The board, which met in Mumbai on Friday, recommended a dividend of 110 per cent (Rs 11 per share) for the year, against 101 per cent in 1997-98.

Turnover from core operations shot up 22 per cent to Rs 883.24 crore from Rs 721.04 crore. Total income, however, recorded a modest increase from Rs 895.97 crore to Rs 901.19 crore during the period, following the company's exit from low-margin coffee export trading and lower other income. Exports of mainline products were, however, higher by 12 per cent.

"Due to the seasonal nature of the industry, sales volume normally dip in the second half. But, on the whole, the results have been sound and all our brands gainedenormously in the marketplace," said a top Tata Tea official.

Income from coffee export trading, which contributed Rs 157.61 crore to the turnover in 1997-98, fell to just Rs 1.47 crore in this fiscal, while other income was marginally lower at Rs 16.48 crore from Rs 17.32 crore in the previous fiscal.

At the Bombay Stock Exchange, the Tata Tea stock closed lower at Rs 438 per share from its Thursday's close of Rs 462.

The Tata Tea official said that that the dip in the company's scrip has been due to the fact that the market was expecting a 1:1 bonus issue. "Although we are a high-dividend paying company, Tata Tea is conservative about expanding the share capital base," he added.

Profit after interest, but before depreciation, increased from Rs 158.82 crore to Rs 202.43 crore, while profit before tax shot up from Rs 144.16 crore to Rs 184.76 crore.

Tata Tea is, however, not too bullish about the current fiscal. "The tea-growing areas in the north have witnessed the most severe drought in recentmemory resulting in substantial loss of crop in the earlier part of the year. Price trends in the south have remained lower than last year due to a fall in export demand. These developments may possibly impact the current financial year," the company said in a release.

Total expenditure was lower at Rs 680.69 crore, against Rs 713.27 crore in the previous fiscal. Interest charges dropped from Rs 23.88 crore to Rs 18.07 crore, but provision for depreciation increased from Rs 14.66 crore to Rs 17.67 crore during the period. Provision for tax was higher at Rs 56 crore, against Rs 42 crore in the previous fiscal.

Tata Tea said that it has taken appropriate steps to ensure that all its operations, processes and information systems would be Y2K-compliant by June, 1999.

"The company has budgeted directly identifiable total cost of Rs 90 lakh including capital expenditure for remedial measures. The company has a contingency plan to address any uncertainties that may arise," Tata Tea said.