Dear Shareholder,
 
 As in last year''s letter to you, let me begin with words of
 congratulations. 2011-12, or FY2012, has been another excellent year
 for your Company. Here are some facts:
 
 - Bajaj Auto recorded its highest sales, exports and profits from
 operations
 
 - Net sales and other operating income grew by over 19% to Rs. 19,804
 crore
 
 - Your Company sold 4.35 million units - consisting of over 3.83
 million motorcycles and more than 515,000 three-wheelers
 
 - Exports rose by 31% over last year to 1.58 million units. It grew
 even faster in revenue terms - by 45% to Rs. 6,604 crore. And accounted
 for 35% of your Company''s net sales
 
 - Bajaj Auto''s operating EBITDA crossed the Rs. 4,000 crore mark -
 increasing by over 18% to Rs. 4,001 crore. The operating EBITDA margin
 was 20.2% of net sales and other operating income
 
 - Profit before taxes (PBT) grew by 15% to Rs. 4,160 crore
 
 - Profit after tax (PAT) but before exceptional items grew by 18% to Rs.
 3,095 crore
 
 I am particularly pleased with your Company''s EBITDA margin and export
 performance.  In a difficult year where growth in motorcycle sales in
 India halved to 11.9%, with Q3 and Q4 showing single-digit growth, it
 is very creditable for Bajaj Auto to earn an operating EBITDA margin of
 over 20% of operating income. This is due to a more profitable product
 portfolio, strong engineering, good R&D, great control over raw
 material costs and logistics and across-the-board productivity
 improvements.
 
 It is also due to an excellent export performance where 31% growth in
 volume - itself very creditable on a relatively high base - was
 bettered by 45% growth in value.  To sell 1.27 million motorcycles in
 highly competitive markets all over the world is a laudable
 achievement. My congratulations to the management for delivering these
 good results.  I am sure that Bajaj Auto will do even better in this
 area in the years to come.
 
 There is another source of pride. In FY2012, your Company won many
 corporate awards and kudos. Your Managing Director, Rajiv Bajaj won the
 AIMA Managing India Award, 2011, for the Emerging Business Leader of
 the Year; the Economic Times Award, 2010-11, as the Company of the
 Year; the CNBC-TV18 Outstanding Business Leader of the year; the NDTV
 Profit Award for being the Young Business Leader of 2011; the Forbes
 Leadership Award, 2011, for the Best CEO in the Private Sector and the
 Business Standard Award, 2011, as the CEO of the Year.  These awards
 reflect the Can Do-Will Do-Will Win attitude of your Company, which
 has been fostered, creatively channelled and executed by its
 leadership. I am proud of the team and its leader, Rajiv Bajaj.
 
 Let me now turn to the domestic sector. For eight successive quarters,
 India''s real GDP growth has been falling: from 9.4% in January-March
 2010 to 6.1% in October-December 2011.  With GDP growth anticipated at
 somewhere between 6.5% and 7.0% for FY2012 and serious uncertainties
 about the quality of governance and speed of decision-making at the
 Central Government and across some states, the chances of significantly
 higher growth look slim, especially for FY2013. If you recollect, I was
 worried about a growth slowdown in my last letter to you.
 
 Regarding your Company, it is also true that FY2012 has been
 disappointing on the domestic front. After growing at over 39.6% in
 FY2010 and 35.5% in FY2011, our domestic motorcycle sales in FY2012
 grew by 6.3%. The reasons may be many. Yet, the fact remains that the
 market grew faster, at over 11%. It is imperative that Bajaj Auto
 increases its domestic motorcycle sales and market share in the years
 ahead.
 
 So, I call upon the management team to rise to the challenge - and
 increase domestic sales as well your Company''s market share of
 motorcycles in FY2013 and thereafter through new product launches,
 marketing initiatives and best-in-class delivery.
 
 This should not be done at the cost of profits. That is the challenge
 of a great company - to create the demand to sell more at healthy
 profits. Bajaj Auto is a great company with a top class management
 team. I am sure it will execute this task.
 
 It is time to end. My thanks to all customers, dealers, vendors and
 employees of Bajaj Auto.  They make your Company and extend its
 footprint. And to you for being a loyal owner of a company through the
 good times and the bad.
 
 With warm regards,
 
 Rahul Bajaj 
 Chairman