In view of the drop in turnover and investments being made by the company for new products, the LML board decided to skip dividend. The company's board on Thursday approved a preferential allotment of Rs 8.8 crore which will take up the Singhania's' stake in LML from 47 per cent to 51 per cent.

The price and other modalities have yet to be worked out. The profit before depreciation, interest and tax is Rs 54.7 crore for the year ended March 31, 2000 as against Rs 127.6 crore for the previous 18-month period. The performance of the company was affected due to a continuous and significant shift from the metal body geared scooters to motorcycles, especially in the urban areas, says a company statement. Operating profit stood at Rs 43.8 crore as against Rs 120.2 crore a year ago. LML Limited paid Rs 24.9 crore as interest and Rs 22.8 crore as depreciation. Sales were also affected as some models of the company at higher price points lost to some lower priced motorcycles.

During the year, the company sold 283,071 units in 1999-2000, registering a decline of 12.5 per cent in volume as compared to the previous year (annualised). Conscious of the changing profile of the two-wheeler industry, the company has already taken steps to transform itself into a producer of wide range of two-wheelers to fit various consumer segments, and has taken several strategic initiatives. The steps being taken include comprehensive corporate and industrial restructuring, enlarging the product portfolio and redefining the product portfolio over a larger price band.

In 2000-01, the company is working to place four-stroke plastic body scooters, a four-stroke step-through and a four-stroke chopper style mobike in the market. The company is also working on development of two-wheelers based on alternative fuels like LPG and direct fuel injection system as per commitment towards a cleaner environment, said a company spokesman.