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Bajaj Auto Ltd Automobiles - Scooters And 3 - Wheelers
BSE Code
532977
ISIN Demat
INE917I01010
Book Value
208.77
NSE Symbol
BAJAJ-AUTO
Div & Yield %
2.60933
Market Cap (Rs Cr.)
44358.97415
P/E
14.29058
EPS
107.27
Face Value
10
BAJAJ AUTO LIMITED

ANNUAL REPORT 2010-2011

DIRECTOR'S REPORT

Introduction:

The directors present their fourth annual report and the audited statements 
of accounts for the year ended 31 March, 2011.

The highlights are as under:

Units in Numbers                                        2011           2010

Two-wheelers                                       3,387,070      2,511,643

Three wheelers                                       436,884        340,937

Total                                              3,823,954      2,852,580

Of which Exports                                   1,203,718        891,002

Financials                                                     
                                                               Rs. In Crore
                                                        2011           2010

Net sales & other income                           16,974.74      12,043.48 

Gross profit before exceptional items,
interest & depreciation                             3,750.73       2,715.06

Interest                                                1.69           5.98

Depreciation                                          122.84         136.45

Gross Profit before Exceptional Items               3,626.20       2,572.63 

Exceptional items: 

Surplus on pre-payment of sales tax
deferral liability/loan                               826.82              - 

Provision for diminution in value of 
investment in PT. Bajaj Auto Indonesia              (102.27)              -

VRS compensation                                           -       (183.30)

Valuation losses of derivative 
hedging instruments                                        -          21.80

Profit before tax                                   4,350.75       2,411.13

Provision for tax                                   1,011.02         707.50

Profit for the year                                 3,339.73       1,703.63

Add: Balance brought forward from previous year       854.99              -

Profit available for Appropriation                  4,194.72       1,700.11

Transfer to General Reserve                           334.00         170.27

Proposed dividend (inclusive of dividend tax)       1,345.24         674.85

Balance carried to Balance Sheet                    2,515.48         854.99

Earnings per share (Rs.)                               115.4           58.8

Bonus Shares:

Pursuant  to  the  approval of the members of the  company  through  postal 
ballot on 31 August 2010, the company issued and allotted Bonus share(s) of 
Rs.  10 each in the ratio of one bonus share for every one existing  equity 
share  held  as  on 10 September 2010 i.e. the record date  fixed  for  the 
purpose.  Consequently,  the paid-up capital of the company  went  up  from 
Rs.144.68 crore to Rs. 289.37 crore during the year under review.

Dividend:

The  directors  recommend  for consideration of  the  shareholders  at  the 
ensuing annual general meeting, payment of a dividend of Rs. 40 per  share, 
(400  per  cent) for the year ended 31 March 2011 on the  enhanced  capital 
after  the  bonus  issue made in the ratio of 1:1  during  the  year  under 
review. The amount of dividend and the tax thereon aggregate to Rs.1,345.24 
crore.

Dividend  paid for the year ended 31 March 2010 was Rs. 40 per  share  (400 
per  cent).  The  amount  of dividend and the  tax  thereon  aggregated  to 
Rs.674.85 crore.

Operations:

The  operations  of the company are elaborated in  the  annexed  Management 
Discussion and Analysis Report.

Capacity expansion & New Projects:

The company plans to maintain the capacity of two and three-wheelers at the 
current  level  of 5,040,000 numbers per annum during the  year  ending  31 
March 2012.

The  4  wheel  vehicle development work is under  progress  and  commercial 
launch of the first product from this platform is scheduled for 2012.

Research & development and technology absorption:

During   the   year  under  review,  your  company  continued   to   invest 
substantially  in  R & D facilities, resulting in the  enhancement  of  its 
infrastructure for design, prototyping & testing. R&D continued to work  on 
improving  its  operations in a number of areas during the year  as  stated 
below:

* Manpower
* Facilities
* Technology
* Total Productivity Management (TPM)

Important products, which demonstrated the technical prowess of the company 
launched during the year under review, were as under:

Avenger  220 DTS-i 
KTM Duke 125
Discover 150 
Discover 125

Your company continues to focus on expanding its design and testing  teams, 
which has enabled it to make the new generation products.

The developments in this area are set out in greater detail in the  annexed 
Management Discussion and Analysis Report.

The  expenditure  on  research and development during 2010-11  and  in  the 
previous year was:

                                                              Rs. In Crore
                                                       2011            2010
i. Capital

(Including technical know-how)                        11.65           31.23

ii. Recurring                                        112.95          103.53 

Total                                                124.60          134.76

iii. Total research and development expenditure 
as a percentage of sales, net of excise duty          0.78%           1.17%

Conservation of energy:

As  a part of continuing efforts to conserve various  resources,  following 
steps  were  taken  to  conserve  energy  in  plants  situated  at  various 
locations:

*  Electrical  energy saving was achieved by replacing  conventional  lamps 
with  Light  Emitting  Diode (LED) street lights  and  LED  mid-bay  lamps; 
installation of portable as well as auto load/unload compressors in various 
shops,  installation of transparent roof sheets for optimum utilisation  of 
natural  lights;  Installation of fan-less cooling  towers  for  compressor 
house;

*   Water   saving  was  achieved  by  usage  of   recycled   water,   drip 
irrigation/sprinkler system for gardening, revising water change  frequency 
of  paint  booth water circulation system; regulating  pump  on-off  timing 
through  timers  and replacement of old underground water pipes  by  above-
ground pipes to avoid wastage of water due to leakage; installation of time 
controlled auto system for water pumping in shops; Use of treated water for 
construction at Pantnagar plant;

* Liquified petroleum gas (LPG)/propane saving was achieved by reduction in 
number  of initial heat up occurrences from two to one for  continuous  gas 
carburising  (CGC) furnace; installation of waste heat recovery system  for 
pre-heating  of  combustion  air  in paint shop;  reduction  in  hot  water 
temperature  for  pre-treatment process; use of reflective  coating  inside 
furnaces for better heat retention;

* Major initiatives in utilization of renewable energy were taken by use of 
solar water heating system for shops, canteens etc; installation of natural 
air exhaust (turbo Ventilators) in shops.

Impact of measures taken:

As a result of the initiatives taken for conservation of energy and natural 
resources, the company has effected an overall reduction in consumption  as 
under:-

                                      Reduction achieved in 
                               2011 (%)            2010 (%)

Electrical energy                 14.31               17.45
Water                             13.33               26.96
LPG                               14.40               12.37

Investment/savings:

Investment for energy conservation activities Rs. 0.84 crore  
Saving achieved through above activities      Rs. 1.12 crore

International Business:

Bajaj  Auto  maintained its stellar growth in exports and continued  to  be 
India's  largest  exporter  of two and  three-wheelers.  During  2011,  the 
company  exported  1,203,718 vehicles, achieving a growth of 35%  over  the 
previous  year.  In 2011, total exports amounted to Rs.  4,552  crore  (US$ 
974.6 Million).

More  details  of  International  Business  are  set  out  in  the  annexed 
Management Discussion & Analysis report.

Foreign exchange earning & outgo:

The company continued to be a net foreign exchange earner during the year.

Total  foreign exchange earned by the company during the year under  review 
was Rs. 4,564.78 crore, compared to Rs. 3,268.95 crore during the  previous 
year.

Total foreign exchange outflow during the year under review was Rs.  844.50 
crore as against Rs. 461.61 crore during the previous year.

The  above  outflow includes an investment of Rs.  210.08  crore  (Previous 
Year; Rs. 1.60 crore) made in its 100% subsidiary, Bajaj Auto International 
Holdings  BV. Netherlands for increasing its stake in KTM Power  Sports  AG 
from 31.92% to 39.26%.

Industrial relations:

Industrial  Relations with staff and workmen across the plants  at  Akurdi, 
Waluj, Chakan and Pantnagar continued to be cordial.

The  wage settlements dated 21 May 2010 and 20 August 2010 were  signed  in 
conciliation between the management and Vishwa Kalyan Kamgar Sanghtana  for 
BAL  Chakan and BAL Akurdi respectively. Also the wage settlement  dated  1 
March 2011 was signed in conciliation between the management and Bajaj Auto 
Ltd. Employees Union for BAL Waluj.

Three  workmen of BAL Waluj, Aurangabad received the Prime  Minister  Shram 
Award at the hands of Prime Minister of India, on 15 September 2010.

Subsidiaries:

PT.  Bajaj  Auto  Indonesia (PT BAI) is a  majority  shareholding  (98.94%) 
subsidiary  of  Bajaj Auto Limited. The subsidiary  assembles  and  markets 
Pulsars in Indonesia.

The past year had recorded a significant growth in volumes compared to last 
year. The growth was led by the Light Sports Pulsar 135. Indonesia, being a 
light  weight high acceleration step-through market (bebek), Pulsar 135  LS 
is  positioned competitively to upgrade from bebek for the  thrill  seeking 
youngsters. The product is well received by the customers and continued  to 
do  well.  So far, there are more than 50,000 satisfied  customers,  owning 
Bajaj motorcycles in Indonesia.

Product  portfolio will be expanded under Pulsar brand with Pulsar  220  in 
the first quarter of 2011-12.

During the year under review, sales and service showrooms were expanded  to 
cover  3 additional provinces. The company plans to increase the number  of 
sales & service show rooms from 84 Nos. to 130 Nos. in the current year.

In  an effort to bring down the customs duty liability, the subsidiary  has 
localised some of the assembly operations. It would continue to pursue  the 
localisation  of sub-assemblies further in 2011-12. Custom duty  rates  for 
SKD and CKD operations have been reduced by 5% from December 2010 by  Govt. 
of Indonesia.

With  the addition of Pulsar 135 & Pulsar 220 to the model lineup and  with 
increased  local  sub-assembly  operations, the subsidiary would  be  in  a 
position to reduce its losses in 2011-12.

Notwithstanding what is stated above, considering the continuing losses and 
longer  gestation  period, the company has assessed the carrying  value  of 
investments  made in PT. Bajaj Auto Indonesia and determined an  amount  of 
Rs. 102.27 crore at present as a diminution in the value of investment  and 
has accordingly made a provision of the said amount.

Bajaj Auto International Holdings BV, Netherlands (BAIHBV):

During  the  year under review, BAIHBV invested further Rs. 32  million  to 
increase its stake in KTM Power Sports AG (KTM PS) to 39.26%.

The first product KTM Duke 125cc went into production on 7 March 2011. This 
product stands testimony to Bajaj Auto's design, development and production 
engineering skills.

KTM  Duke 125cc has been extensively tested by European Auto  Magazine  and 
has  had  rave reviews. The product has been launched in  Europe  in  April 
2011.

KTM 200 from this platform is under development.

Signing for Anti-corruption Initiative of World Economic Forum (WEF):

In support of the initiative taken by WEF with a view to strengthening  the 
efforts  to counter bribery and corruption, your company has now  become  a 
signatory  to the 'Commitment to anti-corruption' and has also  decided  to 
support  the  'Partnering  Against  Corruption-Principles  for   Countering 
Bribery'  derived  from Transparency International's  Business  Principles. 
This  calls  for  a  commitment to two fundamental  actions  viz.  a  zero-
tolerance policy towards bribery and development of practical and effective 
implementation program.

Approval of Shareholders for Payment of commission:

Directors seek your approval by way of a 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 has expired on 31 March 2011.

Corporate social responsibility:

During the year 2010-11, Bajaj Auto continued its Affirmative Action Plan & 
Corporate  Social Responsibility initiatives in various fields.  Activities 
in this area are set out in greater detail in the annexed CSR Report.

Directors:

Nanoo  Pamnani, Manish Kejriwal, P Murari and Niraj Bajaj 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; 
and

* 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  subsidiaries, 
viz.  PT.  Bajaj Auto Indonesia and Bajaj Auto International  Holdings  BV. 
Netherlands and as prepared in compliance with the accounting standards and 
listing agreement as prescribed by SEBI.

Information   in  aggregate  for  each  subsidiary  company  is   disclosed 
separately in the consolidated balance sheet.

Statutory disclosures:

Ministry  of  Corporate Affairs (MCA) vide Circular  No.  51/12/2007-CL-III 
dated 8 February 2011 has given general exemption with regard to  attaching 
of  the balance sheet, profit and loss account and other documents  of  its 
subsidiary  companies  subject  to  fulfillment  of  conditions   mentioned 
therein.  Prior to the issue of this Circular, the company had applied  for 
exemption under Section 212(8) of the Companies Act, 1956. In response, the 
company   received   a  communication  from  MCA   mentioning   about   the 
applicability of this general exemption and that further no exemption would 
be  necessary.  The company has fulfilled all the necessary  conditions  in 
this   regard.  The  summary  of  the  key  financials  of  the   company's 
subsidiaries is included in this annual report.

The  annual accounts of the subsidiary companies and the  related  detailed 
information  will be made available to the members of the company  and  its 
subsidiary  companies, seeking such information at any point of  time.  The 
annual accounts of the subsidiary companies 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.

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.

Particulars  regarding  technology absorption, conservation of  energy  and 
foreign exchange earning and outgo 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 have been given in preceding paragraphs.

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 as Annexure 1.

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.

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 Messers  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.

Mr  A P Raman, cost accountant, Pune has been appointed as cost auditor  to 
conduct the said audit for the year 2011-12, and the government approval in 
this regard has been received.

                                        On behalf of the board of directors

                                                                Rahul Bajaj
                                                                   Chairman 
Date: 18 May, 2011.

MANAGEMENT DISCUSSION AND ANALYSIS

As  in the previous year, Bajaj Auto Limited ('Bajaj Auto', 'BAL'  or  'the 
Company') did much better than the industry as a whole. In FY2011, it  sold 
over  3.38  million motorcycles; grew volumes by more than  35%;  increased 
market shares; and earned the highest EBITDA margin in the industry.

As  stated in the previous year's Management Discussion and  Analysis,  the 
Company's  excellent operational and financial performance is not just  due 
to  the robust growth in motorcycle demand in India. There is more  to  the 
Company's performance than the rising tide. It has to do with Bajaj  Auto's 
execution  of a brand-centred strategy, which was outlined in  last  year's 
annual report. It bears repetition.

The  strategy  consists of a proper alignment of the 'front  end'  and  the 
'back end'. The 'front end' is driven by a proposition that while  products 
may  generate  market share, it is brands that provide  pricing  power  and 
create  higher profits. Over the last two years, Bajaj Auto has focused  on 
positioning  its motorcycle brands in what it calls the Commuter  Standard, 
the  Commuter Deluxe and the Sports categories-and has driven marketing  as 
well as sales through this positioning.

This  is  supported  by a strong 'back end'. Consisting  of  R&D,  quality, 
production  efficiency, logistics and throughput, these efforts are  guided 
by The Prime Mover of Excellence, or TPM in Bajaj Auto's vocabulary.

FY2010  saw  the coming together of the front end and the back  end,  which 
delivered  even better results in FY2011. This alignment has led  to  Bajaj 
Auto  growing  faster  than  the market, gaining  market  share  and,  more 
importantly, earning the highest operating profit rate in the industry.

Markets:

Motorcycles:

There  has  been a steady growth of motorcycle sales, as  Chart  D  clearly 
shows.

As Chart D shows, from 6.54 million units in FY2008, motorcycle sales  rose 
marginally  by  4% in FY2009, and then grew at a much faster rate  of  24%, 
becoming a 10.5 million market size in FY2011. Motorcycles now account  for 
nearly 79% of two-wheeler sales. Given this milieu of growth, how has Bajaj 
Auto performedRs. Table 1 gives the data for the last six years.

Table 1: Bajaj Auto's Sales of Motorcycles (Domestic+Exports)

Year ended      Market   Market             BAL         BAL's         BAL's
31 March        (nos.)   growth          (nos.)        growth        market
                                                                      share

2006         6,200,749    18.8%       1,912,306         31.9%         30.8%
2007         7,099,551    14.5%       2,379,499         24.4%         33.5%
2008         6,544,482    -7.8%       2,139,783        -10.1%         32.7%
2009         6,806,114     4.0%       1,907,853        -10.8%         28.0%
2010         8,444,243    24.1%       2,506,791         31.4%         29.7%
2011        10,500,073    24.3%       3,387,043         35.1%         32.3%

Note: 

'Market'  refers  to  domestic  plus export  sale  of  motorcycles  of  all 
manufacturers in India. Source: SIAM & Company data.

The Company sold almost 3.39 million motorcycles in India and elsewhere. In 
the  process, Bajaj Auto grew its sales by 35.1%-or 10.8 percentage  points 
above the market as a whole.

The  reason why Bajaj Auto has grown faster than the market has much to  do 
with its brands and products getting in close synch with the preference  of 
consumers, both in India and the global markets where it operates.

The  last  few  years have seen distinctive changes in  what  the  domestic 
consumers want out of motorcycles. This can be understood by examining  the 
data according to the three product segments:

Commuter STD:

Chart  E shows that for the industry as a whole, the share of Commuter  STD 
motorcycles has fallen from 43% of the market in FY2006 to 17% in FY2011.

The  category  comprises  low pricing power, low  margins  and  low  profit 
products.  While  Bajaj  Auto will continue to play  in  this  market  with 
appropriate  products, it is also true that there is more brand premium  to 
be harvested through higher profits by being a significant player or leader 
in the other two categories.

Commuter DLX:

This category constitutes the major chunk of India's motorcycle market  and 
is  steadily growing every year. Chart F plots the data. From a  relatively 
high base of 48% in FY2006, the segment has grown to 65% in FY2011.

In  FY2006, the Consumer DLX segment accounted for 25% of the total  number 
of  motorcycles  sold by the Company. By FY2011, it had risen to 51%  on  a 
sharply increasing base. This has been due to the success of Discover  DTS-
Si.

During  FY2011, Bajaj Auto domestically sold over 1.2  million  motorcycles 
belonging  to  the Discover range-Discover 100 and the  Discover  150-which 
represented a growth of 73% over 713,000 units sold in FY2010. Discover  is 
now India's fastest growing motorbike. With the launch of the new  Discover 
125  in March 2011, the Company expects to further strengthen  its  growing 
presence in this profitable segment.

Sports:

This  segment is growing rapidly. In FY2006, it's share of  total  domestic 
motorcycle  sales was 9%. Within five years, this category's  market  share 
has risen to 18% in FY2011.

With  its immensely popular Pulsars, Bajaj Auto has not only  grown  faster 
than  the  market, but also is the clear market leader  in  this  category. 
Chart  G plots the data. It shows that while the share of Sports bikes  for 
the  industry as a whole has increased from 9% in FY2006 to 18% in  FY2011, 
that of Bajaj Auto's has risen from 21% of total domestic sales to 33% over 
the same period.

In  FY2010, the Company domestically sold over 559,000 motorcycles  in  the 
Sports category. This has grown by 42% to almost 796,000 units in FY2011 of 
which Pulsars alone accounted for over 771,000 units.

As Chart H shows, through Discover and Pulsar, Bajaj Auto has  successfully 
transited  from  the low profit Commuter STD segment in favour of  the  two 
better  brand  positioned and higher profit segments-the Commuter  DLX  and 
Sports.

In  addition  to  products, branding and the 'back-end',  the  Company  has 
significantly  strengthened  its  dealer network.  In  FY2011,  Bajaj  Auto 
increased  its dealerships by 159 to raise the total number of  dealers  to 
589.

Three-Wheelers:

In  FY2010,  Bajaj  Auto witnessed a revival in domestic  sales.  This  has 
continued in FY2011.

The  year saw 28% growth in the number of Bajaj Auto  three-wheelers  sold-
from  340,937 in FY2010 to 436,884 units in FY2011. Domestic sales grew  by 
almost 17%, from 176,050 units in FY2010 to 205,603 units in FY2011.

The Company remains the leading three-wheeler player from India, accounting 
for  55% of total sales among all Indian manufacturers  of  three-wheelers. 
For the first time in its history, Bajaj Auto sold over 200,000 vehicles in 
the domestic market. It continues to dominate the petrol and alternate fuel 
passenger  vehicles  segment in India with a market share of 85%.  Chart  I 
gives the data.

Exports:

Bajaj Auto maintained its excellent growth in exports, and continued to  be 
India's  largest  exporter of two and three-wheelers.  During  FY2011,  the 
Company  exported 1,203,718 vehicles-representing a growth of 35% over  the 
previous  year. Exports accounted for Rs. 4,552 crore (US$ 974.6  million), 
which  accounted  for 28.5% of the Company's total net sales, as  shown  in 
Chart J. Table 2 gives the data.

Table 2: Product-Wise Exports of Bajaj Auto:

Product                                 2010           2011          Growth

Motorcycles                          725,023        972,437             34%
Other two-wheelers                     1,092              -               -
Three-Wheelers                       164,887        231,281             40%
Total Vehicles                       891,002      1,203,718             35%

Chart J reflects Bajaj Auto's success in the export market also. Sales from 
exports have increased from Rs. 933 crore, contributing 12.5% of total  net 
sales  in  FY2006 to currently Rs. 4,552 crore, now contributing  28.5%  of 
total net sales.

*  Africa  remains a key focus area, with increased  presence  in  Nigeria, 
Uganda, Kenya and Angola.

*  Sales  in South Asia touched a new high. Peace-time  Sri  Lanka  clocked 
growth of 76% while Bangladesh grew at 34%.

*  South  East Asia was another bright spot. The  Company's  subsidiary  in 
Indonesia, PT BAI, grew volumes by 81% with sales of 21,586 units,  largely 
the Pulsar range.

*  Latin  America bounced back, with Colombia and Central  America  showing 
major recovery. Overall growth in the region was 47%.

Operations:

Plants:

Bajaj  Auto's  operations  at Waluj, Chakan and  Pantnagar  have  optimised 
resources  and  increased  efficiency  under  TPM  to  raise  productivity, 
throughput and, hence, operating margins. Thanks to these initiatives,  the 
plants could produce significantly higher numbers of motorcycles and three-
wheelers  without any major investments in capacity. Table 3 gives  details 
about what each plant produces, and its capacities.

Table 3: Plants-What These Produce and Their Capacities:

                                                               (in numbers)
Plant          Produces                              2010              2011
                                                (as on 31         (as on 31 
                                              March 2010)        March 2011

Waluj          Boxer, Platina, Discover      Motorcycles:      Motorcycles:
               and three-wheelers               1,500,000         1,500,000
                                          Three-wheelers:   Three-wheelers: 
                                                  360,000           540,000

Waluj                                           1,860,000         2,040,000
Sub total      
               Chakan Pulsar, Avenger,  
               Ninja and KTM                    1,200,000         1,200,000

Pantnagar      Platina, Discover                1,200,000         1,800,000

Grand Total                                     4,260,000         5,040,000

The  Pantnagar  plant  produced over 914,000  vehicles  in  FY2011,  versus 
578,000  during  FY2010. It further augmented its capacity to  meet  future 
demand as well as to optimise the tax benefits.

Waluj achieved a landmark production of 1.94 million motorcycles and three-
wheelers. The plant, which is also an export hub for Bajaj, has achieved  a 
target  of  exporting  over a million vehicles in FY2011, out  of  a  total 
export of 1.2 million.

Chakan  continues  to  leverage its top of the line  core  competencies  in 
developing  and  manufacturing high-end sports bikes.  To  establish  BAL's 
presence  in  European market, Chakan has begun regular production  of  the 
first series of KTM bikes.

Research and Development (R & D):

R&D  activities of Bajaj Auto can be categorised in terms of  products  and 
processes.

Products:

*  KTM Duke 125: Aimed primarily for European markets, this completely  new 
platform  of  engine and vehicle was co-designed by Bajaj and  KTM.  It  is 
powered  by  a high performance liquid cooled,  electronic  fuel  injection 
engine  with a six-speed gear box. The vehicle is equipped  with  state-of-
the-art features like radial calipers for front disc brakes, inverted front 
forks and cast aluminium swing arm.

*  Avenger  220  DTS-i: The performance of the cruiser  was  improved  with 
application of a 220 cc DTS-i engine.

Simultaneously,  the  vehicle performance was enhanced with  improved  seat 
comfort and through a new braking system.

* Discover 150: This is the flagship of the Discover family - a full  size, 
powerful  motorcycle for commuters at an affordable price. The engine  uses 
DTS-i  technology. The vehicle is equipped with disc brakes in  the  front, 
and uses wider rear tyres.

*  Discover 125: This is designed to provide the ideal optimum between  the 
power  of the Discover 150 and the fuel economy of the Discover 100. It  is 
aimed at breaking down the resistance of the 100 cc customers to move up in 
performance. The engine uses DTS-i technology, and the vehicle is  equipped 
with a front disc brake.

Subsidiaries:

Bajaj Auto International Holdings BV (BAIH BV):

A 100% Netherlands based subsidiary of Bajaj Auto (Bajaj Auto International 
Holdings  BV)  was  formed to focus on  international  ventures,  including 
possible  acquisitions. In FY2008, BAIH BV invested  Rs. 98.36  million  to 
acquire  24.45%  equity stake in KTM Power Sports AG of  Austria,  Europe's 
second  largest sport motorcycle manufacture. As on date, total  investment 
in KTM was  Rs. 153.71 million for a 39.71% ownership of BAIH BV.

The alliance with KTM needs elaborating. KTM is an outstanding brand  whose 
products use top class technology and have been the world's off-road racing 
champions for the last eight years. The brands also have tremendous pricing 
power. In other words, KTM has an excellent 'front-end'.

What  they lack is the 'back-end'-the economies of scale to ramp  up  their 
production.  Bajaj  Auto has that advantage. Therefore, it  made  sense  to 
combine the two and work together to produce common platforms for both  KTM 
and Pulsar bikes for key emerging markets.

The  first  platform-KTM Duke 125-was developed jointly with  KTM  and  the 
Company  by  Bajaj  Auto's R&D team, and the product  was  manufactured  at 
Chakan.  The first consignment was shipped in March 2011. It has been  well 
received, and will be supplied by Bajaj Auto for KTM world-wide in  FY2012. 
The  same  platform  will  be  leveraged  to  manufacture  higher   powered 
motorbikes for the upper end of the Indian market. This is expected towards 
the end of FY2012.

KTM  sold  85,543  motorcycles  between September  2009  to  December  2010 
achieving  a turnover of Rs.  591.38 million and recording a net profit  of 
Rs.13.96  million  as against 64,080 motorcycles during September  2008  to 
August  2009 recording a turnover of  Rs. 454.62 million and a net loss  of 
Rs.81.43 million.

PT Bajaj Indonesia (PT BAI):

PT BAI was incorporated in FY2007 as a subsidiary in Indonesia with a share 
capital  of  US$  12.5 million. During FY2010,  Bajaj  Auto  added  further 
capital by US$ 17 million, and so increasing its total stake to 98.9% in PT 
BAI. Thus, total investment in PT BAI stands at US$ 29.5 million (Rs.137.82 
crore).

The  subsidiary assembles and markets Pulsars in Indonesia. It sold  21,586 
motorcycles  in FY2011 versus 11,954 in FY2010 - notching a growth of  81%. 
Loss for FY2011 was down to Rs. 11.2 crore at the PBT level, compared to  a 
loss of Rs. 15.9 crore in FY2010.

Considering continuing losses and longer than anticipated gestation period, 
Company has assessed the carrying value of investments made in PT BAI,  and 
has determined an impairment amount of Rs. 102.27 crore as a diminution  in 
the  value  of investment. Bajaj Auto has accordingly made a  provision  of 
this amount, as an exceptional item.

Financials:

Table 4 gives the summarised profit and loss statement:

                                                               Rs. In Crore
                                                        2011           2010
Operations

Sales                                                 12,118         16,932

Less: excise duty                                        609            934

Net sales                                             11,509         15,998

Other operating income                                   412            611

Total operating income                                11,921         16,609 

Cost of materials consumed,
net of expenditures capitalised                        8,055         11,782

Share of material cost                                 67.6%          70.9%

Stores and tools                                          67             85

Share of stores and tools                               0.6%           0.5%

Labour cost                                              399            477

Share of labour cost                                    3.4%           2.9%

Factory and administrative expenses                      342            388

Share of factory and administrative expenses            2.9%           2.3%

Sales and after sales expenses                           465            492

Share of sales and after sales expenses                 3.9%           3.0%

Total expenditure                                      9,328         13,224

Operating profit                                       2,593          3,385 

Operating profit as a share of total
operating income                                       21.7%          20.4%

Interest                                                   6              2

Depreciation                                             136            123

Net operating profit                                   2,451          3,260

Non-operating income, net                                122            366
Profit before exceptional items                        2,573          3,626 

Exceptional Items
Voluntary Retirement Scheme                             -183              - 

Mark to market (-) loss/reversal                          22              - 

Surplus on pre-payment of sales tax
deferral liability/loan                                    -            827 

Provision for diminution in value 
of investment in PT. Bajaj Auto Indonesia                  -           -102

Profit before tax                                      2,412          4,351

Provision for tax                                        708          1,011

Profit after tax                                       1,704          3,340

Operating Working Capital and ROCE:

Despite  a 39% increase in net sales to Rs. 15,998 crore in  FY2011,  Bajaj 
Auto  has succeeded in maintaining negative working capital at (-) Rs.  374 
crore.  Operating profit after interest and depreciation increased by  33%-
from Rs. 2,451 crore in FY2010 to Rs. 3,260 crore in FY2011. Company's pre-
tax return on operating capital stood at 259%. Table 5 gives the data.

Table 5: Return on Operating Capital:
                                                               Rs. In Crore
                                                       As at          As at
                                               31 March 2010  31 March 2011

Fixed assets                                           1,521          1,548

Capital Advances                                          79             80

Technical know-how                                         -              4

Working capital                                        (695)          (374)

Total                                                    905          1,258 

Operating profit after interest
and depreciation                                       2,451          3,260

Pre-tax return on operating                             271%           259%
capital employed 

Sales tax deferral incentive/loan, to the extent eligible under Rule 84  of 
the  Maharashtra Value Added Tax Rules, 2005, has been prepaid  during  the 
year at a discounted value of Rs. 368 crore thereby resulting in a  surplus 
of Rs. 827 crore. The said sum has been reflected as an exceptional item in 
the Profit and Loss account and considered as a capital receipt.

Consolidation of Accounts and Segment Reporting:

Bajaj  Auto  has consolidated the financial statements of  subsidiaries  in 
accordance  with the relevant accounting standards issued by  Institute  of 
Chartered Accountants of India. The summary of the consolidated profit  and 
loss account for FY2010 and FY2011 is given in Table 6 below.

Table 6: Segment Revenue and Segment Results:

                                                               Rs. In Crore
Segment Revenue                                       2010             2011

Automotive                                           11,974          16,642

Investment and others                                   123             366

Total                                                12,097          17,008

Segment Results:

Profit/(Loss) from each segment before tax             2010            2011

Automotive                                            2,185           4,100

Investment and others                                   123             366

Total                                                 2,308           4,466

Less: Interest                                            7               2

Profit before tax                                     2,301           4,464

Cautionary Statement:

Statements  in Management Discussion and Analysis describing the  Company's 
objectives,  projections,  estimates  and  expectations  may  be   'forward 
looking'  within  the meaning of applicable laws  and  regulations.  Actual 
results might differ materially from those expressed or implied.

REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR):

The  CSR activities of Bajaj Group are guided by the vision and  philosophy 
of  its Founding Father, Shri Jamnalal Bajaj, who embodied the  concept  of 
Trusteeship  in business and laid the foundation for  ethical,  value-based 
and transparent functioning.

The  core elements of CSR activities include ethical  functioning,  respect 
for  all  stake-holders,  protection  of human  rights  and  care  for  the 
environment.

The  company  and  Bajaj Group generally implement  the  above  initiatives 
through its employees Welfare Funds and Group NGOs/Trusts/Charitable Bodies 
operating at various locations in the country. It also enlists the help  of 
non-Group   NGOs,  Local  Authorities,  Business  Associations,  Social   & 
Philanthropic  Organizations of repute and Civil Society,  wherever  deemed 
necessary.

Some  of the major initiatives continued during the year under  review  are 
summarised below:-

A. By the Company:

Code of conduct and affirmative action:

Your  company believes that its success is interlinked with the  well-being 
of all sections of the society and equal opportunity for all sections.  The 
company  continues  to  ensure no discrimination of any  type  to  socially 
disadvantaged sections in the work place. During the year under review, the 
company recruited 1410 new employees, of which 179 numbers (12.70%)  belong 
to weaker sections, in line with the affirmative action. At the end of  the 
previous year, this percentage was 7.14%.

Support to weaker sections for IIT JEE entrance:

Economically  weaker, underprivileged children belonging to SC/ST  category 
are  encouraged  to avail financial assistance to  undertake  coaching  for 
Joint  Entrance  Examination  to enable them to qualify  for  admission  to 
India's  premier  engineering  education centre i.e.  Indian  Institute  of 
Technology.

Education:

Under  Public Private Partnership, the company has undertaken to upgrade  3 
Industrial  Training  Institutes (ITI)-two in Pune and  one  in  Pantnagar. 
During the year, one more ITI-at Aurangabad was added.

The  company  took  actions to ensure better quality  of  output  from  the 
Institutes  and  also followed up with concerned agencies for  approval  of 
Institute  Development Plan. For ITI Mulshi, the company  transferred  used 
machinery (current selling price) of Rs. 34.05 lakh for better training and 
job orientation. This ITI has relocated to a new premise. The company  also 
took  actions  to ensure better quality of output from the  Institutes  and 
also  followed  up with the concerned agencies for  approval  of  Institute 
Development Plan for ITI Haveli. At Ramgarh in Pantnagar, the new structure 
is ready and will be available for use in the current year.

Health:

Government  of  India-Ministry of Health and Family  Welfare-National  AIDS 
Control   Organization  (NACO)  and  CII  have  initiated  Public   Private 
Partnership  (PPP) in order to provide better healthcare to AIDS  patients. 
From  Aug  2008, the Bajaj YCMH ART Centre at YCM hospital  has  registered 
5096 patients with 2707 cases for Anti Retroviral Therapy. This centre is a 
benchmark for new centers and is the largest one run by industries. In view 
of  the  increased patient flow, with the YCM  hospital  giving  additional 
space,  your  company  expanded the facility further  during  the  year  by 
providing the required infrastructure to handle increased ART patients.

Others:

Our  Chakan plant employees organized a blood donation camp, in  which  425 
employees donated blood through Pimpri Serological Institute blood bank.

The  company has been participating actively in the Ministry  of  Corporate 
Affairs'   Green  Initiative  in  Corporate  Governance  for   paper   less 
compliances.

B. Through Group Trusts and Group Companies:

1. Jamnalal Bajaj Foundation (JBF-Foundation):

Awards:

The Foundation gives 4 Awards annually-each of the value of Rs. 5 lakh.  Of 
these, three are given to individuals in India for outstanding contribution 
in  the  fields  of constructive work on  Gandhian  lines,  application  of 
science  and  technology for rural development and uplift  and  welfare  of 
women  and  children.  The fourth one is an  International  Award-given  to 
individuals  other  than Indian citizens from foreign countries  for  their 
contribution to the promotion of Gandhian values outside India.

Financial Assistance:

During the year, financial assistance was provided to wives and families of 
farmers, who committed suicide in Wardha District for their subsistence and 
also for educational assistance to their children.

Rural Development:

The  Foundation  has  been undertaking rural  development  work  in  select 
villages  of Wardha District, Maharashtra (since 1987) and  in  Shikohabad, 
Dist.  Firozabad, U.P. (since 1992). The activities are undertaken  on  the 
basis of the need of the local people. Special emphasis is given on health, 
family welfare, immunisation, supply of potable drinking water,  sanitation 
and alternative source of renewable energy.

Employment Generation Programmes:

Programmes  of  employment  generation in the rural area  have  helped  the 
women-folk  and scheduled castes and the poorer sections to  develop  self-
confidence in themselves.

Schools under National Child Labour Project:

Schools running with the financial support of National Child Labour Project 
(GOI),  are  monitored  and controlled by JBF. 200 students  and  20  staff 
members are part of these 4 schools.

Balwadi (Child Training Centre):

Balwadi  is  a pre-school, where under-privileged children  are  taught  by 
trained  teachers.  The Foundation continued running 24 Balwadis  i.e.  Bal 
Sanskar Kendra in rural areas for poor children below six years of age.

Community Awareness Campaign & Health Camp:

The Foundation carried out people-to-people base awareness programmes about 
population  control,  usage of toilet, health hygiene  etc.  and  organised 
health camps for women and handicapped persons.

2. Jankidevi Bajaj Gram Vikas Sanstha (JBGVS):

Rural and Community Development Activities and Empowerment of Women:

The  company  continued  with its rural  development  activities  in  Pune, 
Aurangabad & Wardha districts of Maharashtra & Sikar District of  Rajasthan 
through JBGVS. JBGVS aims at helping integrated development of 61  selected 
villages, to be carried out by the villagers under their own leadership and 
catalysing the unified efforts of Government, local organisations and other 
NGOs.

During  the year, JBGVS undertook a number of development  initiatives  for 
improving  education,  specially  primary  education,  primary  healthcare, 
economic  condition  by promoting self-employment, environment  and  social 
development with special emphasis on women empowerment.

Education:

This year, the focus was on improving infrastructure of the primary schools 
like  building school rooms, providing furniture, providing clean  drinking 
water,  sanitary  units  and  learning equipments.  In  addition  to  this, 
informal  education was imparted to primary school students as  also  young 
girls and boys identified with leadership potential. Computer education was 
started  for  youth.  The activities of  Rural  Education  and  Information 
Network  (REIN) project supported by the World Bank are being continued  to 
generate interest in education in a non-formal way amongst tribal  children 
and youth.

Primary Health Care (PHC):

Reproductive Child Health (RCH) programmes, tackling malnourishment amongst 
children,  specialised  check-up  camps  (gynaec,  eye,  pediatric,  etc.), 
providing  health  services  through mobile  clinics,  promoting  low  cost 
latrines, educating adults and children in hygiene and sanitation practices 
were  taken up in the project villages to improve the health  condition  of 
the  villagers  in  general  and women  and  children  in  particular.  The 
programmes were implemented through socially trained village health workers 
and local PHCs.

Economic development:

The  focus of this programme was to generate self-employment through a  set 
of  activities  like vocational training, i.e, tailoring,  dairy,  goatery, 
backyard  poultry, agro and food processing and two wheeler  repairing  and 
maintenance.  Small  enterprises were promoted by providing  seed  capital. 
Assistance was provided to farmers in preparing bank proposals and  getting 
bank  loans  in  association with Govt. and  other  local  agencies.  Three 
training  programmes  were  organised on dairy,  poultry  and  two  wheeler 
maintenance for the SC/ST youth. Assistance was provided to women self-help 
groups  to  get loans for income generation activities from the  banks  and 
marketing their produce in various places including exhibitions.

Environmental development:

In  all  JBGVS  programmes,  environmental  upgradation  is  given  special 
importance. The farmers as well as school children were encouraged to plant 
fruit  trees.  The  Aamrai  Project, which was  started  at  the  hands  of 
Chairman,  Bajaj Auto in August, 2009 has covered 340 acres of  fruits  and 
forestry  tree  plantation (more than 50,000 plants). 340  tribal  families 
have  got  livelihood from this programme. This programme will  cover  more 
than 1000 tribal families.

Social development:

Under  social development, women self-help groups, traditional  social  and 
cultural activities, sports amongst school children and youth are promoted. 
Village  level leadership trainings are organised for youth to  create  the 
future leaders in the villages.

Samaj  Seva Kendra (SSK) (as part of JBGVS) provides facilities for  social 
development of the residents of Akurdi, Nigdi and adjoining townships, with 
the  aim  of  improving their quality of life,  through  skill  development 
training,  hobby  centre, nursery education, health  care,  sports,  music, 
dance  and  cultural programmes. Programmes are also organised  for  senior 
citizens. Events like making of Christmas craft, earthen pots, summer camps 
and trekking were conducted during the year.

JBGVS started activities in Sikar, Rajasthan, during the year by  providing 
assistance  for  fodder to 5 gaushalas to see through the  drought  period. 
Science  Branch  has been started in Jamnalal Bajaj  Government  School  in 
village  Kashi  ka  bas. Self Help Groups (SHGs) have been  formed  in  all 
select  villages.  Goats were distributed to 48 Below  Poverty  Line  (BPL) 
families.  Other  activities like tailoring classes,  beautician  training, 
drawing  competitions, adolescent girls training, medical camps, eye  check 
up camps were organised regularly.

JBGVS has started the planning process to initiate activities in a big  way 
in  Wardha  district.  Administrative machinery has been put  in  place  at 
Wardha  to  start  work in 10 villages starting  with  formation  of  SHGs, 
veterinary   services,  agricultural  programmes,  dairy  development   and 
sustainable  agricultural  practices to generate livelihood.  Two  projects 
through Magan Sangrahalay as NGO have been shortlisted for funding.

3. Group Trusts for Colleges:

Shiksha  Mandal,  Wardha founded in 1914 by Late Shri Jamnalal  Bajaj  runs 
seven  colleges  with around 10,000 students on its  rolls.  These  include 
colleges  for commerce, science, agriculture, engineering  polytechnic  and 
rural  services.  Its mission is to provide high quality  education  at  an 
affordable cost & to inculcate socially desirable values in its students.

All   its   Colleges  are  undergoing  major  upgradation   in   terms   of 
infrastructure  and work culture. During the year, a new girl's hostel  and 
30,000  sq.  ft.  of classrooms were built. Over 300  computers  have  been 
installed  in it in the last 2 years and students have  unlimited  internet 
access.

Jankidevi Bajaj College of Science received a Rs. 1.4 crore grant from  UGC 
for  upgrading its laboratories. 3 of Shiksha Mandal teachers received  UGC 
funding  for Major Research projects. Over 20 proposals for  research  have 
been  submitted by its teachers during 2010-11. M.Sc.(Biotech) was  started 
in  its  Science  College and an MBA program in  its  Commerce  College  at 
Wardha. Guidance for CA exam was started in its Commerce College at  Nagpur 
which achieved 50% passing rate compared to the 20% rate nationally.

Its  students continue to do well. Besides 15 students in  University/Board 
exam  merit  lists, 3 of the top 20 positions  in  Maharashtra  Engineering 
Entrance exams were taken by its students. One of its students was adjudged 
as the best National Social Service (NSS) volunteer in Maharashtra. Another 
student captained the University Ball Badminton team and 4 of its  students 
represented Maharashtra at the national games.

A  booklet  'Vichardhan' containing inspiring ideas in Hindi,  Marathi  and 
English  was produced for distribution to all students. The students  built 
water  harvesting  structures  in 2 villages near  Wardha,  under  its  NSS 
program.

Bajaj  Trusts  have  donated Rs. 8 crore in the last  3  years  to  Shiksha 
Mandal.

Bajaj  Science  Centre  has been functioning in Wardha for  the  last  four 
years.  The culture of learning science by doing experiments is  developing 
roots  in  Schools  of  Wardha  and  towns  around  it.  Its  students  are 
consistently  getting  recognition  in national competitions.  It  is  also 
reflected  in the increasing number of students appearing for its  entrance 
examination. This year,

830 students appeared for 250 vacancies. Students are coming to it from  as 
far  as Hinganghat, which is 50 kms away. Bajaj Science Centre is adding  a 
scholar batch of 5th standard students from this academic year. This  year, 
it functioned from its new campus, which has become a landmark in Wardha.

Gandhi Vichar Parishad, Wardha, organised a number of programmes during the 
year  2010-11. Important among them were its 8 month Post Graduate  Diploma 
Course  in Gandhian Thought, which had 7 students from different  parts  of 
India, 2 from Sudan and 1 from Brazil; orientation Camp Classes on Gandhian 
Thought  for Medical Students, University Students' Camps at  the  regional 
and  national  level,  Seminar  on  Gandhi's  Concept  of  Swadeshi,  Inter 
Religious  Study Course on Ecological insights in Religions and a  workshop 
on Peace and Conflict Resolution.

4. Marathwada Medical & Research Institute (MMRI):

Bajaj  group is giving substantial financial support to this  Trust,  which 
runs  Kamalnayan  Bajaj Hospital and Kamalnayan Bajaj Nursing  College  for 
B.Sc. Nursing degree course.

Kamalnayan Bajaj Hospital:

MMRI  has established Kamalnayan Bajaj Hospital, located at  Aurangabad  in 
Marathwada  region  of Maharashtra and is providing  super  speciality  and 
tertiary  care medical facilities not available elsewhere in  this  region. 
The  hospital has expanded its capacity to 250 beds and major part  of  the 
expansion  has been for general category patients. It has cancer  treatment 
facilities,  including Linac Accelerator & Brachy therapy, facility for  CT 
Scan  and  MRI  of 1.5 Tesla, new generation Siemens  Cath  Lab  for  heart 
patients,  latest  ophthalmology equipment and  other  advanced  facilities 
including for open heart surgeries and organ transplantation (Kidney).  The 
hospital has been providing relief annually for close to 55,000 patients on 
OPD  basis  and close to 7,000 patients, who are admitted to  hospital  for 
various  treatments. It also provides intensive care unit and cardiac  care 
unit,  with a capacity of 22 beds and generally with an occupancy  rate  of 
more than 95%.

The  hospital  also runs a programme of providing relief to  Below  Poverty 
Line  (BPL)  and  Economically Weaker Section (EWS)  of  the  society  with 
free/subsidized  treatment.  Hospital  with the help  of  NGO  (JBGVS)  has 
conducted  50  camps in the villages of the district of  Aurangabad,  where 
more than 2282 patients have been checked and given treatment and medicines 
free  and  out  of these, 851 patients needing hospital  treatment  at  the 
hospital  were treated totally free, as in-patients at the hospital,  at  a 
cost of Rs. 59.45 lakh.

Kamalnayan Bajaj Nursing College:

First batch of students joined in 2010 and second batch will join in  July-
August  2011. College has intake capacity of 50 students. A best  in  class 
college with all laboratories, library and class rooms and hostel for girls 
and boys with all facilities with investment of over Rs. 10 crore is coming 
up and would be ready for occupation by the end of 2011.

5. Fuji Guruji Memorial Trust:

Fuji  Guruji Memorial Trust has established Bauddha Mandir,  Vishwa  Shanti 
Stupa  at  Wardha for promotion of thoughts and teachings of  Lord  Buddha, 
Mahatma  Gandhi and other preachers preaching same or similar ideology  and 
to propagate the message of world peace, love, non-violence and equality of 
all religions. It has also established Bal Sanskar Kendras for the  benefit 
and  upliftment  of  poor children below the age of six  years  from  small 
villages of Wardha District.

6. Kamalnayan Bajaj Charitable Trust:

Kamalnayan  Bajaj Charitable Trust runs Gitai Mandir, Pujya Jamnalal  Bajaj 
Exhibition and Vinoba Darshan Complex, Audio-video Hall at Wardha. It  also 
runs a library where students from all over India with literature and books 
on Mahatma Gandhi, Vinoba Bhave, Pujya Jamnalal Bajaj, Smt Jankidevi  Bajaj 
and other freedom fighters.

7. Jamnalal Bajaj Seva Trust:

It  conducted  free  computer  training  classes,  tailoring  classes   and 
stitching classes for poor and needy people. It also carried out activities 
for promoting Indian art and culture.

8. Bajaj Allianz Insurance Companies:

Bajaj Allianz Life Insurance Co. Ltd. (BALIC) launched a unique  initiative 
through its Child Plan campaign to support education requirements for Class 
8 students through a known child welfare NGO, namely ASEEMA Foundation.

With  a  combined  effort, BALIC and Bajaj  Allianz  General  Insurance  Co 
Limited (BAGIC) introduced 'Ability Insurance Plan', a customised  solution 
kit  comprising  of a Life, Health and Motor plan; along with  the  regular 
product literature, the kit adds ease of understanding with an audio-visual 
presentation (created for those with hearing/speech disability) & a Braille 
document   (for   the  visually  challenged)  that  explain   the   product 
offering/benefits.

BAGIC  has recently brought forth a unique idea for a greener  environment, 
wherein  any Bajaj Allianz motor insurance claimant would be  rewarded  for 
getting  his damaged vehicular plastic part repaired rather  than  replaced 
thus  reducing  the  carbon  footprint.  Further  for  every  claimant  who 
practices  this  philosophy, the tie-up partner World Vision  will  have  a 
tree-planted in return.

General:

The  Group  has some other Trusts, which are also engaged  in  topical  and 
socially relevant activities. Thus what is listed above is not  exhaustive, 
but  only illustrative to give a glimpse of the importance being  given  by 
the Company and the Group towards CSR.

A publication of the Group 'Beyond Profits-Philanthropic Activities of  the 
Bajaj Group', setting out in greater detail the CSR activities of the Group 
can be made available to any shareholder on request.

Constituents  of 'Group' as defined in MRTP Act, 1969 for the  purposes  of 
SEBI (SAST) Regulations, 1997:

Persons  constituting group within the definition of 'group' as defined  in 
the  Monopolies and Restrictive Trade Practices Act, 1969, for the  purpose 
of  Regulation  3(1)(e)  of  the Securities and  Exchange  Board  of  India 
(Substantial  Acquisition  of  Shares  and  Takeovers)  Regulations,  1997, 
include the following:

Name of the Person/Entity:

1. Anant Bajaj
2. Deepa Bajaj
3. Geetika Bajaj
4. Kiran Bajaj
5. Kriti Bajaj
6. Kumud Bajaj
7. Madhur Bajaj
8. Minal Bajaj
9. Nimisha Bajaj
10. Niraj Bajaj
11. Niravnayan Bajaj
12. Pooja Bajaj
13. Rahul Kumar Bajaj
14. Rajivnayan Bajaj
15. Rishab Bajaj
16. Ruparani Bajaj
17. Sanjali Bajaj
18. Sanjivnayan Bajaj
19. Shefali Bajaj
20. Shekhar Bajaj
21. Siddhant Bajaj
22. Suman Jain
23. Sunaina Kejriwal
24. Manish Kejriwal
25. Aryaman Kejriwal
26. Nirvaan Kejriwal
27. Neelima Bajaj Swamy
28. Aditya Swamy
29. Bachhraj and Company Pvt. Ltd.
30. Bachhraj Factories Pvt. Ltd.
31. Bajaj Allianz Financial Distributors Ltd.
32. Bajaj Allianz General Insurance Company Ltd.
33. Bajaj Allianz Life Insurance Company Ltd.
34. Bajaj Auto Employees' Welfare Funds
35. Bajaj Auto Holdings Ltd.
36. Bajaj Auto Ltd.
37. Bajaj Electricals Ltd. Employees Welfare Funds
38. Bajaj Electricals Ltd.
39. Bajaj Finance Ltd.
40. Bajaj Financial Securities Ltd.
41. Bajaj Financial Solutions Ltd.
42. Bajaj Finserv Ltd.
43. Bajaj Holdings & Investment Ltd.
44. Bajaj International Pvt. Ltd.
45. Bajaj Sevashram Pvt. Ltd.
46. Baroda Industries Pvt. Ltd.
47. Hercules Hoists Ltd.
48. Hind Musafir Agency Ltd.
49. Jamnalal Sons Pvt. Ltd.
50. Kamalnayan Investment & Trading Pvt. Ltd.
51. Madhur Securities Pvt. Ltd.
52. Mukand Engineers Ltd.
53. Mukand Ltd.
54. Niraj Holdings Pvt. Ltd.
55. Rahul Securities Pvt. Ltd.
56. Sanraj Nayan Investments Pvt. Ltd.
57. Shekhar Holdings Pvt. Ltd.
58. Shishir Holdings Pvt. Ltd.
59. The Hindustan Housing Co. Ltd.
60. Anant Trading Company
61. Bachhraj Trading Company
62. Bajaj Trading Company
63. Rishabh Trading Company
64. Anant Trust
65. Aryaman Trust
66. Deepa Trust
67. Geetika Trust
68. Kriti Trust
69. Minal Trust
70. Neelima Trust
71. Nimisha Trust
72. Niravnayan Trust
73. Nirvaan Trust
74. Rishabnayan Trust
75. Sanjali Trust
76. Siddhant Trust

Note: 

Shareholdings of HUFs, are held in the names of the respective  individuals 
in   the  capacity  of  Karta.  Hence  HUFs,  are  not  separately   listed 
hereinabove.