DQ Entertainment Announced Today their Indian Subsidiary Business Update

DQE, a leading animation, gaming, live action entertainment production and distribution company have recently announced being listed on the National Stock Exchange of India Limited in addition to its existing listing on the Bombay Stock Exchange Limited. In continuation to it, DQ Entertainment has today announced the following business update.

Key business highlights:

• DQE's prime intellectual property, The Jungle Book - 52x11', 3D TV Series has successfully been produced and delivered.  Major co-producers ZDF TV Group - Germany, TF-1 TV Group - France and Moon Scoop - France have agreed the immediate production of a second season.
• Recent new orders include productions such as 5 Children & IT - 3D TV series, Robin Hood- 'Mischief in Sherwood' - 52x11' 3D TV Series and production of a second season of Little Nicolas 3D TV Series and a second season of Iron Man 3D TV series.
• Licensing & Merchandising has increased substantially after the successful launch of Jungle Book TV series Season I, in particular in Israel,  Italy, Canada, Spain, Germany, France and the UK.
• Completion of 3D VFX Feature Film - The Prodigies on service to Warner Bros/ Fidelite Films/ Onyx Films, France.
• Development of DQ Entertainment's feature film pipeline consisting of The Jungle Book, Peter Pan and The Phoenix and the Flying Carpet.
• Broadcasting agreement of a high end 2D 60 minute animated TV feature Suryaputra Karan with BUENA VISTA INTERNATIONAL, the international distribution arm of Walt Disney Studios.
• DQE produced 60 minute TV feature 'Suryaputra' was acquired by Disney Channel India to be broadcast on its children's channels for the Indian sub-continent.
• Broadcasting agreement of a high end 2D animated TV series Mysteries and Feluda with Disney India.
• New distribution agreement with ZDF Enterprises for a 3D Stereoscopic HD TV series named "5 & IT" as part of a packaged multi million euro deal signed in Hyderabad, India.
• New co-production agreement with Method Animation, France for a new 3D HD 52x11' series of Robin Hood - 'Mischief in Sherwood'.
• New co-production agreement for the second series of Le Petit Nicolas with M6 Studios (France) comprising 52 episodes of 13 minutes.
• Al Jazeera, Middle Eastern Children's Channel("JCCTV") signed exclusive five year broadcasting agreements for 22 Arabic states in relation to three iconic DQE animated productions - 'The Jungle Book', 'New Adventures of Lassie' and 'Mysteries and Feluda'.
• Broadcasting agreement for The Jungle Book 3D TV series in Italy with RAI DUE ("RAI 2"), an Italian television broadcaster.
• Produced new 3D stereoscopic feature film "The Prodigies" for Warner Bros, Fidelite Films, Studio 37 and Onyx Films, France.  The film was released in France earlier this month and worldwide release is expected shortly.
• Developing three new 3D stereoscopic feature films for the world market scheduled for release from 2013 onwards:
  • The Jungle Book (2013)
  • The New Adventures of Peter Pan (2013-14)
  • The Phoenix and the Flying Carpet (2014-15)
• Three year licensing agreement in India with Bio World Merchandising, for 'The Jungle Book'. Bio world has expertise in the licensing, manufacturing and distribution industries to reach an extremely large and powerful audience through various channels like online retail, department and mass market, wholesale departments among others.
• Publishing licensing deal for 'The Jungle Book' with leading publishers, Editorial Bruno, Spain.
• Merchandising deal for 'The Jungle Book' with Blue Ocean Entertainment AG ("Blue Ocean"), Germany. Under the terms of the agreement, Blue Ocean will have non-exclusive rights over two years to manufacture, distribute and sell Jungle Book magazines in Germany and Switzerland
• Exclusive three year toy licensing agreement for 'The Jungle Book' with Spark Toys Ltd (Spark), an Israel based company.
• Music publishing agreement with London based, Universal Music Publishing International Ltd ("Universal Music").
• Licensing agreement with TV Mania Gmbh through DQE's merchandising agents in France, TF1 Enterprises.  Under the terms of the agreement, TV Mania will have the right to manufacture and distribute Jungle Book apparels and accessories for babies, kids and teenagers over a two year period. DQE will receive a royalty on revenues generated under this agreement, estimated to be €1 million over the two year term, in addition to a minimum guaranteed amount.

Financial impact of above new contracts

Management estimate the above described:

• New co-production agreements in respect of 5&IT, Robin Hood, Jungle Book Season 2 and Little Nick 2, will generate additional revenues approximating Rs 138 Cr (USD 30.7 million) over the production cycle of 12-24 months.
• New licensing and merchandising agreements described above will generate additional revenues approximating Rs. 29.9 Cr (USD 6.6 million) over a four year period.  Management envisage signing a second cycle of new agreements in approximately four years' time.
• The majority of licensing and merchandising agreements since 1 April 2011 relate to 'The Jungle Book' whereas current negotiations are for other properties such as New Adventures of Peter Pan, Iron Man, Casper season 2, Little Nick seasons 1 & 2, 5&IT, Lassie & Friends, Charlie Chaplin and Feluda.

Awards & recognitions:

• The first season of Little Nicolas, co-produced by DQE with  M6 Studios (France) and Method animation, France was awarded  "THE BEST TV PRODUCTION AWARD" in the animated TV series category for the year 2010-11 in the 50th Annecy Film Festival, France.
• DQE received the Excellence Award as the Top Indian ITES Company in the State of Andhra Pradesh on 31 March.  The award was presented to Chairman and CEO Tapaas Chakravarti by Sri.N.Kiran Kumar Reddy, Hon'ble Chief Minister of Andhra Pradesh.