Let me start with joy. 2010-11, or FY2011, has been the best year of
 your Company - much better than even the previous year, which was till
 then the best in the history of Bajaj Auto. Here are some facts.
 
 - In a record year, net sales and other operating income grew by over
 39% to Rs. 16,609 crore.
 
 Your Company sold a record 3.82 million units - consisting of 3,387,043
 motorcycles and 436,884 three-wheelers.
 
 - Exports were at an all-time high - and comfortably crossed the 1
 million mark, and rose by 35% to 1,203,718 units.
 
 - The Companys operating EBITDA for FY2011 grew by 30.6% over the
 previous year to Rs. 3,385 crore. The operating EBITDA margin was 20.4%
 of net sales and other operating income.
 
 - Operating profit before tax (PBT) and exceptional items increased by
 33% to Rs. 3,260 crore.
 
 - Profit after tax and exceptional items increased from Rs. 1,704 crore
 to Rs. 3,340 crore.
 
 No doubt, some of this excellent performance was on account of a smart
 rebound of the Indian economy, which has grown by 8.6% in FY2011 —
 second only to China. After all, the year saw total motorcycle sales by
 the industry increasing by 24% to 10.5 million units.
 
 However, your Companys sales grew significantly faster than the
 market. For instance, Bajaj Autos total motorcycle sales increased to
 almost 3.39 million units. Similarly, while domestic motorcycle sales
 in the aggregate grew by 23% to a bit over 9 million units, your
 Companys domestic sales rose by more than 35% to over 2.4 million.
 
 In other words, there was more to Bajaj Autos performance than riding
 with the tide. It was about combining a highly focused brand-centred
 strategy with production efficiency, quality, costs and logistics. The
 task had started last year, and had played a significant role in
 delivering superior results. It has now come to fruition — where, like
 in a symphony, each player has a role, and all of these are brought
 together to create great music.
 
 Your Companys export performance bears special mention.  Bajaj Auto
 has sold over 1.2 million two- and three-wheelers in FY2011, and
 clocked revenues close to a billion US dollars.
 
 I am absolutely delighted with the performance. Along with the rest of
 the Board, I congratulate your managing director, Rajiv Bajaj, and his
 team for delivering such an outstanding performance in FY2011, riding
 on the back of excellent results in the previous year.
 
 Your managing director often coins pithy phrases. One of them is “Less
 is more”. By that he means it is better to offer consumer a
 
 few high class, choice brands at strategic and tactical price points,
 instead of carpet bombing the market with all manner of products. Bajaj
 Auto is now focused on continuously leveraging its two dominant brands,
 Discover and Pulsar, creating attractive offerings within these two
 categories, and driving home its competitive advantages. Discover and
 Pulsar do not buy market share through eventually debilitating price
 competition.  They gain share by their brand, quality and performance –
 so that customers are pleased to pay more for obviously better value.
 
 I am also glad that your Company is reaching, and occasionally
 surpassing, the targets that I had set earlier.
 
 You may remember my exhorting Bajaj Auto to mobilise India by selling
 4 million motorcycles by FY2011. At almost 3.39 million units, it has
 not yet hit the mark. But it is close. I am confident that your Company
 will cross the 4 million mark in FY2012.
 
 The other target has been surpassed. I had asked your Company to
 globalise India by exporting over 1 million two- and three-wheelers.
 As mentioned earlier, Bajaj Auto has exported more than 1.2 million
 units. I look forward to breaching the 2 million mark in the next three
 to four years.
 
 On a different matter, in support of an initiative taken by the World
 Economic Forum (WEF), your Company has become a signatory to WEFs
 Commitment Against Corruption, and is supporting an initiative called
 Partnering Against Corruption – Principles for Countering Bribery,
 derived from Transparency Internationals Business Principles. Bajaj
 Auto is the third such company in India.
 
 Let me end this upbeat letter with some words of caution.  Interest
 rates are moving up quite rapidly as the Reserve Bank of India attempts
 to combat serious inflationary pressures.  Commodity prices, too, are
 firming up throughout the world.  FY2012 may be a difficult year, and
 automotive companies may get caught in a pincer of slackening demand
 and higher input costs. The management of Bajaj Auto will need to
 battle these forces with the same, if not more, determination as it has
 demonstrated in the last two years. I am sure that it will.
 
 My thanks to all employees of Bajaj Auto for their support. To the
 managing director and his team for demonstrating excellence.  And thank
 you for being by our side in good times and in bad.
 
 With warm regards,
 
 Rahul Bajaj 
 Chairman