Ceat Financial, which has been a marginal player in the capital market, has decided to exit from the business and concentrate in areas like money market where it has emerged as the first private sector company to obtain satellite dealer status from the Reserve Bank of India.

Container finance is another thrust area identified by the company. It continues to lead the market in the retail segment, where the company offers credit to the office automation sector. The company's income from container financing was Rs 17 crore in the year to March 31, 1998, and the projected income from this business is Rs 22 crorein 1998-99.

Director EB Desai chaired the company's 14th annual general meeting (AGM), in the absence of chairman Sanjeev Goenka. Desai read out Goenka's speech at the AGM.

For 1997-98, Ceat Financial had reported a 26 per cent decline in net profit to Rs 15.80 crore, from Rs 21.31 crore in the previous year. Desai, reading out Goenka's speech, said this was due to extraordinary provisions of Rs 7.10 crore (Rs 44 lakh in the previous year) and the impact of minimum alternative tax. The extraordinary provisions were in line with RBI guidelines for non-performing assets and investments.

However, he said the company had boosted its turnover by three per cent despite adverse market conditions, underlining its inherent strength.

Disbursals on account of hire purchase and leasing was lower at Rs 1.70 crore in 1997-98 against Rs 2.25 crore in 1996-97.

IFC has begun disbursing a $20 million line of credit, of which Ceat Financial has already availed itself of $15 million. The IFC loan carries an interestrate of 15 per cent per annnum, Desai pointed out.

According to the sources, who spoke on condition of anonymity, in addition to IFC, two more foreign financial institutions are interested in picking up Ceat Financial's equity. The company is in talks with foreign institutional investors for tying up for term loans.

The company plans to reduce its 320-strong workforce by around 20. The employee cost rose to Rs 7 crore in 1997-98, against Rs 4 crore in the previous year. Desai said that reduction in staff strength has commenced.