Home  »  Company  »  Bajaj Finserv Ltd.  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Bajaj Finserv Ltd.

Mar 31, 2015

Dear Members,

The directors present their Eighth Annual Report and audited financial statements for the year ended 31 March 2015

Financial results

The highlights of the Standalone Financial Results are as under:

(Rs. In Crore)

Particulars FY 2015 FY 2014

Total revenue 211.66 157.30

Total expenses 53.56 51.79

Profit before tax 158.10 105.51

Tax expense 32.17 22.00

Profit after tax 125.93 83.51

Profit for the year 125.93 83.39

Transfer to Reserve fund under section 45-IC(1) of the Reserve Bank of India Act, 1934 25.19 16.68

Transfer to General reserve 12.59 8.34

Proposed dividend 27.85 27.85

Balance carried to Balance Sheet 60.30 30.52

Earnings per share (B) 7.9 5.2

The highlights of the Consolidated Financial Results are as under:

(Rs. In Crore)

Particulars FY 2015 FY 2014

Gross revenue:

i. Gross written premium

a) Life insurance - Bajaj Allianz Life Insurance Co. Ltd. 6,017.30 5,843.14

b) General insurance - Bajaj Allianz General Insurance Co. Ltd. 5,300.66 4,583.89

ii. Gross income - Bajaj Finance Ltd. 5,418.28 4,074.35

iii. Income from windpower generation - Bajaj Finserv Ltd. 50.31 60.44

iv. Investment income (excluding accretions on unit linked investment) 2,685.38 2,059.49

v. Others 117.33 91.78

Total 19,589.26 16,713.09

(Rs. In Crore)

Particulars FY 2015 FY 2014

Revenue from operations and other income 7,102.49 5,386.91

Amount transferred from the policyholders'' account 487.89 639.10

Total revenue 7,590.38 6,026.01

Profit before tax 3,246.15 2,901.61

Tax expense 841.94 710.49

Profit after tax 2,404.21 2,191.12

Tax(debits)/credits pertaining to earlier years 4.96 (0.19)

Minority interest 719.38 646.85

Profit for the year 1,689.79 1,544.08

Earnings per share (B) 106.2 97.0

The financial results of the Company are elaborated in the Management Discussion and Analysis Report.

Dividend

Your directors recommend for consideration of the shareholders at the ensuing annual general meeting, payment of a dividend of Rs. 1.75 per share (35%) for the year ended 31 March 2015.

The amount of dividend and the tax thereon to the extent applicable aggregates to Rs. 27.85 crore.

Dividend paid for the year ended 31 March 2014 was also Rs. 1.75 per share (35%). The amount of dividend and the tax thereon to the extent applicable aggregated to Rs. 27.85 crore.

Share capital

The paid-up equity share capital as on 31 March 2015 was Rs. 79.56 crore. During the Rights Issue of equity shares made by the Company in 2012, certain shares had been kept in abeyance as required by law. With resolution of a few cases during the year under review, the Company has allotted 2,832 equity shares of the face value of Rs. 5 each at the original Rights Issue price of Rs. 650 per share to the eligible shareholders.

There was no public issue, rights issue, bonus issue or preferential issue etc. during the year.

The Company has not issued shares with differential voting rights, sweat equity shares nor has it granted any stock options.

Registration as a Systemically Important Non-Deposit taking NBFC/Core Investment Company

Your Company was registered on 30 October 2009 by 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 Company''. Your Company has not accepted public deposits during the year under review.

Your Company, being eligible, has intimated RBI on 25 November 2014 of its intention to convert itself into a Core Investment Company (CIC). RBI has responded vide letter dated 30 December 2014, communicating its requirements in this regard. The Company is currently in the process of complying with the said RBI requirements keeping in view the provisions of Master circular on Regulatory Framework for Core Investment Company dated 1 July 2014.

Operations

Detailed information on the operations of the different business lines of the Company and details on the state of affairs of the Company are covered in the Management Discussion and Analysis Report.

Extract of annual return

The extract of annual return as provided under sub-section (3) of section 92 of the Companies Act, 2013, in the prescribed Form MGT-9 is annexed to this Report.

Number of meetings of the Board

There were 6 meetings of the Board held during the year. Detailed information is given in the Corporate Governance Report.

Directors'' responsibility statement

As required under clause (c) of sub-section (3) of section 134 of Companies Act, 2013 directors, to the best of their knowledge and belief, state that -

- in the preparation of the annual accounts, the applicable Accounting Standards had been followed alongwith proper explanation relating to material departures;

- the directors had 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 and loss of the Company for that period;

- the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- the directors had prepared the annual accounts on a going concern basis;

- the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

- the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Declaration by independent directors

The independent directors have submitted the Declaration of Independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section (6).

Directors'' Remuneration Policy and criteria for matters under section 178

Information regarding Directors'' Remuneration Policy and criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178 are provided in the Corporate Governance Report.

Particulars of loans, guarantees or investments

Information regarding loans, guarantees and investments covered under the provisions of section 186 of the Companies Act, 2013 are detailed in the Financial Statements.

Related party transactions

There were no related party transactions (RPTs) entered into by the Company during the financial year, which attracted the provisions of section 188 of Companies Act, 2013. There being no ''material'' related party transactions as defined under clause 49 of the Listing Agreement, there are no details to be disclosed in Form AOC-2 in that regard.

During the year 2014-15, pursuant to section 177 of the Companies Act, 2013 and clause 49 of the Listing Agreement, all RPTs were placed before Audit Committee for its prior/omnibus approval.

The Policy on RPTs as approved by Board is uploaded on the Company''s website www.bajajfinserv.in

Material changes and commitments

There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company and the date of this Report.

Conservation of energy and technology absorption

The Company is engaged in wind-farm activities in addition to its financial services activities. Hence, the subject of conservation of energy is applicable to the Company only with regard to its wind-farm business for the Company, being by and large a financial services company, there are no particulars regarding technology absorption required to be given.

Particulars regarding conservation of energy are given below:

a) the steps taken on conservation of energy and for utilising alternate sources of energy:

The Company has installed renewable energy (wind) project with a capacity of 65.2 MW.

It generated 746 lakh units and sold to third parties. It, however, is unable to make captive use of wind energy, because new regulations do not permit the same, where monthly demand is less than 800 KW. The Company has installed LED lamps in place of failed Tube lights and CFL thereby reducing energy consumption in lighting by 7 KW during the year.

b) the capital investment on energy conservation equipment:

Not applicable, since BFS is a non-manufacturing company, coming under the notified industries covered under Energy Conservation Act, 2001. Also, energy demand/connected load of building utilised for the Company''s corporate/commercial activities etc. is less than 500 KW, which is the threshold for applicability of Energy Conservation Act.

Foreign exchange earnings and outgo

Total foreign exchange earned by the Company was Nil during the year under review, as well as during the previous year.

Total foreign exchange outflow during the year under review was Rs. 1.53 crore, as against Rs. 1.96 crore during the previous year.

Risk Management Policy

Information on the development and implementation of a Risk Management Policy for the Company including identification therein of elements of risk which in the opinion of the Board may threaten the existence of the Company is given in the Corporate Governance Report.

Corporate Social Responsibility

Detailed information report on Corporate Social Responsibility Policy developed and implemented by the Company on CSR initiatives taken during the year pursuant to section 135 of the Companies Act, 2013 is given in the annexed Annual Report on CSR activities.

Formal annual evaluation of the performance of Board, its Committees and Directors

Information on the manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual directors is given in the Corporate Governance Report.

Subsidiaries and joint venture

Following are the subsidiary and joint venture companies of the Company as at 31 March 2015:

Name of the company % Shareholding Status

Bajaj Allianz Life Insurance Company Ltd. 74% Subsidiary

Bajaj Allianz General Insurance Company Ltd. 74% Subsidiary

Bajaj Finance Ltd. 61.53% Subsidiary

Bajaj Housing Finance Ltd. (erstwhile Bajaj Financial Solutions Ltd.) (100% subsidiary of Bajaj Finance Ltd.) - Subsidiary

Bajaj Financial Securities Ltd. (100% subsidiary of Bajaj Housing Finance Ltd.) - Subsidiary

Bajaj Financial Holdings Ltd. 100% Subsidiary

Bajaj Allianz Financial Distributors Ltd. 50% Joint Venture

Bajaj Allianz Staffing Solutions Ltd.

(100% subsidiary of Bajaj Allianz Financial Distributors Ltd.) - Joint Venture

During the year under review, the Company sold its 100% shareholding in Bajaj Financial Solutions Ltd. (which includes its 100% holding in Bajaj Financial Securities Ltd.) at Rs. 17 crore to Bajaj Finance Ltd. The name of Bajaj Financial Solutions Ltd. was subsequently changed to Bajaj Housing Finance Ltd. These steps were taken to facilitate Bajaj Finance Ltd. to commence its new line of business in the area of housing finance.

Detailed information on the performance and financial position of each subsidiary/joint venture of the Company is covered in the Management Discussion and Analysis Report.

Directors and Key Managerial Personnel

As reported previously, Dr. Gita Piramal was appointed as an additional director in the category of non-executive, independent director of the Company, in the meeting of the Board held on 27 March 2014. Thereafter, at the seventh annual general meeting of the Company held on 16 July 2014, the members of the Company appointed Dr. Gita Piramal as an Independent Director under the Companies Act, 2013 for a period of 5 years effective from 16 July 2014.

Pursuant to section 149(4) of the Companies Act, 2013, every listed company is required to appoint at least one third of its directors as independent directors. The Board already has one half of its directors in the category of independent directors in terms of clause 49 of the Listing Agreement. The Board in its meeting held on 27 March 2014 appointed the existing independent directors under clause 49 as ''independent directors'' pursuant to Companies Act, 2013 as well.

The members at the annual general meeting held on 16 July 2014, approved the appointment of the existing independent directors for a term of 5 years effective from 1 April 2014.

Pursuant to section 203 of the Companies Act, 2013, the Company has appointed S Sreenivasan, President (Finance) of the Company as Chief Financial Officer (CFO) with effect from 1 October 2014 in place of Kevin D''sa. This change became necessary since as required under the said section 203, Kevin D''sa, who was the CFO of Bajaj Auto Ltd., BFS and Bajaj Holdings & Investment Ltd. (BHIL) chose to continue as CFO in Bajaj Auto Ltd. and relinquished his position as CFO of BFS and BHIL with effect from 1 October 2014.

The Company already has Sanjiv Bajaj, Managing Director and Sonal R Tiwari, Company Secretary as the other Key Managerial Personnel of the Company.

In light of the provisions of the Companies Act, 2013, Rajiv Bajaj retires from the Board by rotation this year and being eligible, offers himself for re-appointment. The information as required to be disclosed under clause 49 of the Listing Agreement in case of re-appointment of the director is provided in the Notice of the ensuing annual general meeting.

Significant and material orders passed by the regulators or courts

During the year under review, there were no significant and material orders passed by the regulators or courts or tribunals, which may impact the going concern status of the Company and its operations in future.

Adequacy of internal financial controls

Internal financial controls with reference to the financial statements were adequate and operating effectively.

Presentation of financial results

The financial results of the Company for the year ended 31 March 2015 have been disclosed as per Schedule III to the Companies Act, 2013.

Consolidated financial statements

The directors also present the audited consolidated financial statements incorporating the duly audited financial statements of the subsidiaries and joint venture and as prepared in compliance with the Companies Act, 2013, Accounting Standards and the Listing Agreement as prescribed by SEBI.

A separate statement containing the salient features of its subsidiaries and joint ventures in the prescribed form (AOC-1) is annexed separately.

Statutory disclosures

The summary of the key financials of the Company''s subsidiaries and joint ventures (Form AOC-1) is included in this Annual Report. A copy of audited financial statements for the said companies will be made available to the members of the Company, seeking such information at any point of time. The audited financial statements for each of the subsidiary companies will be kept for inspection by any member of the Company at its registered office during business hours.

The same are placed on the Company''s website www.bajajfinserv.in

As required under the section 197(12) of the Companies Act, 2013 read with the rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the prescribed particulars are set out in an annexure to the Directors'' Report. As per provisions of section 136(1) of the said Act, these particulars will be made available to shareholder on request.

Disclosures as prescribed by Non-Banking Financial (Non-Deposit Accepting or Holding)

Companies Prudential Norms (Reserve Bank) Directions, 2007 and other NBFC Directions have been made in this Annual Report.

A Cash Flow Statement for the year 2014-15 is attached to the Balance Sheet.

Pursuant to the legislation ''Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013'' introduced by the Government of India, which came into effect from 9 December 2013, the Company has framed a Policy on Prevention of Sexual Harassment at Workplace. There was no case reported during the year under review under the said Policy.

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, alongwith 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 2014-15. A declaration to this effect signed by the Managing Director of the Company is contained in this Annual Report.

The Managing Director and 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.

Certificate from auditors of the Company regarding compliance of conditions of corporate governance is annexed to this Report.

Auditors Statutory auditor

Pursuant to the provisions of section 139 of the Companies Act, 2013 and the Rules made thereunder, the current auditors of the Company, Dalal & Shah, Chartered Accountants (registration number: 102021W) were appointed by the shareholders at the 7th annual general meeting to hold office until the conclusion of the 10th annual general meeting, subject to ratification by shareholders at each annual general meeting.

The members are requested to ratify the appointment of Dalal & Shah, Chartered Accountants, (registration number: 102021W) as statutory auditors of the Company and to fix their remuneration for the year 2015-16.

The statutory audit report does not contain any qualification, reservation or adverse remark or disclaimer made by statutory auditor.

Secretarial auditor

Pursuant to the provisions of section 204 of the Companies Act, 2013 and Rules made thereunder the Company has appointed, Shyamprasad D Limaye, (membership number: 1587) Company Secretaries in Practice, to undertake the secretarial audit of the Company. Secretarial Audit Report for the year 2014-15 given by Shyamprasad D Limaye in the prescribed form MR-3 is annexed to this Report. The Secretarial Audit Report for the year under review does not contain any qualification, reservation or adverse remark or disclaimer made by the secretarial auditor.

Cost auditor

Pursuant to section 148 of the Companies Act, 2013 and Rules made thereunder, Board of Directors had, on the recommendation of the Audit Committee, appointed Dhananjay V Joshi and Associates, (firm registration number: 000030) Cost Accountants, to audit the cost accounts of the Company for the financial year 2015-16 at a remuneration of Rs. 50,000 plus service tax, out-of pocket and travel and living expenses, subject to ratification by the shareholders at annual general meeting. Accordingly, a resolution seeking members'' ratification for the remuneration payable to cost auditor is included in the Notice convening the annual general meeting.

On behalf of the Board of Directors,

Rahul Bajaj Chairman

Pune: 20 May 2015


Mar 31, 2014

The directors present their Seventh Annual Report and audited statement of accounts for the year ended 31 March 2014. Since this Report pertains to financial year that commenced prior to 1 April 2014 the contents therein are governed by the relevant provisions/schedules/rules of the Companies Act, 1956, in compliance with General Circular No. 08/2014 dated 4 April 2014 issued by the Ministry of Corporate Affairs.

Financial results

The financial results of the Company are elaborated in the annexed Management Discussion and Analysis Report.

The highlights of the Standalone Financial Results are as under:

(Rs. In Crore)

Particulars FY2014 FY2013

Total revenue 157.30 152.25

Gross profit before interest and depreciation 106.81 107.44

Depreciation 1.30 1.28

Profit before exceptional item and tax 105.51 106.16

Exceptional item- Provision for diminution in value of investment - (27.00)

Profit before tax 105.51 79.16

Tax expense 22.00 28.32

Profit after tax 83.51 50.84

Profit for the year 83.39 50.84

Add: Balance brought forward from previous year 161.53 149.81

Profit available for appropriation 244.92 200.65

Transfer to Reserve fund u/s 45-IC(1) of Reserve Bank of India Act, 1934 16.68 10.17

Transfer to General reserve 8.34 5.08

Proposed dividend 27.85 23.87

Balance carried to Balance Sheet 192.05 161.53

Earnings per share (Rs.) 5.2 3.3

The highlights of the Consolidated Financial Results are as under:

(Rs. In Crore)

Particulars FY2014 FY2013

Gross revenue:

i. Gross written premium

a) Life insurance - Bajaj Allianz Life Insurance Co. Ltd. 5,843.14 6,892.70

b) General insurance - Bajaj Allianz General Insurance Co. Ltd. 4,583.89 4,109.39

ii. Gross income - Bajaj Finance Ltd. 4,073.33 3,109.66

iii.Income from wind power generation - Bajaj Finserv Ltd. 60.44 73.38

iv. Investment income (excluding accretions on unit linked investment) 2,059.57 1,548.72

v. Others 91.78 77.97

Total 16,712.15 15,811.82



(Rs. In Crore)

Particulars FY2014 FY2013

Revenue from operations and other income 5,385.89 4,155.70

Amount transferred from the policyholders'' account 639.10 917.48

Total revenue 6,024.99 5,073.18

Profit before tax 2,901.61 2,708.11

Tax expense 710.49 493.94

Profit after tax 2,191.12 2,214.17

Minority interest 646.85 640.53

Profit for the year 1,544.08 1,573.64

Earnings per share (Rs.) 97.0 103.0

Banking Licence application

The Company applied for a bank licence when the RBI had opened this window. As one of India''s most successful NBFCs with a strong record of growth, a solid Balance Sheet, constant adherence to prudential lending and income recognition standards that well exceed the RBI norms and a top class Management team, we expected Bajaj Finserv/Finance Ltd. to get a licence. Unfortunately, we did not get it.

The process of approving new bank licences may re-commence soon. It is hoped that the Company would be successful at that time.

Dividend

The directors recommend for consideration of the shareholders at the ensuing annual general meeting, payment of a dividend of Rs. 1.75 per share (35 per cent) for the year ended 31 March 2014. The amount of dividend and the tax thereon to the extent applicable aggregates to Rs. 27.85 crore.

Dividend paid for the year ended 31 March 2013 was Rs.1.50 per share (30 per cent).

The amount of dividend and the tax thereon to the extent applicable aggregated to Rs. 23.87 crore.

Registration as a Systemically Important Non-Deposit taking NBFC

Your Company has been registered on 30 October 2009 by 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 Company''. The Company has not accepted public deposits during the year under review.

Operations

Detailed information on the operations of the different business lines of the Company are covered in the Management Discussion and Analysis Report.

Conservation of energy

The Company, is engaged in wind-farm activities in addition to its financial services activities, hence the subject of conservation of energy is applicable to the Company only with regard to its wind-farm business. Information on this is contained in the Management Discussion and Analysis Report.

Foreign exchange earnings and outgo

Total foreign exchange earned by the Company was Rs. Nil during the year under review, as against Rs. 0.25 crore during the previous year.

Total foreign exchange outflow during the year under review was Rs. 1.96 crore, as against Rs. 1.92 crore during the previous year.

Subsidiaries and joint venture

Following are the subsidiary and joint venture companies of the Company as at 31 March 2014:

% Shareholding of Bajaj Finserv Ltd. Name of the company as on 31 March 2014 Status

Bajaj Allianz Life Insurance Company Ltd. 74% Subsidiary

Bajaj Allianz General Insurance Company Ltd. 74% Subsidiary

Bajaj Finance Ltd. 61.54% Subsidiary

Bajaj Financial Solutions Ltd. 100% Subsidiary

Bajaj Financial Securities Ltd.

(100% subsidiary of Bajaj Financial Solutions Ltd.) 100% Subsidiary

Bajaj Financial Holdings Ltd.

(incorporated on 7 February 2014) 100% Subsidiary

Bajaj Allianz Financial Distributors Ltd. 50% Joint venture

Detailed information on the operations of each subsidiary of the Company is covered in the Management Discussion and Analysis Report.

Corporate Social Responsibility

The Companies Act, 2013 notified section 135 of the Act concerning Corporate Social Responsibility along with the Rules there under and revised Schedule VII to the Act on 27 February 2014 to come into effect from 1 April 2014.

The Company being covered under the provisions of the said section has taken necessary initial steps in this regard. A Committee of the directors, titled ''Corporate Social Responsibility Committee'', has been formed by the Board in its meeting held on 27 March 2014, consisting of the following directors -

1. Rahul Bajaj, Chairman

2. Sanjiv Bajaj

3. Nanoo Pamnani

The Committee has formulated its CSR policy for the Company and is in the process of its implementation.

The said section being enacted with effect from 1 April 2014, necessary details as prescribed under the said section shall be presented to the members in the Annual Report for the year 2014-15.

Even when the said provisions were not mandated by the Ministry of Corporate Affairs, the Bajaj group continued its Corporate Social Responsibility (CSR) initiatives in various fields, during the year 2013-14. Activities in this area are set out in detail in the annexed CSR Report.

Directors

During the year under review, Dr. Gita Piramal was appointed as an Additional Director in the category of non-executive, independent director of the Company, in the meeting of the Board held on 27 March 2014, to hold office up to the date of the ensuing Annual General Meeting (AGM) of the Company. Resolution for appointment of Dr. Gita Piramal is put up for the approval of shareholders in the Notice of AGM.

Pursuant to the provisions of the Companies Act, 2013 which have been enacted with effect from 1 April 2014, Dr. Gita Piramal, if appointed at the forthcoming AGM shall be an ''independent director'' under the said Act for a period of 5 years with effect from the date of the AGM.

On appointment of Dr. Gita Piramal, the provisions of section 149(1) of the Companies Act, 2013 of having at least one woman director on the Board of the Company, stand complied.

In light of the provisions of the Companies Act, 2013, Rahul Bajaj has now become a retiring director, thus Rahul Bajaj retires from the Board by rotation this year and being eligible, offers himself for re-appointment. The information as required to be disclosed under clause 49 of the listing agreement in case of re-appointment of director is provided in the Notice of the ensuing annual general meeting.

Pursuant to section 149(4) of the Companies Act, 2013, every listed company is required to appoint at least one third of its directors as independent directors. The Board already has one half of its directors in the category of independent directors in terms of the provisions of clause 49 of the listing agreement. The Board therefore, in its meeting held on 27 March 2014 appointed the existing independent directors under clause 49 as ''independent directors'' pursuant to Companies Act, 2013, subject to approval of shareholders.

As required under the said Act and the Rules made there under, the same is now put up for approval of members at the ensuing annual general meeting. Necessary details have been annexed to the Notice of the meeting in terms of section 102(1) of the Companies Act, 2013.

The independent directors have submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section(6).

With the appointment of independent directors, the conditions specified in the Act and the Rules made there under as also under new clause 49 of the listing agreement stand complied.

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 had 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 or loss 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 directors had prepared the annual accounts on a going concern basis.

Presentation of financial results

The financial results of the Company for the year ended 31 March 2014 as in the previous year have been disclosed as per the revised Schedule VI to the Companies Act, 1956, pursuant to notification dated 28 February 2011 and General Circular No. 8/2014 dated 4 April 2014 issued by the Ministry of Corporate Affairs.

Consolidated financial statements

The directors also present the audited consolidated financial statements incorporating the duly audited financial statements of the subsidiaries and joint venture 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 General circular no. 2/2011 dated 8 February 2011 has given general exemption with regard to attaching of the Balance Sheet, Statement of Profit and Loss and other documents of its subsidiary companies subject to fulfillment of conditions mentioned therein. The Company has fulfilled all the necessary conditions in this regard and hence is not attaching Balance Sheet, Statement of Profit and Loss and other documents of its subsidiary companies.

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.

The Company, being by and large a financial services company, there are no particulars regarding technology absorption required to be given under section 217(1)(e) of the Companies Act, 1956 and Companies (Disclosure of Particulars in the report of Board of directors) Rules, 1988 for the year under review. Particulars required to be given relating to conservation of energy in its wind energy generation business and foreign exchange earnings and outgo have been set out separately in this Report.

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 2013-14 is attached to the Balance Sheet.

During the year under review, pursuant to the new legislation "Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013" introduced by the Government of India, which came into effect from 9 December 2013, the Company has framed a Policy on Prevention of Sexual Harassment at Workplace. There was no case reported during the year under review under the said Policy.

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.

SEBI vide its circular No. CIR/CFD/POLICY CELL/2/2014 dated 17 April 2014 has notified the revised clause 49 of the listing agreement to be applicable with effect from 1 October 2014. This Report therefore stands complied against the previous clause 49 of the listing agreement.

All Board members and senior management personnel have affirmed compliance with the code of conduct for the year 2013-14. A declaration to this effect signed by the Managing Director/CEO of the Company is contained in this Annual Report.

The Managing Director/CEO and 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

Companies Act, 2013 has now mandated certain Secretarial Standards specified by the Institute of Company Secretaries of India from time to time. The Company is, however, complying with the Secretarial Standards for many years now.

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

Pursuant to the provisions of section 139 of the Companies Act, 2013 and the Rules made there under, the current auditors of the Company, Dalal & Shah, Chartered Accountants are eligible to hold the office for a period of three years only.

The members are therefore requested to appoint Dalal & Shah, Chartered Accountants, (registration number: 102021W) as auditors for three years from the conclusion of the ensuing annual general meeting till the conclusion of the 10th annual general meeting scheduled in 2017 and to fix their remuneration for the year 2014-15.

On behalf of the Board of Directors,

Rahul Bajaj

Chairman

14 May 2014


Mar 31, 2013

The directors present their sixth annual report and the audited statements of accounts for the year ended 31 March 2013.

Financial results

The financial results of the Company are elaborated in the annexed Management Discussion and Analysis Report.

The highlights of the Standalone Financial Results are as under:

(Rs. In Crore)

2013 2012

Total revenue 152.25 144.18

Gross profit before interest and depreciation 107.44 109.26

Depreciation 1.28 1.56 Profit before exceptional item and tax 106.16 107.70

Exceptional item-

Provision for diminution in value of investment (27.00) -

Profit before tax 79.16 107.70

Tax expense 28.32 31.13

Profit after tax 50.84 76.57

Profit available for appropriation 200.65 194.48

Transfer to Reserve fund under section 45-IC (1) of the Reserve Bank of India Act, 1934 10.17 15.31

Transfer to General reserve 5.08 7.66

Proposed dividend 23.87 21.70

Balance carried to Balance Sheet 161.53 149.81

Earnings per share (Rs.) 3.3 5.2

The highlights of the Consolidated Financial Results are as under:

(Rs. In Crore)

2013 2012

Gross Revenue:

i) Gross written premium

a) Life Insurance -

Bajaj Allianz Life Insurance Co. Ltd. 6,892.70 7,483.80

b) General Insurance -

Bajaj Allianz General Insurance Co. Ltd. 4,109.39 3,675.89

ii) Gross income-Bajaj Finance Ltd. 3,111.37 2,171.91

iii) Income from windpower generation- Bajaj Finserv Ltd. 73.38 84.37

iv) Investment income (excluding accretions on unit-linked Investment) 1,548.72 1,048.33

v) Others 77.97 62.11

Total 15,813.53 14,526.41

Revenue from operations and other income 4,157.41 2,835.65

Amount transferred from the policyholders'' account 917.48 1,069.13

Total revenue 5,074.89 3,904.78

Profit before tax 2,708.11 2,226.22

Tax expense 493.94 336.47

Profit after tax 2,214.17 1,889.75

Minority interest 640.53 551.98

Profit for the year 1,573.64 1,337.77

Earnings per share (Rs.) 103.00 90.60

Capital raising through rights equity issue

To meet Company''s different requirements, the Company during the year under review, pursuant to the applicable Board, shareholders and statutory approvals raised Rs. 938.52 crore of equity by way of a rights issue. 14,438,842 equity shares of the face value of Rs. 5 each were issued at a premium of Rs. 645 per share by way of a rights issue to the existing shareholders in the ratio of 1:10. After the issue, the paid equity share capital of the Company has increased from Rs. 72.34 crore to Rs. 79.56 crore. Allotment of the shares was done on 17 October 2012 and these shares commenced trading on BSE and NSE w.e.f. 22 October 2012.

Dividend

The directors recommend for consideration of the shareholders at the ensuing annual general meeting, payment of a dividend of Rs. 1.50 per share (30 per cent) for the year ended 31 March 2013 on the expanded capital of the Company after the rights issue referred to above. The amount of dividend and the tax thereon to the extent applicable aggregates to Rs. 23.87 crore.

Dividend paid for the year ended 31 March 2012 was also Rs.1.50 per share (30 per cent).

The amount of dividend and the tax thereon to the extent applicable aggregated to Rs. 21.70 crore.

Registration as a Systemically Important Non-Deposit taking NBFC

Your Company has been registered on 30 October 2009 by 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 company''. The Company does not hold nor does it accept deposits from the public.

Operations

Detailed information on the operations of the different business lines of the Company are covered in the Management Discussion and Analysis Report.

Conservation of energy

The Company, is engaged in wind farm activities in addition to its financial services activities, hence the subject of conservation of energy is applicable to the Company only with regard to its wind farm business. Information on this is contained in the Management Discussion and Analysis Report.

Foreign exchange earning and outgo

Total foreign exchange earned by the Company was Rs. 0.25 crore during the year under review, as against Rs. 0.19 crore during the previous year.

Total foreign exchange outflow during the year under review was Rs. 1.92 crore, as against Rs. 0.88 crore during the previous year.

Subsidiaries and joint venture

Following are the companies, which are the subsidiary and joint venture companies of the Company as at 31 March 2013:

% Shareholding of Bajaj Finserv Ltd. as on Name of the company 31 March 2013 Status

Bajaj Allianz Life Insurance Company Ltd. 74% Subsidiary

Bajaj Allianz General Insurance Company Ltd. 74% Subsidiary

Bajaj Financial Solutions Ltd. 100% Subsidiary

Bajaj Financial Securities Ltd. (100% subsidiary of Bajaj Financial Solutions Ltd.) 100% Subsidiary

Bajaj Finance Ltd. 61.99% Subsidiary

Bajaj Allianz Financial Distributors Ltd. 50% Joint venture

Detailed information on the operations of each subsidiary of the Company is covered in the Management Discussion and Analysis Report.

Bajaj Financial Solutions Ltd. and Bajaj Financial Securities Ltd. were formed with a main objective of promoting Bajaj Finserv Ltd.''s wealth management services. In view of the accumulated losses and the uncertain gestation period, by way of prudence, the Company has made a provision of Rs. 27 crore towards diminution in the value of investment in these two companies.

Corporate Social Responsibility

During the year 2012-13, Bajaj Group continued its Corporate Social Responsibility initiatives in various fields. Activities in this area are set out in greater detail in the annexed Corporate Social Responsibility Report.

Directors

D J Balaji Rao 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 had 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 or loss 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 directors had prepared the annual accounts on a going concern basis.

Presentation of financial results

The financial results of the Company for the year ended 31 March 2013 as in the previous year have been disclosed as per the revised Schedule VI to the Companies Act, 1956, pursuant to notification dated 28 February 2011 issued by the Ministry of Corporate Affairs.

Consolidated financial statements

The directors also present the audited consolidated financial statements incorporating the duly audited financial statements of the subsidiaries and joint venture 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

The Company having complied with the necessary conditions is eligible for an exemption from the Central Government under section 212(8) of the Companies Act, 1956 with regard to attaching of the Balance Sheet, Profit and Loss Account and other documents of five subsidiaries of the Company for the year 2012-13 as general exemption is now available under Ministry of Corporate Affairs General circular no. 2/2011 dated 8 February 2011.

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.

The Company, being by and large a financial services company, there are no particulars regarding technology absorption required to be given under section 217(1)(e) of the Companies Act, 1956 and Companies (Disclosure of Particulars in the report of Board of directors) Rules, 1988 for the year under review. Particulars required to be given relating to conservation of energy in its wind energy generation business and foreign exchange earning and outgo have been set out separately in this report.

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 2012-13 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 2012-13. A declaration to this effect signed by the Managing Director/CEO of the Company is contained in this annual report.

The Managing Director/CEO and 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.

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 Messrs 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.

On behalf of the Board of Directors,

Rahul Bajaj

Chairman

15 May 2013


Mar 31, 2012

Dear Members,

The directors present their fifth annual report and the audited statements of accounts for the year ended 31 March 2012.

Financial results

The financial results of the Company are elaborated in the annexed Management Discussion and Analysis Report.

The highlights of the Standalone Financial Results are as under:

(Rs. In Crore) 2012 2011

Income from operations and other income 144.18 126.06

Gross profit before interest and depreciation 109.26 94.20

Depreciation 1.56 10.03

Profit before exceptional item 107.70 84.17

Exceptional item-Surplus on pre-payment of sales tax deferral incentive/loan - 139.07

Profit before tax 107.70 223.24

Tax expense 31.13 34.90

Profit after tax 76.57 188.34

Profit available for appropriation 194.48 190.66

Transfer to Reserve Fund under Section 45-IC (1)

of the Reserve Bank of India Act, 1934 15.31 37.67

Transfer to General Reserve 7.66 18.83

Proposed dividend 21.70 18.09

Provision for Corporate Dividend Tax written back - (1.84)

Balance carried to Balance Sheet 149.81 117.91

Earnings per share (Rs.) 5.3 13.0

The highlights of the Consolidated Financial Results are as under:

(Rs. In Crore) 2012 2011

Gross Revenue:

i) Gross written premium

a) Life Insurance

Bajaj Allianz Life Insurance Co Ltd 7,483.80 9,609.95

b) General Insurance

Bajaj Allianz General Insurance Co Ltd 3,675.89 3,129.37

ii) Gross income-Bajaj Finance Ltd 2,171.91 1,109.39

iii) Income from windpower generation-Bajaj Finserv Ltd 84.37 41.79

iv) Investment income (excluding accretions on unit -linked investment) 1,048.33 766.19

v) Others 62.11 55.14

Total 14,526.41 14,711.83

(Rs. In Crore)

2012 2011

Income from operations and other income 2,835.65 1,509.06

Amount transferred from the Policyholders' Account 1,069.13 935.51

Total Income 3,904.78 2,444.57

Profit before exceptional items 2,226.22 1,509.60

Exceptional item-Surplus on pre-payment of sales tax deferral incentive/loan - 139.07

Profit before tax 2,226.22 1,648.67

Tax expense 336.47 177.70

Profit after tax 1,889.75 1,470.97

Minority interest 551.98 377.02

Profit for the year 1,337.77 1,114.84

Earnings per share (Rs.) 92.5 77.1

Dividend

The directors recommend for consideration of the shareholders at the ensuing annual general meeting, payment of a dividend ofRs. 1.50 per share (30 per cent) for the year ended 31 March 2012. The amount of dividend and the tax thereon aggregates to Rs. 21.70 crore.

Dividend paid for the year ended 31 March 2011 wasRs. 1.25 per share (25 per cent). The amount of dividend and the tax thereon aggregated to Rs. 18.09 crore.

Registration as a Systemically Important Non-Deposit taking NBFC

Your company has been registered on 30 October 2009 by 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 company' having total assets of Rs. 100 crore and above. The company does not hold nor does it accept deposits from the public.

Operations

Detailed information on the operations of the different business lines of the Company is covered in Management Discussion and Analysis Report.

Conservation of energy

The company, being engaged in wind farm activities in addition to its financial services activities, the subject of conservation of energy is applicable to the Company only with regard to its wind farm business. Information on this is contained in Management Discussion and Analysis Report.

Foreign exchange earning and outgo

Total foreign exchange earned by the Company was Rs. 0.19 crore during the year under review, as against Rs. Nil during the previous year.

Total foreign exchange outflow during the year under review was Rs. 0.88 crore, as against Rs. 0.02 crore during the previous year.

Corporate Social Responsibility

During the year 2011-12, Bajaj Group continued its Corporate Social Responsibility initiatives in various fields. Activities in this area are set out in greater detail in the annexed Corporate Social Responsibility Report.

Directors

During the year under review, to align the current term of Sanjiv Bajaj, Managing Director with financial year-end of 31 March, the Board of Directors at its meeting held on 26 March 2012 has decided to close out his current term by 31 March 2012 and re-appoint him, subject to approval of shareholders, for a fresh tenure of 5 years commencing from 1 April 2012 to 31 March 2017, instead of doing so effective from 20 February 2013 and also fixed his remuneration, based on the recommendation of Remuneration and Nomination Committee.

Nanoo Pamnani and Madhur 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 alongwith 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

Presentation of financial results

Pursuant to Notification dated 28 February 2011 issued by the Ministry of Corporate Affairs, the format for disclosure of financial statement prescribed under Schedule VI to the Companies Act, 1956 has been substantially revised. The financial results of the Company for the year ended 31 March 2012 have, therefore, been disclosed as per the revised Schedule VI. Previous year's figures have also been restated to conform with the current year's presentation.

Consolidated financial statements

The directors also present the audited consolidated financial statements incorporating the duly audited financial statements of the subsidiaries and joint ventures 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 in consolidated balance sheet.

Further issue of capital by equity issue

To meet the Company's different requirements, the Company needs to raise upto Rs. 1,000 crore through equity issue in one or more tranches and in one or more modes.

The Board of Directors has subject to approval of shareholders decided on the following:

a) Increase in Authorised Capital from Rs. 75 crore to Rs. 100 crore.

b) Raising of capital through Equity upto Rs. 1,000 crore.

Detailed information on this is contained in the Notice to the ensuing Annual General Meeting of the Company.

Statutory disclosures

The company was not required to make an application for an exemption from the Central Government under Section 212(8) of the Companies Act, 1956 with regard to attaching of the balance sheet, statement of profit and loss and other documents of five subsidiaries of the Company for the year 2011-12 as the exemption is available under Ministry of Corporate Affairs General Circular no.2/2011 dated 8 February 2011. 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(l)(b)(iv) of the said Act, these particulars will be made available to any shareholder on request.

The company, being by and large a financial services company, there are no particulars regarding technology absorption required to be given under Section 217(l)(e) of the Companies Act, 1956 and Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988 for the year under review. Particulars required to be given relating to conservation of energy in its wind energy generation business and foreign exchange earning and outgo have been set out separately in this report.

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 2011-12 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, alongwith 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 2011-12. A declaration to this effect signed by the Managing Director/CEO of the Company is contained in this annual report.

The Managing Director/CEO and 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 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 erstwhile Monopolies and Restrictive Trade Practices ("MRTP") Act, 1969 are disclosed in the annual report in terms of Regulation 3(l)(e) of the erstwhile 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 directors recommend the appointment of Messers Dalai 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

16 May 2012


Mar 31, 2011

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

Financial results

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

The highlights of the Standalone Financial Results are as under:

(Rs. In Lakh)

2011 2010

Income from Operations & other income 12,606 12,980

Gross profit before interest & depreciation 9,431 8,130

Interest — —

Depreciation 1,003 2,196

Gross Profit before exceptional item 8,428 5,934

Exceptional item-Surplus on pre-payment of sales tax deferral incentive/loan 13,907 —

Profit before tax 22,335 5,934

Provision for tax 3,501 2,536

Profit after tax 18,834 3,398

Profit available for appropriation 19,066 2,939

Transfer to Reserve Fund under section 45-IC (1) of the Reserve Bank of India Act, 1934 3,767 680

Transfer to General Reserve 1,883 340

Proposed dividend (inclusive of dividend tax) 1,809 1,687

Provision for Corporate Dividend Tax written back (184) —

Balance carried to Balance Sheet 11,791 232

Earnings per share (Rs.) 13.0 2.3

The highlights of the Consolidated Financial Results are as under:

(Rs. In Lakh)

2011 2010

Gross Revenue:

i) Gross written premium

a) Life Insurance– Bajaj Allianz Life Insurance Co Ltd 960,995 1,141,971

b) General Insurance- Bajaj Allianz General Insurance Co Ltd 312,937 272,489

ii) Interest & Finance Charges-Bajaj Finance Ltd 110,939 —

iii) Income from windpower generation– Bajaj Finserv Ltd 4,179 4,311

iv) Investment income (excluding accretions on unit linked Investment) 76,619 63,532

v) Others 5,514 4,336

Total 1,471,183 1,486,639

(Rs. In Lakh)

2011 2010

Income from Operations & other income 150,906 46,093

Amount transferred from the Policyholders Account 93,551 52,448

Total Income 244,457 98,541

Gross profit before exceptional item 150,977 79,206

Exceptional item-Surplus on pre-payment of sales tax deferral incentive/loan 13,907 —

Profit before tax 166,973 83,028

Provision for tax 17,820 9,875

Profit before minority interest 149,186 73,153

Minority interest 37,702 17,241

Profit for the year 111,484 55,912

Earnings per share (Rs.) 77.1 38.6

Dividend

The directors recommend for consideration of the shareholders at the ensuing annual general meeting, payment of a dividend of Rs. 1.25 per share (25 per cent) for the year ended 31 March 2011. The amount of dividend is Rs. 1,809 lakh .

Dividend paid for the year ended 31 March 2010 was Rs. 1 per share (20 per cent). The amount of dividend and the tax thereon aggregated to Rs. 1,687 lakh.

Registration as a non-deposit taking NBFC

In response to the application made by the company to Reserve Bank of India, the company has been registered on 30 October 2009 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 company having total assets of Rs. 100 crore and above. The company does not hold nor does it accept deposits from the public.

Operations

Detailed information on the operations of the different business lines of the company are covered in Management Discussion and Analysis Report.

Conservation of energy

The company, being engaged in wind farm activities in addition to its financial services activities, the subject of conservation of energy is applicable to the company only with regard to its wind farm business. Detailed information on this is contained in Management Discussion and Analysis Report.

Foreign exchange earning & outgo

Total foreign exchange earned by the company was Nil during the year under review as well as in previous year.

Total foreign exchange outflow during the year under review was Rs. 2 lakh, as against Rs. 4 lakh during the previous year.

Subsidiaries & Joint Venture

Following are the companies, which are the subsidiary & joint venture companies of the company as at 31 March 2011:

Name of the Company % Shareholding of Status Bajaj Finserv Limited as on 31 March 2011

Bajaj Allianz Life Insurance Company Limited 74% Subsidiary

Bajaj Allianz General Insurance Company Limited 74% Subsidiary

Bajaj Financial Solutions Limited 100% Subsidiary

Bajaj Allianz Financial Distributors Limited 50% Joint Venture

Bajaj Finance Limited 55.98% Subsidiary

Detailed information on the operations of each subsidiary of the company are covered in Management Discussion and Analysis Report.

Corporate Social Responsibility

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

Directors

Naresh Chandra and Rajiv Bajaj retire from the board by rotation this year and being eligible, offer themselves for re-appointment.

Madhur Bajaj appointed as director in casual vacancy on the board with effect from 21 July 2010.

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 judgements 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 suffcient 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 subsidiaries and joint ventures 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 in consolidated balance sheet.

Statutory disclosures

The company made an application for an exemption from the Central Government under section 212(8) of the Companies Act, 1956 with regard to attaching of the balance sheet, profit and loss account and other documents of five subsidiaries of the company for the year 2010-11 and the approval for the same has been received. Also, the exemption is available under Ministry of Corporate Affairs General Circular no.2/2011 dated 8 February 2011. The summary of the key financials of the companys 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.

The company, being by and large a financial services company, there are no particulars regarding technology absorption required to be given under section 217(1)(e) of the Companies Act, 1956 and Companies (Disclosure of Particulars in the report of board of directors) Rules, 1988 for the year under review. Particulars required to be given relating to conservation of energy in its wind energy generation business and foreign exchange earning and outgo have been set out separately in this report.

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.

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 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 Managing Director/CEO of the company is contained in this annual report.

The Managing Director/CEO and 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 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 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 directors recommend the appointment of Messrs 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.

On behalf of the board of directors

Rahul Bajaj Chairman

17 May 2011


Mar 31, 2010

Financial results

The financial results of the company are elaborated in the annexed Management Discussion and Analysis Report. The highlights are as under:

2009-10 2008-09 Rs. In Million Rs. In Million

Gross profit before interest & depreciation 813 931

Depreciation 219 298

Provision for taxation 254 219

Disposable surplus 294 414

Proposed dividend (inclusive of dividend tax) 169 169

Balance carried in Profit & Loss Account 23 --

Dividend

The directors recommend for consideration of the shareholders at the ensuing annual general meeting, payment of a dividend of Re.1 per share (20 percent) for the year ended 31 March 2010. The amount of dividend and the tax thereon aggregates to Rs.169 million.

Dividend paid for the year ended 31 March 2009 was Re.1 per share (20 per cent). The amount of dividend and the tax thereon aggregated to Rs.169 million.

Registration as a non-deposit taking NBFC

In response to the application made by the company to Reserve Bank of India, the company has been registered on 30 October 2009 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 categorized as a systemically important non-deposit taking non-banking financial companyhaving total assets of Rs.100 crores and above. The company does not hold nor does it accept deposits from the public.

Operations

Detailed information on the operations of the different business lines of the company are covered in Management Discussion and Analysis Report.

Conservation of energy

The company, being engaged in wind farm activities in addition to its financial services activities, the subject of conservation of energy is applicable to the company only with regard to its wind farm business. Detailed information on this is contained in Management Discussion and Analysis Report.

Foreign exchange earning & outgo

Total foreign exchange earned by the company during the year under review was Rs. Nil, compared to Rs. 52.7 million during the previous year.

Total foreign exchange outflow during the year under review was Rs. 0.4 million, as against Rs. 4.1 million during the previous year.

Subsidiaries/Joint Venture/Associates

Following are the companies, which are the subsidiary/joint venture/associate companies of the company as at 31 March 2010:

Name of the Company % Shareholding of Status Bajaj Finserv Limited as on 31 March 2010

Bajaj Allianz General Insurance Company Limited 74% Subsidiary

Bajaj Allianz Financial Distributors Limited 50% Joint Venture

Corporate Social Responsibility

During the year 2009-10, Bajaj Group continued its Corporate Social Responsibility initiatives in various fields. Activities in this area are set out in greater detail in the Corporate Social Responsibility Report.

Directors

D J Balaji Rao and S H Khan retire from the board by rotation this year and being eligible, offer themselves for re-appointment.

Madhur Bajaj resigned from the board with effect from 22 August 2009. The board of directors places its appreciation for the valuable advice and guidance provided by Madhur Bajaj during his tenure as director.

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 judgements 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 subsidiaries, associates and joint ventures 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 in consolidated balance sheet.

Statutory disclosures

The company has made an application for an exemption from the central government under section 212(8) of the Companies Act, 1956 with regard to attaching of the balance sheet, profit and loss account and other documents of three subsidiaries of the company for the year 2009-10 and the approval for the same has been received. The summary of the key financials of the companys 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 DirectorsReport. 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, being by and large a financial services company, there are no particulars regarding technology absorption required to be given under section 217(1)(e) of the Companies Act, 1956 and Companies (Disclosure of Particulars in the report of board of directors) Rules, 1988 for the year under review. Particulars required to be given relating to conservation of energy in its wind energy generation business and foreign exchange earning and outgo have been set out separately in this report.

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.

Disclosures as prescribed by Non-Banking Financial (Non-Deposit Accepting of 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 2009-10 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 2009-10. A declaration to this effect signed by the Managing Director/CEO of the company is contained in this annual report. The Managing Director/CEO and 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 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 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 directors recommend the appointment of Messrs Dalai & 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