Television animation producer DQ Entertainment held revenues steady but saw debtors pile up as cash conversion problems continued to dog the company.
DQ stated that improving its cash flow position "substantially" was a key aim for the current year.
The Hyderabad-based company, whose 3D television series of 'The Jungle Book' and 'Adventures of Peter Pan' are shown by broadcasters from India to Italy, saw revenues rise 1% to 2,294m Indian rupees (£26.7m) in the year to end-March.
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While earnings before interest, tax, depreciation and amortisation increased 5.1% to 1,126m rupees, pre-tax profits sank 9.3% to 427m rupees due to higher admin costs.
But the accounts showed an increase in trade and other receivables to 764m rupees to 2,379m rupees from 1,830m rupees a year before.
Hence the deterioration in operating cash flows to a negative 764m rupees from -293m rupees in the year before and the company's need to place another £4.1m in shares since the start of the new financial year so as to replenish its exhausted cash reserves.
The company said that against a backdrop of shrinking television budgets worldwide, it had sustained "qualitative growth in terms of content production and distribution and capitalised on opportunities in the entertainment marketplace globally".
DQ said licensing and distribution progressed "very well" during the year with revenues now representing 21% of total turnover, but this was down from a 22% share the previous year.
Projects in development include a new 3D feature film of Rudyard Kipling's Jungle Book for release in 2014, written by Madagascar writer Billy Frolick and co-directed by Kevin Johnson, director of Stuart Little and Harry Potter & The Sorcerer's Stone.
Looking forward, the company stated its aims for the current year included improving the cash flow position "substantially", and accelerating growth in licensing and distribution through a focus on new markets for the group such as China, Latin America and Eastern Europe.
Chairman and Chief Executive Officer Tapaas Chakravarti said the production pipeline for the year ahead was strong.
"These will also give a major boost to our licensing and distribution revenues and the company is confident of achieving its targeted growth in the years to come."
Shares in DQ Entertainment were down 11.6% at 13.38p at 14:00 on Friday.
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