July 30, 2008

Chairman, Mr. Keshub Mahindra’s Speech at Mahindra & Mahindra’s 62nd

Annual General Meeting held in Mumbai

Ladies and Gentlemen,

During the year under review, we have received many accolades for our practices of governance as well
as a dedicated pursuit of our corporate social responsibility which focuses on education, health and
environment. All these have been dealt with at length in the Reports in your hands. I will therefore not
subject you to further repetition. I do want to make a special reference of the 14,000 odd employees
who have spent time during the year doing some sort of social service under our Employee Social
Option Plan (ESOP). I am grateful to them for their interest and participation.

I am not going to highlight for you the performance of last year for these are with you in ample
detail. At our Board Meeting this morning, your Directors approved the Company’s quarterly results.

The Auto Sector outperformed the Industry in its core UV business, sale of Company’s Utility
Vehicles witnessed a growth of 21.6% as compared to an Industry growth of 17.4%. The Company sold
37,919 MUVs in the first quarter as against 31,171 MUVs in the same quarter last year. The Company
strengthened its leadership in the domestic UV market with a market share of 51.8% (compared to 50%)
in the same period last year. Sale of company’s tractors in the domestic market grew by 11.5% to
28,161 tractors in the first quarter as compared to 25,250 tractors in the same period last year.

I will now give you the figures for the first quarter ended 30th June 2008. Gross revenues and
other income of the Company is Rs.3749.2 crores as against Rs.2972.8 crores during the corresponding
period last year showing a robust growth of 26.1%. Before making provision for an exchange loss (77.9
crores) which was caused by the appreciation of the dollar against the rupee relating to the FCCBs of $
200 million issued in April, 2006 and also due to other forex borrowings and liabilities, the net profit
this quarter would have been Rs.217.47 crores as against Rs.195.81 crores of the corresponding quarter
last year. After making a provision of Rs.77.9 crores the net profit for the quarter is Rs.159.3 crores as
against Rs.191.2 crores last year. Although there was a satisfactory growth in the revenue, the profits
were also affected by the sharp increase in input costs including the galloping price of oil and
commodities all over the world.

To meet the challenges of rising energy costs, we already have several of our models available
in CNG versions. We have ushered in three-wheeler electric vehicles and are currently developing
electric options for several other models. With better battery technology, we believe that electric
vehicles will have better acceptance and affordability in the future. Our Scorpio hybrid programme is
well known and we have interest in the hydrogen combustion engine, we have already demonstrated a
hydrogen fuelled three-wheeler this January. We have several projects in progress jointly with other
organizations including the Government of India.

We have already validated some of our tractors to work on Bio-diesel and we have a
pilot of 10 Scorpios running on B-100 fuel – our efforts will be to accelerate our Research &
Development in the area of alternate fuels to meet the challenges of rising prices of oil.
At a meeting this morning, your Board of Directors have approved the acquisition of business
assets of Pune-based Kinetic Motor Company Ltd. (KMCL). The deal will enable us to design and
market a range of scooters, value engineered motorcycles and high-end motorcycles for the Indian and
global markets, helping it to establish a robust, end-to-end two-wheeler business in every segment of the
industry.

Founded in 1974, the Kinetic Group has sold over 6 million vehicles in India. The company has
a rich history of innovation and has introduced several new concepts that have revolutionized the two-
wheeler industry. Kinetic, in fact, brought the concept of personalized transport to India with the launch
of the moped Luna in 1974. In 1984, it launched India’s first gearless scooter which has come to
symbolize comfort, convenience and universal appeal. Kinetic has also introduced new technologies to
India including four valve engines, electric start on scooters and motorcycles, v-twin engines, USD
forks, etc. It is also the only company to offer top-end world class bikes, Comet and Aquila, to Indian
bike enthusiasts.

India is the second largest producer of two-wheelers in the world. The two-wheeler industry
has grown from 3 million in the Financial Year 1998 to 8 million in the Financial Year 2008. Domestic
sales, which comprise 93% of total two-wheeler sales, have grown from 3 million in the Financial Year
1998 to 7.2 million in the Financial Year 2008, a CAGR of 9.2%. The penetration level is, however,
still low at 48 vehicles per thousand of population which augurs well for the future growth of the
industry.

Within the overall two-wheeler strategy, scooters will form our entry point into the Indian
market and will be an important part of the company’s overall two-wheeler product portfolio. There are
several macro environmental trends which make the scooter market especially attractive. These include
a younger, more affluent customer base with a significant number of empowered women and increased
scooter demand in tier-2 cities and small towns. We are strongly positioned to cater to this demand,
given the company’s significant presence and brand equity in these markets.

This investment will be made through a special purpose vehicle (SPV). Your Company will
acquire an 80% stake in the SPV for an approximate sum of Rs.110 crores subject to closing due
diligence.

At the Board Meeting held earlier this morning, your Directors have recommended the merger
of Punjab Tractors into your Company. You will recollect that your Company acquired 63.33% stake
of PTL through a negotiated deal and a subsequent open offer. This together with 1.31% held by the
Company’s subsidiary Mahindra Holdings & Finance takes our total shareholding in the Punjab
Tractors to 64.64% Valuation of the shares of both the Companies was done by independent valuers
and they have recommended the merger on the basis of 3 shares of PTL for 1 share of M&M. Directors
of PTL as well as Mahindras at a Board Meeting this morning have recommended this merger proposal
to the shareholders.

It is obvious that there should be a consolidation of our tractor business as that would bring
overall operational efficiencies, achieve overall cost reduction and use each others synergies in
management. This will also bring about better utilization of resources. It is our intention to operate the
Punjab Tractors Limited business as (Swaraj Division of our Farm Equipment Sector) and it will be
headed by a separate CEO who will report to the President of FES. Swaraj brand is very powerful brand
and we will continue to sell the products made by this Division under that brand.

In due course more details of these proposals will be in your hands for it requires not only the
approval of the shareholders of the two Companies but also the approval of the two High Courts in
Mumbai and Punjab.

While your Company has performed satisfactorily on three major counts, governance, CSR, and
the overall business performance, let me end with a word of caution for the current year. We are all
aware of the economic conditions prevailing in the US, as also the disarray in the financial markets, the
rising cost of energy and the price of oil hovering around 130/140 dollars per barrel and the prices of
commodities have gone through the roof. Our economy is no longer insulated or isolated from world
events with the result that we are facing double digit inflation and it is expected that interest rates will
remain high. While Government will attempt to find the right balance between containing inflation and
achieving growth, we see a year of economic turbulence, with forecasts for the next few months difficult
to make. We do hope that subject to rains, a well dispersed monsoon will bring about a good
agricultural growth and that the Services sector continues to be robust. Many of these issues are beyond
the control of your Company but the impact of many of these constraints will be lessened through strict
cost controls, innovation, and pursuing efficiencies all around. We face a turbulent, challenging and a
difficult year, but not necessarily a bad one.