GP Goenka's flagship reported a gross turnover of Rs 961.76 crore in the year to March 31, 1998, which is 18.93 per cent higher than the previous year's gross turnover of Rs 808.66 crore.

Profit before tax and extra-ordinary items was Rs 70.46 crore in 1997-98 against Rs 46.24 crore in the previous year.

The provision for taxation is takes into consideration a Rs 6.35 crore minimum alternate tax of the previous year, extra-ordinary items recognised in earlier years, exchange fluctuations and income arising out of retention price support for fertilisers.

The income from retention price support has been accounted on a provisional basis, as the government is yet to issue the required notification that affectsall fertiliser makers.

For fertiliser companies, calculation of income consists of sales to dealers and distributors and the subsidy granted by the government via the fertiliser industry co-ordination committee.

The subsidies are granted in three ways -- a notification is issued and subsidy is made, notification is issued but subsidy is not made and thirdly no notification has been issued till that time.

Subsidies are calculated on accrual basis when the notification is pending. However, income on the subsidy will be calculated only in the year the notification is issued.

According to company officials, the increase in tax provisions has been on account of subsidies calculated on accrual basis where notifications are pending. Also, dual taxation in its tea business has affected the profitability. Tea accounts for 20 per cent of Duncans' turnover.

According to the notes to the annual accounts, the retention price support has been accounted for in these accounts after taking into account thegovernment's notifications. Over and above, Rs 9.78 crore subsidy revisions due to escalation in input and other costs have been taken into account in respect of notifications which were not issued before the year end.

Statutory auditors Lodha & Co have pointed out in their report that the excise duty in relation to the company's earlier tobacco business is not ascertainable. They have also drawn the attention of the shareholders towards non-provisioning of shortfall in investments.