K D Agrawal, chairman and managing director, IFCI, said, "profits have been slightly lower on account of greater provisioning requirements. Provisioning went up by Rs 430.79 crore on account of non-performing assets and devaluation in investments." The press release makes no mention of the institution's gross or net NPAs. Agrawal said the figures were not available with the chairman's office as yet.

IFCI witnessed a squeeze in its interest spreads which came down to 4.54 per cent during the year from 5.85 per cent in 1996-97. Agrawal discounted the squeeze in spreads to stagnant profitability. "Spreads had to come down as our prime lending rate was brought down. This factor cannot be held responsible for pressure on profits," he said.

The board of directorshave recommended a dividend of 30 per cent for 1997-98 out of which 15 per cent has already been paid as interim dividend, the release says.

Income from operations increased to Rs 2,717 crore in 1997-98 from Rs 2,568 crore. While the profit in 1997-98 has been stagnant compared to the previous year, the average annual growth in net profit from fiscal 1994 to 1997 has been 31 per cent compared to 21.6 per cent for the period 1990 to 1993.

IFCI's disbursements for the year aggregated Rs 5,650 crore showing a growth of 10 per cent. The average annual growth in disbursements over four years covering fiscal 1994 to 1997 has been 33 per cent. The cumulative disbursement since inception up to March 31, 1998 aggregated Rs 30,757 crore. The asset base of the company has increased to Rs 20,986 crore as on March 31, 1998 from Rs 17,492 crore as on March 31, 1997, registering a growth of 20 per cent. The return on net worth stood at 25.82 per cent, capital adequacy ratio at 10.38 per cent as on March 31, 1998 andearnings per share at Rs 10.93.

Sanctions aggregated Rs 10,983 crore to 303 projects. This brings the annual growth in sanctions over the last four years covering fiscal 1994 to 1997 to 39 per cent. The growth in sanctions during the year 1997-98 was 52%.

During the year project finance accounted for Rs 10,443 crore and financial services for Rs 540 crore. Rupee sanctions were to the tune of 53 per cent while assistance in foreign currency (including foreign loan guarantees) represented the balance 47 per cent.

Industry wise distribution of sanctions show that the major beneficiary segments were infrastructure projects 38 per cent (power 31.5 per cent; telecom services 5.5 percent and port services 1 per cent), iron and steel 13.2 per cent, textiles 7.1 per cent, synthetics resins and plastic materials 5.5 per cent, electronics 4 per cent, fertilisers 3.8 per cent, basic chemicals 3.4 per cent, petroleum refining 2.7 per cent, cement 2 per cent.