TIDMDQE
RNS Number : 4254O
DQ Entertainment PLC
28 May 2015
For Immediate Release 28(th) May 2015
DQ Entertainment plc ("DQE" or the "Company")
Final results for the year ended 31 March 2015
DQ Entertainment plc (AIM: DQE), a leading animation, gaming,
entertainment production and distribution company, today announces
its audited results for the year ended 31 March 2015.
Financial Highlights:
Year ended Year
31 March ended
'15 31 March
'14
-------------------------------------- ----------- ----------
INR Mn INR Mn
-------------------------------------- ----------- ----------
Revenue 1828 2397
-------------------------------------- ----------- ----------
Gross profit 779 1021
-------------------------------------- ----------- ----------
Operating profit before financing
costs & Foreign Exchange 614 412
-------------------------------------- ----------- ----------
PBT (129) 410
-------------------------------------- ----------- ----------
Adjusted PBT ( excl foreign exchange
gain/(loss) 195 191
-------------------------------------- ----------- ----------
PAT (202) 376
-------------------------------------- ----------- ----------
Adjusted PAT ( after eliminating
the foreign exchange gain/(loss)) 122 210
-------------------------------------- ----------- ----------
Cash and Cash Equivalent 825 (844)
-------------------------------------- ----------- ----------
Depreciation 466 571
-------------------------------------- ----------- ----------
EBITDA 1080 983
-------------------------------------- ----------- ----------
Revenue/EBITDA ( %) 59% 41%
-------------------------------------- ----------- ----------
The reduction in turnover is primarily due to a slowdown in
production and delay in the commencement of new projects. However,
due to cost efficiencies, operating profit before tax, finance
costs and foreign exchange is up by 33% compared to last year.
The Company has recovered INR 945 mn in receivables from
September 2014 till May 2015, which is nearly 36% of the old
outstanding debtors as on 31(st) August 2014. Five companies have
cleared all the payments, while the balance debtors are paying up
the amounts as committed. The Company is now very hopeful of
recovering most of the aged debtors of over 240 days in the current
financial year.
Operating Highlights:
-- DQE has completed the production and delivery of "Lassie and
Friends", co-produced with Dream Works Classics USA and Super Prod
France, and is airing successfully on international networks such
as TF1 France, Telequebec Canada, ZDF Germany, Sun TV India, Media
Corp Singapore, Noga Israel and several other networks
globally.
-- DQE's VFX foray has been successful and the division has
contracted and delivered high quality VFX for several domestic
feature films.
-- DQE's feature film division has closed a US$ 30m print and
advertisement deal on a proposed theatrical release scheduled for
autumn 2017.Jungle Book has attracted important distributor's and
sales agents in USA and Europe. Distribution contracts are under
negotiation.
-- The Licensing and Distribution division has negotiated 37
audio visual distribution deals and 14 licensing and merchandising
deals worth US$6.29m in the year to 31 March 2015, and a further
US$4m worth is in the pipeline.
-- Power Kids and Tiny Toons, DQE's digital channels, have
recorded an average of 150,000 daily online views, resulting in
increased revenues through both these channels.
-- DQE has developed capabilities to exploit the latest
advancements in technology and geared to meet increased demand for
high quality stereoscopic, 2K and 4K content and is currently
producing a unique hybrid CGI show combining live action with CGI
animation called 7 Dwarfs and Me
Tapaas Chakravarti, Chairman & CEO of DQE, commented:
"The media and entertainment industry is undergoing a deep
transformation. New platforms and ways to access and consume
entertainment are redefining the rules of the game. On the other
hand, newer delivery platforms impose new challenges relating to
rights management, delivery formats and consumption behaviour. We
are focused on adapting our business model with strategies to
remain competitive on a global scale.
Flexibility, adaptability and scalability have become more
critical than ever. Our focus on developing
IP ownership for global audiences with international marquee
partners has forged the way for additional revenue streams to
accelerate growth and profitability."
Chairman and CEO Statement
I am pleased to present our annual report and accounts and the
achievements of your Company for the financial year 2014-15, as
well as my views on the animation/VFX industry.
Animation Industry Scenario
The animation industry is growing globally and production
activity for the animation sector from 2013-15 has been increasing
in various markets at a CAGR of almost 18-20% (Source: FICCI - KPMG
Indian Media and Entertainment Industry Report 2015).
The good news is that animated feature films are a robust and
thriving part of the entertainment industry and are expected to
continue to provide great family entertainment for many years to
come. Similarly the demand for animated content on most children's
and family channels has been consistently growing combined with
support in the form of tax incentives, rebates, production
financing as well as co-production treaties between various
countries, further fuelling the growth.
In November 2014, the Academy of Motion Picture Arts and
Sciences announced that 20 animated films were submitted for the
Oscars, which is a reflection of the demand for animated content
internationally.
The year has been characterized by consolidation and realignment
with mergers of several leading companies in this sector such as
Epitome Picture and Nerd Corp with DHX Media, Micros Images by
Technicolor USA. Synergy from combined resources and production of
high quality and innovative content is expected to result from such
mergers.
The industry has been witnessing a transformation empowered by
technological advancements, new delivery platforms and increasing
diversity in content, like never before. The media and
entertainment industry is undergoing a deep transformation. New
platforms and ways to access and consume entertainment are
redefining the rules of the game. On the other hand, newer delivery
platforms impose new challenges relating to rights management,
delivery formats and consumption behaviour. We are focused on
adapting our business model with strategies to remain competitive
at a global scale.
Flexibility, adaptability and scalability have become more
critical than ever. Our focus on developing IP ownership for global
audiences with international marquee partners has forged the way
for additional revenue streams to accelerate growth and
profitability.
Our Business Divisions
In order to map our specialized offerings better with the market
opportunities, we have streamlined our business divisions into
Animation, VFX, Digital, and Licensing and Distribution.
1. Animation
Our teams continue to deliver high quality CGI and traditional
TV series. In FY 2014-15 we have completed the production of
several high quality shows and also commenced several new
productions. These include 'Sheriff Callies' Wild West', a
work-for-hire series being produced for Disney Junior , and '7
Dwarfs and Me', a hybrid and unique TV show combining CGI
characters and backgrounds with live action sequences with real
actors which is being produced with Method Animation France.
Some of the other projects in production include Peter Pan
season II, Miles from Tomorrow Land, Popples, 7Dwarfs and Me and
Shabiyat, while production of new IPs such as 5 & IT, , Robin
Hood - Mischief in Sherwood Season 2, Wind in the Willows and
Pinocchio - The After Story, will commence soon.
DQE currently has a production order book worth approximately
$76 million for the next 30 months.
DQE recently secured up to US$50m from the issue of senior
secured convertible bonds, mainly to fund the development of
owned-intellectual property and co-production projects currently in
the pipeline for production over the next two years, which are set
out above.
Completed Projects
Robin Hood, Mischief in Sherwood Season 1- 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
Delicious Valley - 30 minute DVD with Team Entertainment
Little Prince - Season 3- 26 x 22' CGI TV series with Method
Animation
On going Projects
Peter Pan Season 2 - 26 x 22' CGI TV series with ZDF Germany, De
Agostini Italy, Method Animation and France TV
Miles from tomorrow land - 22 X 22' CGI for Disney Junior,
USA
Popples - 52 x 11' CGI with Method Animation, France & Saban
Group, USA
Lady Bug - 4 x 11' CGI with Zag Toons, USA
Sheriff Callie Wild West - 52 x 11' CGI for Disney Junior,
USA
7warfs & Me - 52 x 11' live action and CGI with ZDF, FTV,
RAI and Method Animation, France
Shabiyate season 10 - 15 x 13' CGI TV series with Fanar
Productions, UAE
Hive Season II - TV series with Lupus Films UK
Chimpoo & Simpoo - 26 x 22' 2D TV series with ZeeQ Network,
India
Projects in pipeline
Jungle Book Season 3 - CGI TV Series with Story Board Animation
and ZDF Germany
Eshafan - 15 x 13' 2D series with Fanar Productions, UAE
PegHeads - 52 x 11' CGI[-i?] with Story Animation LLC,
Florida
Pio the Chick - 2D TV series with RAI, Italy and Gruppo
Alcuni
5 & IT - 52 x 11' CGI TV Series with Disney / Method
Robin Hood season 2- 52 x 11' - CGI TV series with Method
Animation
2. Visual Effects ("VFX")
The foray by your company into VFX for live action films has
been successful with the team successfully producing VFX for
several domestic live action films. The VFX pipeline has been
strengthened with the addition of highly skilled talent, ready to
take on international VFX film works in the near future. The
Company has completed 5 projects in VFX and 3 more are currently in
productions.
3. Licensing and Distribution
DQE has been distributing and licensing content owned and
produced by the Company as well as co-produced content for which we
hold rights in certain territories. The performance has been
satisfactory with more than 37 audio visual distribution deals and
14 licensing and merchandising deals worth US$6.29 m signed in FY
14-15 and US$ 4.0m worth and more in the pipeline.
Going forward we strive to focus more on the revenues derived
from licensing and merchandising for our owned and co-owned
properties. With the recently concluded deal with Discovery family
channel in the United States, we are confident of achieving success
in this market which represents a large potential in terms of
licensing revenues globally.
4. Digital
Among many other initiatives, our digital kids entertainment
channels launched during the last quarter of 2014 have gathered
momentum and are generating revenues. Power Kids and Tiny Toonz are
expanding their subscriber bases on a continual basis. Power Kids
showcases animated content for children aged five and above,
whereas Tiny Toonz is aimed at younger children. Both channels have
now started to gain traction and have witnessed over 150,000
average daily online views resulting in increased revenues through
both these channels.
Review of Financial Performance
Although our revenues are down by nearly 23% as compared to the
previous year, our earnings before tax, finance costs and foreign
exchange increased by 33% as compared to the previous year. This is
because of the various cost efficiency measures taken by the
Company. The EBITDA margin also improved from 43% in the previous
year to 58% in FY 15 under review.
Our Commitment
The key to our success has been our associates, comprising of a
team of young, creative, dynamic and innovative professionals
determined to excel. We as a team are always committed to our
shareholders, bankers, customers and to everyone associated with
our Company. We aim, with your continued support, to excel in the
global competitive landscape and look forward to better times
ahead.
Tapaas Chakravarti
Chairman & CEO
27 May 2015
Consolidated Income Statement
For the year ended 31 March 2015
2014-15 2013-14 ( as restated)
----------------------------------------------------------------- ----- ---------------- ------------------------
Note Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
----------------------------------------------------------------- ----- ------- ------- ----------- -----------
Continuing operations
Revenue C 1,828 36 2,397 58
Cost of sales (1,049) - (1,376) -
------- ------- ----------- -----------
Gross profit 779 36 1,021 58
------- ------- ----------- -----------
Other operating income D 129 1 16 10
Distribution expenses (27) - (26) -
Administrative expenses AF (267) (35) (598) (55)
(165) (34) (608) (45)
------- ------- ----------- -----------
Operating result before financing costs and foreign exchange 614 2 412 13
------- ------- ----------- -----------
Foreign exchange gain/(loss) (324) (43) 219 (9)
Financial income 101 118 9 109
Financial expenses (421) - (240) -
------- ------- ----------- -----------
Net financing (costs)/ income E (416) 118 (231) 109
------- ------- ----------- -----------
Share of (loss)/profit of associate L (3) - 10 -
(Loss)/Profit before tax (129) 77 410 113
Income tax expense F (73) - (34) -
------- ------- ----------- -----------
(Loss)/Profit after tax (202) 77 376 113
======= ======= =========== ===========
Attributable to:
Owners of the Company (125) - 275 -
Non-controlling interests H (77) - 101 -
Basic and diluted earnings per share for loss attributable to the
equity holders of the Company
for the year (expressed as Indian Rupees per share) T
Basic earnings per share (2) - 6 -
Diluted earnings per share (2) - 6 -
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2015
2014-15 2013-14 ( As Restated)
-------------------------------------------- ----- ---------------- ------------------------
Note Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
-------------------------------------------- ----- ------- ------- ----------- -----------
Profit after tax (202) 77 376 113
Other comprehensive income
Foreign Currency Translation (365) (163) 356 387
------- ------- ----------- -----------
Total comprehensive income
for the year (567) (86) 732 500
------- ------- ----------- -----------
Total comprehensive income attributable to:
Owners of the Company (441) - 579 -
Non-controlling interests H (126) - 153 -
Consolidated Statement of Financial Position
As at 31 March 2015
2014-15 2013-14 (As Restated)
-------------------------------------- ------ ----------------------- ------------------------
Note Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
-------------------------------------- ------ -------- ------------- ---------- ------------
ASSETS
Non current assets
Property, plant and equipment G 64 - 101 -
Goodwill I 432 - 432 -
Intangible assets J 4,215 - 3,455 -
Intangible assets under construction K 999 - 2,210 -
Investment in associate L 184 1,755 198 433
Loan to subsidiary M - - - 1,341
Prepaid leasehold rights 12 - 11 -
Deferred tax asset O 257 - 166 -
Deposits P 14 - 14 -
----------
Total non current assets 6,177 1,755 6,587 1,774
-------- ------------- ---------- ------------
Current assets
Trade and other receivables Q 3,833 577 3,048 652
Cash and cash equivalents R 825 1 28 -
-------- ------------- ---------- ------------
Total current assets 4,658 578 3,076 383
-------- ------------- ---------- ------------
Total assets 10,835 2,333 9,663 2,426
======== ============= ========== ============
Consolidated Statement of Financial Position
As at 31 March 2015 - continued
2014-15 2013-14 ( As Restated)
---------------------------------------------- ------ --------------------- -------------------------
Note Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
---------------------------------------------- ------ ----------- -------- ------------ -----------
EQUITY AND LIABILITIES
Equity S
Issued capital 5 5 5 5
Share premium 2,811 2,231 2,816 2,231
Reverse acquisition reserve 55 - 55 -
Capital Redemption reserve 1 - 1 -
Equity component of convertible instruments 70 - 52 -
Foreign currency translation reserve 214 278 529 441
Retained earnings 1,419 (219) 1,545 (295)
Equity attributable to owners of the Company 4,575 2,295 5,003 2,382
----------- -------- ------------ -----------
Non-controlling interests H 1,105 - 1,226 -
Total equity 5,680 2,295 6,229 2,382
----------- -------- ------------ -----------
Non current liabilities
Interest-bearing loans and borrowings W 2,589 - 967 -
Provisions X 77 - 116 -
----------- -------- ------------ -----------
Total non current liabilities 2,666 - 1,083 -
----------- -------- ------------ -----------
Current liabilities
Trade and other payables U 929 39 853 44
Bank overdraft V 486 - 872 -
Interest-bearing loans and borrowings W 755 - 383 -
Provisions X 319 - 243 -
----------- -------- ------------ -----------
Total current liabilities 2,489 39 2,351 44
----------- -------- ------------ -----------
Total liabilities 5,155 39 3,434 44
----------- -------- ------------ -----------
Total stockholders' equity and liabilities 10,835 2,333 9,663 2,426
=========== ======== ============ ===========
These financial statements were approved by the Board of
Directors and authorised for use on
27 May 2015.
Signed on behalf of the Board of Directors by:
Director Director
Consolidated Statement of Changes in Equity
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
GROUP Equity Equity Share Reverse Equity Foreign Capital Retained Attributable to Non Total
shares - Shares premium acquisition component of currency Redemption earnings owners of the controlling
No of - reserve convertible translation Reserve Company interests
Shares Amount instruments reserve
INR'Mn INR'Mn
INR'Mn INR'Mn INR'Mn INR'Mn INR'Mn INR'Mn INR'Mn
INR'Mn
---------------- ----------- ------- -------- ------------ ---------------- -------------- ----------- ---------- ----------------- --------------- ------------
Balance as at 1
April 2013 42,566,047 4 2,616 55 52 224 1 1,270 4,222 1,073 5,295
Issue of equity
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 - - - - - - - 275 327 102 377
----------- ------- -------- ------------ ---------------- -------------- ----------- ---------- ----------------- --------------- ------------
Balance as at
31 March 2014 56,263,047 5 2,816 55 52 529 1 1,545 5,055 1,226 6,229
Balance as at 1
April 2014 (
As Restated) 56,263,047 5 2,816 55 52 529 1 1,545 5,055 1,226 6,229
Equity
Component on
Convertible
Bond - - - - 18 - - - 18 - 18
Fair valuation
of bonds - - (5) - - - - - (5) 6 1
Other
comprehensive
income - - - - - (315) - - (315) (50) (365)
Income for the
year - - - - - - - (126) (126) (78) (204)
----------- ------- -------- ------------ ---------------- -------------- ----------- ---------- ----------------- --------------- ------------
Balance as at
31 March 2015 56,263,047 5 2,881 55 70 214 1 1,419 4,575 1,104 5,680
---------------- ----------- ------- -------- ------------ ---------------- -------------- ----------- ---------- ----------------- --------------- ------------
Consolidated Statement of Changes in Equity - continued
COMPANY Equity shares - No Equity Shares - Share premium Foreign Retained Total
of Shares Amount currency earnings
INR'Mn INR'Mn translation INR'Mn INR'Mn
reserve
INR'Mn
--------------------- -------------------- ------------------ --------------- --------------- ------------------
Balance as at
1 April 2013 42,566,047 4 2,031 54 (408) 1,681
Issued of
shares for
cash 13,697,000 1 200 - - 201
Other
comprehensive
income - - - 387 - 387
Income for the
year - - - - 113 113
--------------------- -------------------- ------------------ --------------- --------------- ------------------
Balance as at
1 April 2014 56,263,047 5 2,231 441 (295) 2,382
Other
comprehensive
income - - - (163) - (163)
Income for the
year - - - - 76 76
--------------------- -------------------- ------------------ --------------- --------------- ------------------
Balance as at
31 March 2015 56,263,047 5 2,231 278 (219) 2,295
--------------------- -------------------- ------------------ --------------- --------------- ------------------
Consolidated Statement of Cash Flows
For the year ended 31 March 2015
2014-15 2013-14 ( As
Restated)
------------------------- ------ --------------------------- -----------------------
Note Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
------------------------- ------ ---------------- --------- ------------ ---------
Cash flows from
operating activities
(Loss)/Profit for
the year before
tax (129) 77 411 113
Adjustments for:
Depreciation and
amortization 466 - 616 -
Financial income E (5) (118) (9) (109)
Financial expenses E 452 - 252 -
Provisions for employee
benefits 57 - (3) -
Provision for bad
and doubtful debts
(net) (4) - 231 -
Provision for retakes Z - - (8) -
Unrealised gain/(loss)
on foreign exchange
fluctuations (371) 43 (170) 9
Share of profit/(loss)
of associate L 3 - (10) -
(Loss) on sale of
property, plant
and equipment (46) - (4) -
---------------- --------- ------------ ---------
Operating cash flows
before changes in
working capital 423 2 1,306 13
---------------- --------- ------------ ---------
(Increase)/decrease
in trade and other
receivables (778) 33 (909) (153)
Employee benefits
paid (39) - (11) -
Increase/ (decrease)
in trade and other
payables 2 (5) 404 20
---------------- --------- -------- ---------
(392) 30 790 (120)
Income taxes paid - - (34) -
---------------- --------- -------- ---------
Net cash generated
from / (used in
) operating activities (392) 30 756 (120)
---------------- --------- -------- ---------
Consolidated Statement of Cash Flows
For the year ended 31 March 2015 - continued
2014-15 2013-14( As
Restated)
------------------------------------- ------ ------------------ ------------------
Note Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
------------------------------------- ------ -------- -------- -------- --------
Cash flows from
investing activities
Acquisition of
property, plant
and equipment (84) - - -
Acquisition and
advances received
for distribution
rights 152 - (1,072) -
Proceeds from sale
of property, plant
and equipment - - 9 -
Sale of Investment
in Mutual Funds - 18 - (583)
Investment in subsidiary/associates 11 -
Deposits - - 5 -
Finance income 5 117 9 113
-------- -------- --------
Net cash (used
in)/generated from
investing activities 84 135 (1,049) (470)
-------- -------- -------- --------
Cash flows from
financing activities
Proceeds from Borrowings
from Term Loans 372 - 511 -
Repayment of Term
Loans (248) - (307) -
Issue of share
capital - - 1 1
Premium collected
on issue of share 18 - 200 200
Proceeds from Convertible
Bonds 1,708 - - -
Interest paid (452) - (267) -
Net cash
from financing
activities 1,398 - 138 201
-------- -------- -------- --------
Net (decrease)
/ increase in cash
and cash equivalents 1,090 165 (155) (389)
Cash and cash equivalents
at beginning of
year R 30 - 42 1
Bank overdraft R (386) (666) -
(Loss) / gain on
foreign exchange
fluctuations 91 (163) (65) 388
-------- -------- -------- --------
Cash and cash equivalents
at year end R 825 1 (844) -
-------- -------- -------- --------
Notes to 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 consolidated financial statements for DQ Entertainment (the
"Group") and financial statements for the Company have been
prepared for the year ended 31 March 2015.
As on 31 March 2015 the following companies formed part of the
Group:
Company Immediate Parent Country % of Interest
of Incorporation
------------------------ ------------------ ------------------- --------------
Subsidiaries
---------------------------------------------------------------------------------
DQ Entertainment
(Mauritius) Limited DQ Entertainment
(DQM) Plc. Mauritius 100
------------------------ ------------------ ------------------- --------------
DQ Entertainment
(International)
Limited (DQ India)
was formerly known
as "Animation and DQ Entertainment
Multimedia Private (Mauritius)
Limited" Limited India 75
------------------------ ------------------ ------------------- --------------
DQ Entertainment DQ Entertainment
(Ireland) Limited (International)
(DQ Ireland) Limited Ireland 100
------------------------ ------------------ ------------------- --------------
DQ Entertainment Joint Venture Ireland
(International) Company by DQ
Films Limited (DQ India and DQ
Films) Plc.
------------------------ ------------------ ------------------- --------------
DQ Entertainment DQ Entertainment
Peter Pan II Limited Ireland Limited Ireland 100
------------------------ ------------------ ------------------- --------------
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, IM1 1LB, 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 currency of each of the respective Group
companies is:
DQ Plc. British Pound (GBP)
DQ Entertainment (Mauritius) Limited US Dollar (USD)
DQ Entertainment (International) Indian Rupee (INR)
Limited
DQ Entertainment (Ireland) Limited Euro (EURO)
DQ Entertainment (International) Euro (EURO)
Films Limited
DQ Power Kidz Private Limited Indian Rupee (INR)
DQE ITES Parks Private Limited Indian Rupee (INR)
Method Animation SAS Euro (EURO)
DQ Entertainment Peter Pan 2 Limited Euro (EURO)
1. Significant accounting policies
(a) Adoption of new and revised standards
IAS 24 Amendments resulting Annual periods
from Annual Improvements beginning on or
2010-2012 Cycle after 1 July 2014
(management entities)
------- -------------------------- -------------------
IFRS 8 Amendments resulting Annual periods
from Annual Improvements beginning on or
2010-2012 Cycle after 1 July 2014
(aggregation of
segments, reconciliation
of segment assets)
------- -------------------------- -------------------
IFRS 9 Deferral of mandatory Annual periods
effective date beginning on or
of IFRS 9 and after 1 January
amendments to 2015
transition disclosures
------- -------------------------- -------------------
EFFECTIVE DATES OF IFRS AND AMENDMENTS
(i) Standards and interpretations in issue not yet adopted
EFFECTIVE DATES OF IFRS AND AMENDMENTS
Standards or Interpretation Effective for
reporting periods
starting on or
after
-------- ---------------------------- -------------------
IFRS 3 amendments resulting Annual periods
from Annual Improvement's beginning on or
2010-2012 Cycle after 1 January
(scope exception 2015
for joint ventures)
-------- ---------------------------- -------------------
IFRS 5 Amendments resulting Annual periods
from September beginning on or
2014 Annual improvement's after 1 January
to IFRS'S 2016
-------- ---------------------------- -------------------
IFRS 7 Deferral of mandatory Annual periods
effective date beginning on or
of IFRS 9 and after 1 January
amendments to 2015
transition disclosures
-------- ---------------------------- -------------------
IFRS 7 Amendments resulting Annual periods
from September beginning on or
2014 Annual Improvements after 1 January
to IFRS's 2016
-------- ---------------------------- -------------------
IFRS 8 Amendments resulting Annual periods
from Annual Improvements beginning on or
2010-2012 Cycle after 1 July 2014
(aggregation of
segments, reconciliation
of segment assets)
-------- ---------------------------- -------------------
IFRS 9 Deferral of mandatory Annual periods
effective date beginning on or
of IFRS 9 and after 1 January
amendments to 2015
transition disclosures
-------- ---------------------------- -------------------
Finalised version, Annual periods
incorporating beginning on or
requirements for after 1 January
classification 2018
and measurement,
impairment, general
hedge accounting
and derecognition
-------- ---------------------------- -------------------
IFRS 10 Amendments regarding Annual periods
the sale or contribution beginning on or
of assets between after 1 January
an investor and 2016
its associate
or joint venture
-------- ---------------------------- -------------------
Amendments regarding Annual periods
the application beginning on or
of the consolidation after 1 January
exception 2016
-------- ---------------------------- -------------------
IFRS 11 Amendments regarding Annual periods
the accounting beginning on or
for acquisitions after 1 January
of an interest 2016
in joint operation
-------- ---------------------------- -------------------
IFRS 12 Amendments regarding Annual periods
the application beginning on or
of the consolidation after 1 January
exception 2016
-------- ---------------------------- -------------------
IFRS 13 Amendments resulting Annual periods
from Annual Improvements beginning on or
2011-2013 Cycle after 1 July 2014
(scope of the
portfolio exception
in paragraph 52)
-------- ---------------------------- -------------------
IAS 1 Amendments resulting Annual periods
from the disclosure beginning on or
initiative after 1 January
2016
-------- ---------------------------- -------------------
IAS 19 Amendments resulting Annual periods
from September beginning on or
2014 Annual Improvements after 1 January
to IFRS's 2016
-------- ---------------------------- -------------------
IAS 28 Amendments regarding Annual periods
the application beginning on or
of the consolidation after 1 January
exception 2016
-------- ---------------------------- -------------------
IAS 38 Amendments resulting Annual periods
from Annual Improvements beginning on or
2010-2012 Cycle after 1 July 2014
(proportionate
restatement of
accumulated depreciation
on revaluation)
-------- ---------------------------- -------------------
Amendments regarding Annual periods
the clarification beginning on or
of acceptable after 1 January
methods of depreciation 2016
and amortisation
-------- ---------------------------- -------------------
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 above standards or
interpretations becomes effective. There are no other IFRS or IFRIC
interpretations that are effective subsequent to the company's
financial year end that would have a material impact on the
group.
The Company does not intend to apply any of these pronouncements
early.
(b) Basis of preparation and statement of compliance with
International Financial Reporting Standards
The consolidated financial statements have been prepared under
applicable International Financial Reporting Standards ("IFRS")
issued by the International Accounting Standards Board (IASB). The
historical financial information incorporates the financial
statements of the Group made up to 31 March each year.
(c) Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Chairman's Statement. In addition, note AA to
the financial statements includes the Group's objectives, policies
and processes for managing its capital, its financial risk
management objectives, details of its financial instruments and
hedging activities and its exposures to credit and liquidity risk.
The Group has considerable financial resources together with long
term contracts with a number of customers and suppliers across
different geographic areas and industries. As a consequence, the
management believes that the Group is well placed to manage its
business risks successfully despite the current uncertain economic
outlook.
After making enquiries, the management has a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the annual report and financial statements.
(d) The basis of presentation and accounting policies used in
preparing the historical financial information
These accounting policies have been consistently applied to the
results, gains and losses, assets, liabilities and cash flows of
all entities included in the consolidated financial statements for
all the periods presented unless otherwise stated. The consolidated
financial statements are presented in INR, rounded to the nearest
million unless otherwise indicated. They are prepared on the
historical cost basis except for financial instruments, which are
carried at their fair values.
In the process of applying the Group's accounting policies,
management is required to make judgements, estimates and
assumptions that may affect the consolidated financial statements.
Management believes that the judgements made in the preparation of
the historical financial information are reasonable. However,
actual outcomes may differ from those anticipated.
The estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future
periods if the revision affects both current and future periods.
Judgements made by management in the application of IFRSs that have
significant effect on the historical financial information and
estimates with a significant risk of material adjustment in the
next year are discussed in note AG.
(e) Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31 March each year. The group
controls the entity where the groups is exposed to, or has right to
variable returns from its investment with the entity and has the
ability to effect those returns through its power to direct the
activities of the entity. In respect of the associate, the
consolidated financial statements incorporate the last audited
financial statements not exceeding three months from year ending 31
March 2015.
Intra group balances, transactions and any resulting unrealised
gains arising from intragroup transactions are eliminated on
consolidation. Unrealised losses resulting from intragroup
transactions are also eliminated unless cost cannot be recovered.
Amounts reported in the financial statements of the subsidiaries
have been adjusted where necessary to ensure consistency with the
accounting policies adopted by the Group.
Non-controlling interests in subsidiaries are identified
separately from the Group's equity therein. The interests of
non-controlling shareholders may be initially measured either at
fair value or at the non-controlling interests' proportionate share
of the fair value of the acquiree's identifiable net assets.
Subsequent to acquisition, the carrying amount of non-controlling
interests is the amount of those interests at initial recognition
plus the non-controlling interests' share of subsequent changes in
equity. Total comprehensive income is attributed to non-controlling
interests even if this results in the non-controlling interests
having a deficit balance.
Changes in the Group's interests in subsidiaries that do not
result in a loss of control are accounted for as equity
transactions. The carrying amounts of the Group's interests and the
non-controlling interests are adjusted to reflect the changes in
their relative interests in the subsidiaries. Any difference
between the amount by which the non-controlling interests are
adjusted and the fair value of the consideration paid or received
is recognised directly in equity and attributed to owners of the
Group.
(f) Goodwill
(i) Recognition and initial measurement
Goodwill arising on acquisition is recognised as an asset and
initially measured at cost, being the excess of the cost of the
business combination over the Group's interest in the net fair
value of the identifiable assets, liabilities and contingent
liabilities recognised. If, after reassessment, the Group's
interest in the net fair value of the acquiree's identifiable
assets, liabilities and contingent liabilities exceed the cost of
the business combination, the excess is recognised immediately in
profit or loss. On disposal of a subsidiary, the attributable
amount of goodwill is included in the determination of the profit
or loss on disposal.
(ii) Subsequent measurement
Goodwill is not subject to amortisation but is tested for
impairment annually and is measured at cost less accumulated
impairment losses, if any.
(g) Investment in associate
An associate is an entity over which the Group has significant
influence and that is neither a subsidiary nor an interest in a
joint venture. Significant influence is the power to participate in
the financial and operating policy decisions of the investee but is
not control or joint control over those policies.
The results and assets and liabilities of associates are
incorporated in these financial statements using the equity method
of accounting, except when the investment is classified as held for
sale, in which case it is accounted for in accordance with IFRS 5
Non-current Assets Held for Sale and Discontinued Operations. Under
the equity method, investments in associates are carried in the
consolidated balance sheet at cost as adjusted for post-acquisition
changes in the Group's share of the net assets of the associate,
less any impairment in the value of individual investments. Losses
of an associate in excess of the Group's interest in that associate
(which includes any long-term interests that, in substance, form
part of the Group's net investment in the associate) are recognised
only to the extent that the Group has incurred legal or
constructive obligations or made payments on behalf of the
associate. Any excess of the cost of acquisition over the Group's
share of the net fair value of the identifiable assets, liabilities
and contingent liabilities of the associate recognised at the date
of acquisition is recognised as goodwill. The goodwill is included
within the carrying amount of the investment and is assessed for
impairment as part of that investment. Any excess of the Group's
share of the net fair value of the identifiable assets, liabilities
and contingent liabilities over the cost of acquisition, after
reassessment, is recognised immediately in profit or loss.
Where a group entity transacts with an associate of the Group,
profits and losses are eliminated to the extent of the Group's
interest in the relevant associate.
(h) Foreign currency
(i) Translation to presentation currency
The individual financial statements of each group entity are
presented in the currency of the primary economic environment in
which the entity operates (its functional currency).
The functional currency of each of the respective Group
companies is:
DQ Plc. British Pound (GBP)
DQ Entertainment (Mauritius) US Dollar (USD)
Limited
DQ Entertainment (International) Indian Rupee (INR)
Limited
DQ Entertainment (Ireland) Limited Euro (EURO)
Method Animation SAS Euro (EURO)
DQ Entertainment (International) Euro (EURO)
Films Limited
DQ Power Kidz Private Limited Indian Rupee (INR)
DQE ITES Parks Private Limited Indian Rupee (INR)
DQ Entertainment Peter Pan 2 Euro ( Euro)
Limited
At the reporting date the assets and liabilities of the Group
are translated into the presentation currency, which is in Indian
Rupees (INR) at the rate of exchange ruling at the balance sheet
date and the income statement is translated at the average exchange
rate for the year.
Although the functional currency of the ultimate holding Company
DQ Plc. is GBP, the presentation currency of the Group is not GBP
as majority of the operations of the group are transacted in
currencies other than GBP.
The USD: INR exchange rates used to translate the INR financial
information into the presentation currency of INR were as
follows:
2015 2014
Closing rate at 31 March 62.6044 59.8105
Average rate for the year ended
31 March 61.1097 60.4267
The GBP: INR exchange rates used to translate the GBP financial
information into the presentation currency of INR were as
follows:
2015 2014
Closing rate at 31 March 92.8742 99.5211
Average rate for the year ended
31 March 98.5304 96.1556
The EURO: INR exchange rates used to translate the EURO
financial information into the presentation currency of INR were as
follows:
2015 2014
Closing rate at 31 March 67.9314 82.2559
Average rate for the year ended 31 March 77.4865 81.0551
(ii) Foreign currency transactions
Transactions in foreign currencies are translated at the foreign
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
balance sheet date are translated into functional currency at the
foreign exchange rate ruling at that date. Foreign exchange
differences arising on translation are recognised in the income
statement. Non-monetary assets and liabilities that are measured in
terms of historical cost in a foreign currency are translated using
the exchange rate at the date of the transaction. Non-monetary
assets and liabilities denominated in foreign currencies that are
stated at fair value are translated to functional currency at
foreign exchange rates ruling at the dates the fair value was
determined.
(iii) Financial statements of foreign operations
The assets and liabilities of the Group's subsidiaries and other
entities controlled by the Group based outside the Isle of Man
("foreign operations") are translated into INR at the exchange
rates prevailing at the balance sheet date. The income and expenses
of foreign operations are translated into INR at average exchange
rates prevailing during the year. Exchange differences arising on
translation of foreign operations are recognised directly in equity
as foreign currency translation reserve.
(i) Derivative financial instruments
The Group uses derivative financial instruments to manage its
exposure to foreign exchange risks arising from operational
activities. The Group does not hold or issue derivative financial
instruments for trading purposes. However, derivatives that do not
qualify for hedge accounting are accounted for as trading
instruments.
Derivative financial instruments are recognised at fair value.
The subsequent gain or loss on re measurement to fair value is
recognised immediately in profit or loss.
The fair value of forward exchange contracts is their quoted
market price at the balance sheet date, being the present value of
the quoted forward price.
(j) Property, plant and equipment
(i) Owned assets
Items of property, plant and equipment are stated at cost less
accumulated depreciation. Cost includes expenditure that is
directly attributable to the acquisition of the asset. The cost of
self-constructed assets includes the cost of materials and direct
labour, any other costs directly attributable to bringing the asset
to a working condition for its intended use, and the costs of
dismantling and removing the items and restoring the site on which
they are located.
Where parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items of
property, plant and equipment.
Gains and losses on disposal of an item of property, plant and
equipment are determined by comparing the proceeds from disposal
with the carrying amount of property, plant and equipment and are
recognised within "other Income" for gains and "other operating
expenses" for losses in the statement of income.
(ii) Subsequent costs
The Group recognises in the carrying amount of an item of
property, plant and equipment the cost of replacing part of such an
item when that cost is incurred if it is probable that the future
economic benefits embodied within the item will flow to the Group
and the cost of the item can be measured reliably. Replaced parts
are de-recognised with any profit / (loss) on disposal recognised
immediately in the income statement. All other costs are recognised
in the income statement as an expense as incurred.
(iii) Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction and production of qualifying assets are capitalised as
part of the costs of those assets. Qualifying assets are those that
necessarily take a substantial period of time to prepare for their
intended use. Capitalisation of borrowing costs continues up to the
date when the assets are substantially ready for their use. All
other borrowing costs are expensed in the period in which they are
incurred.
(iv) Depreciation
Depreciation is charged to the income statement on a
straight-line basis over the estimateduseful lives of each part of
an item of property, plant and equipment. Land is not depreciated.
The estimated useful lives are as follows:
Computer hardware and software 3 - 6 years
Equipment including office equipment 6 - 10 years
Fixtures and furniture 10 years
Vehicles 4 years
Lease acquisition cost and leasehold improvements are
depreciated over the primary period of the lease or estimated
useful lives of the assets whichever is less. Assets under
construction are not depreciated, as they are not ready for
use.
The depreciation methods, useful lives and residual value, are
reassessed annually.
(k) Intangible assets
(i) Distribution rights
Distribution rights that are acquired by the company are stated
at cost less accumulated amortisation and impairment losses.
(ii) Intangible assets under construction
Under certain distribution contracts, the Group was required to
make advance payments in order to acquire distribution rights.
These payments have been capitalised as intangible assets on the
basis that (i) they will be realised through future sales to be
made by the Group; (ii) they are separately identifiable and (iii)
they are controlled through their legal rights.
The expectation is that these advance payments will be fully
recouped by the Group, however, the extent to which full value will
be obtained is dependent on the ability of the Group to generate
sufficient sales on a go-forward basis under the various
distribution contracts. On this basis, no systematic amortisation
is charged. However, at each reporting date the asset is assessed
for impairment, based on projected sales.
(iii) Projects under development
Direct or indirect expenditure incurred on the development of
film production projects in order to create intellectual property
or content, which are exploited on any form of media, are
capitalised within Intangible Assets under construction, in
accordance with IAS 38 (Intangible Assets), only from the point
that the company can demonstrate:
(i) The technical feasibility of the project;
(ii) Its intention to complete the intangible asset and sell
it;
(iii) Its ability to use or sell the intangible asset;
(iv) How the intangible asset will generate probable future
economic benefits;
(v) The availability of adequate technical, financial and other
resources to complete the development and to use or sell the
intangible asset; and
(vi) Its ability to measure reliably the expenditure
attributable to the intangible asset during its development
(iv) Subsequent expenditure
Subsequent expenditure on capitalised intangible assets is
capitalised only when it increases the future economic benefits
embodied in the specific asset to which it relates.
(v) Amortisation
Amortisation is charged to the income statement on a
straight-line basis over the estimated useful lives of intangible
assets apart from Intangible assets under construction. Intangible
assets are amortised from the date they are available for use. The
estimated useful lives are the term of the licensing agreement or
10 years whichever is less.
Useful lives for individual assets are determined based on the
nature of the asset, its expected use, the length of the legal
agreement or patent and the period over which the asset is expected
to generate economic benefits for the Group ("economic life").
(vi) Assignment of Rights - Policy
Under certain financing arrangements, the Group has assigned its
rights in its non-registered capitalised IP as security for the
period of the related financing. Based on the application of the
substance over form principle, these IP's remain on the Statement
of Financial Position, classified as Intangible Assets, as the
overall substance of the transaction has no discernible effect on
the economics of the transaction as the Group continues to have
full access and use of the IP for the purposes of their
business.
(l) Financial assets
All financial assets are recognised and derecognised on trade
date where the purchase or sale of a financial asset is under a
contract whose terms require delivery of the financial asset within
the timeframe established by the market concerned, and are
initially measured at fair value, plus transaction costs, except
for those financial assets classified as at fair value through
profit or loss, which are initially measured at fair value.
Financial assets are classified into the following specified
categories: 'held for trading', 'held-to-maturity' investments,
'available-for-sale' (AFS) financial assets and 'loans and
receivables'. The classification depends on the nature and purpose
of the financial assets and is determined at the time of initial
recognition.
Investment in Mutual funds is classified as held for trading as
it has been acquired principally for the purpose of selling it in
the near term.
(m) Trade and other receivables
Trade receivables are initially measured at fair value and
subsequently measured at amortised cost using the effective
interest rate method. They are reduced by appropriate allowances
for estimated irrecoverable amounts. A provision for impairment of
trade receivables is established when there is objective evidence
that the Group will not be able to collect all amounts due
according to the original term of the receivable. The amount of the
provision is the difference between the carrying amount and the
recoverable amount and this difference is recognised in the income
statement.
Upon the initial recognition of revenue, when it is expected
that the credit period to be taken by the customer will exceed
normal terms, then the Group discounts the receivable to its
present value using prevailing interest rates at the date of
recognition. The implied interest income element is then recognised
over the expected extended credit period.
(n) Cash and cash equivalents
Cash and cash equivalents comprise cash balances, cash in
transit and call deposits and are carried in the consolidated
statement of financial position at cost. Bank overdrafts that are
repayable on demand and form an integral part of the Group's cash
management are included as a component of cash and cash equivalents
for the purpose of the statement of cash flows.
(o) Impairment
The carrying amounts of the Group's assets are reviewed at the
end of every year to determine whether there is any indication of
impairment. If any such indication exists, the asset's recoverable
amount is estimated. An impairment loss is recognised whenever the
carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. Impairment losses are recognised in the income
statement. A cash-generating unit is the smallest identifiable
group of assets that generates cash inflows that are largely
independent of the cash inflows from other assets or groups of
assets. Impairment losses recognised in respect of cash-generating
units are allocated to reduce the carrying amount of assets in the
unit on a pro rata basis.
(p) Calculation of recoverable amount
The recoverable amount of the Group's receivables carried at
amortised cost is calculated as the present value of estimated
future cash flows, discounted at the original effective interest
rate (i.e. the effective interest rate computed at initial
recognition of these financial assets). Receivables with a short
duration are not discounted. The recoverable amount of other assets
is the greater of their fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset. For an asset that does not
generate largely independent cash inflows, the recoverable amount
is determined for the cash-generating unit to which the asset
belongs.
(q) Share capital
(i) Ordinary shares
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown in
equity as a deduction, net of tax, from the proceeds.
(ii) Dividends
Dividends are recognised as a liability in the year in which
they are declared.
(r) Interest-bearing loans and borrowings
Interest-bearing loans and borrowings are recognised initially
at fair value less attributable transaction costs. Subsequent to
initial recognition, interest-bearing borrowings are stated at
amortised cost with any difference between cost and redemption
value being recognised in the income statement over the period of
the borrowings on an effective interest rate basis.
(s) Employee benefits
(i) Defined contribution plans
Obligations for contributions to defined contribution pension
plans are recognised as an expense in the income statement as
incurred.
(ii) Defined benefit plans
The Group's net obligation in respect of gratuity, which include
amounts payable to employees on termination, resignation or
retirement on completion of a minimum service period with the
Group, and compensated absences, which include amounts payable to
employees on utilisation of accumulated leave balances during the
service period or encashment at the time of termination,
resignation or retirement, is calculated estimating the amount of
future benefit that employees have earned in return for their
service in the current and prior periods; that benefit is
discounted to determine its present value, and the fair value of
any plan assets is deducted. The discount rate is the yield at the
balance sheet date on government bonds that have maturity dates
approximating to the terms of the Group's obligations. The
calculation is performed by a qualified actuary using the projected
unit credit method. Expected cost of compensated absences by way of
sick leave is recognised in the income statement.
When the benefits of a plan are improved, the portion of the
increased benefit relating to past service by employees is
recognised as an expense in the income statement on a straight-line
basis over the average period until the benefits become vested. To
the extent that the benefits vest immediately, the expense is
recognised immediately in the income statement.
All actuarial gains and losses as at 1 April 2004, the date of
transition to IFRSs, were recognised. In respect of actuarial gains
and losses that arise subsequent to 1 April 2004 in calculating the
Group's obligation in respect of a plan, to the extent that any
cumulative unrecognised actuarial gain or loss exceeds 10 per cent
of the greater of the present value of the defined benefit
obligation and the fair value of plan assets, that portion is
recognised in the income statement over the expected average
remaining working lives of the employees participating in the plan.
Otherwise, the actuarial gain or loss is not recognised.
(t) Provisions
A provision is recognised in the consolidated statement of
financial position when the Group has a present legal or
constructive obligation as a result of a past event, and it is
probable that an outflow of economic benefits will be required to
settle the obligation. If the effect is material, provisions are
determined by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessments of the time
value of money and, where appropriate, the risks specific to the
liability.
Provisions for retakes are recognised wherever they are
considered to be material. 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 from customers are expected to be received by the Group
within a period of 3 months from the final delivery and hence the
provision is not discounted.
A provision for onerous contracts is recognised when the
expected benefits to be derived by the Group from a contract are
lower than the unavoidable cost of meeting its obligations under
the contract.
(u) Trade and other payables
Trade and other payables are initially measured at fair value
and subsequently measured at amortised cost using the effective
interest rate method.
(v) Revenue recognition
(i) Production service fee and licensing revenue
Revenue represents amounts receivable for production and
imparting production training skill services rendered and is
recognised in the income statement in proportion to the stage of
completion of the transaction at the period end. The stage of
completion can be measured reliably and is assessed by reference to
work completed as at the period end. The Group uses the services
performed to date as a percentage of total services to be performed
as the method for determining the stage of completion. Where
services are in progress and where the amounts invoiced exceed the
revenue recognised, the excess is shown as deferred income. Where
the revenue recognised exceeds the invoiced amount, the amounts are
classified as unbilled revenue.
The stage of completion for each project is estimated by the
management at the onset of the project by breaking each project
into specific activities and estimating the efforts required for
the completion of each activity. Revenue is then allocated to each
activity based on the proportion of efforts required to complete
the activity in relation to the overall estimated efforts. The
management's estimates of the efforts required in relation to the
stage of completion, determined at the onset of the project, are
revisited at the balance sheet date and any material deviations
from the initial estimate are recognised in the income
statement.
The Group's services are performed by a determinable number of
acts over the duration of the project and hence revenue is not
recognised on a straight-line basis.
Contract costs that are not probable of being recovered are
recognised as an expense immediately.
Revenue from the licensing of distribution rights (including
withholding tax) is recognised on a straight line basis over the
term of the licensing agreement where there is an on-going
performance obligation and in the case of the license fee from
co-production rights on the date declared by the licensee. Revenue
from licensing of distribution rights is recognised at the time of
sale under a non-cancellable contract which permits the licensee to
exploit those rights freely and the Group has no remaining
obligations to perform.
No revenue is recognised if there are significant uncertainties
regarding recovery of the consideration due.
(ii) Royalties
Fees and royalties paid for the use of the group's assets (such
as trademarks, patents, software, music copyright, record masters
and motion picture films) are recognised in accordance with the
substance of the agreement. This may be on a straight line basis
over the life of the agreement, for example, when a licensee has
the right to use certain technology for a specified period of time.
An assignment of rights for a fixed fee or non-refundable guarantee
under a non-cancellable contract which permits the licensee to
exploit those rights freely and the licensor has no remaining
obligations to perform is, in substance, a sale.
(iii)Distribution revenue
Revenue from distribution rights (including withholding tax) is
recognised in accordance with the substance of the agreement.
Revenue is recognised at the time of sale under a non-cancellable
contract which permits the licensee to exploit those rights freely
and the company has no remaining obligations to perform.
(w) Expenses
(i) Operating lease payments
Payments made under non-cancellable operating leases are
recognised in the income statement on a straight-line basis over
the term of the lease. Payments made under cancellable operating
leases are recognised as expense in the period in which they are
incurred.
Leasehold interest in Land is classified as an operating lease
and the amount paid for acquisition of such rights is classified as
prepayments and amortised over the period of the
lease term
(ii) Finance lease payments
Minimum lease payments are apportioned between the finance
charge and the reduction of the outstanding liability. The finance
charge is allocated to each period during the lease term so as to
produce a constant periodic rate of interest on the remaining
balance of the liability.
(iii) Net financing costs
Net financing costs comprise interest payable on borrowings
calculated using the effective interest rate method, dividends on
redeemable preference shares, interest receivable on funds invested
and foreign exchange gains and losses that are recognised in the
income statement.
Interest income is recognised in the income statement as it
accrues, using the effective interest rate method. The interest
expense component of finance lease payments is recognised in the
income statement using the effective interest rate method.
Foreign currency gains and losses are reported on a net
basis.
(x) Income tax
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from profit as reported in the
consolidated statement of comprehensive income because of items of
income or expense that are taxable or deductible in other years and
items that are never taxable or deductible. The Group's liability
for current tax is calculated using tax rates that have been
enacted or substantively enacted by the end of the reporting
period.
Deferred tax is recognised on temporary timing differences
between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the
computation of taxable profit. Deferred tax liabilities are
generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all deductible
temporary differences to the extent that it is probable that
taxable profits will be available against which those deductible
temporary differences can be utilised. Such deferred tax assets and
liabilities are not recognised if the temporary difference arises
from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at the
end of each reporting period and reduced to the extent that it is
no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the period in which the
liability is settled or the asset realised, based on tax rates (and
tax laws) that have been enacted or substantively enacted by the
end of the reporting period. The measurement of deferred tax
liabilities and assets reflects the tax consequences that would
follow from the manner in which the Group expects, at the end of
the reporting period, to recover or settle the carrying amount of
its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
(y) Earnings per share
The Group presents basic and diluted earnings per share (EPS)
data for its ordinary shares. Basic EPS is calculated by dividing
the profit or loss attributable to ordinary shareholders of the
Group by the weighted average number of ordinary shares outstanding
during the period. Diluted EPS is determined by adjusting the
profit or loss attributable to ordinary shareholders and the
weighted average number of ordinary shares outstanding for the
effects of all dilutive potential ordinary shares, which comprise
convertible notes, convertible preference shares and share options
granted to employees.
(z) Segment reporting
The Group has adopted IFRS 8 Operating Segments with effect from
1 January 2009. IFRS 8 requires operating segments to be identified
on the basis of internal reports about components of the Group that
are regularly reviewed by the chief operating decision maker in
order to allocate resources to the segments and to assess their
performance.
(aa) Voluntary changes in accounting policies and corrections of prior period errors
The Group presents all retrospective application of voluntary
changes in the accounting policies and retrospective restatement to
correct prior period errors as far as practical to conform with IAS
8 with relevant disclosures.
(ab) Financial instruments
Financial instruments comprise investments in equity,
investments in equity trade receivables, unbilled revenues, loans
to subsidiaries, cash and cash equivalents, bank borrowings ,
Convertible Bond and trade payables. Financial instruments are
recognised initially at fair value plus, for instruments not at
fair value through profit or loss, any directly attributable
transaction costs.
Note B - 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 Group comprises the following main business segments:
Animation:
The production services rendered to production houses and
training rendered for acquiring skills for production services in
relation to the production of animation television series and
movies.
Distribution:
The revenue generated from the exploitation of the distribution
rights of animated television series and movies acquired by the
Group.
Note B - SEGMENT REPORTING - continued
Segment revenue and segment result
Segment Revenue Segment Result
( As Restated)
------------------ -------------------------
2014-15 2013-14 2014-15 2013-14
INR'Mn INR'Mn INR'Mn INR'Mn
---------------------- -------- -------- --------------- --------
Animation 1,303 1,874 703 1,111
Distribution 525 523 137 153
1,828 2,397 840 1,264
Unallocated Expenses (969) (853)
--------------- --------
Profit before tax (129) 411
Income tax expense (73) (34)
--------------- --------
Profit for the year (202) 377
--------------- --------
Segment assets and liabilities
Assets Liabilities
------------------ -------------------------
2014-15 2013-14 2014-15 2013-14
INR'Mn INR'Mn INR'Mn INR'Mn
----------------------- -------- -------- ------------- ----------
Animation 2,448 2,448 347 347
Distribution 6,172 6,172 140 140
Total of all segments 8,620 8,620 487 487
Unallocated 2,215 1,043 4,668 2,947
-------- -------- ------------- ----------
Consolidated 10,835 9,663 5,155 3,434
-------- -------- ------------- ----------
Other segment information
Depreciation and Additions to
amortisation non-current
assets
------------------- ------------------
2014-15 2013-14 2014-15 2013-14
INR'Mn INR'Mn INR'Mn INR'Mn
-------------- --------- -------- -------- --------
Animation 84 197 37 25
Distribution 380 419 704 208
--------- -------- -------- --------
464 616 741 233
--------- -------- -------- --------
Geographical segments
The animation and distribution segments are managed on a
worldwide basis, but operate in three principal geographical areas:
America, Europe and Others.
The Group's revenue from external customers and information
about its segment assets by geographical location are detailed
below
Revenue from Segment assets Acquisition
external of segment
customers assets
------------------ ------------------ ------------------
2014-15 2013-14 2014-15 2013-14 2014-15 2013-14
INR'Mn INR'Mn INR'Mn INR'Mn INR'Mn INR'Mn
--------- -------- -------- -------- -------- -------- --------
America 994 514 1,335 790 - -
Europe 281 876 4,602 4,733 704 208
Others 553 1,007 4,898 4,140 37 25
-------- -------- -------- -------- -------- --------
1,828 2,397 10,835 9,663 741 233
-------- -------- -------- -------- -------- --------
NOTE C - REVENUE
2014-15 2013-14
--------------------------- ------------------ ------------------
Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
--------------------------- -------- -------- -------- --------
Revenue from animation 1,303 - 1,874 -
Revenue from distribution 525 - 523 -
Service income - 36 - 58
-------- -------- -------- --------
1,828 36 2,397 58
-------- -------- -------- --------
NOTE D - OTHER OPERATING INCOME
2014-15 2013-14
------------------------- ------------------ --------------------
Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
------------------------- -------- -------- -------- ----------
Sundry balances written
back 1 1 10 10
Gain on Sale of Fixed
Assets 46 - 4 -
Recognition on discount
on Trade Receivable 82 - - -
Other income - - 2 -
-------- -------- -------- --------
129 1 16 10
-------- -------- -------- --------
NOTE E - NET FINANCING (COSTS)/INCOME
2014-15 2013-14
------------------------------ ------------------ ----------------------
Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
------------------------------ -------- -------- ------------ --------
Interest income 5 118 9 109
-------- -------- -------- --------
Financial income 5 118 9 109
-------- -------- -------- --------
Interest on short term
borrowings and other
financing costs (105) - (58) -
Interest on term loans (316) - (182) -
Net foreign exchange
loss - - - -
-------- -------- -------- --------
Financial expenses (421) - (240) -
-------- -------- -------- --------
Net financing (costs)/income (416) 118 (231) 109
======== ======== ======== ========
The interest expense is net of INR 2.47 Mn (PY 2013-14 INR 10
Mn) which has been capitalized as part of the acquisition cost of
Intangible assets under construction.
NOTE F - INCOME TAX EXPENSE
2014-15 2013-14
Group Group
INR'Mn INR'Mn
------------------------------- ---- -------- --------
Current tax expense
Current tax (MAT) 89 156
89 156
-------- --------
Deferred tax (credit)/expense
Origination and reversal
of temporary differences (90) (58)
MAT credit entitlement 74 (71)
-------- --------
(16) (129)
-------- --------
Total income tax expense
in income statement 73 27
-------- --------
Reconciliation of effective tax rate
2014-15 2013-14
Group Group
INR'Mn INR'Mn
---------------------------------- ---- -------- --------
Profit before tax (129) 456
Indian corporate income
tax rate 33.99% 33.99%
Income tax at standard
rate (44) 155
Differences on account of
items taxed at zero/lower
rates 43 (45)
MAT credit entitlement 73 (71)
Differences on account of tax
rates in any other jurisdiction
(DQ Ireland @ 12.5%) - (12)
Tax charge 72 27
CURRENT TAX EXPENSE
DQ Plc is liable to Manx corporate tax at the 0% rate.
DQM is liable to Mauritian corporate tax at the general rate of
15%, although in respect of its overseas income, after an available
credit of 80% of the tax payable, the effective rate is reduced to
3%.
DQ India enjoys exemption of its taxable profits from export
profits from production as per the provisions of section 10AA of
the Indian Income Tax Act, 1961. However, as per the provisions of
section 115JB of the Indian Income Tax Act, 1961, relating to
Minimum Alternate Tax (MAT), companies whose tax liability was less
than 20% of the book profits was deemed to have a tax liability
equivalent to 20% of the book profits derived as per the Income
Statement. The amount paid under section 115JB is allowed to be
adjusted against tax liabilities in the succeeding seven financial
years.
DQ Ireland is liable to Irish corporate tax at the general rate
of 12.5%. However the company gets relief for the capital allowance
in excess of depreciation, utilisation of tax losses and losses
carried forward.
Consequently DQ India's current tax expense for the FY: 2014-15
of INR 88 million (FY: 2013-14: INR 156 million) represents the
amount of MAT payable and can be carried forward and adjusted
against the income tax liability (other than MAT tax provision) in
the next ten financial years. Out of this DQ India has recognised
INR 17 million of MAT Credit Entitlement on the basis of expected
future recoveries.
Current tax expenses of the Group for FY: 2014-15 is INR 71
million (FY: 2013-14: INR 27 million) which comprises of Income Tax
of INR 88 million (FY: 2013-14: INR 156 million), reversal of
deferred tax (liability)/asset recognised in earlier years INR (90)
million (FY: 2013-14: INR (58) million) and MAT Credit Entitlement
INR 73 million (FY: 2013-14: INR (71) million).
NOTE G - PROPERTY, PLANT AND EQUIPMENT
Computer Assets
hardware Fixtures Leasehold under
And software Equipment and furniture improvements Vehicles construction Total
INR'Mn INR'Mn INR'Mn INR'Mn INR'Mn INR'Mn INR'Mn
--------------------- -------------- ---------- --------------- -------------- --------- -------------- -------
Cost
Balance at 1 April
2013 1,148 35 33 16 27 1 1,260
Acquisitions 12 - - - - 13 25
Disposals /
Transfers (26) (11) (4) - (10) (13) (64)
Balance at 31 March
2014 1,134 24 29 16 17 1 1,221
-------------- ---------- --------------- -------------- --------- -------------- -------
Balance at 1 April
2014 1,134 24 29 16 17 1 1,221
Acquisitions 14 - - - 7 16 37
Disposals /
Transfers (167) - - - (8) (16) (191)
Balance at 31 March
2015 981 24 29 16 16 1 1,067
-------------- ---------- --------------- -------------- --------- -------------- -------
Depreciation
Balance at 1 April
2013 904 22 19 8 17 - 970
Depreciation due to
change
of law (refer note
AG) 26 - - - - - 26
Depreciation charge
for the
year 158 3 3 2 5 - 171
Disposals (24) (11) (4) - (8) - (47)
Balance at 31 March
2014 1,064 14 18 10 14 - 1,120
-------------- ---------- --------------- -------------- --------- -------------- -------
Balance at 1 April
2014 1,064 14 18 10 14 - 1,120
Depreciation due to
change
of law (refer note
AG) (26) - - - - - (26)
Depreciation charge
for the
year 71 5 3 3 2 - 84
Disposals (167) - - - (8) - (175)
Balance at 31 March
2015 942 19 21 13 8 - 1,003
-------------- ---------- --------------- -------------- --------- -------------- -------
Carrying amounts
At 31 March 2015 39 5 8 3 8 1 64
-------------- ---------- --------------- -------------- --------- -------------- -------
At 31 March 2014 96 10 11 6 3 1 101
-------------- ---------- --------------- -------------- --------- -------------- -------
Security
At 31 March 2015 assets with a carrying amount of INR 64 million
(31 March 2014 INR 127 million) are secured to borrowings from
banks.
NOTE H - NON - CONTROLLING INTEREST
2014-15 2013-14
Group Group
INR'Mn INR'Mn
-------------------------------- -------- --------
Balance at beginning of year 1,226 1,073
Profit/( Loss) for the year (77) 102
Other comprehensive income for
the year (50) 51
Security premium on bonds 6 -
-------- --------
Closing balance 1,105 1,226
-------- --------
NOTE I - GOODWILL
Goodwill arising on acquisition of subsidiaries
An amount of INR 432 million represents goodwill arising on
consolidation of financial statements of the Company's
subsidiaries. Goodwill represents the excess amount paid over the
nominal value of the shares of DQ India, which DQ Mauritius
acquired from certain shareholders.
2014-15 2013-14
Group Group
INR'Mn INR'Mn
----------------- ----------- --------
Cost
Opening balance 432 432
Closing balance 432 432
----------- --------
The Group tests for impairment of goodwill annually or more
frequently if there are any indications that the impairment may
have arisen. The recoverable amount of a Cash Generating Unit
("CGU") is determined based on the higher of fair values less costs
to sell and value-in-use calculations. The key assumptions for the
value-in-use calculations are those regarding discount rates and
long term growth rates. The discount rate is based on the risk free
rate of interest on government of India bonds, while growth rates
are based on management's experience and expectations and do not
exceed the long term average growth rate for the region in which
the CGU operates. These calculations use cash flow projections
based on financial budgets approved by the management. Cash flows
are extrapolated using the estimated growth rates. No impairment
losses were recognised in 2014-15 (2013-14: Nil). The discount rate
used for discounting the future cash flows is 14% (FY 2013-14:
18.04 %).
NOTE J - INTANGIBLE ASSETS
2014-15 2013-14
Group Group
INR'Mn INR'Mn
------------------------------------ -------- --------
Cost
Opening balance 4,616 4,247
Acquisitions 704 208
Disposal (133) (284)
Translation adjustment/elimination
effects 394 445
-------- --------
Closing Balance 5,581 4,616
-------- --------
Amortisation
Opening balance 1,161 960
Amortisation due to
change of laws (19) 19
Amortisation expense 262 223
Impairment losses charged
to profit or loss 118 177
Disposal (76) (284)
Translation adjustment (80) 66
-------- --------
Closing Balance 1,366 1,161
-------- --------
Carrying amounts
-------- --------
At beginning of year 3,474 3,287
At end of year 4,215 3,455
-------- --------
Intangible assets represent the unamortized value of costs
incurred in acquiring advance paid for distribution rights and copy
rights. The Group started acquiring these rights from the year
2003-04 and to date fifty series (FY: 2013-14: forty four series)
of Animation rights have been acquired for different territories
across the globe. In the current year the group earned revenue of
INR 535 million (FY: 2013-14: INR 523 million) from exploitation of
distribution rights. The Group has performed testing for impairment
of intangibles which resulted in an impairment loss of INR 118
million (FY: 2013-14: INR 177 million) on account of the
recoverable amount of certain intangibles being less that their
carrying amount.
As a result of fundraising activities during the year, the Group
has given the following security over the IP owned by DQ Ireland,
detailed as follows:
-- For all of its Registered IP, amounting to INR'16.7 Mn , a
first fixed charge over all its present and future rights, titles
and interests, including all Registered Intellectual Property
acquired by it in the future; and
-- For all of its non-Registered IP, amounting to INR' 9 Mn, as
continuing security for the payment and discharge of the funding
raised, it has assigned absolutely (subject to a proviso for
reassignment on redemption) all its present and future rights,
titles and interests in and to and the benefit of any Intellectual
Property owned by it. Under this assignment agreement, the
bondholders have granted DQ Ireland an exclusive, royalty-free
licence to use all Intellectual Property assigned by it.
-- In the opinion of the directors, the carrying value of the
intangible assets are not less than their recoverable amounts.
-- These assets are subject to the same security arrangements as
detailed in Note J above. The total of INR'Mn 999 relates to
non-registered IP rights.
NOTE K - INTANGIBLE 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.
2014-15 2013-14
Group Group
INR'Mn INR'Mn
--------------------------- -------- --------
Opening Balance 2,210 1,230
Acquisitions 249 913
Transfers to distribution
rights (327) (108)
Translation adjustment (1,133) 175
-------- --------
Closing Balance 999 2,210
-------- --------
These assets are subject to the same security arrangements as
detailed in Note J above. The total of INR'Mn 999 relates to
non-registered IP rights.
NOTE L - INVESTMENT IN ASSOCIATE
On 28 March 2008 the Company acquired a 20% equity stake in
Method Animation, SAS (the "Associate"), for a consideration of INR
156 million. For the purpose of applying the equity method of
accounting, as the financial year of Associate ends on 31 December,
the financial statements as of 31 December 2014 of the Associate,
adjusted for significant transactions occurred between 31 December
2014 and 31 March 2015, have been used.
Details of acquisition and the accounting for the Associates
share of profits are as follows:
2014-15 2013-14
------------------------ ------------------ ------------------
Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
------------------------ -------- -------- -------- --------
Opening balance 152 161 152 161
Cost of acquisition 152 161 152 161
-------- -------- -------- --------
Share of profit/(
Loss) in Associates (3) - 10 -
Translation adjustment 35 1,594 36 272
-------- -------- -------- --------
Closing balance 184 1,755 198 433
======== ======== ======== ========
The summarised financial information as at and for the year
ended 31 March 2015 is as follows:
2014-15 2013-14
INR'Mn INR'Mn
------------------------------ -------- --------
Ownership share 20% 20%
Assets 3,281 3,492
Adjustment to the fair value - -
-------- --------
Assets - restated 3,281 3,492
Liabilities (2,853) (3,036)
Revenue 752 542
Profit (17) 52
Goodwill of INR 156 million arose on acquisition of the 20%
equity stake in the associate during 2007-08 and is included in the
carrying cost of the investment.
NOTE M - LOAN TO SUBSIDIARY
As per the shareholders' loan agreement DQ Plc. has given an
interest free loan amounting to INR 1,142 million to its subsidiary
DQ Mauritius.
Fair value on initial recognition of the loan amounted to INR
758 million assuming an interest rate of 8% per annum and repayment
period of 10 years. As at 31 March 2014, the fair value of the loan
outstanding amounted to INR Nil million, This loan has been
converted to DQ Mauritius Equity as on 31.03.2015. (31 March 2014:
INR 1,030 million).
2014-15 2013-14
Company Company
INR'Mn INR'Mn
------------------------------- --------- ---------
Opening balance 1,341 1,030
Interest accrued - 96
Transfer to Equity Investment (1,341) -
Translation adjustment - 215
--------- ---------
Closing balance - 1,341
========= =========
NOTE N - INTERESTS IN OTHER ENTITIES
DQE is principally involved with structured entities, as defined
by IFRS 12 Interests in Other Entities, through the sale of (i)
production rights, (ii) production services and (iii) the licensing
of distribution rights for the completed productions from which is
generates distribution income. The structured entities generally
finance these activities through the upfront sales of the
distribution rights to DQE. The business activities of all of these
structured entities relates to the acquisition of TV and film
rights, their development and exploitation. DQE has some level of
involvement in all aspects of these businesses.
Risk associated with unconsolidated structured entities:
The following table summarises the carry values recognised in
the statement of financial position of DQE's interests in
unconsolidated structured entities as at 31 March 2015.
NOTE O - DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets and liabilities of the Group are
attributable to the following:
Assets Liabilities Net
------------------ ------------------ ------------------
2014-15 2013-14 2014-15 2013-14 2014-15 2013-14
INR'Mn INR'Mn INR'Mn INR'Mn INR'Mn INR'Mn
------------------------ -------- -------- -------- -------- -------- --------
Property, plant
and equipment - - 4 72 (4) (72)
Intangible assets - - 45 6 (45) (6)
Employee benefits 49 43 - - 49 43
Tax value of loss
carry forwards
recognized 22 26 - - 22 26
Share Issue expenses - - 6 34 (6) (34)
MAT Credit Entitlement 241 209 - - 241 209
Net tax assets 312 278 55 112 257 166
-------- -------- -------- -------- -------- --------
NOTE P - DEPOSITS
Deposits represent amounts paid to various government agencies
for the use of services including electricity, water and telephone
supplied by these agencies. These amounts are refundable to the
group on the termination of services with these agencies.
NOTE Q - TRADE AND OTHER RECEIVABLES
2014-15 2013-14
--------------------- ------------------ ------------------
Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
--------------------- -------- -------- -------- --------
Trade receivables
( Net of discount) 3,389 330 2,599 79
Unbilled revenue 267 - 320 -
Prepayments 26 - 31 1
Receivables from
Group - 247 - 572
Other receivables 151 - 98 -
-------- -------- -------- --------
3,833 577 3,048 652
-------- -------- -------- --------
Total trade receivables (net of allowances) held by the Group at
31 March 2015 amounted to INR 3,389 million (31 March 2014: INR
2,599 million) includes INR 2,728 million being above 120 days (31
March 2014: INR 1,690 million).
The ageing analysis of trade receivables is given below:
2014-15 2013-14
----------------------- ------------------ --------------------
Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
----------------------- -------- -------- ---------- --------
Less than 30 days 319 6 642 10
30 - 60 days 72 - 107 -
60 - 90 days 72 9 84 15
90 - 120 days 232 - 76 -
Greater than 120 days 2,728 315 1,690 54
-------- -------- ---------- ----------
3,423 330 2,599 79
-------- -------- ---------- ----------
In establishing the requirement for a bad debt provision or for
the need to discount the trade receivables outstanding as at year
end, management have calculated and booked the appropriate
provision have reviewed the payment patterns of all customers.
Through working closely with all customers, management 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, as evidenced in the
ageing analysis above. Based on internal calculations whereby
customers have been profiled based on their underlying payment
patterns, management have calculated and booked the appropriate
discount provision. This is an area which attracts constant
attention from management that they keep under review to determine
whether provision is required.
Ageing of impaired trade receivables
2014-15 2013-14
----------------------- ------------------ --------------------
Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
----------------------- -------- -------- ---------- --------
Less than 30 days - - - -
30 - 60 days - - - -
60 - 90 days - - - -
90 - 120 days - - - -
Greater than 120 days 64 - 77 -
Allowance for doubtful debts is made by the Group for trade
receivables beyond 120 days and where the Group is of the opinion
that the amount is not recoverable. As of 31 March 2015, the amount
of trade receivables beyond 180 days was INR 2,733 million (31
March 2014: INR 1,391 million). Historically the Group has
recovered all its trade receivables.
Movement in the allowance for doubtful debts
2014-15 2013-14
---------------------------- ------------------ --------------------
Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
---------------------------- -------- -------- ---------- --------
Balance at beginning
of the year 77 - 21 -
Impairment losses
recognised on receivables (2) - 55 -
Amounts recovered
during the year - - - -
Foreign exchange
translation gains
and losses (11) - 1 -
-------- -------- ---------- --------
64 - 77 -
-------- -------- ---------- --------
NOTE R - CASH AND CASH EQUIVALENTS
2014-15 2013-14
--------------------------- ------------------ --------------------
Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
--------------------------- -------- -------- -------- --------
Cash and bank balances 805 1 10 -
Call deposits 20 - 18 -
-------- -------- -------- --------
Cash and cash equivalents 825 1 28 -
Bank overdraft (486) - (872) -
-------- -------- -------- --------
339 (844)
-------- -------- -------- --------
NOTE S - 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 Sterling 0.1 pence each.
Issue of ordinary shares
2014-15 2013-14
Group Company Group Company
------------------ ----------- ----------- ----------- -----------
Number of shares
Opening balance 56,263,047 56,263,047 42,566,047 42,566,047
Issued for cash - - 13,697,000 13,697,000
Closing balance 56,263,047 56,263,047 56,263,047 56,263,047
----------- ----------- ----------- -----------
2014-15 2013-14
------------------- ------------------ -----------------------
Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
------------------- -------- -------- ----------- ----------
Share capital
Opening balance 5 5 4 4
Issued for cash - - 1 1
Closing balance -
fully paid 5 5 5 5
-------- -------- ------------------ ---
2014-15 2013-14
------------------ ------------------ ---------------------
Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
------------------ -------- -------- ---------- ---------
Share premium
Opening balance 2,816 2,231 2,616 2,031
Equity Component
of Convertible
Instruments 13 - 200 200
Closing balance 2,829 2,231 2,816 2,231
-------- -------- ---------- ---------
b) Reserves
Translation reserve- Assets, liabilities, income, expenses and
cash flows are translated in to INR (presentation currency) from
Euros (functional currency of DQ Ireland & DQ Films Ltd), USD
(functional currency of DQ Mauritius) and British Pounds
(functional currency of DQ Plc). The exchange difference arising
out of the year-end translation is debited to Foreign Currency
Translation Reserve, which amounts to INR 214 million (31 March
2014: INR 529 million) Credit.
Translation reserve
2014-15 2013-14
--------------------- ------------------ ------------------
Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
Opening balance 529 441 224 54
Increase/(decrease)
during the year (315) (163) 305 387
-------- --------
Closing balance 214 278 529 441
-------- -------- -------- --------
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 aggregating to INR
1,421 million (31 March 2014: INR 1,597 million) include all
current and prior year results as disclosed in the income
statement.
2014-15 2013-14
------------------------- ------------------ ------------------------
Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
Opening balance 1,545 (295) 1,270 (408)
Prior Period Adjustment - - (52) -
Profit for the year (124) 76 327 113
Closing balance 1,421 (219) 1,545 (295)
-------- -------- ----------- -----------
The accumulated earnings are in the nature of distributable
reserves for the purposes of distribution of dividend by the parent
company DQ Plc.
Other Reserves - The Reverse Acquisition Reserve, Equity
component of convertible instruments and Capital Redemption Reserve
is non-distributable in nature.
NOTE T - EARNINGS PER SHARE (EPS)
Profit/(Loss) attributable to ordinary shareholders
2014-15 2013-14
------------------------------------------ --------- ---------
Profit/( Loss) attributable
to ordinary shareholders INR'Mn (125) 327
Weighted average number
of ordinary shares outstanding
during the year (in
million) 55,889 55,889
Basic EPS (2) 6
Diluted EPS (2) 6
The Company does not have any dilutive instruments for the year
ended 31 March 2015 and as such diluted EPS equals basic EPS.
NOTE U - TRADE AND OTHER PAYABLES
2014-15 2013-14
----------------------- ------------------ ------------------
Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
-------- --------
Trade payables 397 - 683 -
Deferred income 215 - 121 -
Non-trade payables
and accrued expenses 317 39 49 44
-------- -------- -------- --------
929 39 853 44
-------- -------- -------- --------
Ageing analysis of trade payables is as follows:
2014-15 2013-14
------------------------ ------------------ ------------------
Group Company Group Company
INR'Mn INR'Mn INR'Mn INR'Mn
------------------------ -------- -------- -------- --------
Less than three months 125 - 146 -
Three to twelve months 272 - 537 -
397 - 683 -
-------- -------- -------- --------
NOTE V - BANK OVERDRAFT
Secured bank overdraft facility:
2014-15 2013-14
Group Group
INR'Mn INR'Mn
--------------- -------- --------
Amount used 486 872
Amount unused 77 19
-------- --------
563 891
-------- --------
NOTE W - INTEREST-BEARING LOANS AND BORROWINGS
This note provides information about the contractual terms of
the Group's interest-bearing loans and borrowings. For more
information about the Group's exposure to interest rate and foreign
currency risk, see note AA.
2014-15 2013-14
Group Group
INR'Mn INR'Mn
---------------------------- -------- --------
Non-current liabilities
Secured bank loans 554 967
554 967
-------- --------
Current liabilities
Current portion of secured
bank loans 755 383
755 383
-------- --------
The borrowings are repayable
as follows:
------------------------------ -------- --------
2014-15 2013-14
Group Group
INR'Mn INR'Mn
------------------------------ -------- --------
On demand or within
one year 755 383
In the second year - 430
In the third to fifth
years inclusive 554 537
1,309 1,350
-------- --------
Unrealised direct issue
cost of secured bank
loan - -
-------- --------
1,309 1,350
-------- --------
Less: Amount due for
settlement within twelve
months (shown under
current liabilities) 755 383
Amount due for settlement
after twelve months 554 967
The interest rate for three loans is pegged at a factor to the
bank's Prime Lending Rate, while in respect of other loans they are
pegged at a factor to LIBOR.
Interest Bearing Loans
Financial liabilities and equity instruments
(i) Classification as debt or equity
Debt and equity instruments issues by the group are classified
as either financial liabilities or as equity in accordance with the
substance of the contractual arrangements and the definitions of a
financial liability and an equity instrument.
(ii) Equity instruments
Conversion option that will be settled by the exchange of a
fixed amount of cash or another financial asset for a fixed number
of the company's own equity instruments is an equity
instrument.
The conversion option classified as equity is determined by
deducting the amount of the liability component from the fair value
of the instrument as a whole. This is recognised and included in
equity, net of income tax effects, and is not subsequently
remeasured. In addition, the conversion option classified as equity
will remain in equity until the conversion option is exercised. No
gain or loss is recognised in the profit or loss upon conversion or
expiration of the conversion option.
(ii) Financial liability
At the date of issue, the fair value of the liability component
is estimated using the prevailing market interest rate for similar
non-convertible instruments. This amount is recorded as a liability
on an amortised cost basis using the effective interest method
until extinguished upon conversion or at the instrument's maturity
date. Interest related to the financial instrument is recognised in
the profit and loss. On conversion, the financial liability is
classified to equity and no gain or loss is recognised.
(iii) Transaction costs
Transaction costs that relate to the issue of the convertible
notes are allocated to the liability and equity components in
proportion to the allocation of the gross proceeds. Transaction
costs relating to the equity component are recognised directly in
equity. Transaction costs relating to the liability component are
included in the carrying amount of the liability component and are
amortised over the lives of the convertible notes using the
effective interest method.
NOTE X - PROVISIONS
Provisions include the following:
2014-15 2013-14
Group Group
INR'Mn INR'Mn
--------------------------- -------- --------
Current employee benefits
(note Y) 68 11
Provision for income
tax 238 219
Provision for retakes
(note Z) 13 13
-------- --------
319 243
-------- --------
NOTE Y - EMPLOYEE BENEFITS
The defined benefit obligations of the Group include gratuity
and compensated absences. Gratuity represents amounts payable to
the employees, at the time of termination, resignation or
retirement from services, on completion of a minimum service period
of 5 years with the Group. The amount of gratuity payable to an
employee is equal to the product of 15 days salary and the number
of completed years of service or part thereof in excess of 6
months.
Compensated absences represent amounts payable to employees on
utilisation of accumulated leave balances during service with the
Group or encashment of such accumulated leave balances on
termination, resignation or retirement from the services. Maximum
leave available for encashment on termination, resignation or
retirement is 60 days.
2014-15 2013-14
INR'Mn INR'Mn
--------------------------------------- -------- --------
Present value of unfunded obligations 86 90
-------- --------
Recognised liability for defined
benefit obligations 86 90
Liability for compensated absences 30 35
--------
Total employee benefit liability 116 125
--------
Movements in the net liability for defined benefit obligations
recognised in the balance sheet
2014-15 2013-14
INR'Mn INR'Mn
Opening balance 90 96
Expense recognised in the income statement (see below) 40 20
Actuarial loss (2) (18)
Contributions to defined benefit obligations (21) (8)
Closing balance 107 90
Employee benefits recognised in the balance sheet are as
follows:
2014-15 2013-14
INR'Mn INR'Mn
Current employee benefits 68 11
Non-current employee benefits 77 116
145 127
Expense recognised in the income statement
2014-15 2013-14
INR'Mn INR'Mn
Current service costs 31 12
Interest on obligation 9 8
Actuarial loss (2) (18)
38 2
NOTE Y - EMPLOYEE BENEFITS - continued
The expense is recognised in the following line items in the
income statement:
2014-15 2013-14
INR'Mn INR'Mn
-------- --------
Cost of sales 35 2
General and administrative expenses 3 -
38 2
--------
Liability for defined benefit obligations
Principal actuarial assumptions at the balance sheet date:
2014-15 2013-14
INR'Mn INR'Mn
-------- --------
Discount rate at 31 March 9.10% 9.10%
Future salary increases 4% 4%
Withdrawal rate
Age group (in years):
18-30 5% 5%
31-40 4% 4%
41-45 3% 3%
46 and above 2% 2%
Mortality: Standard table of Life Insurance Corporation of India
(1994-96) was used for mortality rate.
Personnel costs
2014-15 2013-14
INR'Mn INR'Mn
------------------------------------------------------------ --------
Wages and salaries 551 671
Contributions to defined
contribution plans 37 47
Increase in liability
for defined benefit
plans 38 2
Increase / (decrease) in liability for compensated absences 8 (4)
634 716
--------
NOTE Z - PROVISION FOR RETAKES
2014-15 2013-14
Group Group
INR'Mn INR'Mn
Opening balance 13 21
Provisions made during
the year 14 18
Provisions reversed during the year (14) (26)
Closing balance 13 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 AA- FINANCIAL INSTRUMENTS
Financial risk management objectives
The Group's major financial instruments during the year
comprised bank loans, call deposits, options and forward foreign
exchange contracts. The principal objective of these financial
instruments is to finance the Group's operations, to manage the
interest rate risk arising from its sources of finance and to
minimise the impact of fluctuations in exchange rates on future
cash flows. The Group's other financial instruments consist of
trade receivables and trade payables, which arise directly from its
operations.
The Group regularly reviews its exposure to interest, liquidity
and foreign currency risk. Where appropriate the Group will take
action, in accordance with a Board approved Treasury Policy, to
minimise the impact on the business of movements in interest rates
and currency rates.
The Group's activities expose it primarily to the financial
risks of changes in foreign currency exchange rates. The Group only
enters into derivative instruments with approved banking
institutions to ensure appropriate counterparty credit quality.
Capital risk management
The Group manages its capital to ensure that entities in the
Group will be able to continue as a going concern while maximising
the return to stakeholders through the optimization of the debt and
equity balance.
The capital structure of the Group consists of debt, which
includes the borrowings disclosed in note X, cash and cash
equivalents and equity attributable to equity holders of the
parent, comprising issued capital, reserves and retained earnings
as disclosed in notes S and T respectively.
Gearing ratio
The Group's management reviews the capital structure on a
semi-annual basis. As part of this review, the management considers
the cost of capital and the risks associated with each class of
capital. The Group has a target gearing ratio of 1:1 determined as
the proportion of net debt to equity.
The gearing ratio at the year-end was as follows:
2014-15 2013-14
Group Group
INR'Mn INR'Mn
--------------------------- -------- --------
Debt (i) 1,795 2,222
Cash and cash equivalents (825) (28)
-------- --------
Net debt 970 2,194
-------- --------
Equity (ii) 5,680 6,281
-------- --------
Net debt to equity ratio 0.17 0.35
-------- --------
(i) Debt is defined as long and short-term borrowings, as
detailed in note V and W
(ii) Equity includes all capital and reserves of the Group.
Credit risk
The Group's principal financial assets are cash and bank
balances, trade and other receivables and currency derivative
financial instruments.
The credit risk on liquid funds and currency derivative
financial instruments is limited because the counterparties are
banks with high credit--ratings assigned by international
credit--rating agencies.
Management has a credit policy in place and the exposure to
credit risk is monitored on an on-going basis. Credit evaluations
are performed on all customers. The Group does not require
collateral in respect of financial assets.
The carrying amount of financial assets recorded in the
financial statements, which is net of impairment losses, represents
the Group's maximum exposure to credit risk.
At 31 March 2015 there was concentration of credit risk in four
customers to the extent of 40% of the total trade receivables.
However the Group does not foresee any credit risk, as 50% of the
receivable from such customer is less than 180 days. Investments
are allowed only in liquid securities and only with counterparties
that have a credit rating equal to or better than the Group and
hence management does not expect any counterparty to fail to meet
its obligations.
Liquidity risk
The Group keeps its short, medium and long term funding
requirements under constant review. Its policy is to have
sufficient committed funds available to meet medium term
requirements, with flexibility and headroom to make minor
acquisitions for cash if the opportunity should arise. The table
below analyses the Group's financial liabilities which will be
settled on a net basis into relevant maturity groupings based on
the remaining period at the balance sheet date to the contractual
maturity date.
Liquidity risk
Group Less than one month One to three months Three to twelve months One to five years Total
31 March 2015
Interest bearing loans
and borrowings (note W) - 94 661 554 1,309
Bank Overdraft (note V) 486 - - - 486
Trade and other
payables(note U) 85 40 745 5 875
571 134 1,406 559 2,670
31 March 2014
Interest bearing loans
and borrowings (note W) - 223 160 967 1,350
Bank Overdraft (note V) 872 - - - 872
Trade and other
payables(note U) 100 46 377 330 853
972 269 537 1,297 3,075
------------------- ---------------------- ----------------- ------
Interest rate risk
The Group regularly evaluates the profile of borrowings and the
associated interest rates. The Group does not foresee any
significant risk because of the level of exposure.
The following table demonstrates the sensitivity to a reasonably
possible change in interest rates, with all other variables held
constant, on the Group's net profit before tax (through the impact
on floating rate borrowings).
Increase/(decrease) in basis points Effect on Group net profit before tax - INR'Mn
2014-15
Increase 100 4
Decrease (100) (9)
2013-14
Increase 100 7
Decrease (100) (5)
FINANCIAL INSTRUMENTS - continued
Effective interest rates
In respect of income-earning financial assets and
interest-bearing financial liabilities, the following table
indicates their effective interest rates and the maturity profiles
of their carrying amounts at the balance sheet date:
2014-15 2013-14
INR'Mn INR'Mn
On On
Effective demand Effective demand
Less More Less More
Interest than 1 - 5 than interest than 1 -5 than
Rate Total 1 year years 5 years rate Total 1 year years 5 years
Financial
assets
Cash and bank
balances - 805 805 - - - 10 10 - -
Call deposits 4% - 10% 20 20 - - 4% - 10% 18 18 - -
Trade and
other
receivables - 3,833 3,833 - - - 3,048 3,048 - -
Deposits - 14 - 14 - - 14 - 14 -
4,672 4,658 14 3,090 3,076 14 -
------ ------- ------ -------
Financial
liabilities
US dollar
floating
rate loan 2.96% - 6.5% 722 378 344 - 2.96% -6.5% 838 194 644 -
Rupee
floating
rate loan 13.5% -16.5% 327 117 210 - 13.5%-16.75% 512 189 323 -
Euro floating
rate
loan 3% 260 260 - - - - - -
Bank
overdraft - 487 487 - - - 872 872 - -
Trade and
other
payables - 929 924 5 - - 853 523 330 -
------ ------- ------ -------
2,725 2,166 559 3,075 1,778 1,297 -
------ ------- ------ -------
FINANCIAL INSTRUMENTS - continued
Currency risk
The Group is exposed to currency risk on sales, purchase of
fixed assets, overseas outsourcing and borrowings that are
denominated in currencies other than the Indian Rupee. The
currencies giving rise to this risk are primarily Euros and U.S.
Dollars.
The Group uses currency forward exchange contracts and currency
option contracts to manage its foreign currency risk. As at the
balance sheet date the Group did not have any outstanding currency
option contracts in place.
The financial instruments of the Group include the following
amounts, which are denominated in the following foreign
currencies:
2014-15 2013-14
INR'000 INR'000
Euro USD Other Total Euro USD Other Total
Assets
Cash and
bank balances 803 - 2 805 8 - 2 10
Call deposits - - 20 20 - - 18 18
Trade and
other receivables 586 3,247 - 3,833 1,613 830 605 3,048
Liabilities
Trade and
other payables 207 107 615 929 384 221 248 853
Borrowings
- current 260 378 117 755 - 194 189 383
- non current - 344 210 554 - 644 323 967
Bank overdraft - - 487 487 - - 872 872
Currency risk table
The following table demonstrates the sensitivity to a reasonably
possible change in currency rates, with all other variables held
constant, on the Group's net profit before tax (through the impact
on currency rate changes between the INR: Euro for Group and INR:
GBP for Company).
Group Company
Increase/(decrease) Effect on Group net profit Increase/(decrease) Effect on Company net profit
in value of INR before tax in value of INR before tax
INR'000 INR'000
2014-15
Increase INR 1 130 INR 1 -
Decrease (INR 1) (130) (INR 1) -
2013-14
Increase INR 1 (455) INR 1 -
Decrease (INR 1) 455 (INR 1) -
FINANCIAL INSTRUMENTS - continued
Fair values
The fair values of the financial assets are approximately equal
to the carrying amount as reflected in the consolidated statement
of financial position.
Estimation of fair values
The following summarises the major methods and assumptions used
in estimating the fair values of financial instruments.
Interest-bearing loans and borrowings
Fair value is calculated based on discounted expected future
principal and interest cash flows. For vehicle loans, the fair
value is estimated as the present value of future cash flows,
discounted at market interest rates for homogeneous vehicle loans.
The estimated fair values reflect changes in interest rates.
Cash and cash equivalents
The Group considers that the carrying amount of cash and cash
equivalents approximates their fair value.
Convertible debentures and redeemable convertible preference
shares
The fair value for the liability portion of the instrument is
based on the prevailing market rates for a similar term
non-convertible instrument.
Trade and other receivables / payables
The Group considers that the carrying amount of trade and other
receivables / payables approximates their fair values.
NOTE AB - OPERATING LEASES
Leases as lessee
The Group leases a number of offices, residential facilities and
land under cancellable operating leases. The leases typically run
for a period of 2 - 33 years, with an option to renew the lease
after that date. Lease payments are increased every year to reflect
market rentals. None of the leases includes contingent rentals. The
Group does not have an option to purchase the leased asset at the
expiry of the lease period.
Payments recognised as an expense
2014-15 2013-14
INR'Mn INR'Mn
Minimum lease payments 27 30
27 30
------- -------
NOTE AC - COMMITMENTS AND CONTINGENT LIABILITIES
2014-15 2013-14
Group Group
INR'Mn INR'Mn
Capital commitments:
Purchase of property, plant and equipment - -
Purchase of distribution rights 361 575
Contingent liabilities:
Outstanding letters of credit for capital investments 1,039 1,225
Bonds executed in favour of Indian customs and excise authorities 3 3
Claims not acknowledged as debts 58.06 10
NOTE AD - 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)
b) Joint Venture
DQ Entertainment (International) Films Limited (with effect from
11 March 2013)
c) Associate
Method Animation SAS (with effect from 28 March 2008)
d) Key management personnel
Mr. Tapaas Chakravarti - Director
Mr. K. Balasubrahmanyam - Director
Ms. Theresa Plummer - Director
Mr. Anthony BM (Tony) Good - Director
Ms. Rashida Adenwala - Director
e) 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)
Trading transactions
Transactions between DQ Plc 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 Animation Amounts owed by related party
2014-15 2013-14 2014-15 2013-14
INR'Mn INR'Mn INR'Mn INR'Mn
Associate - 59 140 180
Revenue from production from related parties were 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 Group and their immediate relatives control
14.47% per cent of the voting shares of the Group.
The remuneration of directors and other members of key
management during the year are as follows:
2014-15 2013-14
INR'Mn INR'Mn
Short term benefits 33 36
33 36
Other related party transactions
Remuneration paid to relatives of key management personnel
during the year was INR 83 million (31 March 2013: INR 83
million)
NOTE AE - AUDITORS' REMUNERATION
Details of the auditors' remuneration are as follows:
2014-15 2013-14
Group Group
INR'Mn INR'Mn
Statutory audit fees 9 9
Tax audit fee - -
Other services - -
9 9
NOTE AF - ADMINISTRATIVE EXPENSES
Details of the administrative expenses are as follows:
2014-15 2013-14
Group Group
INR'Mn INR'Mn
Depreciation and amortization 8 18
Director Remuneration 33 36
Salaries and wages 119 125
Other adminstrative expenses 107 374
267 553
NOTE AG - RESTATEMENT OF OPENING BALANCE OF PRIOR PERIOD
ITEMS
Retained Earning Property, Plant and Intangible Assets Provisions
GROUP Equipment
Closing balance as on 31
March 2014 1,597 127 3,474 236
Depreciation* (45) (26) (19) -
Corporate tax ** (7) - - 7
Restated closing balance as
on 31 March 2014 1,545 101 3,455 243
* Due to GAAP difference on adjustment on account of additional
depreciation on DQ India due to local company act changes in
financial year 2014-15.
** Provision for Corporate taxation on DQ Ireland relating to
financial year 2013-2014 was not included in consolidated
accounts.
NOTE AH - ACCOUNTING ESTIMATES AND JUDGEMENTS
Management discussed the development, selection and disclosure
of the Group's critical accounting policies and estimates and the
application of these policies and estimates.
The preparation of the financial statements in conformity with
IFRS requires management to make estimates and assumptions, which
may differ from actual results in the future. Management is also
required to use its discretion as to the application of the
accounting principles used to prepare these statements.
Convertible financial instruments
In accordance with IAS 32 'Financial Instruments: Disclosure and
Presentation' management is required to assess the liability
component of any compound financial instrument. Such an assessment
requires management to consider the characteristics of similar
financial instruments without conversion options. In the absence of
any such instruments being in issue by the Group management must
estimate what those characteristics would be.
Revenue recognition
The Group recognises revenue in accordance with the accounting
policy in 2(v) (i). When recognising revenue, management is
required to estimate the stage of completion with such estimates
being revisited at each balance sheet date. Material deviations are
recognised in the income statement of the current period unless an
error is identified in which case prior periods are revised in
accordance with IAS 8 'Accounting Policies, Changes in Accounting
Estimates and Errors'.
Impairment of goodwill
Determining whether goodwill is impaired requires an estimation
of the value in use of the cash-generating units to which goodwill
has been allocated. The value in use calculation requires the
directors to estimate the future cash flows expected to arise from
the cash-generating unit and a suitable discount rate in order to
calculate present value.
Impairment of Intangible assets
Determining whether Intangible assets are impaired requires an
estimation of the value in use of the intangible assets. The value
in use calculation requires the directors to estimate the future
cash flows expected to arise from the intangibles assets and a
suitable discount rate in order to calculate present value.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BLGDUCXDBGUR
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