GECs
Q1-2014: DQE International continues profitable run
BENGALURU: The Tapas Chakravarti (he’s the CMD and CEO) led, Hyderabad based DQ Entertainment (International) Ltd, (DQE) continued its profitable run in Q1-2014.
DQE had reported loss for Q1-2013 of Rs 9.2 crore. It reported profit of Rs 14 crore in Q3-2013 followed by a profit of Rs 23.3 crore in Q4-2013. DQE’s net profit for FY-2013 was Rs 37.3 crore. As of June 2013 (Q1-2014), DQE had recorded a net consolidated profit of Rs 6.6 crore.
The company says that its revenue and profitability has a clear seasonal pattern, similar to that of the rest of the global animation industry, wherein almost 60 per cent of the annual revenue is achieved in the third and fourth quarter of the financial year and these results are in line with that trend.
DQE is a global player in the creation, production, distribution, licensing and marketing of various forms of entertainment. The company is a major player in the country in animation production capacity for television, feature films, home video, online game art, visual effects, mobile and next generation console games.
Let us take a look at DQE’s other figures for Q1-2014
DQE’s consolidated net income from operations of Rs 30.43 crore in Q1-2014 was 1.64 per cent lower than the Rs 30.93 crore for Q1-2013 and a little more than a third (34.4 per cent) of the Rs 88.54 crore for Q4-2013.
In Q1-2014, DQE had suffered a foreign exchange loss of Rs 18.4 crore, in Q1-2013, this loss was lower at Rs 5.94 crore, while in Q4-2013, it had a gain of Rs 4.3 crore on account of foreign exchange.
DQE’s total expense for Q1-2014 at Rs 18.9 crore was more than half (51.7 per cent) of Rs 36.56 crore in Q1-2013 and less than a third (31.9 per cent) of the Rs 59.26 crore in Q4-2013.
DQE’s production expense in Q1-2014 at Rs 1.65 crore was a little more than a third (36.7 per cent) of the expense of Rs 4.5 crore in Q1-2013 and almost a quarter (25.24 per cent) of the Rs 6.53 crore in Q4-2013.
DQE’s employee expense at Rs 20.22 crore for Q1-2014 was 15.1 per cent lower than the Rs 23.81 crore in Q1-2013 and just 0.75 per cent lower than the Rs 20.38 crore in Q4-2013.
DQE’s animation segment reported consolidated revenue of Rs 27.57 crore in Q1-2014, lower by 1.8 per cent as compared to the Rs 28.08 crore in Q1-2013, and a little more than a third (35.22 per cent) of the revenue of Rs 78.28 crore in Q4-2013.
DQE’s animation business had revenue of Rs 182.01 crore for FY-2013.
Capital employed for the animation segment at Rs 192.80 crore for Q1-2014 was 42.3 per cent more than the Rs 135.50 crore for Q1-2013 and 17.5 per cent more than the Rs 164.05 crore for Q4-2013.
In its Q2-2013, DQE had said that it expected its distribution business to deliver significant net cash flows from FY-14 onwards. This has not happened in Q1-2014. Results from this segment were Rs (-1.859) crore in Q1-2014, Rs (-1.884) crore for Q1-2012 and Rs (-9.482 crore in Q4-2013. For FY-2013, DQE’s segment result from Distribution was Rs 12 crore.
Revenue from DQE’s distribution business in Q1-2014 at Rs 2.852 crore, was almost flat as compared to the Rs 2.847 crore for Q1-2013 and a little more than a fourth (27.8 per cent) of the Rs 10.26 crore in Q4-2013. Given the fact that DQE’s overall business has seasonal patterns, this segment could show results as per the company’s expectations during the rest of the quarters of FY-2014.
Capital employed for distribution for Q1-2014 at Rs 244.56 crore was 35.2 per cent less than the Rs 377.28 crore in Q1-2013 and 1.7 per cent more than the Rs 240.33 crore in Q4-2013.
Chakravarti said, “The macroeconomic environment in some markets, especially in Europe and Canada, remains very challenging even in the children’s entertainment business. There is however a definitive improvement in the US Animation and children’s entertainment segment where considerable effort is being paid by us to further enhance our footprint.”
“Our core business fundamentals remain sound with a strong current order book, to be executed over the next 2-3 years Our business is global and we have had particular success in TV and Home Video distribution, licensing, merchandising and publishing for brands like The Jungle Book and Peter Pan, as well as for many other properties such as Iron Man, Casper, Charlie Chaplin, Tara Duncan and Little Prince.”
“We are in the process of rescheduling DQE India’s working capital facilities necessary to execute our new order pipeline and complete production and delivery of high brand equity properties such as The Jungle Book – series II, Peter Pan – series II, 5 Children & IT- series I, Lassie – series I, Little Prince – series III, Robin Hood – series I, besides several other productions”, informed Chakravarti.
“We have given a special focus to strengthening our balance sheet by putting an extraordinary effort into the collection of receivables from our clients and partners, which will further improving our working capital position.
I remain cautiously optimistic that we will end the fiscal year in a satisfactory position as planned,” Chakravarti said.
GECs
Sebi sends show-cause notice to Zee over fund diversion, company responds
Regulator questions 2018 letter of comfort and governance lapses; company vows robust legal response
MUMBAI: India’s markets watchdog has reignited its long-running scrutiny of Zee Entertainment Enterprises, issuing a sweeping show-cause notice that drags the broadcaster and 84 others into a widening governance storm.
The notice, dated February 12, has been served by the Securities and Exchange Board of India to Zee, chairman emeritus Subhash Chandra and managing director and chief executive Punit Goenka, among others. At its heart: allegations that company funds were indirectly routed to settle liabilities of entities linked to the Essel Group.
The regulator’s probe traces its roots to November 2019, when two independent directors resigned from Zee’s board, flagging concerns over the alleged appropriation of fixed deposits by Yes Bank. The deposits were reportedly adjusted against loans extended to Essel Group entities, triggering questions about related-party dealings and board oversight.
A key flashpoint is a letter of comfort dated September 4, 2018, issued by Subhash Chandra in his dual capacity as chairman of Zee and the Essel Group. The document, linked to credit facilities availed by certain group companies from Yes Bank, was allegedly known only to select members of management and not disclosed to the full board—an omission SEBI believes raises red flags over transparency and governance controls.
Zee has pushed back hard. In a statement, the company said it “strongly refutes” the allegations against it and its board members and will file a detailed response. It expressed confidence that SEBI would conduct a fair review and signalled readiness to pursue all legal remedies to protect shareholder interests.
The notice marks the latest twist in a saga that has shadowed the broadcaster since 2019. What began as boardroom unease has morphed into a full-blown regulatory confrontation. The final reckoning now rests with SEBI—but the reputational stakes for Zee, and the message for India Inc on governance discipline, could scarcely be higher.
