The Directors present their Twenty Fourth Annual Report and the Audited
 Statement of Accounts for the year ended 31 March 2011.
 
 Business Performance
 
 The gross deployment of the Company for the year 2010-11 were Rs. 9,435
 Crores as against Rs. 4,585 Crores for the year 2009-10.
 
 Rs. in Crores
 
 Deployment                    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 
 Personal
 
 Loan Cross sell                1,038         803          29%
 
 Total                          9,435       4,585         106%
 
 Financial Results
 
                                                   Rs. in Crores
 
 Particulars                               2010-11     2009-10
 
 Income from 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
 
 Profit before Taxation                     369.92     134.30
 
 Provision for Taxation                     123.29      44.90
 
 Profit for the year after Taxation         246.63      89.40
 
 Prior period adjustments relating to 
 earlier years                                0.33       0.01
 
 Profit for the year after Taxation and prior
 period adjustments                         246.96      89.41
 
 Balance brought forward from previous year  85.25       0.40
 
 Transfer from Debenture Redemption Reserve   -         48.05
 
 Profit available for appropriations        332.21     137.86
 
 Appropriations:
 
 Transfer to Reserve Fund                   (49.50)    (18.00)
 
 Transfer to General Reserve                (25.00)     (9.00)
 
 Provision for Proposed Dividend            (36.63)    (21.96)
 
 Provision for Dividend Tax                  (5.94)     (3.65)
 
 Balance carried to Balance Sheet           215.14      85.25
 
 Dividend
 
 The Directors recommend for the consideration of the shareholders at
 the ensuing Annual General Meeting, payment of dividend of Rs. 10 per
 share (100 percent) for the year ended 31 March 2011. The amount of
 dividend and tax thereon aggregates to Rs. 42.57 Crores.
 
 Dividend paid for the year ended 31 March 2010 was Rs. 6 per share (60
 percent). The amount of dividend and tax thereon aggregated to Rs. 25.61
 Crores.
 
 Change in the name and status of the Company
 
 Name of the Company has changed from ‘Bajaj Auto Finance Limited to
 ‘Bajaj Finance Limited consequent to the fresh Certificate of
 Incorporation issued by the Registrar of Companies, Maharashtra, Pune
 w.e.f. 6 September 2010.
 
 The Company has become a subsidiary of Bajaj Finserv Limited w.e.f. 5
 July 2010.
 
 Working Results
 
 The Company, during the year 2010-11, deployed a total amount of Rs.
 9,435 Crores under various products. As against this, during the
 previous year 2009-10, the total amount deployed was Rs. 4,585 Crores.
 
 The receivables under financing as on 31 March 2011 were Rs. 7,270 Crores
 as compared to Rs. 4,032 Crores as on 31 March 2010.
 
 Total income during 2010-11 increased to Rs. 1,406 Crores from Rs. 916
 Crores during 2009-10.
 
 The profit before tax for the year was at Rs. 370 Crores, as against Rs.
 134 Crores in the previous year. The profit after tax for the year was
 Rs. 247 Crores as compared to Rs. 89 Crores in the previous year.  This has
 been due to improvement in net interest margins across businesses,
 contribution from new lines of businesses, third party fee products
 distribution and various re-engineering initiatives.
 
 The Companys current provisioning standards are more stringent than
 RBI prudential norms. In line with its conservative approach, the
 Company continues to strengthen its provisioning norms beyond the
 Reserve Bank of India regulation by accelerating the provisioning to an
 early stage of delinquencies based on the past experience and emerging
 trends. Consequently, the additional estimated provision aggregates Rs.
 39 Crores for the year.
 
 The Company had an excellent year aided by strong volume growth in
 Consumer and Small & Medium Enterprise business lines. During the year,
 the Company launched three new product lines viz. Construction
 equipment finance, Retail loans against securities and Home loans. Its
 investments over the last three years in people, processes and
 technology have begun to yield operating leverage benefits resulting in
 improvement in margins.  Portfolio quality, aided by a good
 macro-economic environment is robust. Recent acquisitions across
 products are performing significantly better than earlier.
 
 Operations
 
 The operations of the Company are elaborated in the annexed Management
 Discussion and Analysis Report.
 
 Conservation of Energy and Technology Absorption
 
 The Company, being a Non-Banking Financial Company, does not have any
 manufacturing activity. The Directors, therefore, have nothing to
 report on Conservation of Energy and Technology Absorption.
 
 Foreign Currency
 
 Foreign currency expenditure amounting to Rs. 1.27 Crores (previous year
 Rs. 0.45 Crore) was incurred during the year under review. The Company
 did not have any foreign exchange earnings.
 
 Employee Stock Option Scheme
 
 Details required to be provided under Securities and Exchange Board of
 India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
 Guidelines, 1999 are set out in the Annexure to this report.
 
 Fixed Deposits
 
 During the year under review, the Company renewed fixed deposits of Rs.
 0.30 Crore. Public Deposits outstanding at the year end were Rs. 1.75
 Crores and the number of depositors were 616.  At the end of the
 financial year under review, there were 71 deposits aggregating Rs. 0.13
 Crores which matured but remained unclaimed as on that date. The
 Company had written to these depositors and as on date, a deposit of Rs.
 5,000/- has been repaid.
 
 Credit Rating
 
 Despite a tough economic environment, the Company managed to retain all
 its credit ratings owing to high capital adequacy, strong promoter
 support, tightened credit acceptance criteria and robust
 asset-liability management.
 
 CRISIL has re-affirmed the highest rating of FAAA/Stable for the
 Fixed Deposit programme of the Company. This rating indicates very
 strong degree of safety with regard to timely payment of interest and
 principal. The Company is one of the very few Non-Banking Financial
 Companies (NBFCs) which enjoy the highest rating.
 
 The Company also enjoys the highest rating of P1+ from CRISIL and
 A1+ from ICRA for Short Term Debt programme.  The Long Term
 Non-Convertible Debentures have been assigned AA+/Stable rating by
 CRISIL indicating high degree of safety with regard to timely payment
 of interest and principal and high credit quality rating of LAA+ with
 stable outlook by ICRA.  The Company has also been assigned  AA+/
 Stable  rating by CRISIL and LAA+ with stable outlook by ICRA for Rs.
 400 Crores Lower Tier II Bond programme.
 
 As regards the latest Bank Loan Ratings for the bank facilities
 stipulated by RBI, as a part of BASEL II guidelines, CRISIL has
 assigned AA+/Stable rating for the Companys Cash Credit/ Working
 Capital Demand Loan amounting to Rs. 1,035 Crores and Long Term Bank
 facilities amounting to Rs. 2,515 Crores and P1+ rating for the Short
 Term Bank facilities amounting to Rs. 950 Crores.
 
 RBI Guidelines
 
 The Company continues to fulfill all the norms and standards laid down
 by the Reserve Bank of India (RBI) pertaining to non- performing
 assets, capital adequacy, statutory liquidity ratio etc.  As against
 the RBI norm of 12%, the capital adequacy ratio of the Company is 20%.
 
 In line with the RBI guidelines for Asset-Liability Management (ALM)
 system for NBFCs, the Company has an Asset-Liability Committee which
 meets periodically to review its ALM risks and opportunities.
 
 Upon change of name of the Company, Reserve Bank of India (RBI) has
 issued a fresh Certificate of Registration in the name of Bajaj Finance
 Limited w.e.f. 5 October 2010. The RBI has also changed classification
 of the Company from ‘Asset Finance Company to a ‘Loan Company.
 
 Corporate Social Responsibility
 
 During the year 2010-11, Bajaj Group continued its Corporate Social
 Responsibility initiative in various fields. Activities in this area
 are set out in greater detail in the Corporate Social Responsibility
 Report.
 
 Directors
 
 Rahul Bajaj, Madhur Bajaj and Sanjiv Bajaj, Directors, retire from the
 Board by rotation this year and being eligible, offer themselves for
 re-appointment.
 
 The information on the particulars of Directors seeking re-appointment
 as required under Clause 49 of the Listing Agreement with the Stock
 Exchanges has been given in the notice of Annual General Meeting.
 
 Appointment of Manager under the Companies Act,1956
 
 Subject to the approval of the shareholders, the Board of Directors
 have re-appointed Rajeev Jain, as Manager under the Companies Act, 1956
 with the designation Chief Executive Officer (CEO), for a further
 period of five years with effect from 1 April 2011, on the terms of
 remuneration set out in the resolution in the notice of the ensuing
 Annual General Meeting.  The resolution is commended for approval of
 the shareholders at the Annual General Meeting.
 
 Directors Responsibility Statement
 
 In compliance of Section 217(2AA) of the Companies Act, 1956, the
 Directors state that:
 
 (i) in the preparation of the annual accounts, the applicable
 accounting standards have been followed along with proper explanation
 relating to material departures;
 
 (ii) the Directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company at the end of the financial year and of the profit of
 the Company for that period;
 
 (iii) the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities;
 
 (iv) the Directors have prepared the annual accounts on a going concern
 basis.
 
 Statutory Disclosures
 
 As required under the provisions of Section 217(2A) of the Companies
 Act, 1956, read with the Companies (Particulars of Employees) Rules,
 1975, as amended, particulars of employees are set out in the Annexure
 to the Directors Report. As per the provisions of Section
 219(1)(b)(iv) of the said Act, these particulars will be made available
 to any shareholder on request.
 
 Directors Responsibility Statement as required by Section 217(2AA) of
 the Companies Act, 1956 appears in the preceding paragraph.
 
 Certificate from auditors of the Company regarding compliance of
 conditions of Corporate Governance is annexed to this report.
 
 Disclosures as prescribed by Non-Banking Financial (Deposit Accepting
 or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007
 and other NBFC regulations have been made in this Annual Report.
 
 A Cash Flow Statement for the year 2010-11 is attached to the Balance
 Sheet.
 
 Corporate Governance
 
 Pursuant to clause 49 of the listing agreement with stock exchanges, a
 separate section titled ‘Corporate Governance has been included in
 this Annual Report, along with the reports on Management Discussion and
 Analysis and General Shareholder Information.
 
 All Board members and senior management personnel have affirmed
 compliance with the Code of Conduct for the year 2010-11. A declaration
 to this effect signed by the Chief Executive Officer (CEO) of the
 Company is contained in this Annual Report.
 
 The CEO and Chief Financial Officer (CFO) have certified to the Board
 with regard to the financial statements and other matters as specified
 in clause 49 of the listing agreement and the said certificate is
 contained in this Annual Report.
 
 Group
 
 Pursuant to an intimation from the promoters, the names of the
 promoters and entities comprising Group as defined under the
 Monopolies and Restrictive Trade Practices Act, (MRTP) Act, 1969 are
 disclosed in the Annual Report for the purpose of Regulation 3(1)(e) of
 the SEBI(Substantial Acquisition of Shares and Takeovers) Regulations,
 1997.
 
 Auditors Report
 
 The observations made in the Auditors Report read with the relevant
 notes thereon are self-explanatory and hence, do not call for any
 further comments under Section 217 of The Companies Act, 1956.
 
 Auditors
 
 The Directors recommend the appointment of Dalal & Shah, Chartered
 Accountants as auditors for the period from the conclusion of the
 ensuing Annual General Meeting till the conclusion of the next Annual
 General Meeting and to fix their remuneration.
 
 The Company has obtained a certificate from Dalal & Shah, Chartered
 Accountants, Mumbai to the effect that their re- appointment as
 auditors of the Company if made would be within the limits prescribed
 under Section 224(1B) of the Companies Act, 1956.
 
 Acknowledgement
 
 The Board of Directors takes this opportunity to express their sincere
 appreciation for the support and the co- operation from the banks,
 financial Institutions and the debenture trustees.
 
 The Board of Directors also put on record their sincere appreciation of
 the hard work and commitment put in by the management and employees of
 the Company and thank them for another good year for the Company.
 
 On behalf of the Board of Directors
 
 Rahul Bajaj
 Chairman
 
 Pune: 17 May 2011