Crest Animation Studios Ltd has informed that in the limited review report of the Company for the quarter ended December 31, 2007, the Auditors of the Company have made the following observations :
1. The Company has investments in subsidiary companies, aggregate carrying value as at March 31, 2007: Rs 4630.78 lacs; comprising Rs 4188.43 lacs in equity shares and Rs 442.35 lacs in cumulative redeemable preference shares, with an option to convert into equity shares. The combined loss for the year ended March 31, 2007 and the net worth as on that date of these subsidiaries and the step - down subsidiaries and their joint ventures, attributable to the Company, on the basis of the financial statements for the year ended March 31, 2007, are Rs 2376.41 lacs and Rs 1311.79 lacs respectively. The management is of the view that there is no diminution in the value of these investments and therefore no provision is considered necessary; and
2. In respect of long-term contracts for production of a feature film where revenue of Rs 2078.42 lacs has been recognised on a percentage completion method, the Auditor have relied upon the managements estimates of percentage of completion and cost of completion in view of the technical nature of such estimates.
3. The Company has capitalised an amount of Rs 920.02 lacs (written down value as at December 31, 2007: Rs 690.01 lacs) towards the cost of acquisition of a Production Process Monitoring Software after cancelling the operating lease entered into for taking that software on lease. On the basis of the information and explanations given to the Auditors and documentation produced to them, being a technical matter, the Auditors are unable to review the reasonableness of the carrying amount and whether any impairment loss needs to be provided for [managements representation is given in Note 3(a)].
1. The Company has investments in subsidiary companies, aggregate carrying value as at March 31, 2007: Rs 4630.78 lacs; comprising Rs 4188.43 lacs in equity shares and Rs 442.35 lacs in cumulative redeemable preference shares, with an option to convert into equity shares. The combined loss for the year ended March 31, 2007 and the net worth as on that date of these subsidiaries and the step - down subsidiaries and their joint ventures, attributable to the Company, on the basis of the financial statements for the year ended March 31, 2007, are Rs 2376.41 lacs and Rs 1311.79 lacs respectively. The management is of the view that there is no diminution in the value of these investments and therefore no provision is considered necessary; and
2. In respect of long-term contracts for production of a feature film where revenue of Rs 2078.42 lacs has been recognised on a percentage completion method, the Auditor have relied upon the managements estimates of percentage of completion and cost of completion in view of the technical nature of such estimates.
3. The Company has capitalised an amount of Rs 920.02 lacs (written down value as at December 31, 2007: Rs 690.01 lacs) towards the cost of acquisition of a Production Process Monitoring Software after cancelling the operating lease entered into for taking that software on lease. On the basis of the information and explanations given to the Auditors and documentation produced to them, being a technical matter, the Auditors are unable to review the reasonableness of the carrying amount and whether any impairment loss needs to be provided for [managements representation is given in Note 3(a)].
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