1.  We have audited the attached Balance Sheet of Bajaj Finance Limited
 (the Company) as at 31 March 2011 and the related Proft and Loss
 Account and Cash Flow Statement for the year ended on that date annexed
 thereto, which we have signed under reference to this report. These
 fnancial statements are the responsibility of the Companys Management.
 Our responsibility is to express an opinion on these fnancial
 statements based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 fnancial statements are free of material misstatement. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the fnancial statements. An audit also includes
 assessing the accounting principles used and signifcant estimates made
 by Management, as well as evaluating the overall fnancial statement
 presentation.
 
 We believe that our audit provides a reasonable basis for 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 by the Central Government of India in
 terms of sub-section (4A) of Section 227 of the Companies Act, 1956 of
 India (the Act) and on the basis of such checks of the books and
 records of the Company as we considered appropriate and according to
 the information and explanations given to us, we give in the Annexure a
 statement on the matters specifed in paragraphs 4 and 5 of the Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (a) We have obtained all the information and explanations which, to the
 best of our knowledge and belief, were necessary for the purposes of
 our audit;
 
 (b) In our opinion, proper books of account as required by law have
 been kept by the Company so far as appears from our examination of
 those books;
 
 (c) The Balance Sheet, Proft and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 (d) In our opinion, the Balance Sheet, Proft and Loss Account and Cash
 Flow Statement dealt with by this report comply with the accounting
 standards referred to in sub-section (3C) of Section 211 of the Act;
 
 (e) On the basis of written representations received from the
 Directors, as on 31 March 2011 and taken on record by the Board of
 Directors, none of the Directors is disqualifed as on 31 March 2011
 from being appointed as a director in terms of clause (g) of
 sub-section (1) of Section 274 of the Act;
 
 (f) In our opinion and to the best of our information and according to
 the explanations given to us, the said fnancial statements together
 with the notes thereon and attached thereto give, in the prescribed
 manner, the information required by the Act, and give a true and fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 (i) in the case of the Balance Sheet, of the state of afairs of the
 Company as at 31 March 2011;
 
 (ii) in the case of the Proft and Loss Account, of the proft for the
 year ended on that date; and
 
 (iii) in the case of the Cash Flow Statement, of the cash fows for the
 year ended on that date.
 
 Annexure to the Auditors Report Referred to in paragraph 3 of the
 Auditors Report of even date to the members of Bajaj Finance Limited
 on the fnancial statements for the year ended 31 March 2011.
 
 1.  (a) The Company is maintaining proper records showing full
 particulars, including quantitative details and situation, of fxed
 assets.
 
 (b) The fxed assets are physically verifed by the Management according
 to a phased programme designed to cover all the items over a period of
 3 years which, in our opinion, is reasonable having regard to the size
 of the Company and the nature of its assets. Pursuant to the programme,
 a portion of the fxed assets has been physically verifed by the
 Management during the year and no material discrepancies between the
 book records and the physical inventory have been noticed.
 
 (c) In our opinion and according to the information and explanations
 given to us, a substantial part of fxed assets has not been disposed of
 by the Company during the year.
 
 2.  (a) The Company has not granted any loans, secured or unsecured, to
 companies, frms or other parties covered in the register maintained
 under Section 301 of the Act.
 
 (b) The Company has not taken any loans, secured or unsecured, from
 companies, frms or other parties covered in the register maintained
 under Section 301 of the Act.
 
 3.  In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business for the
 purchase of fxed assets and for the sale of services. Further, on the
 basis of our examination of the books and records of the Company, and
 according to the information and explanations given to us, no major
 weakness have been noticed or reported.
 
 4.  (a) In our opinion and according to the information and
 explanations given to us, the particulars of contracts or arrangements
 referred to in Section 301 of the Act have been entered in the register
 required to be maintained under that section.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements and exceeding the value of Rupees Five Lacs in respect of
 any party during the year have been made at prices which are reasonable
 having regard to the prevailing market prices at the relevant time.
 
 5.  In our opinion and according to the information and explanations
 given to us, the Company has complied with the directives issued by
 Reserve Bank of India and the provisions of Sections 58A and 58AA or
 any other relevant provisions of the Act and the Companies (Acceptance
 of Deposits) Rules, 1975 with regard to the deposits accepted from the
 public.  According to the information and explanations given to us, no
 order has been passed by the Company Law Board or National Company Law
 Tribunal or Reserve Bank of India or any Court or any other Tribunal on
 the Company in respect of the aforesaid deposits.
 
 6.  In our opinion, the Company has an internal audit system
 commensurate with its size and nature of its business.
 
 7.  As informed to us, the maintenance of cost records has not been
 prescribed under clause (d) of sub-section (1) of Section 209 of the
 Act.
 
 8. (a) According to the information and explanations given to us and
 the records of the Company examined by us, in our opinion, the Company
 is regular in depositing the undisputed statutory dues including
 provident fund, investor education and protection fund, employees
 state insurance, income-tax, sales-tax, wealth tax, service tax, cess
 and other material statutory dues as applicable with the appropriate
 authorities. 
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, the particulars of dues of
 income-tax, sales-tax, wealth-tax, service-tax and cess as at 31 March
 2011 which have not been deposited on account of a dispute are as
 follows:
 
 Name of the   Nature of dues    Amount    Period to which    Forum where
 statute                      (Rs. in Lacs)  the amount      the dispute is
                                            relates             pending
 
 Sales Tax    Value Added        218       Year 2005-06,    Commissioner
              Tax Liability                2006-07          Appeals
                                           2007-08
                                           2008-09
 
 ESIC         Employee State     446       Year 1999-2000   Employee
              Insurance                    to 2006-07       State
              Corporation                                   Insurance
                                                            Court
 
              Employee State      68       Year 1991-92     Deputy
                                                            Director,
              Insurance                    to 2002-03       Employee
                                                            State
              Corporation                                   Insurance
                                                            Corporation
 
 9.  The Company has no accumulated losses as at 31 March 2011 and it
 has not incurred any cash losses in the fnancial year ended on that
 date or in the immediately preceding fnancial year.
 
 10. According to the records of the Company examined by us and the
 information and explanation given to us, the Company has not defaulted
 in repayment of dues to any fnancial institution or bank or debenture
 holders as at the balance sheet date.
 
 11. In our opinion, the Company has maintained adequate documents and
 records in the cases where the Company has granted loans and advances
 on the basis of security by way of pledge of shares, debentures and
 other securities.
 
 12. In our opinion, the Company has maintained proper records of
 transactions and contracts relating to dealing or trading in shares,
 securities, debentures and other investments during the year and timely
 entries have been made therein.
 
 13. In our opinion and according to the information and explanations
 given to us, the Company has not given any guarantee for loans taken by
 others from banks or fnancial institutions during the year.
 
 14. In our opinion, and according to the information and explanations
 given to us, on an overall basis, the term loans have been applied for
 the purposes for which they were obtained.
 
 15. On the basis of an overall examination of the balance sheet of the
 Company, in our opinion and according to the information and
 explanations given to us, there are no funds raised on a short-term
 basis which have been used for long-term investment.
 
 16. The Company has not made any preferential allotment of shares to
 parties and Companies covered in the register maintained under Section
 301 of the Act during the year.
 
 17. The Company has created security or charge in respect of debentures
 issued and outstanding at the year-end. The details of security are
 disclosed in Note No. 9 in Schedule 13 to the fnancial statements;
 
 18. The Company has not raised any money by public issues during the
 year.
 
 19. During the course of our examination of the books and records of
 the Company, carried out in accordance with the generally accepted
 auditing practices in India, and according to the information and
 explanations given to us, we have neither come across any instance of
 material fraud on or by the Company, noticed or reported during the
 year.
 
 20. Considering the nature of the business conducted by the Company,
 the other clauses, viz., (ii), (iii) (b) (c) (d) (f) and (g) and (xiii)
 of paragraph 4 of the Companies (Auditors Report) Order 2003, as
 amended by the Companies (Auditors Report) (Amendment) Order, 2004,
 are not applicable in the case of the Company for the current year, and
 hence in our opinion there is no matter which arises to be reported in
 the aforesaid clauses of the order.
 
 For DALAL & SHAH
 
 Firm Registration Number: 102021W
 
 Chartered Accountants
 
 Anish Amin
 
 Partner
 
 Membership Number: 40451
 
 Pune: 17 May 2011