The sales of the tractor company also declined by 7 per cent to Rs 1,319.7 crore as against Rs 1,417.76 crore reported in 1997-98.

Despite fall in net profit, the board of directors of the company have decided to maintain dividend at 45 per cent in 1998-99, company statement said here.

It said the fall in sales and profit was due to a labour strike for 70 days which resulted in production loss.

In 1998-99, tractors sold by the company declined by 7 per cent to 45,010 from 48,330 units in the previous year. The company had a market share of 17.7 per cent of total tractor market during the year.

Escorts Ltd chairman Rajan Nanda said the company had promising start in the current fiscal with market share of at 20.5 per cent against 15.1 per cent during the same period last year.

In the first two months of the current fiscal, the company sold 8,493tractors as against 5,930 during the corresponding period last year, a growth of 43 per cent.

Escorts has negotiated a long term settlement with workmen. The agreement encompasses new industrial engineering norms and productivity levels commensurate with machine output standards and working hours.

This settlement is an instrument for cultural transformation and will afford the company greater operational flexibility in resource utilisation and higher productivity, it said.

The company has fully protected its long term business expansion plans, investing Rs 90 crore in modernising its agri-machinery plants and Rs 105 crore in the share capital of group companies without any significant recourse to borrowing.

Out of all the group companies the single largest investment was made in cellular services subsidiary escotel.

Nanda said, "After three difficult years, the business outlook confirms, that our vision, business selection and large invesmtents made by us would enlarge the growth prospects of thecompany."

All business have completed financial closure for their respective product programme and have a very optimistic growth for the mid-term, he said.