Bajaj 10-11

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Contents

Corporate In ormation ...................................................................2

Directors Report ...............................................................................3

Management Discussion and Analysis ..................... ................8

Corporate Governance ................................................................12

General Shareholder In ormation ...........................................17

Report on Corporate Social Responsibility ..........................20

MRTP Disclosure ............................................................................24

Auditors Report .............................................................................26

Balance Sheet and Proft & Loss Account .............................30

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Bajaj Finance Limited | 3

The Directors present their Twenty Fourth Annual Report and theAudited Statement o Accounts or the year ended 31 March 2011.

Business Per ormance

The gross deployment o the Company or the year 2010-11 were ` 9,435 Crores as against ` 4,585 Crores or the year 2009-10.

` in CroresDeployment 2010-11 2009-10 % change

Two & Three Wheelers 2,034 1,364 49%

Consumer Durables 2,262 1,037 118%

Mortgages 1,672 1,067 57%

Vendor Financing 1,346 149 803%Other assets 389 165 136%

Construction Equipment 694

Small Business Loans and PersonalLoan Cross sell 1,038 803 29%

Total 9,435 4,585 106%

Financial Results ` in Crores

Particulars 2010-11 2009-10

Income rom Operations 1,392.33 910.06

Other Income 13.80 6.10

Total 1,406.13 916.16

Expenses 441.79 311.97

Loan losses and Provisions 204.61 260.58

Interest and Finance Charges 377.95 201.67

Depreciation 11.86 7.64

Total Expenditure 1,036.21 781.86

Pro it be ore Taxation 369.92 134.30

Provision or Taxation 123.29 44.90

Pro it or the year a ter Taxation 246.63 89.40

Prior period adjustments relating to earlier years 0.33 0.01

Pro it or the year a ter Taxation and priorperiod adjustments 246.96 89.41

Balance brought orward rom previous year 85.25 0.40

Trans er rom Debenture Redemption Reserve 48.05

Pro it available or appropriations 332.21 137.86

Appropriations:

Trans er to Reserve Fund (49.50) (18.00)

Trans er to General Reserve (25.00) (9.00)

Provision or Proposed Dividend (36.63) (21.96)

Provision or Dividend Tax (5.94) (3.65)

Balance carried to Balance Sheet 215.14 85.25

Directors ReportDividend

The Directors recommend or the consideration o theshareholders at the ensuing Annual General Meeting, paymento dividend o ` 10 per share (100 percent) or the year ended31 March 2011. The amount o dividend and tax thereonaggregates to ` 42.57 Crores.

Dividend paid or the year ended 31 March 2010 was ` 6 per share(60 percent). The amount o dividend and tax thereon aggregatedto ` 25.61 Crores.

Change in the name and status o the Company

Name o the Company has changed rom Bajaj Auto FinanceLimited to Bajaj Finance Limited consequent to the reshCerti icate o Incorporation issued by the Registrar o Companies,Maharashtra, Pune w.e. . 6 September 2010.

The Company has become a subsidiary o Bajaj Finserv Limitedw.e. . 5 July 2010.

Working Results

The Company, during the year 2010-11, deployed a total amounto ` 9,435 Crores under various products. As against this, during

the previous year 2009-10, the total amount deployed was ` 4,585 Crores.

The receivables under inancing as on 31 March 2011 were ` 7,270 Crores as compared to ` 4,032 Crores as on 31 March 2010.

Total income during 2010-11 increased to ` 1,406 Crores rom ` 916 Crores during 2009-10.

The pro it be ore tax or the year was at ` 370 Crores, as against ` 134 Crores in the previous year. The pro it a ter tax or the yearwas ` 247 Crores as compared to ` 89 Crores in the previous year. This has been due to improvement in net interest margins acrossbusinesses, contribution rom new lines o businesses, third partyee products distribution and various re-engineering initiatives.

The Companys current provisioning standards are more stringentthan RBI prudential norms. In line with its conservative approach,the Company continues to strengthen its provisioning normsbeyond the Reserve Bank o India regulation by accelerating theprovisioning to an early stage o delinquencies based on the pastexperience and emerging trends. Consequently, the additionalestimated provision aggregates ` 39 Crores or the year.

The Company had an excellent year aided by strong volumegrowth in Consumer and Small & Medium Enterprise businesslines. During the year, the Company launched three new product

lines viz. Construction equipment inance, Retail loans againstsecurities and Home loans. Its investments over the last threeyears in people, processes and technology have begun to yield

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4 | Bajaj Finance Limited

operating leverage bene its resulting in improvement inmargins. Port olio quality, aided by a good macro-economicenvironment is robust. Recent acquisitions across products areper orming signi icantly better than earlier.

Operations

The operations o the Company are elaborated in the annexedManagement Discussion and Analysis Report.

Conservation o Energy and TechnologyAbsorption

The Company, being a Non-Banking Financial Company, doesnot have any manu acturing activity. The Directors, there ore,have nothing to report on Conservation o Energy and Technology Absorption.

Foreign Currency

Foreign currency expenditure amounting to ` 1.27 Crores(previous year ` 0.45 Crore) was incurred during the yearunder review. The Company did not have any oreignexchange earnings.

Employee Stock Option Scheme

Details required to be provided under Securities and ExchangeBoard o India (Employee Stock Option Scheme and EmployeeStock Purchase Scheme) Guidelines, 1999 are set out in theAnnexure to this report.

Fixed Deposits

During the year under review, the Company renewed ixeddeposits o ` 0.30 Crore. Public Deposits outstanding at the yearend were ` 1.75 Crores and the number o depositors were 616.At the end o the inancial year under review, there were71 deposits aggregating ` 0.13 Crores which matured butremained unclaimed as on that date. The Company had writtento these depositors and as on date, a deposit o ` 5,000/- hasbeen repaid.

Credit Rating

Despite a tough economic environment, the Company managedto retain all its credit ratings owing to high capital adequacy,strong promoter support, tightened credit acceptance criteria androbust asset-liability management.

CRISIL has re-a irmed the highest rating o FAAA/Stable or theFixed Deposit programme o the Company. This rating indicatesvery strong degree o sa ety with regard to timely payment o interest and principal. The Company is one o the very ewNon-Banking Financial Companies (NBFCs) which enjoy thehighest rating.

The Company also enjoys the highest rating o P1+ rom CRISILand A1+ rom ICRA or Short Term Debt programme. The Long Term Non-Convertible Debentures have been assigned

AA+/Stable rating by CRISIL indicating high degree o sa ety

with regard to timely payment o interest and principal and highcredit quality rating o LAA+ with stable outlook by ICRA. The Company has also been assigned AA+/ Stable rating byCRISIL and LAA+ with stable outlook by ICRA or ` 400 CroresLower Tier II Bond programme.

As regards the latest Bank Loan Ratings or the bank acilitiesstipulated by RBI, as a part o BASEL II guidelines, CRISIL hasassigned AA+/Stable rating or the Companys Cash Credit/Working Capital Demand Loan amounting to ` 1,035 Crores andLong Term Bank acilities amounting to ` 2,515 Crores andP1+ rating or the Short Term Bank acilities amounting to

` 950 Crores.

RBI Guidelines

The Company continues to ul ill all the norms and standards laiddown by the Reserve Bank o India (RBI) pertaining to non-per orming assets, capital adequacy, statutory liquidity ratio etc.As against the RBI norm o 12%, the capital adequacy ratio o theCompany is 20%.

In line with the RBI guidelines or Asset-Liability Management(ALM) system or NBFCs, the Company has an Asset-LiabilityCommittee which meets periodically to review its ALM risksand opportunities.

Upon change o name o the Company, Reserve Bank o India (RBI)has issued a resh Certi icate o Registration in the name o BajajFinance Limited w.e. . 5 October 2010. The RBI has also changedclassi ication o the Company rom Asset Finance Company to aLoan Company.

Corporate Social ResponsibilityDuring the year 2010-11, Bajaj Group continued its Corporate SocialResponsibility initiative in various ields. Activities in this area are setout in greater detail in the Corporate Social Responsibility Report.

Directors

Rahul Bajaj, Madhur Bajaj and Sanjiv Bajaj, Directors, retire romthe Board by rotation this year and being eligible, o erthemselves or re-appointment.

The in ormation on the particulars o Directors seekingre-appointment as required under Clause 49 o the ListingAgreement with the Stock Exchanges has been given in thenotice o Annual General Meeting.

Appointment o Manager under theCompanies Act,1956

Subject to the approval o the shareholders, the Board o Directors have re-appointed Rajeev Jain, as Manager under theCompanies Act, 1956 with the designation Chie ExecutiveO icer (CEO), or a urther period o ive years with e ect rom1 April 2011, on the terms o remuneration set out in theresolution in the notice o the ensuing Annual General Meeting. The resolution is commended or approval o the shareholders

at the Annual General Meeting.

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Disclosure pursuant to the provisions o SEBI (Employee Stock Option and Employee Stock Purchase Scheme) Guidelines, 1999,as on 31 March 2011

1. Options granted 458750

2. Pricing ormula Closing market price one day prior to the date o Grant on thestock exchange with the highest trading volume subject to thecondition that exercise price will not be less than the acevalue o the shares

3. Options vested 33000

4. Options exercised (as on 31 March 2011) 1250

5. Total number o shares arising as a result o exercise o options 1250

6. Options lapsed (as on 31 March 2011) 8750

7. Variation o terms o options N.A

8. Money realized by exercise o options ` 4,48,375

9. Total number o options in orce (as on 31 March 2011) 448750

10. Employee wise details o options granted

(i) Senior Managerial Personnel

Sr. No. Name No. o options No. o optionsgranted in Grant I granted in Grant II

1. Rajeev Jain 39000 39000(ii) Any other employee who receives a grant in any one year

o option amounting to 5% or more o optionsgranted during the year

11. Identi ied employees who were granted options,during any one year, equal to or exceeding 1%o the issued capital (excluding outstanding

warrants and conversions)o the Company atthe time o grant Nil

12. Diluted Earnings Per Share (EPS) pursuant toissue o shares on exercise o options calculatedin accordance with Accounting Standard 20Earnings Per Share: ` 67.47

13. Where the Company has calculated the employee Had compensation cost or the stock option plancompensation cost using the intrinsic value o the outstanding been determined based on air valuestock options, the di erence between the employee approach, the net pro it and earnings per sharecompensation cost so computed and the employee would have been as per the pro orma amountscompensation cost that shall have been recognized indicated below:i it had used the air value o the options, shall bedisclosed. The impact o this di erence on pro its &

on EPS o the Company shall also be disclosed:

Annexure to the Directors Report

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Particulars 31 March 2011

Net pro t (as reported) ( ` in Crores) 246.96

Add: Stock based employee compensation expense included in net income Nil

Less: Stock based compensation expense determined under air value basedmethod (pro orma) ( ` in Crores) 2.61

Net Pro t (pro orma) ( ` in Crores) 244.35

Basic Earnings per share (as reported) ( ` ) 67.47

Basic Earnings per share (pro orma) ( ` ) 66.76

Diluted Earnings per share (as reported) ( ` ) 67.47

Diluted Earnings per share (pro orma) ( ` ) 66.76

14. Weighted average exercise price o options whose

(i) Exercise price equals market price ( ` ) 542.00

(ii) Exercise price is greater than market price Nil

(iii) Exercise price is less than market price Nil

Weighted average air value o options whose

(i) Exercise price equals market price ( ` ) 274.76

(ii) Exercise price is greater than markert price Nil

(iii) Exercise price is less than market price Nil

15. A description o the method and signi cant assumptions used The air value has been calculated using the Black during the year to estimate the air values o options, Scholes Option Pricing model. The assumptions used inincluding the ollowing weighted average in ormation the model are as ollows:

Date o Grant 21 July 2010 12 January 2010

(i) Risk- ree interest rate 7.42% 6.70%

(ii) Expected li e 3.5-6.5 years 1-5 years

(iii) Expected volatility 55.38% 54.01%

(iv) Expected dividend yield 1.28% 0.62%

(v) The price o the underlying share in market at the time o option grant ( ` ) 542.00 358.70

Annexure to the Directors Report (Contd.)

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The Indian economy per ormed very well in 2010-11 (FY2011).GDP grew by an estimated 8.6%. All three major sectors grewsubstantially. A ter years o lacklustre per ormance, agriculture didwell, as did manu acturing and this played a major role inincreasing disposable income throughout most parts o rural andup-country India. It is worth mentioning that among the majoreconomies, Indias growth in FY2011 is the second highest in theworld, second only to China.

Despite such growth, there have been signs o disquiet. Duringthe year, India also aced severe in lationary pressures comingacross the entire spectrum o goods oodstu , hydrocarbons,commodities and manu acture. To combat this, the Reserve Bank o India (RBI) has raised interest rates. FY2011 saw seven suchhikes o 25 basis points (bps) each. In May 2011, the rate hike was50 bps, with the RBI clearly indicating that its hitherto so tapproach to in lation is coming to an end. I both supply-sidein lation and interest rate hikes were to continue throughoutFY2012, India may see a slowing down o GDP growth as well asthe rate o growth o consumer demand. It is however, too earlyto hazard a orecast.

Having said this, there is little doubt that FY2011 was a good year

or the retail inance industry. A ter three years o competing in amilieu o single-digit nominal growth that was not much higherthan in lation, business or the industry is estimated to havegrown by over 29% in FY2011. Moreover, with several retailinance players having to make major provisions in 2007-2009 onaccount o non-per orming loan assets, the competitiveenvironment was benign. Those who had been care ul in the pastand had relatively strong balance sheets could leverage up tolend more in FY2011. Going orward, while retail inance shouldgrow at a healthy pace, so too would the orces o competition.

Non-Banking Financial Companies (NBFCs) are increasinglyplaying a critical role in making inancial services accessible towider set o Indias population and, thus, emerging as signi icantplayers in the retail inance space. Going orward, one can expectNBFCs to strengthen their presence in retail inance and grow at ahealthy pace.

With assets under management o over ` 7,571 Crores, BajajFinance Limited (BFL or the Company), earlier Bajaj AutoFinance Limited, is a leading, diversi ied NBFC in the country.A listed entity, the Company delivered superior resultsin FY2011. Given below are the highlights o BFLs per ormanceor the year under review.

BFLs Per ormance, FY2011

l Total income or FY2011 was up by 53% to ` 1,406 Croresl Pro it a ter tax rose by 178% to ` 247 Croresl Loan deployment increased by 106% to ` 9,435 Croresl Assets under management stood at ` 7,571 Crores as

on 31 March 2011l Receivables under inancing activity rose by 80%

to ` 7,270 Croresl Loan losses and provisions or the year reduced by 21%

to ` 205 Croresl Capital adequacy as on 31 March 2011 stood at 20%,

which was well above RBI norms

A Snapshot o BFLs Loan Deployment

Table 1 gives the mix o loan deployment or FY2011 (comparedto FY2010), while Chart A plots BFLs loan deployment over thelast ive years.

Table 1: BFLs Mix o Loan Deployment ( ` in Crores)Loan Deployment 2010-11 2009-10 Change

Two and Three Wheelers 2,034 1,364 49%

Consumer Durables 2,262 1,037 118%

Mortgages 1,672 1,067 57%

Vendor Financing 1,346 149 803%

Other assets 389 165 136%


Small Business Loans andPersonal Loan Cross sell (PLCS) 1,038 803 29%

Total 9,435 4,585 106%

Management Discussion

and Analysis

10,000

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

2,631

2006-07

3,036

2007-08

2,451

2008-09

4,585

2009-10

9,435

2010-11

CAGR (37%)n ` Crores

Chart A: Growth in BFLs Loan Deployment ( ` in Crores)

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Receivables Under Finance

Table 2 gives the data o BFLs receivables under inance.

Table 2: BFLs Receivables under Finance ( ` in Crores)Receivables under Finance 2010-11 2009-10 Change

Two and Three Wheelers 1,953 1,393 40%Consumer Durables 893 427 109%

Mortgages 1,996 1,061 88%

Vendor Financing 324 139 133%

Other assets 321 170 89%


Small Business Loans and PLCS 1,192 842 42%

Total 7,270 4,032 80%

The quality o BFLs loan book continued to improve in the currentiscal. It urther strengthened its provisioning standards, and nowranks among the most prudent in the NBFC space. Its netnon-per orming assets stood at 0.8% in FY2011, demonstratingstrong credit quality.

Business Segment Update

Two and Three Wheeler Financing

Riding on the back o robust Two Wheeler sales growth, loandeployment in this segment grew by 49% to ` 2,034 Crores. The Company acquired over 5,22,000 customers during theyear representing 38% growth over the previous year. BFLs Two Wheeler inancing was made available across 351 Bajaj Autodealer locations and 1,170 sub-dealers across the country.

BFL had launched a Direct Cash Collection model inFY2010 to attract inancially responsible customers with nobanking habits and history in the semi-urban and rural markets.In FY2011, the Company acquired over 1,57,000 such customers.

The competitive environment had remained benign or most parto the year. However, it began seeing the entry o competitors inthe last quarter o FY2011.

Consumer Durables Financing

This business is present in 71 cities across India. Loans disbursedunder this segment grew by 118% to ` 2,262 Crores in FY2011,which was higher than an estimated industry growth o 31%.Competition was benign due to the high up- ront investmentsrequired in distribution, technology and processes to compete inthis relatively low ticket size, high volume business. The Companyacquired around 9,69,000 new customers, and is present at over2,000 points o sale across the country.

BFLs strategy o ocusing on relatively a luent customers andmajor dealerships has yielded signi icant bene its through loweroperating costs and improved risk per ormance. At present, theCompany is inancing one out o every ive LCD and plasma TVs inthe country, and inances products o all leading consumerdurable manu acturers. It continues to invest in technology to

improve its operating leverage, risk per ormance and o er bettercustomer experience.

Personal Loan Cross-Sell

Present across 81 cities o India, this business targets customers

with good repayment history o their Two Wheeler and/orconsumer durable loans to cross-sell a personal loan. BFLcontinued to grow this business in a cautious manner in FY2011,with an eye to optimising the risk-reward equation and hencepro itability. During the year, loan deployment in this segmentgrew by 66% to ` 375 Crores. BFL inanced around 67,000 newcustomers in the year under review.

Personal and Small Business Loans

This business operates in top 23 cities across India. Small BusinessLoan deployments grew by 51% to ` 663 Crores in FY2011. TheCompanys strategy o ocusing on a luent small businessmencoupled with its cautious approach has helped it to grow thisbusiness in a steady manner. BFLs relationship model o lending,where knowing the client is paramount or relatively big ticketitems, has signi icantly helped in improved risk per ormance.

Vendor Financing The Company started to grow this new line o business in the yearunder review. It ocuses on short and medium term lending needso vendors o large auto manu acturers. BFL deployed short termloans o ` 1,255 Crores and medium term loans o ` 91 Croresduring FY2011.

Mortgages

This business is present across 23 cities o India. It targets a luentand high net worth small business customers, and o ers loansagainst the mortgage o retail, residential and commercialpremises. Aided by a strong revival in the mortgage business inthe second hal o FY2011, the port olio increased in line with theindustrys growth. Loan against property deployments grew by35% to ` 1,440 Crores. The Company also launched home loansor a luent and high net worth sel -employed customers, anddeployments stood at ` 232 Crores in its irst hal year o launcho this line o business. It hopes to grow this business in thecoming years.

Construction Equipment Finance

The Company launched its construction equipment inancebusiness in FY2011. It ocuses on inancing small, mid andstrategic contractors or their construction equipment inancingneeds. This is asset backed lending, collateralised by constructionequipment assets. During the irst year o operation, BFL deployed

` 694 Crores and added some 2,900 customers.

In rastructure Finance

The Company has started its oray in in rastructure inancebusiness towards the end o the iscal year. The results will bethere to report in FY2012.

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New Initiatives

During the year, the Company and Central Bank o India haveentered into a Tie-up arrangement or inancing. This partnershipmodel is amongst the irst o its kind in the industry. Under thisarrangement, the Company partially assigns loan receivables o

some o its port olios in a predetermined sharing ratio to CentralBank o India. This initiative is mutually bene icial since itenhances returns or Central Bank o India at a relationship leveland or the Company it provided another avenue or unding andimprovement in Return on Equity.

Financial Per ormance

Table 3 gives BFLs inancial per ormance or FY2011 comparedwith FY2010. Charts B and C plot the Companys pro it a ter taxand net owned unds over the last ive years respectively.

Table 3: BFLs Financial Per ormance ( ` in Crores)Particulars 2010-11 2009-10 Change

Total Income 1,406 916 53%

Interest and Finance Charges 378 202 87%

Net Interest Income 1,028 714 44%

Salary Cost 145 99 46%

Marketing and Other Commissions 103 54 91%

Recovery Commission 49 56 -13%

Loan losses and Provisions 205 261 -21%

Depreciation 12 7 71%

Other Expenses 144 103 40%

Profit Before Tax (PBT) 370 134 176%

Profit After Tax (PAT) 247 89 178%

Earnings Per Share (EPS) Basic ( `) 67.47 24.43 176%

Earnings Per Share (EPS) Diluted ( `) 67.47 24.43 176%

Book Value Per Share ( `) 370.76 314.93 18%

Chart B shows that FY2011 has been a landmark year or BFL onein which the Company has earned its highest ever PAT.

Risk Management and Port olio Quality

As an NBFC, the Company is exposed to credit risk, liquidity risk and interest rate risk. BFL has invested in people, processes andtechnology to mitigate risks posed by external environment andby its borrowers. It has in place a strong risk management team, aswell as an e ective credit operations structure. The Companyurther strengthened its risk management by separating andsegregating the unctions o Chie Risk O icer and Chie Credit O icer. Sustained e orts to strengthen the risk ramework and port olioquality have started bearing results. The overall port olio qualityhas improved signi icantly over the last inancial year. BFLsAssets-Liability Committee (ALCO), set-up in line with theguidelines issued by the RBI, monitors asset-liability mismatches,and ensures that there are no material imbalances or excessiveconcentration on either side o the balance sheet.

Internal Control Systems and Their AdequacyBFL has an independent internal management assurance unctioncommensurate with the size o the Company. It evaluates theadequacy o all internal controls and processes. The assuranceunction helps in ensuring adherence to clearly laid down internalprocesses and procedures as well as to the prescribed regulatoryand legal ramework.

The Audit Committee o the Companys Board o Directors reviewsthe internal audit reports and the adequacy and e ectiveness o internal controls.

Ful ilment o The RBIs Norms and Standards

BFL continues to ul il or exceed all the norms andstandards laid down by the RBI relating to the recognition andprovisioning o non-per orming assets, capital adequacy, statutoryliquidity ratio and the like. The Companys capital adequacy ratiois 20%, which is well above the RBI norm o 12%.

Chart C: BFLs Net Owned Funds

1,600

1,400

1,200

1,000

800

600

400

200

0

996

2006-07

1,063

2007-08

1,089

2008-09

1,153

2009-10

1,358

2010-11

n ` in Crores

300

250

200

150

100

50

0

47

2006-07

20

2007-08

34

2008-09

89

2009-10

247

2010-11

Chart B: Pro it a ter Tax ( ` in Crores)

CAGR (51%)n ` Crores

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Human Resources

BFL continues to lay emphasis on its most valuable resource, itspeople. In an increasingly competitive market or humanresources, the Company puts great emphasis on attracting andretaining the right talent. It thrives on well-rewarded, per ormance

driven culture and encourages its people to excel in the areas thatthey operate. BFL provides equal opportunity to all employees todeliver results.

During the year, the Company added 603 permanent employeestaking the total employee strength to 1657.

Business Outlook

As mentioned in the beginning o the chapter, the twomacroeconomic concerns are in lation and interest rate increasesboth o which a ect disposable income and consumer borrowingsentiments. These could dampen growth prospects or consumer-

driven NBFCs. As o now, BFL nevertheless expects to maintain itscurrent years per ormance in FY2012 due to a strong momentumin its lines o businesses and robust port olio quality.

In FY2012, the Companys approach would be to maintain growthwhile maintaining a strong ocus on the risk-return matrix. It will

launch new product lines such as in rastructure inance andsalaried loans business. It will continue to invest in strengtheningrisk management practices; and maintain investments intechnology and human resources to consolidate its position as asigni icant NBFC in India.

Cautionary Statement

Statements in this Management Discussion and Analysis describingthe Companys objectives, projections, estimates and expectationmay be forward looking within the meaning of applicable laws and regulations. Actual results might differ materially from thoseexpressed or implied.

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Brie statement on the Companys philosophy

on code o governance The Company strongly believes in air, e icient and transparentbusiness operations, airness to all stakeholders in the Company,proper disclosure o relevant inancial and non- inancial in ormationand enhancing shareholder value on a continuing basis.

Board o Directors

In keeping with the commitment o the management orthe principle o integrity and transparency in business operationsor good corporate governance, the Companys policy is to havean appropriate blend o executive and independent Directors tomaintain the independence o the Board, and to separate theBoard unctions o governance and management.

Composition

The Company has a non-executive Chairman. According toclause 49, i the non-executive Chairman is a promoter, at leastone hal o the Board o the Company should consist o independent Directors.

As on 31 March 2011, the Board o the Company consisted o tenDirectors, o whom ive were non-executive independent and ivewere non-executive & non-independent. The Board has noinstitutional nominee Directors. As Table 1 shows, the Company is

in compliance with the guidelines. Non-Executive Directors Compensation

As ixed by the Board o Directors at its meeting held on15 January 2009, a sitting ee o ` 20,000 per meeting is paid tonon-executive Directors, including independent Directors, orevery meeting o the Board or Committees o the Board attendedrom 20 May 2009.

The shareholders o the Company vide a special resolution passedat the Annual General Meeting held on 9 July 2008 have by way o an enabling provision approved the payment o a sum notexceeding one percent o the net pro its o the Company,calculated in accordance with the provisions o sections 198,349 and 350 o the Companies Act, 1956, to one or more or allnon-executive Directors as may be decided by the Board o Directors at its discretion rom time to time or a period o ive yearscommencing rom 1 April 2007. In terms o the said approvals givenby the Board o Directors and shareholders, one non-executiveindependent Director viz., Nanoo Pamnani is proposed to be paid

` 50,00,000 as commission or the year 2010-11 in consideration o the services rendered by him during the year 2010-11.

In view o the increased demands on non-executive Directorsparticipation in Board and Committee meetings and the higher

responsibilities they are expected to bear in the interest o

higher level o excellence in corporate governance, the Boardo Directors at its meeting held on 18 January 2011 has alsoapproved commission to non-executive Directors (independentand non-independent) at the rate o ` 25,000 per meeting o Board and/or Committee attended by them with e ect rom1 April 2011, subject to the aggregate being within the overallceiling o one percent o the net pro its.

The Company currently does not have a stock option programmeor any o its Directors.

Board Procedures

During 2010-11, the Board o Directors met our times:on 11 May 2010, 21 July 2010, 18 October 2010 and18 January 2011. The gap between any two meetings hasbeen less than our months.

Attendance Record o Directors

Table 1: Composition o the Board and attendance record o Directors or 2010-11Name of Director Category Meetings Whether

Attended AttendedAGM

Rahul Bajaj Chairman, Non-executive 4 Yes

Nanoo Pamnani Vice-Chairman, Non-executive,Independent 4 Yes

Madhur Bajaj Non-executive 3 Yes

Rajiv Bajaj Non-executive 3 Yes

Sanjiv Bajaj Non-executive 4 Yes

D S Mehta Non-executive, Independent 3 Yes

D J Balaji Rao Non-executive, Independent 4 Yes

Dipak Poddar Non-executive 3 Yes

Ranjan Sanghi Non-executive, Independent 4 Yes

Rajendra Lakhotia Non-executive, Independent 4 Yes

In ormation supplied to the Board

In advance o each meeting, the Board is presented with relevantin ormation on various matters related to the working o theCompany, especially those that require deliberation at the highestlevel. Presentations are also made to the Board by the di erentunctional heads on various issues concerning the Company romtime to time. Directors have separate and independent access tosenior management at all times.

In addition to items which are required to be placed be ore theBoard or its noting and/or approval, in ormation is provided onvarious signi icant items.

Corporate Governance

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Directorships and memberships o Board Committees

Table 2 gives the number o Directorships and Committeepositions held by the Directors o the Company.

Table 2: Directorships/Committee positions as on 31 March 2011Name of Director In listed In unlisted public Committee Positions

companies limited companies As Chairman As Member

Rahul Bajaj 4 2

Nanoo Pamnani 4 5 2

Madhur Bajaj 6 1

Rajiv Bajaj 4 1 1

Sanjiv Bajaj 6 4 1 5

D S Mehta 5 7

D J Balaji Rao 10 4 6

Dipak Poddar 4 5 4

Ranjan Sanghi 4 2 1 3

Rajendra Lakhotia 1 3 Notes:Private Limited Companies, Foreign Companies and Companies under section 25 o theCompanies Act, 1956 are excluded or the above purposes. Only Audit Committee andShareholders & Investors Grievance Committee are considered or the purpose o Committee positions as per listing agreement.None o the Director was a member in more than ten Committees, nor a Chairman in morethan ive Committees across all Companies in which he was a Director.

Code o Conduct

The Board has laid down a Code o Conduct or all Board membersand senior management o the Company, which has been postedon the website o the Company. All the Board members andsenior management personnel have a irmed compliance with the

Code or the year ended 31 March 2011. A declaration to thise ect signed by the CEO is given elsewhere in this Annual Report.

Audit Committee

Constitution and Composition

The terms o re erence o the Audit Committee apart rom thosespeci ied in the Listing Agreement with the Stock Exchangesbroadly pertain to review o business practices, review o investment policies, review o compliances and review o systemsand controls etc.

The present Audit Committee consists o theollowing Directors:

1. Nanoo Pamnani, Chairman2. Sanjiv Bajaj3. D S Mehta4. Ranjan Sanghi

In compliance with clause 49 o the listing agreement, threemembers o the Audit Committee including Chairman areindependent Directors. All the members are non-executiveDirectors and are inancially literate as required by clause 49.Moreover, the Audit Committee has members who haveaccounting or related inancial management expertise.

Meetings, attendance and topics discussed

During 2010-11, the Audit Committee met our times:

11 May 2010, 21 July 2010, 18 October 2010 and18 January 2011.

The meetings were scheduled well in advance. In addition to themembers o the Audit Committee, these meetings were attendedby the heads o inance and internal audit unctions o theCompany and those executives who were considered necessaryor providing inputs to the committee. The Company Secretaryacted as the Secretary to the Audit Committee.

Table 3: Composition o the Audit Committee and attendancerecord o members or 2010-11Name of Director Category Meetings

Attended

Nanoo Pamnani Chairman (Non-executive& Independent) 4

Sanjiv Bajaj Non-executive 4

D S Mehta Non-executive & Independent 3

Ranjan Sanghi Non-executive & Independent 4

The terms o re erence o the Audit Committee are extensive andgo beyond what is mandated in clause 49 o the listingagreement, section 292A o the Companies Act, 1956 and underNBFC regulations.

Disclosures

A summary statement o transactions with related parties was

placed periodically be ore the Audit Committee during the year.Suitable disclosures have been made in the inancial statements,together with the managements explanation in the event o anytreatment being di erent rom that prescribed in accountingstandards.

At its meeting o 21 May 2008, the Board laid down procedures toin orm it o the Companys risk assessment and minimisationprocedures. These are periodically reviewed to ensure thatmanagement identi ies and controls risk through a properlyde ined ramework.

Upon change o name o the Company, Reserve Bank o India (RBI)has issued a resh Certi icate o Registration in the name o BajajFinance Limited w.e. . 5 October 2010. The RBI has also changedclassi ication o the Company rom Asset Finance Company to aLoan Company.

There were no public issues, right issues, pre erential issues etc.during the year.

Remuneration and Nomination Committee

The terms o re erence o the Remuneration and NominationCommittee in brie pertain to, inter alia, determining theCompanys policy on and approve speci ic remuneration packageor Non-Executive Directors a ter taking into account inancial

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position o the Company, trend in the industry, appointeesquali ication, experience, past per ormance, past remuneration,interest o the Company and shareholders.

The Remuneration and Nomination Committee also acts asCompensation Committee or implementation o Employee

Stock Option Scheme 2009. The Committee consists o the ollowing members as on31 March 2011:

1. Nanoo Pamnani, Chairman2. Rahul Bajaj3. Sanjiv Bajaj4. Ranjan Sanghi5. Rajendra Lakhotia

During the year, the Committee met on 11 May 2010 torecommend to the Board the re-constitution o Shareholders/Investors Grievance Committee (SIGC) and nominees or electionat the Annual General Meeting. The Committee also met on21 July 2010 to approve grant o options to eligible employeesunder Employee Stock Option Scheme, 2009. All the memberso this Committee attended both the meetings.

Remuneration o Directors

Pecuniary relationship or transactions o Non-Executive Directors

During the year under review, there were no pecuniaryrelationships and transactions o any non-executive Director withthe Company.

Criteria o making payments to Non-ExecutiveDirectors

Non-executive Directors o the Company play a crucial role in theindependent unctioning o the Board. They bring in an externalperspective to decision-making, and provide leadership andstrategic guidance while maintaining objective judgment. Theyalso oversee corporate governance ramework o the Company.

The criteria o making payments to non-executive Directors hasbeen put on the Companys website www. bajaj inservlending.in

Non-Executive Directors

All Non-executive Directors are paid sitting ees and oneindependent Director is paid commission as separately stated inthis report. Also, the Board o Directors at its meeting held on18 January 2011 approved the payment o commission tonon-executive Directors (independent and non-independent)at the rate o ` 25,000 per meeting o Board and/or Committeeattended by them with e ect rom 1 April 2011.

The Company currently has no stock option plan or any o itsDirectors. During the year under review, none o the Directors waspaid any per ormance-linked incentive. In 2010-11, the Companydid not advance any loans to any o the non-executive Directors.

Table 4 gives details o the remuneration paid or payable toDirectors during 2010-11.

Table 4: Remuneration paid/payable to Directors during 2010-11Amount in `

Name of Director Relationship Sitting Salary & Commission Total

with other Directors fees perquisitesRahul Bajaj Father of Rajiv Bajaj

& Sanjiv Bajaj 1,20,000 1,20,000

Nanoo Pamnani 2,40,000 50,00,000 52,40,000

Madhur Bajaj 60,000 60,000

Rajiv Bajaj Son of Rahul Bajaj ,brother of Sanjiv Bajaj 60,000 60,000

Sanjiv Bajaj Son of Rahul Bajaj ,brother of Rajiv Bajaj 2,40,000 2,40,000

D.S. Mehta 1,60,000 1,60,000

D J Balaji Rao 80,000 80,000

Dipak Poddar 60,000 60,000

Ranjan Sanghi 2,40,000 2,40,000

Rajendra Lakhotia 1,20,000 1,20,000

Notes:Salary and perquisites include all elements o remuneration i.e. salary, allowances andbene its. No bonus, pension or incentive is paid to any o the Directors. The Company hasnot issued any stock options to any o the Directors

Shares held by Non-Executive Directors

The non-executive Directors who held shares in the Company ason 31 March 2011 are:

Name of director Number of shares heldas on 31 March 2011

Rahul Bajaj 16000Madhur Bajaj 16000

Rajendra Lakhotia 92234

Management

Management Discussion and Analysis

This is given as a separate chapter in this annual report.

Disclosure o Material Transactions

Under clause 49, senior management is required to makeperiodical disclosures to the Board relating to all material, inancialand commercial transactions where they had (or were deemed tohave had) personal interest that might have been in potentialcon lict with the interest o the Company. Provision regarding theabove has been adhered to.

Compliances regarding Insider Trading

Comprehensive guidelines in accordance with the SEBIregulations are in place. The Code o Conduct and CorporateDisclosure Practices ramed by the Company have helped inensuring compliance with the requirements.

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Shareholders

Appointment and/or reappointment o Directors

According to the statutes, at least two-third o the Board shouldconsist o retiring Directors. O these, one third are required to

retire every year and, i eligible, may seek reappointment by theshareholders. Accordingly Rahul Bajaj, Madhur Bajaj and SanjivBajaj retire rom Board by rotation this year and being eligibleo ers themselves or reappointment.

Brie pro iles o the retiring Directors are given in the noticeconvening the ensuing Annual General Meeting o the Company.

Communication to shareholders

Quarterly, hal yearly and annual inancial results are published invarious leading dailies, such as The Economic Times (all editions),Financial Express (all editions), Indian Express (Pune edition), andLoksatta (Pune edition) along with the o icial press release. TheCompany also sends the hal -yearly inancial results, along with adetailed write-up, to each household o shareholders.

The Company has its own website, www.bajaj inservlending.in which contains all important public domain in ormation includingpresentations made to the media, analysts and institutionalinvestors. The website also contains in ormation on mattersconcerning the shareholders and details o the corporate contactpersons. All inancial and other vital o icial news releases are alsocommunicated to the concerned stock exchanges, besides beingplaced on the Companys website.

The Company also iles the ollowing in ormation, statements,

reports on the website as speci ied by SEBI:l Full version o the Annual Report including the Balance Sheet,

Pro it & Loss Account, Directors Report and Auditors Report,Cash Flow Statements, hal -yearly inancial statements andquarterly inancial statements.

l Corporate Governance Report.

l Shareholding Pattern.

In ormation on General Body Meetings

The last three Annual General Meetings o the Company wereheld at the registered o ice o the Company at Mumbai-PuneRoad, Akurdi, Pune 411 035 on the ollowing dates and time:

21st AGM 9 July 2008 at 11.30 a.m.22nd AGM 15 July 2009 at 11.30 a.m.23rd AGM 21 July 2010 at 12 noon

I. Special resolutions passed in the previous three AnnualGeneral Meetings:

At the 23rd AGM held on 21 July 2010, one specialresolution was passed, pertaining to the change in thename o the Company.

At the 22nd AGM held on 15 July 2009, one special resolutionwas passed or incorporating new articles in the articles o association o the Company.

At the 21st AGM held on 9 July 2008, two special resolutionswere passed, pertaining to :

a) Appointment and remuneration payable to Rajeev Jain asManager with the designation o Chie Executive O iceror a term o three years with e ect rom 1 April 2008 and

b) Payment o commission to Non-Executive Directors.

II. No special resolution was passed through postal ballot.

III. No resolution is proposed to be passed through postal ballotat this Annual General Meeting.

Material disclosure o related party transactions

There were no material transactions entered into with relatedparties, during the period under review, which had any potentialcon lict with the interests o the Company.

Details o capital market non-compliance, i any

There was no non-compliance by the Company o any legalrequirements; nor has there been any penalty, stricture imposedon the Company by any stock exchange, SEBI or any statutoryauthority on any matter related to capital markets during theperiod under review.

Shareholders and Investors Grievance Committee

The Shareholders and Investors Grievance Committee has beenconstituted to speci ically look into the shareholders andinvestors complaints on matters relating to trans er o shares,non-receipt o annual report, non-receipt o dividend etc.In addition, the Committee also looks into matters that canacilitate better investor services and relations.

During the year, Nanoo Pamnani resigned as Chairman o theCommittee and Sanjiv Bajaj, was appointed as a member andthe Chairman o the Committee with e ect rom 11 May 2010.

The Committee consisted o the ollowing Directors as on31 March 2011:

1. Sanjiv Bajaj, Chairman2. Nanoo Pamnani3. D S Mehta4. Ranjan Sanghi

During the year under review, the Committee met twice on11 May 2010 and 18 January 2011 to, inter alia, review the statuso investors services rendered. The secretarial auditors as well as

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the Company Secretary (who is also the Compliance O icer) werealso present. All the members o this Committee attended boththe meetings.

More details on this subject have been urnished in the chapter onGeneral Shareholder In ormation.

CEO/CFO Certi ication

The CEO and CFO have certi ied to the Board with regard to theinancial statements and other matters as required by clause 49o the listing agreement. The certi icate is contained in thisAnnual Report.

Report on Corporate Governance

This chapter, read together with the in ormation given in thechapters on Management Discussion and Analysis and GeneralShareholder In ormation, constitute the compliance report onCorporate Governance during 2010-11.

Auditors Certi icate on Corporate Governance

The Company has obtained the certi icate rom its statutoryauditors regarding compliance with the provisions relating toCorporate Governance laid down in clause 49 o the listingagreement. This report is annexed to the Directors Report and willbe sent to the stock exchanges along with the Annual Report tobe iled by the Company.

Compliance o mandatory and non-mandatoryrequirements under clause 49

Mandatory The Company has complied with all the mandatory requirementso clause 49 o the listing agreement.

Non-mandatory

The Company has also complied with the non-mandatoryrequirements as under:

The Board

The non-executive Chairman has an o ice at the Companyspremises. All independent Directors o the Company, exceptRanjan Sanghi and Rajendra Lakhotia have tenures not exceedinga period o nine years on the Board. The Board believes that theircontribution on the Board is in the Companys interest.

Remuneration Committee The Company has a Remuneration Committee. A detailed note onthis Committee is provided in the Annual Report.

Shareholder rightsA hal -yearly declaration o inancial per ormance includingsummary o signi icant events in the preceding six months, is sentto each household o shareholders.

Audit quali ications There are no quali ications in the inancial statements o theCompany or the year 2010-11.

Whistle Blower Policy The Company has Whistle Blower Policy. This policy is to enableemployees to report to the management their concerns aboutunethical behaviour, actual or suspected raud or violation o Companys code o conduct or ethics policy. This mechanismprovides sa eguards against victimisation o employees, whoavail o the mechanism. This also provides or direct access tothe Chairman o the Audit Committee in exceptional cases. The

policy has been appropriately communicated to the employeeswithin the organisation. The same has been put on theCompanys website www.bajaj inservlending.in

Declaration on Code o Conduct

The Board o DirectorsBajaj Finance Limited,

I, Rajeev Jain, Chie Executive O icer o Bajaj Finance Limited hereby declare that all the Board Members and senior managerial personnelhave a irmed or the year ended 31 March 2011 compliance with the Code o Conduct o the Company laid down or them.

Place: Pune Rajeev Jain Date: 17 May 2011 Chie Executive O icer

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24th Annual General Meeting

Date : 13 July 2011 Time : 12 noonVenue : Regd. O ice o the Company at

Mumbai - Pune Road,Akurdi, Pune - 411 035.

Financial Calendar

Audited annual results or year ending 31 March MayMailing o Annual Reports JuneAnnual General Meeting JulyUnaudited irst quarter inancial results JulyUnaudited second quarter inancial results OctoberUnaudited third quarter inancial results January

Dividend

The Board o Directors o the Company has proposed a dividend

o `

10 per equity share (100 percent) or the inancial year2010-11, subject to approval by the shareholders at the AnnualGeneral Meeting. Dividend paid in the previous year was ` 6 perequity share (60 percent).

Dates o Book Closure

1 July 2011 to 13 July 2011 (both days inclusive)

Date o Dividend Payment

The payment o dividend, upon declaration by the shareholdersat the orthcoming Annual General Meeting, will be madeon 18 July 2011

a) to all those bene icial owners holding shares in electronicorm, as per the ownership data made available to theCompany by National Securities Depository Limited (NSDL)and the Central Depository Services (India) Limited (CDSL) aso the end-o -the-day on Thursday, 30 June 2011; and

b) to all those shareholders holding shares in physical orm,a ter giving e ect to all the valid share trans ers lodged withthe Company on or be ore the closing hours on Thursday,30 June 2011.

Payment o Dividend

Dividend will be paid by account payee/non-negotiableinstruments or through the National Electronic Clearing Service(NECS), as noti ied by the SEBI through the stock exchanges. In view

o the signi icant advantages and the convenience, the Companywill continue to pay dividend through NECS in all major cities tocover maximum number o shareholders, as per applicableguidelines. Shareholders are advised to re er to the notice o theAnnual General Meeting or details o action required to be takenby them in this regard. For additional details or clari ications,shareholders are welcome to contact the registered o ice o theCompany.

Unclaimed DividendUnclaimed dividends upto 1994-95 have been trans erred to thegeneral revenue account o the central government. Those whohave not encashed their dividend warrants or the period prior toand including 1994-95 are requested to claim the amount romRegistrar o Companies, Maharashtra, Pune, PMT Building, DeccanGymkhana, Pune 411 004.

As per Section 205C o the Companies Act, 1956, any moneytrans erred by the Company to the unpaid dividend account andremaining unclaimed or a period o seven years rom the date o such trans er shall be trans erred to a und called the Investor

Education and Protection Fund set up by the central government.Accordingly, the unpaid/unclaimed dividends or the years1995-96 to 2002-03 were trans erred by the Company to the saidund in the years 2003 to 2010. No claim shall lie against the undor the Company in respect o amounts so trans erred.

Unpaid/unclaimed dividend or 2003-04 shall becometrans erable to the und in September 2011. Shareholdersare requested to veri y their records and send claim, i any, or2003-04, be ore the amount becomes due or trans er to the und.

Registrar and Share Trans er Agent

The Company has appointed Karvy Computershare Pvt Ltd.Hyderabad as its share trans er agent. All physical trans ers,transmission, transposition, issue o duplicate share certi icate/s,issue o demand dra ts in lieu o dividend warrants etc as well asrequests or dematerialisation/rematerialisation are beingprocessed at Karvy Computershare Private Limited. The work related to dematerialisation/rematerialisation is handled by KarvyComputershare Private Limited through its connectivity withNational Securities Depository Limited and Central DepositoryServices (India) Limited.

Share trans er system

Share trans ers received by the Company and the share trans er

agents are registered within 15 days rom the date o receipt,provided the documents are complete in all respects. Totalnumber o shares trans erred in physical category was 13885shares during 2010-11.

General Shareholder

In ormation

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Dematerialisation o Shares

During 2010-11, 92585 shares were dematerialised. Distributiono shares as on 31 March 2011 is given in Table 1.

Table 1: Shares held in physical and electronic mode

Position as on Position as on Net change31 March 2011 31 March 2010 during 2010-11No. of % to total No. of % to total No. of % to totalshares shares shares shares shares shares

Physical 469071 1.28 561656 1.53 (92585) (0.25)

Demat :

NSDL 35298468 96.37 35476060 96.94 (177592) (0.57)

CDSL 861537 2.35 558360 1.53 303177 0.82

Sub Total 36160005 98.72 36034420 98.47 125585 0.25

Total 36629076 100.00 36596076 100.00 33000 *

* 33000 ESOS shares added in the Demat Share capital

Stock code1. BSE, Mumbai 500034

2. National Stock Exchange BAJFINANCE -EQ

3. ISIN or depositories (NSDL & CDSL) INE296A01016

Listing on Stock Exchanges

Name Address

1. Bombay Stock Exchange 1st Floor, Phiroze Jeejeebhoy TowersLtd., Mumbai (BSE) Dalal Street, Mumbai 400 001

2. National Stock Exchange Exchange Plaza, Bandra-Kurla Complex,

o India Ltd. (NSE) Bandra (E), Mumbai 400 051

Annual Listing Fees as prescribed have been paid to the aboveStock Exchanges upto 31 March 2012.

Market Price Data (on BSE) during each month in lastinancial year :

Table 2 gives the monthly highs and lows o Companys shareson the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

Table 2: Monthly highs and lows o Bajaj Finance Limitedshares during 2010-11 ( ` vis-a-vis Sensex)Month BSE NSE Closing

High Low High Low BSE Sensex

Apr 2010 427.85 324.50 428.80 325.70 17558.71

May 2010 494.05 423.75 493.90 423.60 16944.63

Jun 2010 475.00 459.70 475.35 457.60 17700.90

Jul 2010 569.40 462.75 569.00 462.90 17868.29

Aug 2010 644.05 569.70 644.10 569.50 17971.12

Sep 2010 798.20 626.35 798.85 627.90 20069.12

Oct 2010 807.15 755.40 805.40 751.20 20032.34

Nov 2010 817.95 710.30 815.80 707.35 19521.25

Dec 2010 739.45 660.00 741.85 661.00 20509.09

Jan 2011 704.90 590.70 704.75 587.45 18327.76Feb 2011 644.15 546.25 648.75 544.40 17823.40

Mar 2011 703.15 619.90 708.50 617.35 19445.22

Distribution o Shareholding

Table 3 gives details about the pattern o shareholding amongvarious categories as on 31 March 2011 and 31 March 2010,while Table 4 gives the data according to size classes as on31 March 2011. Table 3: Distribution o shareholding across categories

31 March 2011 31 March 2010Categories No. of % to total No. of % to total

shares capital shares capital

Promoter & Promoter Group 20538169 56.07 18486979 50.52

Resident Individuals 4843857 13.22 4391213 12.00

Domestic Companies 2566969 7.01 2366531 6.47

Financial Institutions/ Banks/Mutual Funds 4603368 12.57 2848725 7.78

Foreign Institutional Investors 2021423 5.52 6555262 17.91

Foreign Corporate Bodies 1656000 4.52 1656000 4.53Non Resident Individuals/Overseas Corporate Bodies 318106 0.87 253205 0.69

Others 81184 0.22 38161 0.10

Total 36629076 100.00 36596076 100.00

Table 4: Distribution o shareholding according to sizeclass as on 31 March 2011Range o Holding No. o % to total No. o % to

Shareholders Shareholders shares held total shares

1 - 100 11796 71.51 732525 2.00

101 - 500 3472 21.05 808898 2.21

501 - 1000 538 3.26 412432 1.131001 - 10000 577 3.50 1733437 4.73

10001 - 50000 82 0.50 1762519 4.81

50001 - 100000 9 0.05 601515 1.64

100001 and above 22 0.13 30577750 83.48

Total 16496 100.00 36629076 100.00

Shareholders and Investors Grievances

The Board o Directors o the Company currently has aShareholders/Investors Grievance Committee consisting o our

Directors to speci ically look into the shareholders/ investorscomplaints on various matters. Routine queries/complaintsreceived rom shareholders are promptly attended to and replied.Queries/complaints received during the period under review

Chart: Per ormance in comparison to BSE Sensex

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related to non receipt o dividend by warrants as well as throughelectronic clearing service, non receipt o Annual Report, nonreceipt o trans erred shares and change o address and/orbank particulars. There was no pending issue to be addressedor resolved.

During the year, there were 14 complaints received rom SEBI/RoC/shareholders on various matters, which were duly addressedand no action remained to be taken at the Companys end.

Nomination

Individual shareholders holding shares singly or jointly in physicalorm can nominate a person in whose name the shares shall betrans erable in the case o death o the registered shareholder(s). The prescribed nomination orm will be sent by the share trans eragent o the Company upon such request. Nomination acility orshares held in electronic orm is also available with depositoryparticipant as per the bye-laws and business rules applicable toNSDL and CDSL.

Address or Correspondence

Investors and shareholders can correspond with the share trans eragent or the Company at the ollowing address:

Share Trans er Agent

Karvy Computershare Private LimitedUnit: Bajaj Finance LimitedPlot No.17 to 24, Near Image Hospital,Vittalrao Nagar, Madhapur,Hyderabad - 500 081

Contact persons

Mr M S MadhusudhanMr Mohd.Mohsinuddin Tel No. (040) 44655000, Extn. 5152Fax No. (040) 44655024E-mail:[email protected]: www.karvy.com

Company

Registered Office Address

Mumbai Pune Road, Akurdi,Pune 411 035.

Corporate Office Address

Secretarial Department4th Floor, Bajaj Finserv Corporate O ice,O Pune Ahmednagar Road,Viman Nagar, Pune 411 014Phone No. (020) 30405060Fax No. (020) 30405020/30E-mail id:investor.service@bajaj inserv.inWebsite: www.bajaj inservlending.in

Additional Information

1. The company, during the year under review, has notsanctioned any loan to any o the Directors and there is nooutstanding towards loans to Directors as on date.

2. None o the employees o the Company is related to any o theDirectors o the company.

3. From the date o the Balance Sheet till the date o this report,there is no signi icant event which will have an impact on theper ormance o the Company during the year 2011-12.

4. Pro ile o Fixed Deposits as on 31 March 2011 wasas under:

Period of Deposit (months) No. of Amount % to TotalDepositors ( ` ) Deposits

36 616 1.75 Crores 100

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Report on Corporate

Social Responsibility (CSR) The CSR activities o Bajaj Group are guided by the vision andphilosophy o its Founding Father, Shri Jamnalal Bajaj, whoembodied the concept o Trusteeship in business and laid theoundation or its ethical, and value-based and transparentunctioning.

The core elements o CSR activities include ethical unctioning,respect or all stake-holders, protection o human rights and careor the environment.

Bajaj Group generally implements the above initiatives throughits Employees Wel are Funds and Group NGOs / Trusts / CharitableBodies operating at various locations in the country. It alsoenlists the help o Non-Group NGOs, Local Authorities, BusinessAssociations, Social & Philanthropic Organisations o repute andCivil Society, wherever deemed necessary.

Some o the major initiatives taken up /continued during the yearunder review are summarized below:-

A. Through Group Trusts

1. Jamnalal Bajaj Foundation (JBF)

Awards

The Foundation gives 4 Awards annually - each o the valueo ` 5 lacs. O these, three are given to individuals in India oroutstanding contribution in the elds o constructive work onGandhian lines, application o science and technology or ruraldevelopment and upli t and wel are o women and children. The ourth one is an International Award - given to individualsother than Indian citizens rom oreign countries or theircontribution to the promotion o Gandhian values outside India.

Financial Assistance

During the year, nancial assistance was provided to wives andamilies o armers, who have committed suicide in Wardha Districtor their subsistence and also or educational assistance to theirchildren.

Rural Development

The Foundation has been undertaking rural development work in select villages o Wardha District, Maharashtra (since 1987) andin Shikohabad, Dist. Firozabad, U.P. (since 1992). The activities areundertaken on the basis o the need o the local people.Special emphasis is given on health, amily wel are, immunisation,supply o potable drinking water, sanitation and alternative source

o renewable energy.

Employment Generation Programmes

Programmes o employment generation in the rural area havehelped the women- olk and scheduled castes and the poorersections to develop sel -con dence in themselves.

Schools under National Child Labour Project

Schools running with the nancial support o National ChildLabour Project (GOI), are monitored and controlled by JBF.200 students and 20 sta members are part o these 4 schools.

Balwadi (Child Training Centre)

Balwadi is a pre-school, where under-privileged children aretaught by trained teachers. The Foundation continued running24 Balwadis i.e. Bal Sanskar Kendra in rural areas or poor childrenbelow six years o age.

Community Awareness Campaign & Health Camp

The Foundation carried out people-to-people base awarenessprogrammes about population control, usage o toilet, health

hygiene etc. and organised health camps or women andhandicapped persons.

2. Jankidevi Bajaj Gram Vikas Sanstha (JBGVS)

Rural and Community Development Activities andEmpowerment o Women

The Company continued with its rural development activitiesin Pune, Aurangabad & Wardha districts o Maharashtra & SikarDistrict o Rajasthan through JBGVS. JBGVS aims at helpingintegrated development o 61 selected villages, to be carried outby the villagers under their own leadership and catalyzing theuni ed e orts o Government, local organizations andother NGOs.

During the year, JBGVS undertook a number o developmentinitiatives or improving education, specially primary education,primary healthcare, economic condition by promoting sel -employment, environment and social development with specialemphasis on women empowerment.

Education

This year, the ocus was on improving in rastructure o the primaryschools like building school rooms, providing urniture, providingclean drinking water, sanitary units and learning equipments.

In addition to this, in ormal education was imparted to primaryschool students as also young girls and boys identi ed with

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leadership potential. Computer education was started or youth. The activities o Rural Education and In ormation Network (REIN)project supported by the World Bank are being continued togenerate interest in education in a non- ormal way amongst tribalchildren and youth.

Primary Health Care (PHC)Reproductive Child Health (RCH) programmes, tacklingmalnourishment amongst children, specialized check-up camps(gynaec, eye, pediatric, etc.), providing health services throughmobile clinics, promoting low cost latrines, educating adults andchildren in hygiene and sanitation practices were taken up in theproject villages to improve the health condition o the villagers ingeneral and women and children in particular. The programmeswere implemented through socially trained village health workersand local PHCs.

Economic development

The ocus o this programme was to generate sel -employmentthrough a set o activities like vocational training, i.e, tailoring,dairy, goatery, backyard poultry, agro and ood processing andtwo wheeler repairing and maintenance. Small enterprises werepromoted by providing seed capital. Assistance was provided toarmers in preparing bank proposals and getting bank loans inassociation with Govt. and other local agencies. Three trainingprogrammes were organized on dairy, poultry and two wheelermaintenance or the SC/ST youth. Assistance was provided towomen sel -help groups to get loans or income generationactivities rom the banks and marketing their produce in variousplaces including exhibitions.

Environmental developmentIn all JBGVS programmes, environmental upgradation is givenspecial importance. The armers as well as school children wereencouraged to plant ruit trees. The Aamrai Project, which wasstarted at the hands o Chairman, Bajaj Auto in August, 2009has covered 340 acres o ruits and orestry tree plantation(more than 50,000 plants). 340 tribal amilies have got livelihoodrom this programme. This programme will cover more than1000 tribal amilies.

Social development

Under social development, women sel -help groups, traditionalsocial and cultural activities, sports amongst school childrenand youth are promoted. Village level leadership trainings areorganized or youth to create the uture leaders in the villages. Samaj Seva Kendra (SSK) (as part o JBGVS) provides acilities orsocial development o the residents o Akurdi, Nigdi and adjoiningtownships, with the aim o improving their quality o li e, throughskill development training, hobby centre, nursery education,health care, sports, music, dance and cultural programmes.Programmes are also organized or senior citizens. Events likemaking o Christmas cra t, earthen pots, summer camps andtrekking were conducted during the year.

JBGVS started activities in Sikar, Rajasthan, during the year byproviding assistance or odder to 5 gaushalas to see through

the drought period. Science Branch has been started in JamnalalBajaj Government School in village Kashi ka bas. Sel HelpGroups (SHGs) have been ormed in all select villages. Goats weredistributed to 48 Below Poverty Line (BPL) amilies. Other activitieslike tailoring classes, beautician training, drawing competitions,adolescent girls training, medical camps, eye check up camps were

organized regularly.JBGVS has started the planning process to initiate activities in abig way in Wardha district. Administrative machinery has beenput in place at Wardha to start work in 10 villages starting withormation o SHGs, veterinary services, agricultural programmes,dairy development and sustainable agricultural practices togenerate livelihood.Two projects through Magan Sangrahalay asNGO have been shortlisted or unding.

3. Group Trusts or Colleges

Shiksha Mandal, Wardha ounded in 1914 by Late Shri JamnalalBajaj runs seven colleges with around 10,000 students on itsrolls. These include colleges or commerce, science, agriculture,engineering polytechnic and rural services. Its mission is toprovide high quality education at an a ordable cost & to inculcatesocially desirable values in its students.

All its Colleges are undergoing major upgradation in terms o in rastructure and work culture. During the year, a new girls hosteland 30,000 sq. t. o classrooms were built. Over 300 computershave been installed in it in the last 2 years and students haveunlimited internet access.

Jankidevi Bajaj College o Science received a ` 1.4 Crores grant

rom UGC or upgrading its laboratories. 3 o Shiksha Mandalteachers received UGC unding or Major Research projects. Over20 proposals or research have been submitted by its teachersduring 2010-11. M.Sc.(Biotech) was started in its Science Collegeand an MBA program was started in its Commerce College atWardha. Guidance or CA exam was started in its CommerceCollege at Nagpur which achieved 50% passing rate compared tothe 20% rate nationally.

Its students continue to do well. Besides 15 students in University/Board exam merit lists, 3 o the top 20 positions in MaharashtraEngineering Entrance exams were taken by its students. One o its students was adjudged as the best National Social Service(NSS) volunteer in Maharashtra. Another student captained theUniversity Ball Badminton team and 4 o its students representedMaharashtra at the national games.

A booklet Vichardhan containing inspiring ideas in Hindi,Marathi and English was produced or distribution to all students. The students built water harvesting structures in 2 villages nearWardha, under its NSS program.

Bajaj Trusts have donated ` 8 Crores in the last 3 years toShiksha Mandal.

Bajaj Science Centre has been unctioning in Wardha or the lastour years. The culture o learning science by doing experiments

is developing roots in Schools o Wardha and towns aroundit. Its students are consistently getting recognition in national

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competitions. It is also re ected in the increasing number o students appearing or its entrance examination. This year, 830students appeared or 250 vacancies. Students are coming to itrom as ar as Hinganghat, which is 50 kms away. Bajaj ScienceCentre is adding a scholar batch o 5th standard students rom thisacademic year. This year, it unctioned rom its new campus, which

has become a landmark in Wardha.Gandhi Vichar Parishad, Wardha, organised a number o programmes during the year 2010-11. Important among themwere its 8 month Post Graduate Diploma Course in Gandhian Thought, which had 7 students rom di erent parts o India, 2 romSudan and 1 rom Brazil; orientation Camp Classes on Gandhian Thought or Medical Students, University Students Camps atthe regional and national level, Seminar on Gandhis Concept o Swadeshi, Inter Religious Study Course on Ecological insights inReligions and a workshop on Peace and Con ict Resolution.

4. Marathwada Medical & ResearchInstitute (MMRI)

Bajaj group is giving substantial nancial support to this Trust,which runs Kamalnayan Bajaj Hospital and Kamalnayan BajajNursing College or B.Sc. Nursing degree course.

Kamalnayan Bajaj Hospital

MMRI has established Kamalnayan Bajaj Hospital, locatedat Aurangabad in Marathwada region o Maharashtra and isproviding super speciality and tertiary care medical acilities notavailable elsewhere in this region. The hospital has expandedits capacity to 250 beds and major part o the expansion hasbeen or general category patients. It has cancer treatment

acilities, including Linac Accelerator & Brachy therapy, acilityor CT Scan and MRI o 1.5 Tesla, new generation Siemens CathLab or heart patients, latest ophthalmology equipment andother advanced acilities including or open heart surgeries andorgan transplantation (Kidney). The hospital has been providingrelie annually or close to 55,000 patients on OPD basis andclose to 7,000 patients, who are admitted to hospital or varioustreatments. It also provides intensive care unit and cardiac careunit, with a capacity o 22 beds and generally with an occupancyrate o more than 95%.

The hospital also runs a programme o providing relie to BelowPoverty Line (BPL) and Economically Weaker Section (EWS) o thesociety with ree / subsidized treatment. Hospital with the helpo NGO (JBGVS) has conducted 50 camps in the villages o thedistrict o Aurangabad, where more than 2282 patients have beenchecked and given treatment and medicines ree and out o these,851 patients needing hospital treatment at the hospital weretreated totally ree, as in-patients at the hospital, at a cost o

` 59.45 lacs.

Kamalnayan Bajaj Nursing College

First batch o students joined in 2010 and second batch will joinin July-August 2011. College has intake capacity o 50 students.A best in class college with all laboratories, library and class roomsand hostel or girls and boys with all acilities with investment o

over `

10 crore is coming up and would be ready or occupation bythe end o 2011.

5. Fuji Guruji Memorial Trust

Fuji Guruji Memorial Trust has established Buddha Mandir, VishwaShanti Stupa at Wardha or promotion o thoughts and teachingso Lord Buddha, Mahatma Gandhi and other preachers preachingsame or similar ideology and to propagate the message o world

peace, love, non-violence and equality o all religions. It has alsoestablished Bal Sanskar Kendras or the bene t and upli tmento poor children below the age o six years rom small villages o Wardha District.

6. Kamalnayan Bajaj Charitable Trust

Kamalnayan Bajaj Charitable Trust runs Gitai Mandir, PujyaJamnalal Bajaj Exhibition and Vinoba Darshan Complex, Audio-video Hall at Wardha. It also runs a library where students romall over India with literature and books on Mahatma Gandhi,Vinoba Bhave, Pujya Jamnalal Bajaj, Smt Jankidevi Bajaj and otherreedom ghters.

7. Jamnalal Bajaj Seva Trust

It conducted ree computer training classes, tailoring classes andstitching classes or poor and needy people. It also carried outactivities or promoting Indian art and culture.

B. Through Group Companies

1. Bajaj Auto Limited (BAL)

Code o conduct and a irmative action

BAL believes that its success is interlinked with the well-being o

all sections o the society and equal opportunity or all sections.It continues to ensure no discrimination o any type to sociallydisadvantaged sections in the work place.

During the year under review, BAL recruited 1410 new employees,o which 179 numbers (12.70%) belong to weaker sections, in linewith the afrmative action. At the end o the previous year,this percentage was 7.14%.

Support to weaker sections or IIT JEE entrance

Economically weaker, underprivileged children belonging to SC/STcategory are encouraged to avail nancial assistance to undertakecoaching or Joint Entrance Examination to enable them to quali yor admission to Indias premier engineering education centre i.e.Indian Institute o Technology.

Education

Under Public Private Partnership, BAL has undertaken to upgrade3 Industrial Training Institutes (ITI) - two in Pune and one inPantnagar. During the year, one more ITI at Aurangabadwas added.

BAL took actions to ensure better quality o output rom theInstitutes and also ollowed up with concerned agencies orapproval o Institute Development Plan. For ITI Mulshi, BAL

trans erred used machinery (current selling price) o `

34.05 lacsor better training and job orientation. This ITI has relocated

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to a new premise. BAL also took actions to ensure better qualityo output rom the Institutes and also ollowed up with theconcerned agencies or approval o Institute Development Plan orITI Haveli. At Ramgarh in Pantnagar, the new structure is ready andwill be available or use in the current year.

HealthGovernment o India Ministry o Health and Family Wel are National AIDS Control Organisation (NACO) and CII have initiatedPublic Private Partnership (PPP) in order to provide betterhealthcare to AIDS patients. From Aug 2008, the Bajaj YCMH ARTCentre at YCM hospital has registered 5096 patients with2707 cases or Anti Retroviral Therapy. This centre is a benchmark or new centers and is the largest one run by industries. In view o the increased patient ow, with the YCM hospital giving additionalspace, BAL expanded the acility urther during the year byproviding the required in rastructure to handle increasedART patients.

Others

Chakan plant employees o BAL organized a blood donationcamp, in which 425 employees donated blood through PimpriSerological Institute blood bank.

2. Bajaj Allianz Insurance Companies

Bajaj Allianz Li e Insurance Co Ltd (BALIC) launched a uniqueinitiative through its Child Plan campaign to support educationrequirements or Class 8 students through a known child wel areNGO, namely ASEEMA Foundation.

With a combined e ort, BALIC and Bajaj Allianz GeneralInsurance Co Limited (BAGIC) introduced Ability Insurance Plan,a customized solution kit comprising o a Li e, Health and Motorplan; along with the regular product literature, the kit adds easeo understanding with an audio-visual presentation (created orthose with hearing/speech disability) & a Braille document ( or the

visually challenged) that explain the product o ering/ bene ts.BAGIC has recently brought orth a unique idea or a greenerenvironment, wherein any Bajaj Allianz motor insurance claimantwould be rewarded or getting his damaged vehicular plastic partrepaired rather than replaced thus reducing the carbon ootprint.Further or every claimant who practices this philosophy, thetie-up partner World Vision will have a tree-planted in return.

General

The Group has some other Trusts, which are also engaged intopical and socially relevant activities. Thus what is listed aboveis not exhaustive, but only illustrative to give a glimpse o theimportance being given by the Company and the Grouptowards CSR.

The Company has been participating actively in the Ministry o Corporate A airs Green Initiative in Corporate Governance orpaper less compliances.

A publication o the Group Beyond Pro ts PhilanthropicActivities o the Bajaj Group, setting out in greater detail theCSR activities o the Group can be made available to anyshareholder on request.

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1 Anant Bajaj2 Deepa Bajaj3 Geetika Bajaj4 Kiran Bajaj5 Kriti Bajaj

6 Kumud Bajaj7 Madhur Bajaj8 Minal Bajaj9 Nimisha Bajaj

10 Niraj Bajaj11 Niravnayan Bajaj12 Pooja Bajaj13 Rahul Kumar Bajaj14 Rajivnayan Bajaj15 Rishab Bajaj16 Ruparani Bajaj17 Sanjali Bajaj18 Sanjivnayan Bajaj19 She ali Bajaj20 Shekhar Bajaj21 Siddhant Bajaj22 Suman Jain23 Sunaina Kejriwal24 Manish Kejriwal25 Aryaman Kejriwal26 Nirvaan Kejriwal

27 Neelima Bajaj Swamy28 Aditya Swamy29 Bachhraj and Company Pvt Ltd30 Bachhraj Factories Pvt. Ltd.31 Bajaj Allianz Financial Distributors Ltd32 Bajaj Allianz General Insurance Company Ltd.33 Bajaj Allianz Li e Insurance Company Ltd.34 Bajaj Auto Employees Wel are Funds35 Bajaj Auto Holdings Ltd36 Bajaj Auto Ltd.37 Bajaj Electricals Ltd Employees Wel are Funds

38 Bajaj Electricals Ltd.

39 Bajaj Finance Ltd.40 Bajaj Financial Securities Ltd.41 Bajaj Financial Solutions Ltd.42 Bajaj Finserv Ltd.43 Bajaj Holdings & Investment Ltd.

44 Bajaj International Pvt Ltd.45 Bajaj Sevashram Pvt. Ltd.46 Baroda Industries Pvt Ltd.47 Hercules Hoists Ltd.48 Hind Musa r Agency Ltd.49 Jamnalal Sons Pvt Ltd.50 Kamalnayan Investment & Trading Pvt Ltd51 Madhur Securities Pvt Ltd52 Mukand Engineers Ltd.53 Mukand Ltd54 Niraj Holdings Pvt Ltd55 Rahul Securities Pvt Ltd56 Sanraj Nayan Investments Pvt Ltd57 Shekhar Holdings Pvt Ltd58 Shishir Holdings Pvt Ltd59 The Hindustan Housing Co Ltd60 Anant Trading Company61 Bachhraj Trading Company62 Bajaj Trading Company63 Rishabh Trading Company64 Anant Trust

65 Aryaman Trust66 Deepa Trust67 Geetika Trust68 Kriti Trust69 Minal Trust70 Neelima Trust71 Nimisha Trust72 Niravnayan Trust73 Nirvaan Trust74 Rishabnayan Trust75 Sanjali Trust

76 Siddhant Trust

MRTP DisclosureConstituents o Group as de ined in MRTP Act, 1969 or the purposes o SEBI (SAST) Regulations, 1997Persons constituting group within the de nition o Group as de ned in the Monopolies and Restrictive Trade Practices Act, 1969,or the purpose o Regulation 3(1)(e) o the Securities and Exchange Board o India (Substantial Acquisition o Shares and Takeovers)Regulations, 1997, include the ollowing:

Note: Shareholdings o HUFs, are held in the names o the respective individuals in the capacity o Karta. Hence HUFs,are not separately listed hereinabove.

Sr No Name o the Person/Entity Sr No Name o the Person/Entity

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To the Members o Bajaj Finance Limited

We have examined the compliance o conditions o Corporate Governance by Bajaj Finance Limited, or the year ended 31 March 2011,as stipulated in Clause 49 o the Listing Agreement(s) o the said Company with stock exchange(s) in India.

The compliance o conditions o Corporate Governance is the responsibility o the Companys management. Our examination wascarried out in accordance with the Guidance Note on Certi cation o Corporate Governance (as stipulated in Clause 49 o the ListingAgreement), issued by the Institute o Chartered Accountants o India and was limited to procedures and implementation thereo ,adopted by the Company or ensuring the compliance o the conditions o Corporate Governance. It is neither an audit nor anexpression o opinion on the nancial statements o the Company.

We certi y that the Company has complied with the conditions o Corporate Governance as stipulated in the above mentionedListing Agreement.

We state that such compliance is neither an assurance as to the uture viability o the Company nor the efciency or e ectiveness withwhich the management has conducted a airs o the Company.

For DALAL & SHAHFirm Registration Number: 102021WChartered Accountants

Anish AminPartnerMembership Number : 40451Pune : 17 May 2011

Certi icate by the Auditors on Corporate Governance

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1. We have audited the attached Balance Sheet o Bajaj FinanceLimited (the Company) as at 31 March 2011 and the relatedPro t and Loss Account and Cash Flow Statement or the yearended on that date annexed thereto, which we have signed

under re erence to this report. These nancial statementsare the responsibility o the Companys Management. Ourresponsibility is to express an opinion on these nancialstatements based on our audit.

2. We conducted our audit in accordance with the auditingstandards generally accepted in India. Those Standardsrequire that we plan and per orm the audit to obtainreasonable assurance about whether the nancial statementsare ree o material misstatement. An audit includesexamining, on a test basis, evidence supporting the amountsand disclosures in the nancial statements. An audit alsoincludes assessing the accounting principles used andsigni cant estimates made by Management, as well asevaluating the overall nancial statement presentation.We believe that our audit provides a reasonable basisor our opinion.

3. As required by the Companies (Auditors Report) Order,2003, as amended by the Companies (Auditors Report)(Amendment) Order, 2004 (together the Order), issued bythe Central Government o India in terms o sub-section (4A)o Section 227 o the Companies Act, 1956 o India (the Act)and on the basis o such checks o the books and records o the Company as we considered appropriate and according tothe in ormation and explanations given to us, we give in theAnnexure a statement on the matters speci ed in paragraphs

4 and 5 o the Order.4. Further to our comments in the Annexure re erred to in

paragraph 3 above, we report that:

(a) We have obtained all the in ormation and explanationswhich, to the best o our knowledge and belie , werenecessary or the purposes o our audit;

(b) In our opinion, proper books o account as required by lawhave been kept by the Company so ar as appears romour examination o those books;

(c) The Balance Sheet, Pro t and Loss Account and Cash FlowStatement dealt with by this report are in agreement withthe books o account;

(d) In our opinion, the Balance Sheet, Pro t and Loss Accountand Cash Flow Statement dealt with by this report complywith the accounting standards re erred to in sub-section(3C) o Section 211 o the Act;

(e) On the basis o written representations received rom theDirectors, as on 31 March 2011 and taken on record by theBoard o Directors, none o the Directors is disquali ed ason 31 March 2011 rom being appointed as a director interms o clause (g) o sub-section (1) o Section 274 o the Act;

( ) In our opinion and to the best o our in ormation andaccording to the explanations given to us, the saidnancial statements together with the notes thereonand attached thereto give, in the prescribed manner,the in ormation required by the Act, and give a true andair view in con ormity with the accounting principlesgenerally accepted in India:

(i) in the case o the Balance Sheet, o the state o a airso the Company as at 31 March 2011;

(ii) in the case o the Pro t and Loss Account, o the pro tor the year ended on that date; and

(iii) in the case o the Cash Flow Statement, o the cash

ows or the year ended on that date.For DALAL & SHAHFirm Registration Number: 102021WChartered Accountants

Anish AminPartnerMembership Number: 40451Pune: 17 May 2011

Report o the Auditors to the Members

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Re erred to in paragraph 3 o the Auditors Report o evendate to the members o Bajaj Finance Limited on the fnancialstatements or the year ended 31 March 2011.

1. (a) The Company is maintaining proper records showing ullparticulars, including quantitative details and situation, o xed assets.

(b) The xed assets are physically veri ed by the Managementaccording to a phased programme designed to cover allthe items over a period o 3 years which, in our opinion,is reasonable having regard to the size o the Companyand the nature o its assets. Pursuant to the programme,a portion o the xed assets has been physically veri edby the Management during the year and no materialdiscrepancies between the book records and the physicalinventory have been noticed.

(c) In our opinion and according to the in ormation andexplanations

Documents

Bajaj 10-11