The Members
 
 DQ Entertainment (International) Limited
 
 The Directors have pleasure in presenting the Fourth annual report on
 the business and operations of DQ Entertainment (International) Limited
 (the Company or DQE) and its 100% subsidiary company DQ Entertainment
 (Ireland) Limited for the period ended March 31, 2011.
 
 FINANCIAL HIGHLIGHTS
 
 Rupees in thousands
 
                               For the year       For the year 
 Particulars
 
                                      ended              ended
 
                                  31-Mar-11          31-Mar-10
 
 Total Income                     2,162,602          1,766,067
 
 Total Expenditure                1,810,142          1,497,555
 
 Profit before tax                  352,460            268,512
 
 Tax Expense
 
 (Current Tax 
 Deferred Tax [Net                  (73,880)            (1,791)
 of MAT credit
 entitlement])
 
 Profit after tax                   278,580            266,721
 
 BUSINESS REVIEW
 
 DQE has continued to progress the animation value chain, into IP
 creation and distribution of animation content globally We have been
 developing and co-producing famous IPs such as The Jungle Book, Peter
 Pan, 5 & IT, Charlie Chaplin, Iron Man, Lassie, as well as Indian IPs
 such as Balkand, Omkar, Mysteries and Feluda, Suryaputra.  This has
 added famous brands to DQE''s programming portfolio to exploit revenues
 in perpetuity.
 
 DQE''s first home grown international IP The Jungle Book 1 has been a
 global success. It is airing on marquee networks with highest
 viewership ratings. The Jungle Book has attracted strong support and
 interest from licensees worldwilde.
 
 DQE''s portfolio now consists of over 600 hours of animated content for
 exploitation and will see further enhancement of the same with addition
 of some more classical brands such as Charlie Chaplin, Young Robin Hood
 , Lassie, Casper and others in 2011-12.
 
 DQE''s feature film division has successfully completed the production
 of 3D stereoscopic animated feature film The Prodigies for Warner
 Bros, Fidelite Films, Studio 37 and Onyx Films, France. Three new 3D
 stereoscopic feature films are in development for the world market
 scheduled for release from 2013 onwards.
 
 The Company will continue to expand its portfolio of classical
 properties for worldwide exploitation across all platforms of
 audio-visual formats while licensing and distribution will add to the
 production revenues of the Company.  Exploitation through newer
 delivery formats such as online and mobile content will be a focus area
 for exploration and growth for the company''s owned IP.
 
 DIVIDEND
 
 The Directors do not recommend payment of any dividend for this
 financial year.
 
 SUBSIDIARY
 
 Our Company has a wholly owned subsidiary, DQ Entertainment (Ireland)
 Limited (DQE Ireland), incorporated in Ireland which is engaged in
 the business of content development for animation and live action for
 TV series, movies and various other media.
 
 Pursuant to the general exemption granted by the Central Government in
 relation to the provisions of Section 212 of the Companies Act, 1956
 for not attaching the balance sheet of the subsidiary company; the
 Company has not included the detailed financials of its subsidiary DQE
 Ireland in this report.
 
 The annual accounts of DQE Ireland and the related detailed information
 shall be made available to shareholders of the Company and DQE Ireland
 seeking such information at any point of time. The annual accounts of
 DQE Ireland shall also be kept for inspection by any shareholders at
 the registered office of the Company and of DQE Ireland. The Company
 shall furnish a hard copy of detailed accounts of DQE Ireland to any
 shareholder on demand.
 
 DIRECTORS
 
 Ms. Rashida Adenwala was appointed as an Additional Director of the
 Company w.e.f October 1, 2010.
 
 As per Article 109 to 115 of the Articles of Association, Mr. K.
 Balasubramanian and Mr. Girish Kulkarni shall retire by rotation at the
 ensuing Annual General Meeting. Both the directors being eligible are
 liable for re- appointment.
 
 The detailed profiles of all the directors are available under the
 chapter Board of Directors.
 
 AUDITORS
 
 M/s. Deloitte Haskins & Sells, Chartered Accountants has resigned as
 the joint statutory auditor of the Company.
 
 M/s Haribhakti Co., Chartered Accountants, Hyderabad, the existing
 statutory auditor of the Company shall retire at the ensuing Annual
 General Meeting and has confirmed its eligibility and willingness to
 accept office, if re-appointed.
 
 PARTICULARS OF EMPLOYEES AND OTHER ADDITIONAL INFORMATION
 
 In terms of the provisions of Section 217 (2A) of the Companies Act,
 1956, read with the Companies (Particulars of Employees) Rules, 1975,
 the names and other particulars of concerned employees are required to
 be set out in the Annexure to the Directors'' Report.
 
 However, the provisions of Section 219 (1) (b) (iv) of the Companies
 Act, 1956 exempts the Company from publishing the same in the Annual
 Report.
 
 Hence, the Annual Report excluding the aforesaid information is being
 sent to all the members of the Company and others entitled thereto. The
 said statement is open for inspection at the Registered Office of the
 Company. Any member interested in obtaining such particulars may write
 to the Company Secretary at the Registered Office of the Company.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 (i) Energy Conservation: The operations of the Company involve low
 energy consumption.  Adequate measures have however been taken to
 conserve energy.
 
 (ii) Technology Absorption: We have developed in-house plug- ins to
 maximize technology absorption at minimal cost. The Company produces
 majority of the content in the 3D stereoscopic technology which is the
 latest offering in the entertainment industry.
 
 (iii) Foreign Exchange Earnings and Outgo:
 
                                          Rupees in thousands
 
                                 For the year      For the year
                                       ended              ended
 
 CIf value of Imports               31-Mar-11          31-Mar-10
 
 Capital Goods                        253,920              2,237
 
                                            -                  -
 
 earnings in foreign
                                            -                  -
 Currency
 
 Income from production             1,523,306          1,358,447
 
 License Fees                         156,857             90,516
 
                                            -                  -
 
 expenditure in foreign
                                            -                  -
 exchange
 
 (Subject to deduction of
                                            -                  -
 tax where applicable)
 
 Travel                                 3,359              1,837
 
 Production Expenses                  200,946             62,693
 
 Professional and                      93,542              7,516
 
 Consultancy Charges
 
 Financial Charges                          7              5,242
 
 Others (Capex)                       320,904              1,523
 
 Total                                618,759             78,811
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217 (2AA) of the Companies Act, 1956, your
 Directors confirm that;
 
 i) In the preparation of the annual accounts for the financial year
 ended on March 31, 2011, the applicable accounting standards have been
 followed along with proper explanation relating to material departures,
 if any.
 
 ii) The directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company as at March 31, 2011 and of the profit of the company
 for that period.
 
 iii) Proper and sufficient care has been taken for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 iv) The Directors have ensured prepartion of the annual accounts of the
 Company on a ''Going Concern Basis''.
 
 CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS
 STATEMENT
 
 A report on the Corporate Governance standards followed by your Company
 and Management Discussion and Analysis statement are given in the
 respective sections of the Annual Report.
 
 ACKNOWLEDGEMENT
 
 Your directors would like to take this opportunity to express their
 sincere gratitude to all the clients, vendors, investors, advisors and
 bankers for their continued support during the year. We place on record
 our appreciation for the commitment shown by our employees in
 supporting the Company in its journey to be A Global Entertainment
 Powerhouse. Our consistent growth was made possible by their hard
 work, solidarity, co-operation and support.  We look forward to their
 continued support in the future.
 
 The Annual General Meeting of the Company will be held on September 23,
 2011.
 
                            for and on behalf of the Board
 
                            DQ Entertainment (International) Limited
 
                            Tapaas Chakravarti
 
                            CMD & CEO
 
 Place: Hyderabad
 
 Date: August 10, 2011