The RP Goenka owned power utility recently advertised in local dailies seeking buyers for a prime property at Magnet House, now occupied by the company and another group outfit - RPG Netcom Ltd, among others. CESC had adjusted part of its accumulated losses with transfers from its general and debenture redemption reserves. The utility, which supplies power to Calcutta and adjoining areas, first slipped into the red in fiscal 1997-98 with losses of Rs 114.75 crore. Thereafter, it posted losses in two consecutive fiscals - 1998-99 and 1999-2000. In fiscal 1998-99, the net loss stood at Rs 128.75 crore. the company reported another unaudited Rs 71 crore net loss in fiscal 1999-2000.

Net losses for three consecutive years together with Q1 losses add up to Rs 328.83 crore. On March 31, 1999, CESC had reserves of Rs 360 crore - excluding debenture redemption and a Rs 1409 crore revaluation reserve - after adjusting Rs 130 crore of losses.

The unaudited net loss of Rs 71 crore in fiscal 1999-2000 and Rs 15 crore in the first quarter of the current year have effectively wiped out over 20 per cent of its present net worth of Rs 417 crore (Rs 360 crore reserves and Rs 58 crore paid-up capital). Just before it reported a loss for the first quarter to June 30, 2000, CESC invited bids for sale of Magnet House. The sale excluded a major portion on the building's second floor that is under DIL Properties Ltd. It has a total floor space of 71,000 square feet, of which 48,000 sqft is occupied by RPG Netcom and 2200 square feet is occupied by CESC.

The company had bought the building premises in July 1995 from GEC Alsthom Ltd, now renamed Alsthom Ltd, for Rs 13.10 crore.

When contacted by The Financial Express, a CESC spokesperson indicated that CESC may stay on as a tenant although the building is up for sale. Over the years, CESC has been depending on other income components to either remain in the black or reduce the extent of losses.

In fact, the last time in recent years the company made profits was in fiscal 1996-97. It had reported a net profit of Rs 41.36 crore in 1996-97 on an other income of Rs 78.27 crore. Rising interest and depreciation are the two main factors behind the rising losses. CESC's total loan component was Rs 2966.03 crore as on March 31, 1999, of which Rs 1134.68 crore is in foreign currency. While the company has been arguing for a hike in tariff, it is yet to pay dues of Rs 786 crore to the West Bengal State Electricity Board, part of which is disputed.

This is apart from the Rs 169.89 crore electricity duty for the period between 1990 and March 1999, that it owes the government, according to a report by the Comptroller & Auditor General of India. The CAG has pointed out that the government has not collected Rs 63 crore by way of interest.