Mahindra & Mahindra Ltd. (500520) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.
Kapil Singh – Nomura Securities: Sir, just wanted you to give some more color on the rationale behind this merger of truck business and also what kind of impact should we expect on P&L because of this, because last year there was a loss of INR3.6 billion, so given that we are not expecting any major growth to come, should we expect similar kind of losses to continue?
Pawan Goenka – President – Automotive & Farm Equipment Sectors: So first of all, it’s a demerger not a merger. The MTBL Company continues and it will have the spares business of the truck and bus (Technical Difficulty). I will start again, so first of all it was not a merger but a demerger where the truck and bus business is coming into Mahindra & Mahindra and the spares business of MTBL resides in MTBL. The primary reason for rationale for the demerger, obviously is the fact that, now it’s 100% owned subsidiary. The reason we had it as a separate company was because it was joint venture with Navistar, now it’s a big 100% subsidiary. It makes a lot of sense for it to be part of Mahindra & Mahindra because it is a main line of business for us. Clearly, it will bring some operational efficiencies by being part of M&M Limited and some of the transactional losses that we have because of various companies transacting business with MTBL within the Group. Those will get eliminated as a result of merger and there will be some manpower efficiencies also that will come. There also is a tax benefit that will happen because there is a fairly large accumulated losses in MTBL which we’ll be able to send off, so that’s a rationale for it.
Kapil Singh – Nomura Securities: Why the spares business is being kept separate?
V.S. Parthasarathy – Group CIO, EVP – Group M&A, Finance and Accounts: Let me just back off a little bit more and add color to what Pawan said. There will be a tax benefit which will be because of the accumulated losses and the effective date of this transaction will be 1st April but this effect, all of them will come once the High Court actually approves this merger. Therefore, in terms of timing, it will depend on when that happens. You know, whether it happens in this financial year or next. We’d assume normally it should happen by April, May, June kind of timeframes. So it is – it depends on which financial year it will come also. So that’s one input. Second about spare parts, the base – if you remember, Kapil, even when we did MADPL, we left the spare part business and bought in the other manufacturing unit. So, we believe that manufacturing has a lot of synergy and operational efficiency. Spare parts is a separate business, and at some point we can look at spare part as a profit center in a much broader way for the Group. So when we are – therefore we are leaving the spare part businesses out where it happened to be already out, as in the case of MADPL and similarly we are doing the same in current transaction…