TIDMDQE
RNS Number : 0312X
DQ Entertainment PLC
14 November 2014
For immediate release 14 November 2014
DQ Entertainment plc
("DQE" or the "Company")
Results for the half year ended 30 September 2014
DQE, a leading animation, gaming, live action entertainment
production and distribution company, today announces its
consolidated un-audited financial results for the half year ended
30 September 2014.
1. Financial Highlights for the half year ended 30 September 2014:
o Revenue: INR 733 m (H1 2013: INR 870 m)
o From Production : INR 500 m (H1 2013: INR 692 m)
o From Distribution : INR 233 m (H1 2013: INR 178 m)
o EBIDTA : INR 215 m (H1 2013: 82.6 m)
o Profit before tax: INR 4 m (H1 2013: INR 296 m)
o Adjusted Profit before tax : INR 77 m (H1 2013: INR 5 m)**
o Profit after tax: INR 39 m (H 2013: INR 287 m)
o Adjusted Profit/(Loss) after Tax : INR 112 m (H1 2013: INR
(4m))**
* the adjusted profit before tax and adjusted profit/(loss)
after tax is after elimination of the notional foreign exchange
loss for the half year period to 30 September 2014 of INR 73 m ( H1
2013: Foreign exchange gain of INR 291 m).
As reported in the previous quarter, we have commissioned new
productions only in July and early August and the revenues from
these projects are expected to come in from this quarter onwards.
These include Seven Dwarfs & Me, Lady Bug, Delicious Valley and
Popples. In regard to the Company's own IP, it has commenced the
production of the second season of the Peter Pan TV series and a
third season of the Jungle Book TV series is in development . In
addition, the productions of Lassie and Robin Hood are ongoing. The
market generally remains buoyant, however, the delay in the
commencement of productions will mean we are unlikely to meet
market expectations for the year to 31 March 2015.The distribution
revenue of INR 178 m in the previous corresponding period has
increased to INR 233 m in the current half year under review.
The Company's discussions with an investor for financing the
development and production of its properties are advanced and we
are in the process of completing the documentation. However,
working capital remains under pressure in the meantime. The
receivables collection has continued to be slow, but now the
Company has definitive commitments from the key parties for
payments and we expect a significant reduction in the debtors by
March 2015.
2. Operating Highlights
The Company has formulated its digital platform strategy to
exploit its substantial library of over 600 hours of children's
animated content. This will encompass all platforms such as apps,
tablets, smartphones, social media and YouTube with the intent to
develop a strong and sustainable digital content strategy. The
Company has launched two YouTube Channels - Power Kids and Tiny
Toonz. Our plans are also underway to launch content and games on
other popular digital platforms such as Google play store, Amazon,
iTunes etc.
Our visual effects (VFX) teams has successfully completed a
small project for a locally produced Live Action feature film and
have more projects in the pipeline. With the increasing demand for
VFX content for animated feature films, Live Action thrillers and
action films and sci-fi films from Hollywood, Europe and Japan, DQE
is well positioned to capitalise on this opportunity.
Our licensing and distribution teams continue to monetize our IP
through different platforms such as VOD (video-on-demand) and SVOD
(subscription video-on-demand), merchandise, publications, home
video, promotional deals and other avenues, and new deals are being
closedfor our IP in various territories such as Latin America,
South East Asia, USA and parts of Europe. During the half year
period, over 20 major licensing agreements and a number of smaller
deals have been executed and signed. The major agreements include:
a licensing agreement with CIWEN Kids China for multiple DQ
properties; Netflix Latin America for the Iron Man TV series;
Series 4 for the Peter Pan TV series; Sky Italia for a Robin Hood
Stereoscopic broadcast; and several others.
Completed projects in the half year period:
-- Manav - 65' 2D Feature with Disney India.
-- Shabiyate - 15x13' CGI TV series with Fanar productions (UAE)
-- NFL Season 3 - 20 x 22' CGI / 2D TV Series with Rollman
Entertainment, USA for Nick Toons (USA)
-- The Jungle Book Season 2 - 52 x 11' 3D TV series being
coproduced with ZDF TV (Germany), TF1 TV (France), Moonscoop
(France), ZDF-E (Germany)
-- Iseodo - TV series - Rollman Entertainment USA
-- Lanfeust - 26 x 22' TV Series - Alphanim, France
-- Peter Pan TV Movie - 70" TV feature
-- Motion books- ebooks with Circle of Confusion
-- Jungle Book Christmas Special- 30 Min TV Feature
On- going projects:
-- Peter Pan Season 2- 26 x 22' CGI TV series with ZDF Germany,
De Agostini Italy and Method Animation and France TV.
-- Robin Hood, Mischief in Sherwood - 52 x 11' CGI TV series
with Method Animation and TF1 France, ZDF Germany, ATV Turkey, DeA
Kids Italy.
-- Lassie & Friends - 52 x 11' 2D HD TV series with
Dreamworks Classic Media USA, Super Prod & TF1 France, ZDF
Germany.
-- Little Prince - 3 - 26 x 22' CGI TV series with Method Animation and France TV & RAI.
-- Miles from Tomorrow Land - 22 X 22' CGI with Wild Canary, USA
-- Seven Dwarfs and Me - 26 x 22' Hybrid TV series with Method Animation
-- Lady Bug -52 x 11' CGI TV series with Zag Toons
-- Delicious Valley- 30 min DVD with Team Entertainment
-- Popples - 52 x 11' CGI TV series with Saban Entertainment and ZAG toons.
Projects to start:
-- Escape Hockey - 52 x 11' CGI TV series IMIRA(Spain)
-- 5 Children & It - 52 x 11' CGI TV Series - Disney / Method
-- Yonaguni - 52 x 11' TV series to be produced by with Seaworld & Rollman Entertainment
-- Leo and the Pisa Gang- 52 x 11' CGI TV series with MPP(Germany)
-- Shabiyate - Season 10, 15x13' TV series CGI with Fanar Productions, UAE
-- Hive - Season II, 69 x 7' and 3 x 21' with The Hive enterprises Limited, UK
The total contract value for the service/co-production projects
signed is US $63 m to be executed over the next 18 months.
Licensing and Distribution:
Our licensing and distribution efforts have proven increasingly
successful on a global scale and are helping to create long term
and sustained value for DQE.
BROADCAST & HOME VIDEO DEALS SIGNED BETWEEN APRIL - SEPTEMBER
2014
----------------------------------------------------------------------------
SL. NO Broadcaster Property Territory
------- ---------------- ------------------------ -----------------------
1 SKY ITALIA ROBINHOOD ITALY
------- ---------------- ------------------------ -----------------------
2 PHASE 4 PETER PAN SEASON 1 USA & CANADA
------- ---------------- ------------------------ -----------------------
3 ONE VISION PETER PAN SEASON 1 INDONESIA
------- ---------------- ------------------------ -----------------------
4 TELEQUEBEC PETER PAN SEASON 2 CANADA
------- ---------------- ------------------------ -----------------------
5 ZDFE PETER PAN SEASON 2 GERMAN SPEAKING EUROPE
------- ---------------- ------------------------ -----------------------
6 DE AGOSTINI PETER PAN SEASON 2 ITALY
------- ---------------- ------------------------ -----------------------
7 DISNEY THE LANFEUST QUEST MIDDLEAST & TURKEY
------- ---------------- ------------------------ -----------------------
8 E-Vision IM2 Middle East, North
Africa and Pakistan
------- ---------------- ------------------------ -----------------------
9 DLA IM2 Latin America
------- ---------------- ------------------------ -----------------------
10 Telequebec Jungle Book Christmas Canada
Special
------- ---------------- ------------------------ -----------------------
11 Discovery Asia JB Safari Asia Pacific
------- ---------------- ------------------------ -----------------------
12 Discovery LatAm JB Christmas Special Latin America
------- ---------------- ------------------------ -----------------------
13 SUN Network Lassie & Lanfeust Quest India and Sri Lanka
------- ---------------- ------------------------ -----------------------
14 Ciwen Kids Iron Man, Robin Hood, China, Hong Kong &
Casper, Jungle Book, Taiwan
Lassie, Lanfeust Quest
------- ---------------- ------------------------ -----------------------
MERCHANDISING DEALS SIGNED BETWEEN APRIL - SEPTEMBER 2014
-------------------------------------------------------------------------------------------
SERIAL LICENSEE PROPERTY TERRITORIES CATEGORIES
------- ------------- ------------ --------------------- ------------------------------
1 DWI LTD THE JUNGLE SOUTH KOREA KIDS STUDY TABLE
BOOK
------- ------------- ------------ --------------------- ------------------------------
2 VIACOM THE JUNGLE INDIA ALL CATEGORIES
18 BOOK
------- ------------- ------------ --------------------- ------------------------------
3 Vergani PETER PAN Italy, San Marino, Chocolate Easter Eggs
Srl Vatican City
------- ------------- ------------ --------------------- ------------------------------
4 GDG Group PETER PAN Italy, San Marino, All kinds of clothes
Srl Vatican City wear
------- ------------- ------------ --------------------- ------------------------------
5 Buffalo PETER PAN France, Switzerland, QSR promotion
Grill Luxembourg
------- ------------- ------------ --------------------- ------------------------------
6 Kenny Jungle Book South Korea All Categories
& Co
------- ------------- ------------ --------------------- ------------------------------
7 Buffalo Jungle Book France, Switzerland, QSR Promotion
Grill Luxembourg
------- ------------- ------------ --------------------- ------------------------------
8 Showtime Peter Pan Australia, New Costume Character Appearances
Attractions Zealand
------- ------------- ------------ --------------------- ------------------------------
The total contract value for the licensing and distribution
deals signed is USD 12 m.
For further information, please visit www.dqentertainment.com or
contact:
DQ Entertainment plc Tel: +91 40 235 53726
Tapaas Chakravarti - Chairman and CEO
Rashida Adenwala - Director Finance & Investor
Relations
Allenby Capital Limited Tel: +44(0) 20 3328
Jeremy Porter / Alex Price 5656
Buchanan Communications Tel: +44 (0)20 7466
Mark Edwards/Clare Akhurst 5000
www.buchanan.uk.com
DQ Entertainment International Limited ("DQE India"), which is
75 per cent owned by DQE and is listed on the Bombay Stock Exchange
and National Stock Exchange of India, has today announced its
unaudited financial results for the quarter ended 30 September
2014. The full unaudited results are available from the DQE India
secton of the BSE website (www.bseindia.com) and NSE website
(www.nseindia.com), as well as on DQE's website
(www.dqentertainment.com).
Condensed Consolidated Income Statement
GROUP Note Six Six Year
months months ended
ended ended 31
30 30 March
September September 2014
2014 2013 INR'Mn
INR'Mn INR'Mn
------------------------------------------------------------------------------------------- ----- --------- --------- -------
Revenue C 733 870 2,397
Cost of sales (428) (601) (1,376)
--------- --------- -------
Gross profit 305 269 1,021
--------- --------- -------
Other operating income 3 10 16
Distribution expenses (15) (15) (26)
Administrative expenses (78) (171) (553)
Other operating expenses (10) (1)
--------- --------- -------
(90) 186 (564)
--------- --------- -------
Operating result before financing costs and Foreign Exchange 215 83 457
--------- --------- -------
Foreign exchange gain /(loss) (73) 291 219
Financial income 3 37 9
Financial expenses (143) (117) (239)
Net financing costs J (140) (80) (230)
--------- --------- -------
Share of profit of associate 2 2 10
Profit before tax 4 296 456
Income tax expense 35 (9) (27)
--------- --------- -------
Profit after tax 39 287 429
========= ========= =======
Attributable to:
Owners of the Company 35 214 327
Non-controlling interests L 4 73 102
Basic and diluted earnings per share for profit attributable to the equity holders of the K
company during the period (expressed as cents per share)
Basic earnings per share 1 4 6
Diluted earnings per share 1 4 6
Condensed Consolidated Statement of Comprehensive Income
Six months Six months Year
GROUP ended ended ended
Note 30 September 30 September 2013 31 March
2014 INR'Mn 2014
INR'Mn INR'Mn
------------------------------------------------- ------- ------------- ------------------ ---------
Profit after tax 39 287 429
Other comprehensive income
Foreign currency translation (54) 580 356
Total comprehensive income for the period / year (15) 867 785
============= ================== =========
Total comprehensive income
attributable to :
Owner of the company (14) 698 632
Non controlling Interests L (1) 169 153
Condensed Consolidated Statement of Financial Position
GROUP Note As at As at As at
30 September 30 September 2013 31 March
2014 INR'Mn 2014
INR'Mn INR'Mn
-------------------------------------- ------ -------------- ------------------- ----------
ASSETS
Non-current assets
Property, plant and equipment 98 202 127
Goodwill 432 432 432
Intangible assets E 3,677 3,969 3,474
Intangible assets under construction F 1,954 1,857 2,210
Investment in associate 203 194 198
Prepaid leasehold rights 9 10 11
Deferred tax asset 218 57 166
Deposits 14 17 14
-------------- ------------------- ----------
Total non-current assets 6,605 6,738 6,632
-------------- ------------------- ----------
Current assets
Trade and other receivables 3,577 2,682 3,048
Cash and Bank balances D 22 24 28
Total current assets 3,599 2,706 3,076
-------------- ------------------- ----------
Total assets 10,204 9,444 9,708
============== =================== ==========
Condensed Consolidated Statement of Financial Position
(Continued)
GROUP Note As at As at As at
30 September 30 September 31 March
2014 2013 2014
INR'Mn INR'Mn INR'Mn
---------------------------------------------- ------ --------------- -------------- ----------
EQUITY AND LIABILITIES
EQUITY
Issued capital M 5 5 5
Share premium 2,816 2,816 2,816
Reverse acquisition reserve 55 55 55
Capital redemption reserve 1 1 1
Foreign currency translation reserve 480 708 529
Retained earnings 1,676 1,536 1,649
--------------- -------------- ----------
Equity attributable to owners of the Company 5,033 5,121 5,055
--------------- -------------- ----------
Non-controlling interests L 1,225 1,242 1,226
Total equity 6,258 6,363 6,281
--------------- -------------- ----------
Non-current liabilities
Interest-bearing loans and borrowings G 871 869 967
Provisions 119 143 116
--------------- -------------- ----------
Total non-current liabilities 990 1,012 1,083
--------------- -------------- ----------
Current liabilities
Trade and other payables P 1,178 692 853
Bank overdraft D 988 892 872
Interest-bearing loans and borrowings G 532 456 383
Provisions 258 29 236
--------------- -------------- ----------
Total current liabilities 2,956 2,069 2,344
--------------- -------------- ----------
Total liabilities 3,946 3,081 3,427
--------------- -------------- ----------
Total stockholders' equity and liabilities 10,204 9,444 9,708
=============== ============== ==========
These financial statements were approved by the Board of
Directors and authorised for use on 13 November 2014.
Signed on behalf of the Board of Directors by:
Director Director
Condensed Consolidated Statement of Changes in Equity for the
period ended 30 September 2014
Equity Equity Share Reverse Foreign Capital Retained Attributable Non-controlling Total
GROUP shares Shares premium acquisition currency Redemption earnings to owners of interests
-No of - reserve & translation Reserve the Company
Shares Amount equity reserve
component INR'Mn
INR'Mn of INR'Mn INR'Mn INR'Mn INR'Mn INR'Mn
INR'Mn convertible
instruments
INR'Mn
--------------- ----------- ------- -------- ------------ ------------ ----------- --------- ------------- ---------------- -------
Balance as at
1 April, 2013 42,566,047 4 2,616 107 224 1 1,270 4,222 1,073 5,295
Changes in
equity for the
year ended
31 March, 2014
Issue of
shares 13,697,000 1 - - - - - 1 - 1
Premium on
issue of
shares - - 200 - - - - 200 - 200
Other
comprehensive
income - - - - 305 - - 305 51 356
Income for the
year - - - - - - 327 327 102 429
--------------- ----------- ------- -------- ------------ ------------ ----------- --------- ------------- ---------------- -------
Balance as at
31 March,
2014 56,263,047 5 2,816 107 529 1 1,597 5,055 1,226 6.281
=============== =========== ======= ======== ============ ============ =========== ========= ============= ================ =======
Changes in equity
for the six months
ended
30 September 2014
Issue of shares
during the period - - - - - - - - - -
Premium on issue - - - - - - - - - -
of shares
Opening adjustments - - - - - - (8) (8) - (8)
Other comprehensive
income - - - - (49) - - (49) (5) (54)
Income for the
period - - - - - - 35 35 4 39
---------------------- ----------------- --------- --------- ----------- --------- ------ -------- --------- --------- ---------
Balance as at
30 September 2014 56,263,047 5 2,816 107 480 1 1,624 5,033 1,225 6,258
====================== ================= ========= ========= =========== ========= ====== ======== ========= ========= =========
Condensed Consolidated Statement of Changes in Equity for the period ended 30 September 2014
(Continued)
Equity Equity Share Reverse Foreign Capital Retained Attributable Non-controlling Total
shares Shares premium acquisition currency Redemption earnings to owners interests
GROUP -No of - reserve translation Reserve of the
Shares Amount & equity reserve Company
component
of INR'Mn
INR'Mn convertible INR'Mn INR'Mn INR'Mn INR'Mn
INR'Mn instruments INR'Mn
INR'Mn
------ ------- ------- -------- ------------ ------------ ----------- --------- ------------- ---------------- -------
Balance as at
1 April, 2012 35,966,047 3 2,516 107 204 1 974 3,805 992 4,797
Changes in equity
for the year
ended
31 March 2013
Issue of shares 6,600,000 1 - - - - - 1 - 1
Premium on issue
of shares - 100 - - - - 100 - 100
Other comprehensive - - - - 20 - - 20 (4) 16
income
Income for the
year - - - - - - 296 296 85 381
------------------------ ------------ ------ ------- -------- ----- ------ -------- ------- -------- ---------
Balance as at
31 March, 2013 42,566,047 4 2,616 107 224 1 1,270 4,222 1,073 5,295
======================== ============ ====== ======= ======== ===== ====== ======== ======= ======== =========
Changes in equity
for the six
months ended
30 September
2013
Issue of shares 13,697,000 1 - - - - - 1 - 1
Premium on issue - - 200 - - - - 200 - 200
Other comprehensive
Income - - - - 484 - - 484 96 580
Income for the
period - - - - - - 214 214 73 287
-------------------- ---------------- ------ ------- -------- ----- ------ -------- ------- -------- ---------
Balance as at
30 September2013 56,263,047 5 2,816 107 708 1 1,484 5,121 1,242 6,363
==================== ================ ====== ======= ======== ===== ====== ======== ======= ======== =========
Condensed Consolidated Statement of Cash Flows for the period
ended 30 September 2014
GROUP Note Six months Six months Year
ended ended ended
30 September 30 September 31 March
2014 2013 2014
INR'Mn INR'Mn INR'Mn
------------------------------------ ------ -------------- -------------- ----------
Cash flows from operating
activities
Profit for the period before
tax 4 296 456
Adjustments for:
Depreciation and amortization 160 187 571
Opening adjustment (6)
Financial income J (3) (37) (9)
Financial expenses J 143 117 239
Provisions for employee benefits 4 20 (3)
Provision for bad and doubtful
debts (net) 3 231
Provision for retakes H (1) (1) (8)
Loss/(gain)on foreign exchange
fluctuations 37 (301) (157)
Share of gain of associate (2) (2) (10)
(Gain) / loss on sale of property,
plant and equipment - (3) (4)
-------------- -------------- ----------
Operating cash flows before
changes in working capital 339 276 1,306
-------------- -------------- ----------
Decrease /(increase) in trade
and other receivables (505) 72 (909)
Employee benefits paid (1) (7) (11)
(Decrease)/increase in trade
and other payables 370 8 404
-------------- -------------- ----------
203 349 790
Income taxes paid 4 - (34)
-------------- -------------- ----------
Net cash generated from /
(used in) operating activities 207 349 756
============== ============== ==========
Condensed Consolidated Statement of Cash Flows for the period
ended 30 September, 2014 (Continued)
GROUP Note Six months Six months Year
ended ended ended
30 September 30 September 31 March
2014 2013 2014
INR'Mn INR'Mn INR'Mn
----------------------------------- ------ -------------- -------------- ----------
Cash flows from investing
activities
Acquisition of property, plant
and equipment (1) (1) -
Acquisition and advances paid
for distribution rights (116) (807) (1,072)
Proceeds from sale of property,
plant and equipment 1 5 9
Sale of investment in mutual
funds - - -
Financial assets at fair value
through - - -
Deposits (12) 5
Finance income (22) 5 9
Net cash used in investing
activities (138) (810) (1,049)
-------------- -------------- ----------
Cash flows from financing
activities
Proceeds from borrowings from
term loans 49 307 511
Repayment of term loans (90) (155) (307)
Issue of share capital - 1 1
Premium collected on issue
of shares - 200 200
Interest paid (186) (115) (267)
Net cash generated from /(used
in) financing activities (227) 238 138
-------------- -------------- ----------
Net decrease in cash and cash
equivalents (158) (223) (155)
Cash and cash equivalents
at beginning of period 28 43 42
Bank overdraft at beginning
of period (872) (666) (666)
Gain / (loss) on foreign exchange
fluctuations 36 (22) (65)
-------------- -------------- ----------
Cash and cash equivalents
at the end of period / year D (966) (868) (844)
============== ============== ==========
Notes to Condensed Consolidated Financial Statements
NOTE A - BASIS OF PREPARATION
1. General information
DQ Entertainment Plc. (the 'Company' or "DQ Plc.") is a company
domiciled and incorporated in the Isle of Man on 19 April 2007 and
was admitted to the Alternative Investment Market of London Stock
Exchange on 18 December 2007.
The condensed consolidated financial statements of the Company
for the six months period ended 30 September 2014, comprises the
financial Information of the Company, its subsidiaries and
associate (together referred to as the 'Group').
As at 30 September 2014 the following companies formed part of
the Group:
Company Immediate Parent Country of % of Interest
Incorporation
---------------------------------- ----------------------- ---------------- --------------
Subsidiaries
---------------------------------------------------------------------------------------------
DQ Entertainment (Mauritius) DQ Entertainment
Limited (DQM) Plc. Mauritius 100
---------------------------------- ----------------------- ---------------- --------------
DQ Entertainment (International)
Limited (DQ India) was
formerly known as "Animation
and Multimedia Private DQ Entertainment
Limited" (Mauritius) Limited India 75
---------------------------------- ----------------------- ---------------- --------------
DQ Entertainment
DQ Entertainment (Ireland) (International)
Limited (DQ Ireland) Limited Ireland 100
---------------------------------- ----------------------- ---------------- --------------
DQ Entertainment (International) Joint Venture Company
Films Limited (DQ Films) by DQ India and
DQ Plc.
---------------------------------- ----------------------- ---------------- --------------
DQ Entertainment
DQ Power Kidz Private (International)
Limited Limited India 100
---------------------------------- ----------------------- ---------------- --------------
DQ Entertainment
DQE ITES Parks Private (International)
Limited Limited India 100
---------------------------------- ----------------------- ---------------- --------------
Associate
---------------------------------------------------------------------------------------------
Method Animation SAS France 20
----------------------------------------------------------- ---------------- --------------
The Company's registered address is 33-27, Athol Street,
Douglas, IM ILB, Isle of Man.
The Group is primarily engaged in the business of providing
traditional and digital animation for television, home video and
feature films. The Group also is engaged in exploitation of its
distribution rights to broadcasters, television channels, home
video distributors and others.
The functional currencies of the respective Group companies
are:
DQ Plc. British Pound (GBP)
--------------------- --------------------
DQ Mauritius US Dollar (USD)
--------------------- --------------------
DQ India Indian Rupee (INR)
--------------------- --------------------
DQ Ireland Euro (EURO)
--------------------- --------------------
DQ Films Euro (EURO)
--------------------- --------------------
DQ Power Kidz Indian Rupee (INR)
--------------------- --------------------
DQ ITES Parks Indian Rupee (INR)
--------------------- --------------------
Method Animation SAS Euro (EURO)
--------------------- --------------------
NOTE B - STANDARDS AND INTERPRETATIONS NOT YET APPLIED
The following new Standards and Interpretations, which are yet
to become mandatory, have not been applied in the Company's
Financial Statements.
IFRS 3 Business Combinations
-- (Amendments resulting from Annual Improvements 2010-2012
Cycle) Effective: annual periods beginning on or after 1 July
2014.
-- (Amendments resulting from Annual Improvements 2011-2013
Cycle) Effective: annual periods beginning on or after 1 July
2014.
IFRS 7 Financial Instruments: Disclosure
-- (Deferral of Mandatory effective date of IFRS 9 and
amendments to transition disclosures) Effective: annual periods
beginning on or after 1 January 2015.
-- (Amendments resulting from September 2014 Annual Improvements
to IFRSs) Effective: annual periods beginning on or after 1 January
2016.
IFRS 8 Operating Segments
-- (Amendments resulting from Annual Improvements 2010-2012
Cycle) annual periods beginning on or after 1 July 2014.
IFRS 9 Financial Instruments
-- (Finalised version, incorporating requirements for
classification and measurement, impairment, general hedge
accounting and derecognition) Effective: annual periods beginning
on or after 1 January 2018.
IFRS 10 Consolidated Financial Statements
-- (Amendments regarding the sale or contribution of assets
between an investor and its associate or joint venture) Effective:
annual periods beginning on or after 1 January 2016.
IFRS 13 Fair Value Measurement
-- (Amendments resulting from Annual Improvements 2011-2013
Cycle) Effective: annual periods beginning on or after 1 July
2014.
IFRS 15 Revenue from contracts with customers
-- (Original Issue) Effective: annual periods beginning on or after 1 January 2017.
IAS 16 Property Plant & Equipment
-- (Amendments resulting from Annual Improvements 2010-2012
Cycle) Effective: annual periods beginning on or after 1 July
2014.
-- (Amendments regarding the clarification of acceptable methods
of depreciation and amortisation) Effective: annual periods
beginning on or after 1 January 2016.
IAS 19 Employee Benefits
-- (Amendments to clarify the requirements that relate to how
contributions from employees to third parties that are linked to
service should be attributable to periods of service) Effective:
annual periods beginning on or after 1 July 2014.
-- (Amendments resulting from September 2014 Annual Improvements
to IFRSs) Effective: annual periods beginning on or after 1 January
2016.
IAS 24 Related Party Disclosures
-- (Amendments resulting from Annual Improvements 2010-2012
Cycle) Effective: annual periods beginning on or after 1 July
2014.
IAS 27 Separate Financial Statements
-- (Amendments reinstating the equity method as an accounting
option for investments in subsidiaries, joint venture and
associates in an enitys separate financial statements) Effective:
annual periods beginning on or after 1 January 2016.
IAS 28 Investments in Associates and Joint Ventures
-- (Amendments regarding the sale or contribution of assets
between an investor and its associate or joint venture) Effective:
annual periods beginning on or after 1 January 2016.
IAS 34 Interim Financial Reporting
-- (Amendments resulting from September 2014 Annual Improvements
to IFRSs) Effective: annual periods beginning on or after 1 January
2016.
IAS 38 Intangible Assets
-- (Amendments resulting from Annual Improvements 2010-2012
Cycle) Effective: annual periods beginning on or after 1 July
2014.
-- (Amendments regarding the clarification of acceptable methods
of depreciation and amortisation) Effective: annual periods
beginning on or after 1 January 2016.
Based on the Company's current business model and accounting
policies, management does not expect any material impact on the
Company's financial statements when any of the other standards or
interpretations becomes effective.
The Company does not intend to apply any of these pronouncements
early.
1. Significant accounting policies
The condensed consolidated interim financial information should
be read in conjunction with the annual financial statements for the
year ended 31 March, 2014, which have been prepared in accordance
with International Financial Reporting Standards ('IFRS's)
In the opinion of management, all adjustments, which are of a
normal recurring nature and necessary for a fair presentation, have
been included. The Company has chosen to present the condensed
consolidated financial position, condensed consolidated income
statement, condensed consolidated comprehensive income statement,
condensed consolidated statement of cash flows and condensed
consolidated statement of changes in equity along with selected
explanatory notes. Accordingly, certain information and note
disclosures normally included in annual financial statements
prepared in accordance with IFRS have been condensed or omitted,
although the Company believes that the disclosures made are
adequate to make the information presented not misleading. These
condensed consolidated financial statements have been prepared
using the same accounting policies that were applied in the
preparation of the Company's annual consolidated financial
statements for the year ended 31 March, 2014.
The directors have had regard to the 12 month period from the
date of approval of the interim financial statements and have
reviewed the forecasted cash flows. The Company has sufficient
resources to meet its on-going liabilities as they fall due.
NOTE C - SEGMENT REPORTING
Segment information is presented in respect of the Group's
business and geographical segments. The primary format, business
segments, is based on the Group's management and internal reporting
structure.
Segment results, assets and liabilities include items directly
attributable to a segment as well as those that can be allocated on
a reasonable basis. Unallocated items comprise mainly
interest-bearing loans, borrowings and expenses, and corporate
assets and expenses.
Segment capital expenditure is the total cost incurred during
the period to acquire segment assets that are expected to be used
for more than one period.
Business segments
The Company comprises the following main business segments:
Animation production:
The production services rendered to production houses and
training rendered for acquiring skills for production services in
relation to the production of animated television series and
movies.
Distribution:
The revenue generated from the exploitation of the distribution
rights of animated television series.
The following is an analysis of the Company's revenue and
results by operating segment for the periods under review:
Segment Revenue Segment Result
------------------------------------------ ------------------------------------------
GROUP Six months Six months Year Six months Six months Year
ended ended ended ended ended ended
30 September 30 September 31 March 30 September 30 September 31 March
2014 2013 2014 2014 2013 2014
INR'Mn INR'Mn INR'Mn INR'Mn INR'Mn INR'Mn
---------------------------- -------------- -------------- ---------- -------------- -------------- ----------
Animation production 500 692 1,874 171 294 927
Distribution 233 178 523 107 76 153
Total 733 870 2,397 278 370 1,080
Unallocated expenses (274) (74) (624)
----------
Profit before tax 4 296 456
Income tax expense 35 (9) (27)
-------------- -------------- ----------
Profit for the period/year 39 287 429
-------------- -------------- ----------
NOTE D - CASH AND CASH EQUIVALENTS
GROUP 30 September 30 September 31 March
2014 2013 2014
INR'Mn INR'Mn INR'Mn
---------------------------------- ------------- ------------- ---------
Cash and bank balances 3 7 10
Call deposits 19 17 18
------------- ------------- ---------
Cash and bank balances 22 24 28
------------- ------------- ---------
Bank overdraft (988) (892) (872)
------------- ------------- ---------
Cash and cash equivalents in the
statement of cash flows (966) (868) (844)
------------- ------------- ---------
NOTE E - INTANGIBLE ASSETS
GROUP 30 September 30 September 2013 31 March
2014 INR'Mn 2014
INR'Mn INR'Mn
------------------------------------------------ ------------- ------------------ ---------
Cost
Opening balance 4,616 4,254 4,247
Acquisitions/transfer from
assets under construction/recoupment 461 289 208
Disposals (76) (65) (284)
Translation adjustment (145) 528 445
------------- ------------------ ---------
Closing balance 4,856 5,006 4,616
------------- ------------------ ---------
Amortisation
Opening balance 1,142 960 960
Amortisation expense 128 110 223
Impairment losses recognised in profit or loss - - 177
Disposal (76) (65) (284)
Translation adjustment (15) 32 66
------------- ------------------ ---------
1,179 1,037 1,142
------------- ------------------ ---------
Carrying amounts
------------- ------------------ ---------
At beginning of period/year 3,474 3,294 3,287
------------- ------------------ ---------
At end of period/year 3,677 3,969 3,474
------------- ------------------ ---------
NOTE F - INTANGBILE ASSETS UNDER CONSTRUCTION
Intangible assets under construction include amounts paid to the
producers for acquisition of the distribution rights and amounts
incurred on internally generated intellectual property rights
pending for capitalisation. These advances are transferred to
distribution rights on completion of the entire production
activities and when the asset is ready for exploitation.
GROUP 30 September 2014 30 September 2013 31 March
INR'Mn INR'Mn 2014
INR'Mn
-------------------------------- ------------------ ------------------ ---------
Opening balance 2,210 1,230 1,230
Acquisitions 385 495 913
Transfers to intangible assets (547) (123) (108)
Translation adjustment (94) 255 175
------------------ ------------------ ---------
Closing balance 1,954 1,857 2,210
------------------ ------------------ ---------
NOTE G - INTEREST BEARING LOANS AND BORROWINGS
Interest bearing loans and borrowings comprise the
following:
GROUP 30 September 30 September 31 March
2014 2013 2014
INR'Mn INR'Mn INR'Mn
--------------------------------- ------------- ------------- ---------
Non-current liabilities:
Secured bank loans 871 869 967
Finance lease liabilities - - -
871 869 967
------------- ------------- ---------
Current liabilities:
Current portion of secured bank
loans 532 455 383
Finance lease liabilities - 1 -
532 456 383
------------- ------------- ---------
NOTE H - PROVISION FOR RETAKES
GROUP 30 September 30 September 31 March
2014 2013 2014
INR'Mn INR'Mn INR'Mn
------------------------------------ ------------- ------------- ---------
Opening balance 13 21 21
Provisions made during the period/
year - 9 18
Provisions used during the period/
year - - -
Provisions reversed during the
period/ year (1) (10) (26)
Closing balance 12 20 13
------------- ------------- ---------
Retakes include creative changes to the final product delivered
to the customer, performed on the specific request of the customer
at the Group's own cost. Requests for retakes will be accepted from
customers by the Group for a maximum period of three months from
the final delivery and hence the provision is not discounted.
NOTE I - PERSONNEL COSTS
Details of personnel expenses included in cost of sales,
administrative and distribution expenses are as follows:
GROUP 30 September 2014 30 September 2013 31 March
INR'Mn INR'Mn 2014
INR'Mn
------------------------------------------------- ------------------ ------------------ ---------
Wages and salaries 292 354 671
Contributions to defined contribution plans 20 24 47
Increase in liability for defined benefit plans 7 8 2
Increase in liability for compensated absences (1) 12 (4)
318 398 716
------------------ ------------------ ---------
Cost of sales 312 389 588
Administrative expenses 4 7 124
Distribution expenses 2 2 4
NOTE J - NET FINANCING COSTS
GROUP 30 September 2014 30 September 2013 31 March
INR'Mn INR'Mn 2014
INR'Mn
------------------------------------------------------------- ------------------ ------------------ ----------
Interest income 3 37 9
------------------ ------------------ ----------
Financial income 3 37 9
------------------ ------------------ ----------
Interest on short term borrowings and other financing costs (40) (60) (57)
Interest on term loans (103) (57) (182)
Net foreign exchange loss - - -
Financial expenses (143) (117) (239)
------------------ ------------------ ----------
Net financing costs (140) (80) (230)
------------------ ------------------ ----------
NOTE K - EARNINGS PER SHARE ("EPS")
Profit attributable to ordinary shareholders
GROUP 30 September 2014 30 September 2013 31 March
INR'Mn INR'Mn 2014
INR'Mn
------------------------------------------------------------------- ------------------ ------------------ ---------
Profit attributable to ordinary shareholders 35 214 327
Weighted average number of ordinary shares outstanding during the
period(in thousand) 55,889 55,426 55,889
Basic EPS (Cents) 1 4 6
Diluted EPS (cents) 1 4 6
The Group does not have any dilutive instruments for any of the
periods ended 30 September 2014 or 30 September 2013 and for the
year ended 31 March, 2014 and as such Diluted EPS equals Basic
EPS.
NOTE L - NON - CONTROLLING INTERESTS
GROUP 30 September 30 September 31 March
2014 2013 2014
INR'Mn INR'Mn INR'Mn
------------------------------------- ------------- ------------- ---------
Balance at beginning of period/year 1,226 1,073 1,073
Profit for the period 4 73 102
Other comprehensive income for
the period/year (5) 96 51
Closing balance 1,225 1,242 1,226
------------- ------------- ---------
NOTE M- EQUITY
a) Ordinary shares
DQ Plc. presently has only one class of ordinary shares. For all
matters submitted to vote in the shareholders' meeting, every
holder of ordinary shares, as reflected in the records of the
Company on the date of the shareholders' meeting, has one vote in
respect of each share held. All shares are equally eligible to
receive dividends and the repayment of capital in the event of
liquidation of the Company.
The Company has an authorized share capital of 60,000,000 equity
shares of 0.1 pence each.
GROUP 30 September 30 September 31 March
2014 2013 2014
------------------ ------------- ------------- -----------
Number of shares
Opening balance
Issued for cash 56,263,047 42,566,047 42,566,047
- 13,697,000 13,697,000
Closing balance 56,263,047 56,263,047 56,263,047
------------- ------------- -----------
Issue of ordinary shares
GROUP 30 September 30 September 2013 31 March 2014
2014 INR'Mn INR'Mn
INR'Mn
Share capital
Opening balance 5 4 4
Issued for cash - 1 1
Closing balance 5 5 5
NOTE M - EQUITY (Continued)
Share premium - The amount received by the company over and
above the par value of shares issued is shown under this
heading.
GROUP 30 September 30 September 31 March
2014 2013 2014
INR'Mn INR'Mn INR'Mn
-------------------------- ------------- ------------- ---------
Share premium
Opening balance 2,816 2,616 2,616
Issued for cash - 200 200
------------- ------------- ---------
Closing balance 2,816 2,816 2,816
------------- ------------- ---------
The share premium reserve can be utilised by the Company for the
declaration of bonus shares and for offsetting incremental costs
directly attributable to the issues of new shares.
b) Reserves
Translation reserve - Assets, liabilities, income, expenses and
cash flows are translated into Indian Rupees (presentation
currency) from US Dollars (functional currency of DQ Mauritius),
Euros (functional currency of DQ Ireland and DQ Films Ltd) and
Great British Pounds (functional currency of DQ Plc.). The exchange
difference arising out of the period-end translation is debited or
credited to foreign currency translation reserve.
The movements in this reserve which are attributable to the
controlling interests are set out below:
GROUP 30 September 30 September 31 March
2014 2013 2014
INR'Mn INR'Mn INR'Mn
---------------------------- ------------- ------------- ---------
Opening balance 529 224 224
Increase/(decrease) during
the period (49) 484 305
------------- ------------- ---------
Closing balance 480 708 529
------------- ------------- ---------
Exchange differences relating to the translation of the net
assets of the Group's foreign operations from their functional
currencies to the Group's presentation currency (i.e. INR) are
recognised directly in other comprehensive income and accumulated
in the foreign currency translation reserve.
Accumulated earnings - Accumulated earnings include all current
and prior period results as disclosed in the income statement which
are attributable to the controlling interests. The movements in the
accumulated earnings are set out below:
GROUP 30 September 30 September 31 March
2014 2013 2014
INR'Mn INR'Mn INR'Mn
------------------------ ------------- ------------- ---------
Opening balance 1,597 1,270 1,270
Opening P&L adjustment (8)
Profit for the period 35 214 327
------------- ------------- ---------
Closing balance 1,624 1,484 1,597
------------- ------------- ---------
Other reserves - The Reverse acquisition reserve, equity
component of convertible instruments and
capital redemption reserve are non distributable in nature.
NOTE N - CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
GROUP 30 September 2014 30 September 2013 31 March
INR'Mn INR'Mn 2014
INR'Mn
------------------------------------------------------------------- ------------------ ------------------ ---------
Capital commitments:
Purchase of property, plant and equipment - - -
Purchase of distribution rights 386 918 575
Contingent liabilities:
Outstanding letters of credit for capital investments 1,063 917 1,225
Bonds executed in favour of Indian customs and excise authorities 3 3 3
Claims not acknowledged as debts - 10 10
NOTE O - RELATED PARTIES
Identity of related parties
DQ Plc. has a related party relationship with its directors,
executive officers, subsidiaries and associate.
DQ Plc. does not have any ultimate controlling entity.
Related parties and their relationships
a) Subsidiaries
DQ Entertainment (Mauritius) Limited (with effect from 27
November 2007)
DQ Entertainment (International) Limited (with effect from 18
February 2008)
DQ Entertainment (Ireland) Limited (with effect from 12 November
2008)
DQ Power Kidz Private Limited (with effect from 5 October
2012)
DQE ITES Parks Private Limited (with effect from 19 October
2012)
DQ Entertainment (International) Films Limited (with effect from
11 March 2013)
b) Associate
Method Animation SAS (with effect from 28 March 2008)
c) Key management personnel
Mr. Tapaas Chakravarti - Director
Mr. K. Balasubramanian - Director
Ms. Theresa Plummer - Director
Mr. V.Santhanaraman - Director
Ms. Rashida Adenwala - Director
d) Relatives of key management personnel with whom DQ India had transactions during the year -
Mrs. Rashmi Chakravarti (wife of Mr. Tapaas Chakravarti)
Ms Nivedita Chakravarti (daughter of Mr.Tapaas Chakravarti)
Mr Hatim Adenwala - Senior Vice President Human Resources
(Husband of Rashida Adenwala)
NOTE O - RELATED PARTIES (Continued)
Trading transactions
Transactions between the Company and its subsidiaries, which are
related parties of the Company, have been eliminated on
consolidation and are not disclosed in this note. Details of
transactions between the Group and other related parties are
disclosed below.
Revenue from Amounts Revenue Amounts Revenue Amounts owed
GROUP Animation owed by from Animation owed by/ from Animation by/(to) related
/(to) related (to) related party
party party
----------- ------------- --------------- ---------------- -------------- ---------------- -----------------
30 September 30 September 30 September 30 September 31 March 31 March
2014 2014 2013 2013 2014 2014
INR'Mn INR'Mn INR'Mn INR'Mn INR'Mn INR'Mn
------------- --------------- ---------------- -------------- ---------------- -----------------
Associate 77 221 53 319 59 180
Revenue from production from related parties was at prices
arising out of the Group's usual trade practices. The amounts
outstanding are unsecured and will be settled in cash. No
guarantees have been given or received. No expense has been
recognised in the period for bad or doubtful debts in respect of
the amounts owed by related parties.
Compensation of key management personnel
Directors of the company and their immediate relatives control
14.47 per cent of the voting shares of the company.
The remuneration of directors and other members of key
management during the period were as follows:
30 September 30 September 31 March
GROUP 2014 2013 2014
INR'Mn INR'Mn INR'Mn
---------------------------------------- -------------- ------------- ---------
Short term benefits 18 18 36
Other related party transactions
Remuneration paid to relatives of key management personnel
during the period was INR 4 Mn.; 30 September 2013: 4 Mn. and 31
March 2014: INR 8 Mn.
NOTE P - TRADE AND OTHER RECEIVABLES
In establishing the requirement for both (i) a bad debt
provision or (ii) for the need to discount the trade receivables
outstanding as at 30 September 2014, management and the directors
have reviewed the payment patterns of all customers, along with
their ultimate recoverability.
Through working closely with all customers, management have
devised a collection plan for all customers and are confident in
obtaining full payment, however they recognize the fact that some
customers are taking extended credit periods and/or making smaller
than anticipated payments.
Based on internal calculations prepared by management whereby
customers have been profiled based on their underlying payment
patterns, management are satisfied that neither the potential
discount figure nor any bad debt expense would be material to
either the financial performance or the financial position of the
Group as at 30 September 2014 and therefore have not made any such
provision. This is an area which attracts constant attention from
both management and the directors that they keep under review to
determine whether provision is required.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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