66th AGM Speech by Mr.Keshub Mahindra, Chairman, M&M

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Mahindra

Welcome to the 66th Annual General Meeting.  The Annual Accounts as well as the Notice of the Meeting has been with you for some time,  may I take these as read.

I would like to introduce two eminent personalities, who have joined the Board since we last met. 

May I present  Dr. Vishakha Desai and Mr. Vikram Singh Mehta.  

Dr. Vishakha  Desai  from New York  is President and CEO of Asia Society.Dr. Desai holds an M.A. and Ph.D in Asian Art History from the University of Michigan.  

Mr. Vikram Singh Mehta is the Chairman of the Shell Group of Companies in India since 1994.  He has a Master’s Degree in Politics and Economics (Hons.) from Magdalen College, Oxford University UK  and a Master’s Degree in Energy Economics from the Fletcher School of Law and Diplomacy, Tufts University in USA.  Welcome to you both.

I am not going to dwell on the details of the year under review, which are exhaustively covered in the Annual Accounts which are with you.  However, I do want to stress that it has been a very difficult year and a most challenging one.  There have been problems stemming from many circumstances abroad like the state of the sovereign debts of many advanced economies, turmoil in the middle east, weakening global economic environment and our rising fiscal and current account deficits. 

Our currency continues to weaken with a high inflation rate and prolonged uncertainties in respect of our policies and regulations.  In spite of this turbulent and uncertain period,   our business continued to grow –  in the automotive sector, we had a growth of nearly 29%, while in the case of tractors, inspite of the sluggish conditions in the last few months, in the year gone by, the growth was 10%.

We acquired majority holding in South Korean SsangYong  Motor Company. We inaugurated our World Class Engineering and Research and Development Centre, the Mahindra Research Valley (MRV) in Chennai. Spread over 125 acres, bearing testimony to our Group’s technology-driven innovations, MRV is the cradle of our future. This facility was created at an investment of  650 crores and presently has a work force of 1500 employees.

At the Board Meeting held earlier today, your Board approved and adopted the Accounts for the first quarter of the current year :

Gross Revenues and Other Income of the Company together with MVML is 10003.9 crores as against 7400.0 crores during the corresponding period last year, showing a growth of 35.2 per cent.  The Net Profit of the quarter is 778.5 crores as against 618.3 crores of the corresponding quarter last year – a growth of 25.9 per cent.

Consolidated financials for the Group will be available in a few days after the Board of Tech Mahindra approves their accounts.

The first quarter Auto and Farm sales volumes are as follows.

Your Company recorded total sales of  1,22,571 vehicles, as compared to 95,238 vehicles in the previous year, registering a growth of 28.70% in vehicle sales. 

Your Company sold  59,881 tractors under the Mahindra and Swaraj brands, a 0.87%  de-growth compared to 60,408 tractors sold during the first quarter of the last year.

These results have been attained through a very disciplined strategy, cutting costs, curbing expenditures, maintaining growth by meeting the ever changing consumer demand.  These efforts are reflected in the figures I have just given to you. 

However, the economic uncertainties of the year under review aggravated further in the current year, with the Indian economy facing a persistent inflation, a volatile currency, the GDP growth forecasted below 6%, high interest rates,  the price of oil remaining high, and the threats by the rating agencies to downgrade the country’s rating.

The risks of a full fledged crisis in Europe remains high, Greece is in a dire state, Spain is showing signs of recession and Italy is showing unacceptable figures of stability.  China is showing signs of slowing down, oil markets are in a flux.  At the same time, weak domestic macros – high inflation, large fiscal and current account deficits – coalition politics continue to constrain policy actions critical to supporting growth – for any growth below 7% cannot even begin to meet our social needs.  Uncertainties of our policies and our vacillation on major reforms together with the south west monsoon remaining weak, adds to our woes !

The future indeed looks challenging, but there is hope that in the latter part of the current year, one might see a change leading to growth and the containment of our revenue and fiscal deficits.  I also expect that the Government will move to clarify the uncertainties in many sections of our economy and to bring back focus on providing a platform for the growth of our economy which is critical for bettering the quality of the lives of our people.  Towards this effort I make a plea that all of us who are outside the stream of Government must assist and support the policies enunciated and ensure to the best of our ability that all political parties move with one objective of creating an environment in which the economic growth of our country continues.

By now, all of you know that after having enjoyed the privilege of serving as a Director of your Company for 64 years, and the honour of being Chairman of the Board for 48 years, I have decided to hand over the baton to the younger generation. 

I wish to convey my sincere gratitude to all of you, the Board of Directors, and to the employees of this Company for making it possible for me to lead the Company over the years, have it grow exponentially and yet stay unflinchingly on the path of sound ethics, inclusiveness and uncompromising integrity, despite the increasingly sullied environment.The affection that you have always showered upon me is embedded in my mind and heart.  Yet, it is time to break new grounds. 

My innings as your Chairman concludes at the end of this meeting.  I am deeply moved by the sentiments expressed by the Board and the Management in requesting me to accept the position of Chairman Emeritus, which I do with humility.

The Board has selected Anand Mahindra to be the next Chairman.  As you all know, Anand is a leader of great acumen, moving in step with technological advances and above all, passionate about preserving what is ‘core’ to the Company – integrity, ethics and inclusiveness.

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