1 Company overview:
 
 The Company is engaged in the business of providing services relating
 to animation production for television and film production companies
 and rendering training for acquiring skills for production services in
 relation to the production of animation television series and movies.
 The Company also provides services for gaming consoles and licensing of
 programme distribution rights to broadcasters, television channels and
 home video distributors.
 
 Pursuant to a special resolution of the members passed at an Annual
 General Meeting on July 25, 2009, DQ Entertainment (International)
 Private Limited became a public limited company and the name was
 changed to DQ Entertainment (International) Limited. A fresh
 certificate of incorporation consequent to conversion of Company from
 private to public was granted on September 10, 2009 by the Registrar of
 Companies, Andhra Pradesh at Hyderabad.
 
 2 share Capital:
 
 authorised share capital
 
 On 15th September 2009 the Company increased its authorised equity
 share capital from 3,010,000 shares of face value of Rs 10/- each to
 80,000,000 shares of face value of Rs 10/- each and cancelled the
 800,000 1% Redeemable Optionally Convertible Preference share capital.
 
 Issued, subscribed & Paid up
 
 a) Equity Shares :
 
 The Company made an Initial Public Offer (IPO) of 16,048,011 equity
 shares of Rs.10/- each. Out of 16,048,011 equity shares, 172,960 equity
 shares were allotted to employees at a premium of Rs.63 per share and
 15,875,051 equity shares to others at a premium of Rs.70 per share. The
 Company made a pre-IPO placement of 3,772,771 equity shares of Rs.10/-
 each at a premium of Rs.58.11 per equity share. The aggregate share
 premium received in IPO and pre-IPO is Rs. 1,341,385,859 million. On 29
 March 2010, the equity shares of the Company were listed on the Bombay
 Stock Exchange.
 
 Conversion: After the expiry of twenty four months from the date of
 issuance of the Preference Shares and to the extent the Preference
 Shares have not been redeemed by the Company, the holders of the
 Preference Shares shall be entitled, at their option to call for
 conversion for all or part of such Preference Shares in one or more
 trenches into Equity Shares at a conversion ratio of 1:1, i.e., issue
 and allotment of 1 (One) Equity Share for each converted Preference
 Share.
 
 Maturity: The Preference Shares shall (unless converted into Equity
 Shares or redeemed in the manner stated above) be redeemed at the
 Redemption Price at the expiry of sixty months from the date of
 issuance thereof.
 
 The terms and conditions of the 1% Redeemable Optionally Convertible
 Non Cumulative Preference Shares may be varied by the Board of
 Directors of the Company subject to the applicable provisions of the
 Act.
 
 3 Reserves and surplus
 
 Capital Subsidy :
 
 Erstwhile DQ Entertainment Limited was sanctioned a Capital Subsidy of
 Rs. 800,000 (31.03.2010: Rs.800,000) under clause 7(f) of ICT Incentive
 Policy of the Government of Andhra Pradesh
 
 4 distribution Rights
 
 Distribution rights (Schedule 4 of the financial statements)
 aggregating to Rs.1,443,444,901 (31.03.2010: Rs.1,029,662,841)
 represent the costs incurred in acquiring distribution rights. The
 Company started acquiring these rights from the year 2003-04 and till
 date 42 series (31.03.2010: 30) of Animation rights have been acquired
 for different territories across the globe. The Company has started
 earning revenues from usage of rights since 2006-07. The Company has
 performed testing for impairment of intangibles which resulted in an
 impairment loss of Rs.6,862,541 (31.03.2010: Rs.16,067,608) on account
 of recoverable amount of intangibles being less than its carying
 amount. These have been included in the line item Depreciation &
 Amortisation in the Statement of Profit and Loss.  The accumulated
 Impairment Loss as at 31.03.2011 on distribution righhts amounted to
 Rs. 85,107,474(31.03.2010: Rs.78,244,933).
 
 5 Capital work-in-progress
 
 a) Includes Rs. 25,125,004 (31.03.2010: Rs.48,572,918) on account of
 advances to suppliers of capital goods and Rs.  241,310,025
 (31.03.2010: Rs.318,608,602) incurred under various co-production
 agreements for which distribution rights are yet to be received.
 Pending receipt of distribution rights and considering the potential
 benefits likely to accrue to the Company in future, the carrying amount
 of Capital work-in-progress have been valued at cost.
 
 b) Includes Rs.6,061,050 (31.03.2010: Rs.35,510,728) incurred towards
 projects under development to be exploited as Telivision Series/Films
 and others. Based on review of estimated future realizations the
 management is of the view that estimated future recoverable amount from
 these projects are more than its carrying unamortized cost and
 consequently no provision for impairment is considered necessary by the
 management at this stage.
 
 6 (a) The company is an Export Oriented Unit registered with Software
 Technology Parks of India and Special Economic Zone and its business
 income is exempted from tax in terms of section 10A & 10AA of the
 Income Tax Act, 1961.  Currently Tax provision on book profit is
 provided as per the provisions of Section 115JB (MAT) of the Income Tax
 Act, 1961.
 
 6 (b) The company has recognised a deferred tax asset of Rs. 54,082,894
 on unabsorbed depreciation as claimed in the returns for the respective
 years. In the assessment orders passed for the assessment years 2004
 -05 and 2006 -07 unabsorbed depreciation has been determined to be Rs
 NIL. The Company has preferred appeals in Hon''ble High Court against
 the subject orders. In the opinion of the management the manner of
 adjustment of unabsorbed depreciation and carry forward of business
 losses by the department is not appropriate and based on professional
 advice the management is confident of succeeding in appeals and get the
 unabsorbed depreciation/ carry forward of business losses restored. On
 a prudent basis the company has not recognised any deferred tax asset
 on such unabsorbed depreciation contested before the Hon''ble High
 court.
 
                                    31 March           31 March 2010
                                        2011
 
                                         Rs.                    Rs.
 
 7 Contingent Liabilities
 
 a) bonds executed in favour of 
 customs and excise authorities   43,250,000             37,250,000
 
 b) Letters of Credit          1,253,636,938            302,192,625
 
 c) Income tax assessment of DQ Entertainment (International) Limited
 has been completed till Assessment Year 2007-08 (financial year
 2006-07). The Company has preferred an appeal for the Assessment Years
 2004-05 and 2006-07 and is pending before the Hon''ble High court . No
 demand has been raised by the Department on the above.
 
 d)Claims against the Company not acknowledged as debts is Rs.9,642,147
 (31.03.2010: Rs. 9,642,147). This comprise of demands raised by the
 Income Tax department for non deduction of TDS on payments to non
 residents on which the Company has gone on appeal and the appeal is
 allowed before the Commissioner of Income Tax (Appeals), Hyderabad in
 favor of the company. The department has gone for an appeal and the
 same is pending before the Income tax appellate tribunal (ITAT).
 
 8 Micro, small and Medium enterprises development act, 2006
 
 The Company has received intimation from certain suppliers regarding
 their status under the Micro, Small and Medium Enterprises Development
 Act 2006 confirming that they do not fall under the Micro, Small &
 Medium Enterprises Category while other Suppliers have not intimated
 regarding their status, and hence disclosures, if any, relating to
 amounts unpaid as at the year end together with interest paid/payable
 as required under the said Act have not been given.
 
 9 Related party disclosures
 
 9 (a) Related parties and their relationships
 
 i) holding and subsidiary Companies
 
 a.  DQ Entertainment (Mauritius) Limited - Holding company
 
 b.  DQ Entertainment Plc - Parent of holding company
 
 c.  DQ Entertainment (Ireland) Limited - Subsidiary company
 
 ii) key management personnel
 
 Mr. Tapaas Chakravarti - Managing director & Chief executive officer
 iii) Relatives of Key Management Personnel with whom the Company had
 transactions during the year - Mrs. Rashmi Chakravarti (wife of Mr.
 Tapaas Chakravarti) (Director with effect from 25 May 2009) Ms.
 Nivedita Chakravarti (Daughter of Mr. Tapaas Chakravarti)
 
 iv) associate of the ultimate holding Company
 
 Method Animation SAS
 
 v) firm in which a key management personnel is a partner
 
 R & A Associates
 
 vi)Relative of a director
 
 Hatim Adenwala - Senior Vice president HR
 
 10 Leases
 
 The Company''s significant leasing arrangement is in respect of
 operating lease for premises. The Company has exclusive right to cancel
 the lease with prior notice. The aggregate lease rents payable are
 charged as rent in the Profit and Loss Account. The aggregate amount of
 Lease rentals charged to Profit and Loss account is Rs.37,148,894
 (31.03.2010: Rs.43,654,269).
 
 11 segmental Reporting as per accounting standard 17:
 
 11 (a) business segment
 
 The Company 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.
 
 Gaming:
 
 The services provided for the contents in Console / Mobile / Other
 platforms.
 
 Distribution:
 
 The revenue generated from the exploitation of the distribution rights
 of animated television series and movies acquired by the Company.
 
 12 Figures of previous year have been regrouped/rearranged/reclassified
 wherever necessary to conform to the current year presentation.