The directors present their sixty-sixth annual report and the audited
 statements of accounts for the year ended 31 March 2011
 
 Operations
 
 The operations and financial figures of the company are elaborated in
 the annexed Management Discussion and Analysis Report. The highlights
 are as under:-
 
 Financial results (standalone)
 
                                                         Rs In Lakh
 
                                             2011          2010
 
 Net sales & other income                 107,645         81,348
 
 Gross profit before interest & 
 depreciation                             106,936         80,721
 
 Interest                                       -              -
 
 Depreciation                                  24             22
 
 Profit before tax                        106,912         80,699
 
 Provision for tax                          7,141          3,566
 
 Profit after tax                          99,771         77,133
 
 Add: Tax credits pertaining to 
 earlier years                                238              -
 
 Profit for the year                      100,009         77,133
 
 Add: Balance brought forward from 
 previous year                             16,371              -
 
 Less: Adjustments on revaluation of 
 deferred tax assets                            -            526
 
 Profit available for appropriation       116,380         76,607
 
 Transfer to Reserve Fund u/s 45IC(1) 
 of the Reserve Bank of India Act, 1934    20,002         15,427
 
 Transfer to General Reserve               10,001          7,713
 
 Proposed dividend (inclusive of 
 dividend tax)                             45,272         37,096
 
 Balance carried to Balance Sheet          41,105         16,371
 
 Financial results (consolidated)
                                                  
 
                                                       Rs In Lakh
 
                                            2011           2010
 
 Total income                              90,046        71,942
 
 Income from associates                   150,423        69,023
 
 Profit before tax                        239,250       139,881
 
 Profit for the year                      232,276       136,260
 
 Basic Earnings per share (Rs)              217.0         134.6
 
 Diluted Earnings per share (Rs)            213.5         133.1
 
 Dividend
 
 The directors recommend for consideration of the shareholders at the
 ensuing annual general meeting, payment of dividend of Rs 35 per share
 (350 per cent) for the year ended 31 March 2011.  The amount of
 dividend and the tax thereon aggregates to Rs 45,272 lakh.
 
 Dividend paid for the year ended 31 March 2010 was Rs 30 per share (300
 per cent). The amount of dividend and the tax thereon aggregated to Rs
 37,096 lakh.
 
 Registration as a Systemically Important Non-deposit Taking NBFC
 
 The company has been registered with the Reserve Bank of India as a
 Non-Banking Financial Institution (non-deposit taking).In terms of
 provisions of Non-Banking Financial (Non-Deposit Accepting or Holding)
 Companies Prudential Norms (Reserve Bank) Directions, 2007, your
 company is categorised as a systemically important non-deposit taking
 non-banking financial companys having total assets of Rs 100 crore and
 above. The company has not accepted public deposits during the year
 under review.
 
 Subsidiary/Joint venture/Associates
 
 Following are the companies, which are the subsidiary/joint
 venture/associate companies of the company:
 
                         % Shareholding of 
 Name of the Company     Bajaj Holdings & Investment Limited   Status
 
                              as on 31 March 2011
 
 Bajaj Auto Limited                  31.49%                   Associate
 
 Bajaj Finserv Limited               38.69%                   Associate
 
 Bajaj Auto Holdings 
 Limited                               100%                  Subsidiary
 
 Maharashtra Scooters
 Limited (MSL)                          24%               Joint Venture
 
 As regards MSL, a company jointly promoted by the company (erstwhile
 BAL) and Western Maharashtra Development Corporation Ltd. (WMDC), WMDC
 had offered to sell its 27 per cent shareholding in MSL and the company
 had confirmed its willingness to purchase these shares. The price at
 which the shares were to be sold, had been jointly referred to a sole
 arbitrator, Justice Arvind V Savant (Retd.), with an understanding in
 writing that arbitral award would be binding on both.
 
 As reported in the past, the award of the arbitrator dated 14 January
 2006 valuing the share price of MSL at Rs 151.63 per share as the rate
 at which 3,085,712 equity shares of MSL held by WMDC are to be sold to
 the company, was challenged by WMDC in the Bombay High Court.
 
 After hearing both the parties, the Honble Bombay High Court, vide its
 order dated 15 February 2010, while confirming the ruling of the
 arbitrator on the relevant date for valuation and on the methodology
 adopted by the arbitrator on valuation, set aside the award of the
 learned arbitrator on the ground that the Arbitral Award goes contrary
 to the provisions of Section 111A of the Companies Act, 1956, which
 relates to free transferability of shares in a public limited company.
 The company has challenged the decision of the Honble Bombay High
 Court by way of filing an appeal before the division bench of the High
 Court on various grounds and the same has been admitted. The appeal is
 currently pending.
 
 Preferential Issue
 
 During the year under review, promoters converted balance 5,251,000
 warrants by paying balance 75%, i.e. Rs 337.185 per equity share,
 aggregating to Rs 17,706 lakh in January 2011.
 
 In terms of powers conferred by the board of directors, share allotment
 committee allotted 5,251,000 equity shares of Rs 10/- each to the
 promoters, at its meeting held on 21 January 2011.
 
 Paid-up capital of the company has accordingly increased from Rs 10,604
 lakh (106,042,510 equity shares of Rs 10/- each) to Rs 11,129 lakh
 (111,293,510 equity shares of Rs 10/- each).  The Share Premium balance
 has gone up from Rs 21,359 lakh to Rs 44,442 lakh, since shares were
 issued at Rs 449.58 per share, inclusive of Rs 439.58 per share as share
 premium.
 
 Approval of shareholders for payment of commission
 
 Directors seek your approval by way of special resolution for payment
 of commission to non-executive directors of a sum not exceeding 1% of
 the net profits of the company for a further five years term from 1
 April 2011 to 31 March 2016, subject to applicable provisions of the
 Companies Act, 1956. Earlier such approval expired on 31 March 2011.
 
 Corporate Social Responsibility
 
 During the year 2010-11, Bajaj Group continued its Corporate Social
 Responsibility (CSR) initiatives in various fields. Activities in this
 area are set out in detail in the annexed CSR Report.
 
 Directors
 
 During the year under review, Madhur Bajaj was appointed as
 non-executive director to fill up the casual vacancy caused by his
 resignation in the year 2009-10.
 
 Madhur Bajaj, Rajiv Bajaj and S H Khan retire from the board by
 rotation this year and being eligible, offer themselves for
 re-appointment.
 
 Directors responsibility statement
 
 As required by sub-section (2AA) of section 217 of the Companies Act,
 1956, directors state:
 
 that in the preparation of annual accounts, the applicable accounting
 standards have been followed along with proper explanation relating to
 material departures.
 
 that 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.
 
 that 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.
 
 that the annual accounts have been prepared on a going concern basis.
 
 Consolidated financial statements
 
 The directors also present the audited consolidated financial
 statements incorporating the duly audited financial statements of the
 subsidiary, associates and joint venture and as prepared in compliance
 with the accounting standards and listing agreement as prescribed by
 SEBI.
 
 Information in aggregate for the subsidiary company is disclosed
 separately in the consolidated balance sheet.
 
 Statutory disclosures
 
 The company has received an exemption with regard to attaching of the
 balance sheet, profit and loss account and other documents of its
 subsidiary company, Bajaj Auto Holdings Limited.  The summary of the
 key financials of the companys subsidiary is included in this annual
 report.
 
 The annual accounts of the subsidiary company and the related detailed
 information will be made available to the members of the company and
 its subsidiary company, seeking such information at any point of time.
 The annual accounts of the subsidiary company will be kept for
 inspection by any member of the company at its registered office and
 also at the registered office of the concerned subsidiary company.
 
 The company has received an exemption with regard to disclosure of
 investments in the investment schedule in the accounts under section
 211(4) of the Companies Act, 1956. Any shareholder interested in
 obtaining the details thereof may write to the company.
 
 As required under the provisions of sub-section (2A) of section 217 of
 the Companies Act, 1956 read with the Companies (Particulars of
 Employees) Rules 1975 as amended, particulars of the employees are set
 out in an Annexure to the Directors Report.  As per provisions of
 section 219(1)(b)(iv) of the said Act, these particulars will be made
 available to any shareholder on request.
 
 The company has no particulars to report regarding technology
 absorption, conservation of energy and foreign exchange earning and
 outgo as required under section 217(1)(e) of the Companies Act, 1956
 and Companies (Disclosure of Particulars in the report of board of
 directors) Rules, 1988.
 
 Directors Responsibility Statement as required by section 217(2AA) of
 the Companies Act, 1956 appears in a 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 (Non-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 required
 in clause 49 of the listing agreement and the said certificate is
 contained in this annual report.
 
 Secretarial standards of ICSI
 
 Secretarial standards issued by the Institute of Company Secretaries of
 India (ICSI) from time to time are currently recommendatory in nature.
 Your company is, however, complying with the same.
 
 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 (“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 together with the
 relevant notes thereon are self-explanatory and hence, do not call for
 any comments under section 217 of the Companies Act, 1956.
 
 Auditors
 
 The members are requested to appoint M/s Dalal and 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.
 
 
 On behalf of the board of directors
 
 Rahul Bajaj
 
 Chairman                                              18 May 2011