The Calcutta-based Tata Construction and Projects Ltd (TCPL), the sick construction arm of the Tata group, has undertaken a valuation of its shares and arrived at a negative figure.
The valuation, done on instructions from the Board for Industrial and Financial Reconstruction (BIFR), was undertaken undertaken by Price Waterhouse.
TCPL, formerly known as Tata Davy Ltd, has undertaken the valuation of its shares as on March 31, 1995.
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On that date, the company had an equity capital of Rs 4.52 crore and reserves (including reserves arising out of revaluation of specified fixed assets) to the tune of Rs 11.66 crore. Against this, the company had accumulated losses amounting to Rs 17.28 crore.
After taking into account the loss of Rs 2.44 crore incurred by TCPL during 1995-96, the companys accumulated losses increased to Rs 19.67 crore.
TCPL has also provided Rs 75 lakh for sundry debtors which the management of the company considers irrecoverable.
The contingent liability of the company, excluding those which had not become potential liabilities as on March 31, 1995 amounted to Rs 11.18 crore.
After adjusting the preference capital of Rs 31.02 lakh and an estimated loss for 1995-96 amounting to Rs 50 lakh (though the actual loss was much more), the present worth of the net assets as on March 31, 1995 amounted to a negative figure - (Rs 13.93 crore).
This suggests that the entire net worth of the company has been eroded.The management has, however, projected a profit before tax of Rs 1.05 crore for the present financial year and Rs 1.25 crore for the 1997-98 fiscal. After capitalisation of profit after tax at the rate of 15 per cent per annum, TCPL arrived at an amount of Rs 7.45 crore.
The amount of Rs 7.45 crore capitalised would help the company increase the value of its equity shares to Rs 16.47 per share.