Acquiring and co-producing Indian films, including primarily in Hindi languageas well as certain Tamil and other Regional

language films. General Corporate purposes.

S.N.

Description

Amount (Rs. in Lakhs)

1 2 3

Gross Proceeds of the Issue* Issue Expenses* Net Proceeds of the Issue*

* To be finalised on determination of Issue price

S.N.

Description

Amount proposed to be financed from Net Proceeds (in Lakhs)

28000.00 -

1 2

Acquiring and co-producing Indian films General Corporate Purpose

Total*

* To be finalised on determination of Issue price

Any expenditure towards the aforementioned objects would be recovered from the Net Proceeds of the Issue Entire requirement of the objects will be funded from the Net Proceeds. There is no requirement of making firm arrangements of finance towards 75% of the stated means of finance, excluding the amount to be raised through the issue & existing identifiable internal accruals

Company intends to use upto Rs. 28000.0 Lakhs of the Net Proceeds to fund our Hindi, Tamil & other regional language films. The Eros India Library includes over 1000 Indian films including regional language films.

Revenues earned by exploiting film content that we buy from third parties, co-produce & occassionaly produce. We source or acquire our film conten through entering into assignment/ licensing/ co-produtions arrangements with other film producers & co-producers All these above content is expolited & distributed by us end-to-end through multiple formats such as theatres, home entertainment, principally in form of DVDs, VCDs and music CDs, television syndication & digital new media.

S. N. 1 2

PERIOD

NO. OF HINDI FILMS 4 13

NO. OF REGIONAL FILMS 10 102

HINDI FILM NAMES

April to June, 2010 March 31, 2010

Housefull & Pathshala Kambakkht Ishq, Love Aaj Kal, Wanted De Dana Dan

3
4 5

March 31, 2009

March 31, 2008 March 31, 2007

19
23 27

75
42 2 Om Shanti Om, Partner, Hey Baby Omkara, Namastey London

Cost of Rs. 28000.00 Lakhs will include the following cost with estimated % of the total cost: Cast & Crew Expenses (45%) Shooting Expenses (30 %) Post Production Expenses (5%) Marketing & Advertising (20%)

We have deployed Rs. 5388.00 Lakhs towards the Hindi & Marathi film projects as on July 31, 2010

Organic & inorganic growth opportunities including acquisitions & strategic initiatives. New projects and existing projects. Balance net proceeds will be utilised towards general corporate purposes.

Our fund requirements as described above are based on management estimates and our current business plan and have not been appraised by any bank or financial institution. Also see, Risk Factors on page x.

Our Company, in accordance with the policies of our Board of Directors, will have flexibility in deploying the Net Proceeds. Pending utilisation for the purposes described above, we intend to invest the funds in: high quality interest/dividend bearing liquid instruments investments in mutual funds deposits with banks other investment grade interest bearing securities. Such investments would be in accordance with applicable laws and investment policies approved by our Board of Directors from time to time.

Our Company will disclose the utilisation of the Net Proceeds, including interim use under a separate head in its balance sheet for such fiscal periods as required under the ICDR Regulations, the Equity Listing Agreement and any other applicable law or regulations, clearly specifying the purposes for which the Net Proceeds have been utilised. Our Company will also, in its balance sheet for the applicable fiscal periods, provide details, if any, in relation to all such Issue Proceeds that have not been utilised, if any, of such currently unutilised Issue Proceeds. As per the current requirements of Clause 49 of the Equity Listing Agreement, our Company will disclose to the Audit Committee the use/application of funds on a quarterly basis as part of our quarterly declaration of results. Further, on an annual basis, our Company shall place before the Audit Committee a statement of funds utilised for purposes other than those stated in this Red Herring Prospectus. This disclosure will be made until such time 46 as the entire proceeds of the Issue have been fully spent. The statement will be certified by our statutory auditors.

Further, in accordance with clause 43A of the Equity Listing Agreement, our Company will furnish to the Stock Exchanges on a quarterly basis, a statement indicating material deviations, if any, in the utilisation of the proceeds of the Issue for the Objects of the Issue as stated above. This information will also be published in newspapers simultaneously with the interim or annual financial results, after placing the same before the Audit Committee. Except for an amount up to Rs. 5,000 lakhs, which would be payable in course of our ordinary business to our Promoter Eros Worldwide in relation to acquisition of film content for one of the untitled projects, described in the table under the heading Details of the Objects of the Issue-Acquiring and co-producing Indian Films, including primarily Hindi language films as well as certain Tamil and other regional language films on page 43, no part of the Issue Proceeds will be paid by our Company as consideration to our Promoters, Directors, Key Managerial Personnel, associates and Group Entities promoted by the Promoters.

 The

Issue Price will be determined in consultation with the BRLMs, on the basis of assessment of market demand for the Equity Shares through the Book Building Process. The face value of the equity shares is Rs. 10. The Issue Price is [] times the face value at the lower end of the Price Band and [] times the face value at the higher end of the Price Band.

Valuable and expanding content library Well developed content distribution network Portfolio approach to films and a strong regional presence Strong long-standing relationships with talent within the industry provide steady access to content and talent Strong and experienced management Value of the Eros name

Weighted Average Earning Per Share 2. Price Earning Ratio in relation to the Issue Price 3. Weighted Average Return on Net Worth as per Restated Financial Statements 4. Minimum Return on increased Net Worth after Issue needed to maintain Pre-Issue EPS 5. Net Asset Value# per Equity Share of face value Rs. 10 each 6. Comparison with Industry Peers
1.