DQ ENTERTAINMENT PLC
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 Special | Canada |
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, Casper, Jungle Book, Lassie, Lanfeust Quest | China, Hong Kong & Taiwan |
MERCHANDISING DEALS SIGNED BETWEEN APRIL - SEPTEMBER 2014 | ||||
SERIAL | LICENSEE | PROPERTY | TERRITORIES | CATEGORIES |
1 | DWI LTD | THE JUNGLE BOOK | SOUTH KOREA | KIDS STUDY TABLE |
2 | VIACOM 18 | THE JUNGLE BOOK | INDIA | ALL CATEGORIES |
3 | Vergani Srl | PETER PAN | Italy, San Marino, Vatican City | Chocolate Easter Eggs |
4 | GDG Group Srl | PETER PAN | Italy, San Marino, Vatican City | All kinds of clothes wear |
5 | Buffalo Grill | PETER PAN | France, Switzerland, Luxembourg | QSR promotion |
6 | Kenny & Co | Jungle Book | South Korea | All Categories |
7 | Buffalo Grill | Jungle Book | France, Switzerland, Luxembourg | QSR Promotion |
8 |
Showtime Attractions | Peter Pan | Australia, New Zealand | Costume Character Appearances |
The total contract value for the licensing and distribution deals signed is USD 12 m.
For further information, please visit www.dqentertainment.comor contact:
DQ Entertainment plc Tapaas Chakravarti - Chairman and CEO Rashida Adenwala - Director Finance & Investor Relations | Tel: +91 40 235 53726 |
Allenby Capital Limited Jeremy Porter / Alex Price | Tel: +44(0) 20 3328 5656 |
Buchanan Communications Mark Edwards/ Clare Akhurst | Tel: +44 (0)20 7466 5000 |
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 months ended 30 September 2014 INR'Mn | Six months ended 30 September 2013 INR'Mn | Year
ended 2014 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 company during the period (expressed as cents per share) | K | |||||
Basic earnings per share | 1 | 4 | 6 | |||
Diluted earnings per share | 1 | 4 | 6 | |||
Condensed Consolidated Statement of Comprehensive Income
GROUP | Note | Six months ended 30 September 2014 INR'Mn | Six months ended 30 September 2013 INR'Mn | Year
ended 2014 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 30 September 2014 INR'Mn | As at 30 September 2013 INR'Mn | As at 31 March 2014 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 30 September 2014 INR'Mn | As at 30 September 2013 INR'Mn | As at 31 March 2014 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 13November 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
GROUP | Equity shares -No of Shares | Equity Shares - Amount INR'Mn | Share premium INR'Mn | Reverse acquisition reserve & equity component of convertible instruments INR'Mn | Foreign currency translation reserve INR'Mn | Capital Redemption Reserve INR'Mn | Retained earnings INR'Mn | Attributable to owners of the Company INR'Mn | Non-controlling interests INR'Mn | Total 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)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Statement of Cash Flows for the period ended 30 September 2014
GROUP | Note | Six months ended 30 September 2014 INR'Mn | Six months ended 30 September 2013 INR'Mn | Year
ended 2014 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 ended 30 September 2014 INR'Mn | Six months ended 30 September 2013 INR'Mn | Year
ended 2014 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 Incorporation | % of Interest |
Subsidiaries | |||
DQ Entertainment (Mauritius) Limited (DQM) | DQ Entertainment Plc. | Mauritius | 100 |
DQ Entertainment (International) Limited (DQ India) was formerly known as "Animation and Multimedia Private Limited" | DQ Entertainment (Mauritius) Limited | India | 75 |
DQ Entertainment (Ireland) Limited (DQ Ireland) | DQ Entertainment (International) Limited | Ireland | 100 |
DQ Entertainment (International) Films Limited (DQ Films) | Joint Venture Company by DQ India and DQ Plc. | ||
DQ Power Kidz Private Limited | DQ Entertainment (International) Limited | India | 100 |
DQE ITES Parks Private Limited | DQ Entertainment (International) 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 ended 30 September 2014 INR'Mn | Six months ended 30 September 2013 INR'Mn | Year ended 31 March 2014 INR'Mn | Six months ended 30 September 2014 INR'Mn | Six months ended 30 September 2013 INR'Mn | Year ended 31 March 2014 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 2014 INR'Mn | 30 September 2013 INR'Mn | 31 March 2014 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 2014 INR'Mn | 30 September 2013 INR'Mn | 31 March 2014 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 INR'Mn | 30 September 2013 INR'Mn | 31 March 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 2014 INR'Mn | 30 September 2013 INR'Mn | 31 March 2014 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 2014 INR'Mn | 30 September 2013 INR'Mn | 31 March 2014 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 INR'Mn | 30 September 2013 INR'Mn | 31 March 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 INR'Mn | 30 September 2013 INR'Mn | 31 March 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 INR'Mn | 30 September 2013 INR'Mn | 31 March 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 2014 INR'Mn | 30 September 2013 INR'Mn | 31 March 2014 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 2014 | 30 September 2013 | 31 March 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 2014 INR'Mn | 30 September 2013 INR'Mn | 31 March 2014 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 2014 INR'Mn | 30 September 2013 INR'Mn | 31 March 2014 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 2014 INR'Mn | 30 September 2013 INR'Mn | 31 March 2014 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 2014 INR'Mn | 30 September 2013 INR'Mn | 31 March 2014 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 INR'Mn | 30 September 2013 INR'Mn | 31 March 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.
GROUP | Revenue from Animation | Amounts owed by /(to) related party | Revenue from Animation | Amounts owed by/ (to) related party | Revenue from Animation | Amounts owed by/(to) related party |
30 September 2014 INR'Mn | 30 September 2014 INR'Mn | 30 September 2013 INR'Mn | 30 September 2013 INR'Mn | 31 March 2014 INR'Mn | 31 March 2014 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:
GROUP | 30 September 2014 INR'Mn | 30 September 2013 INR'Mn | 31 March 2014 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
|
distributed by
|
