------------------------------------------------------

| | · | fair value through profit or loss (‘FVTPL’)
| | - | -------------------------------------------

| | · | fair value through other comprehensive income (‘FVTOCI’)
| | - | --------------------------------------------------------

| | · | amortized cost
| | - | --------------

| | ii. | Eliminates the requirement for separation of embedded derivatives from hybrid financial assets, the classification requirements
to be applied to the hybrid financial asset in its entirety.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | iii. | Requires an entity to present the amount of change in fair value due to change in entity’s own credit risk in other comprehensive
income.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------

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EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



| | iv. | Introduces new impairment model, under which the “expected” credit loss are required to be recognized as compared
to the existing “incurred” credit loss model of IAS 39.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | v. | Fundamental changes in hedge accounting by introduction of new general hedge accounting model which:
| | -- | ----------------------------------------------------------------------------------------------------

| | · | Increases the eligibility of hedged item and hedging instruments;
| | - | -----------------------------------------------------------------

| | · | Introduces a more principles-based approach to assess hedge effectiveness.
| | - | --------------------------------------------------------------------------

IFRS 9 is effective for annual periods beginning
on or after January 1, 2018.

Earlier application is permitted provided that all the
requirements in the Standard are applied at the same time with two exceptions:

| | i. | The requirement to present changes in the fair value of a liability due to changes in own credit risk may be applied early
in isolation;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------

| | ii. | Entity may choose as its accounting policy choice to continue to apply hedge accounting requirements of IAS 39 instead of new
general hedge accounting model as provided in IFRS 9.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company is currently evaluating the impact that this
new standard will have on its consolidated financial statements.



| | iv) | In January 2016, IASB has issued a new standard, IFRS 16 “Leases”. The new standard sets out the principles for
recognition, measurement, presentation and disclosure of leases for both parties to a contract i.e. the lessee and the lessor.
The standard provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless
the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or
finance. IFRS 16 supersedes IAS 17 ‘Leases’ and related interpretations and is effective for periods beginning on or
after 1 January 2019, with earlier adoption permitted in IFRS 15 ‘Revenue from Contracts with Customers’ has also been
applied.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company is currently evaluating the impact that this
new standard will have on its consolidated financial statements.



| | v) | In January 2016, the IASB issued amendments to IAS 12 – “Income taxes” to clarify the following:
| | -- | ------------------------------------------------------------------------------------------------

| | · | the carrying value of an asset does not limit the estimation of probable future taxable profits.
| | - | ------------------------------------------------------------------------------------------------

| | · | estimates for future taxable profits exclude tax deductions resulting from the reversal of deductible temporary differences.
| | - | ----------------------------------------------------------------------------------------------------------------------------

| | · | an entity assesses a deferred tax asset in combination with other deferred tax assets. Where tax law restricts the utilization
of tax losses, an entity would assess a deferred tax asset in combination with other deferred tax assets of the same type. The
amendments are effective for annual periods beginning on or after January 1, 2017. Earlier application is permitted.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company does not believe that this amendment will
have a material impact on its consolidated financial statements.



| | vi) | In January 2016, the IASB issued amendments in IAS 7 – “Statement of Cash Flows” to clarify and improve information
provided to users of financial statements about an entity’s financing activities.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The IASB requires that the following changes in liabilities
arising from financing activities to be disclosed (to the extent necessary):

| | · | changes from financing cash flows;
| | - | ----------------------------------

| | · | changes arising from obtaining and losing control of subsidiaries or other businesses;
| | - | --------------------------------------------------------------------------------------

| | · | the effect of changes of foreign exchange rates;
| | - | ------------------------------------------------

| | · | changes in fair values; and
| | - | ---------------------------

| | · | other changes.
| | - | --------------

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EROS INTERNATIONAL PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



The amendments are effective for annual periods beginning
on or after January 1, 2017. Earlier application is permitted. Entities need not present comparative information when they first
apply the amendments.

The Company is currently evaluating the effect of this
amendment on its consolidated financial statements.

| | vii) | In June 2016, the IASB issued amendments to IFRS 2 – “Share-based Payment” to clarify the accounting for
certain types of share-based payment transactions:
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

The amendments, which were developed through the IFRS
Interpretations Committee, provide requirements on the accounting for the following:

| | · | the effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments;
| | - | ----------------------------------------------------------------------------------------------------------

| | · | share-based payment transactions with a net settlement feature for withholding tax obligations; and
| | - | ---------------------------------------------------------------------------------------------------

| | · | a modification to the terms and conditions of a share-based payment that changes the classification of the transaction from
cash-settled to equity-settled
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------

The amendments are effective for annual periods beginning
on or after January 1, 2018. Earlier application is permitted.



The Company does not believe that this amendment
will have a material impact on its consolidated financial statements.



F-53