EROS: Suggested Investor Questions on UAE Financial Reporting

Eros International Plc [NYSE Trading Symbol: EROS, $13.99] is scheduled to host a conference call later this morning at 8:30 AM Eastern Time to discuss its reported financial results for fourth quarter and fiscal year 2016.  The following are suggested issues for investors to raise with management

  1. its undisclosed “divided” audit and shifting revenue and cost allocation between its two public entities;
  2. its Audit Committee investor representations of a purported review;
  3. its relationship with Rana Productions Limited and former Group Chief Financial Officer Andrew Hefferman’s role in this company;
  4. its discretionary valuation of Film Content and Accounts Receivables;
  5. its former CFO Hefferman’s failure to execute and file the required Sarbanes-Oakley compliance certification for Fiscal 2014 and 2015.

Another investor concern is EROS’s self-professed claim to have increased revenues to customers located in the United Arab Emirates (“UAE”) over 15 fold in the last three years.  The UAE professed a 1,550.8% increase in the reported revenues while revenues in India decreased 3.6% and revenues for all Customer Locations excluding the UAE decreased 9.9%.

Attached here you will find’s spreadsheet analysis titled “Revenues by Customer Location.”

Grant Thornton India LLP’s (“GTI”) has retained Foley and Lardner LLP (“Foley”) as its counsel. has sent a letter seeking information from Foley pertaining to the GTI “divided responsibility” audit. has also sent a letter to pertaining to Skadden, Arps, Slate, Meagher & Flom LLP’s (“Skadden”) role in Eros’ internal review.


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