BAJAJ FINANCE Auditors Report

Independent Auditors'''' Report on the Standalone Financial Statements

To the Members of Bajaj Finance Ltd.

1. We have audited the accompanying standalone financial statements of Bajaj Finance Ltd. (''''the Company''''), which comprise the Balance Sheet as at 31 March 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''''s responsibility for the standalone financial statements

2. The Company''''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (''''the Act'''') with respect to the preparation of these standalone financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'''' responsibility

3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made there under including the Accounting Standards and matters which are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditors'''' judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''''s preparation of the standalone financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''''s directors, as well as evaluating the overall presentation of the standalone financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March

2017, and its profit and its cash flows for the year ended on that date.

Report on other legal and regulatory requirements

9. As required by ''''the Companies (Auditor''''s Report) Order, 2016'''', issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the ''''Order''''), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

10. As required by section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by Law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on 31 March 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2017 from being appointed as a director in terms of section 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.

(g) With respect to the other matters to be included in the Auditors'''' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

i. The Company has disclosed the impact, if any, of pending litigations as at 31 March 2017 on its financial position in its standalone financial statements;

ii. The Company has made provision as at 31 March 2017, as required under the applicable Law or Accounting Standards, for material foreseeable losses, if any, on long-term contracts. The Company did not have any long-term derivative contracts as at 31 March 2017;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company for the year ended 31 March 2017;

iv. The Company has provided requisite disclosures in the financial statements as to its direct holdings as well as dealings in Specified Bank Notes during the period 8 November 2016 to 30 December 2016, which based on audit procedures and relying on Management representations are in agreement with the books of accounts maintained by the Company and as produced to us for our verification. However, disclosures of holdings on 8 November 2016 and depositions thereof made directly by collecting agents, in SBN and other denomination, in respect of its two-wheelers and three-wheelers financing business as detailed in note no. 34(ii)(b) to the financial statements are only to the extent of information available and received by the Company and hence are not verifiable by us.

Report on the internal financial controls under clause (i) of sub-section 3 of section 143 of the Act

1. We have audited the internal financial controls over financial reporting of Bajaj Finance Ltd. (''''the Company'''') as of

31 March 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''''s responsibility for internal financial controls

2. The Company''''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors'''' responsibility

3. Our responsibility is to express an opinion on the Company''''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the ''''Guidance Note'''') and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act

to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''''s internal financial controls system over financial reporting.

Meaning of internal financial controls over financial reporting

6. The Company''''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company''''s internal financial control over financial reporting includes those policies and procedures that

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of Management and directors of the Company; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''''s assets that could have a material effect on the financial statements.

7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper Management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

(c) The title deeds of immovable properties, as disclosed in note no. 10 on fixed assets to the financial statements, are held in the name of the Company.

2. The Company is in the business of financing and consequently, does not hold any inventory. Therefore, the provisions of clause 3(ii) of the said Order are not applicable to the Company.

3. The Company has granted secured loans to a Company covered in the register maintained under section 189 of the Act.

(a) In respect of the aforesaid loan, the terms and conditions under which such loan was granted are not prejudicial to the Company''''s interest.

(b) In respect of the aforesaid loans, the schedule of repayment of principal and payment of interest has been stipulated, and the party is repaying the principal amounts, as stipulated, and are also regular in payment of interest as applicable.

(c) In respect of the aforesaid loans, there is no amount which is overdue for more than ninety days.

4. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of section 186 of the Companies Act, 2013 in respect of the investments made by it.

5. In our opinion, and according to the information and explanations given to us, the Company being a Non-Banking Finance Company (NBFC) registered with Reserve Bank of India, is not required to comply with the provisions of sections 73, 74,

75 and 76 or any other relevant provisions of the Act and the Rules framed there under to the extent notified, with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

6. The Central Government of India has not specified the maintenance of cost records under sub-section (1) of section 148 of the Act for any of the product and services of the Company.

7. (a) According to the information and explanations given to us and the records of the Company examined by us, in our

opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employees'''' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income tax, duty of customs, duty of excise, value added tax which have not been deposited on account of any dispute. The particulars of dues of sales tax, service tax, esic and income tax as at 31 March 2017 which have not been deposited on account of a dispute are as follows:

(RS, In Crore)

Name of the statute	Nature of dues	Amount*	Period to which the amount relates	Forum where the dispute is pending
Sales Tax	Sales tax	0.86*	2005-06 to 2008-09	Additional Commissioner
	Sales tax	0.09*	2005-06	Appellate Tribunal
	Service tax	2.53	2007-08 to September 2015	Customs, Excise and Service Tax Appellate Tribunal
Central Excise Act, 1944	Service tax	1.27	2007-08 to 2013-14	Customs, Excise and Service Tax Appellate Tribunal
	Service tax	0.38	2014-15	Commissioner Appeals
	Service tax	1,147.10	2010-11 to September 2016	Company is in process of filing appeal against the order
Income Tax Act, 1961	Income tax	29.09	1995-96 to 2010-11	Mumbai High Court
ESIC	Employee State Insurance Corporation	4.46	1999-2000 to 2006-07	Employee State Insurance Court
	Employee State Insurance Corporation	0.68	1991-92 to 2002-03	Deputy Director Employee State Insurance Corporation

* Net of H 1.54 crore deposited under protest.

8. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the Balance Sheet date.

9. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments). Accordingly, the provisions of clause 3(ix) of the Order are not applicable to the Company. In our opinion, and according to the information and explanations given to us, the moneys raised by way of term loans have been applied for the purposes for which they were obtained.

10. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management although there have been few instances of loans becoming doubtful of recovery consequent upon fraudulent misrepresentation by borrowers, the amounts whereof are not material in the context of the size of the Company and the nature of its business and which have been provided for.

11. The Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

12. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of clause 3(xii) of the Order are not applicable to the Company.

13. The Company has entered into transactions with related parties in compliance with the provisions of sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18, related party disclosures specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

14. The Company had made a preferential allotment of warrants to Bajaj Finserv Ltd. (promoter) in the previous year. The warrants were converted to equity shares on payment of balance consideration as detailed in note no. 3(a) of the financial statements, in compliance with the requirements of section 42 of the Act. The amounts raised have been used for the purpose for which funds were raised.

15. The Company has not entered into any non-cash transactions with its directors or persons connected with him.

Accordingly, the provisions of clause 3(xv) of the Order are not applicable to the Company.

16. The Company is required to, and has been registered under section 45-IA of the Reserve Bank of India Act, 1934 as a ''''Loan Company''''.

For Dalal & Shah LLP

Chartered Accountants

Firm Registration Number: 102021W/W100110

S Venkatesh

Partner

Membership Number: 037942

Pune: 17 May 2017

1. We have audited the accompanying standalone financial statements of
Bajaj Finance Limited (''the Company''), which comprise the Balance Sheet
as at 31 March 2015, the Statement of Profit and Loss, the Cash Flow
Statement for the year then ended and a summary of the significant
accounting policies and other explanatory information.

Management''s responsibility for the standalone financial statements

2. The Company''s Board of Directors is responsible for the matters
stated in section 134(5) of the Companies Act, 2013 (''the Act'') with
respect to the preparation of these standalone financial statements to
give a true and fair view of the financial position, financial
performance and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including the
Accounting Standards specified under section 133 of the Act, read with
rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.

Auditors'' responsibility

3. Our responsibility is to express an opinion on these standalone
financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules
made thereunder including the Accounting Standards and matters which
are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) of the Act and other applicable
authoritative pronouncements issued by the Institute of Chartered
Accountants of India. Those Standards and pronouncements require that
we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence
about the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view, in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s directors, as well as
evaluating the overall presentation of the financial statements.

7. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the
standalone financial statements.

8. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid standalone financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of
affairs of the Company as at 31 March 2015, and its profit and its cash
flows for the year ended on that date.

Report on other legal and regulatory requirements

9. As required by ''the Companies (Auditor''s Report) Order, 2015'',
issued by the Central Government of India in terms of sub- section (11)
of section 143 of the Act (hereinafter referred to as the ''Order''), and
on the basis of such checks of the books and records of the Company as
we considered appropriate and according to the information and
explanations given to us, we give in the Annexure a statement on the
matters specified in paragraphs 3 and 4 of the Order.

10. As required by section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.

(b) In our opinion, proper books of account as required by Law have
been kept by the Company so far as it appears from our examination of
those books.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.

(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under section 133 of the
Act, read with rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the
directors as on 31 March 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2015
from being appointed as a director in terms of section 164 (2) of the
Act.

(f) With respect to the other matters to be included in the Auditor''s
Report in accordance with rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our knowledge and belief
and according to the information and explanations given to us:

i The Company has disclosed the impact, if any, of pending litigations
as at 31 March 2015 on its financial position in its financial
statements. ii. The Company has made provision as at 31 March 2015,
as required under the applicable Law or Accounting Standards, for
material foreseeable losses, if any, on long-term contracts. The
Company did not have any long-term derivative contracts as at 31 March
2015.

iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company during the year ended 31 March 2015.

Referred to in paragraph 9 of the Independent Auditors'' Report of even
date to the members of Bajaj Finance Limited on the standalone
financial statements as of and for the year ended 31 March 2015

1. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.

(b) The fixed assets of the Company have been physically verified by
the Management according to a phased programme designed to cover all
the items over a period of three years which, in our opinion, is
reasonable having regard to the size of the Company and the nature of
its assets. Pursuant to the programme, a portion of the fixed assets
has been physically verified by the Management during the year and no
material discrepancies have been noticed on such verification. 2. The
Company is in the business of financing, and consequently, does not
hold any inventory. Therefore, the provisions of clause 3(ii) of the
said order are not applicable to the Company.

3. The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under section 189 of the Act. Therefore, the provisions of clause 3
(iii)(a) and (iii)(b) of the said Order are not applicable to the
Company.

4. In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of fixed assets and for the sale of services. Further, on the
basis of our examination of the books and records of the Company, and
according to the information and explanations given to us, we have
neither come across, nor have been informed of, any continuing failure
to correct major weaknesses in the aforesaid internal control system.

5. In our opinion, and according to the information and explanations
given to us, the Company has complied with the provisions of sections
73, 74, 75 and 76 or any other relevant provisions of the Act and the
Rules framed thereunder to the extent notified, with regard to the
deposits accepted from the public. According to the information and
explanations given to us, no order has been passed by the Company Law
Board or National Company Law Tribunal or Reserve Bank of India or any
Court or any other Tribunal on the Company in respect of the aforesaid
deposits.

6. The Central Government of India has not specified the maintenance
of cost records under sub-section (1) of section 148 of the Act for any
of the services of the Company.

7. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is regular in depositing the undisputed statutory dues, including
provident fund, employees'' state insurance, income tax, sales tax,
wealth tax, service tax, duty of customs, duty of excise, value added
tax and other material statutory dues, as applicable, with the
appropriate authorities.

(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of income-tax,
wealth-tax, duty of customs, duty of excise which have not been
deposited on account of any dispute. The particulars of dues of sales
tax, service tax as at 31 March 2015 which have not been deposited on
account of a dispute, are as follows:

(Rs. In Crore)

Name of the Period to which the
statute Nature of dues Amount amount relates

Sales Tax 0.86 2005-06 to 2008-09

Sales tax 0.09 2005-06

Sales Tax Sales tax 1.54 2008-09 to 2011-12

Sales tax 0.70 2012-13 to July 14

Sales tax 1.31 2005-06 to 2006-07

Service Tax 0.76 2007-08 to 2011-12

Central Excise

Service Tax 0.22 2012-13



Name of the
statute Forum where the
dispute is pending

Sales Tax Additional Commissioner

Appellate Tribunal

Rajasthan Tax Board

Deputy Commissioner Appeals

Sales Tax Appellate Tribunal

Central Excise Customs, Excise & Service Tax
Appellate Tribunal

Commissioner Appeals

(c) The amount required to be transferred to Investor Education and
Protection Fund has been transferred within the stipulated time in
accordance with the provisions of the Companies Act, 1956 and the rules
made thereunder.

8. The Company has no accumulated losses as at the end of the
financial year and it has not incurred any cash losses in the financial
year ended on that date or in the immediately preceding financial year.

9. According to the records of the Company examined by us and the
information and explanations given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the balance sheet date.

10. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee

Pfor loans taken by others from banks or financial institutions during
the year. Accordingly, the provisions of clause 3(x) of the order are
not applicable to the Company. 11. In our opinion, and according to
the information and explanations given to us, the term loans have been
applied for the purposes for which they were obtained.

12. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of such case by the Management,
although there have been few instances of loans becoming doubtful of
recovery consequent upon fraudulent misrepresentation by borrowers, the
amounts whereof are not material in the context of the size of the
Company and the nature of its business and which have been provided
for.

For Dalal & Shah
Chartered Accountants
Firm Registration Number: 102021W

S. Venkatesh
Partner

Membership Number: 037942
Pune: 20 May 2015

1. We have audited the accompanying financial statements of Bajaj
Finance Limited (the "Company"), which comprise the Balance Sheet as at
31 March 2014, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information, which we have
signed under reference to this report.

Management''s responsibility for the financial statements

2. The Company''s Management is responsible for the preparation of
these financial statements that give a true and fair view of the
financial position, financial performance and cash flows of the Company
in accordance with the Accounting Standards notified under the
Companies Act, 1956 (the "Act") read with the General Circular 15/2013
dated 13 September 2013 of the Ministry of Corporate Affairs in respect
of section 133 of the Companies Act, 2013. This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.

Auditors'' responsibility

3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing and other applicable authoritative
pronouncements issued by the Institute of Chartered Accountants of
India. Those Standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence,
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors'' judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditors consider internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion

on the effectiveness of the entity''s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by Management, as
well as evaluating the overall presentation of the financial
statements.

5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.

Opinion

6. In our opinion, and to the best of our information and according to
the explanations given to us, the accompanying financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March 2014;

b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.

Report on other legal and regulatory requirements

7. As required by ''the Companies (Auditors'' Report) Order, 2003'', as
amended by ''the Companies (Auditors'' Report) (Amendment) Order, 2004'',
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Act (hereinafter referred to as the "Order"), and
on the basis of such checks of the books and records of the Company as
we considered appropriate and according to the information and
explanations given to us, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.

8. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purpose of our
audit;

b) In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;

c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards notified under the Companies Act, 1956 read with
the General Circular 15/2013 dated 13 September 2013 of the Ministry of
Corporate Affairs in respect of section 133 of the Companies Act, 2013;

e) On the basis of written representations received from the directors
as on 31 March 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31 March 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act.

Annexure to Independent Auditors'' Report

Referred to in paragraph 7 of the Independent Auditors'' Report of even
date to the members of Bajaj Finance Limited on the financial
statements for the year ended 31 March 2014

1. a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.

b) The fixed assets are physically verified by the Management according
to a phased programme designed to cover all the items over a period of
three years which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. Pursuant to the
programme, a portion of the fixed assets has been physically verified
by the Management during the year and no material discrepancies have
been noticed on such verification.

c) In our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.

2. The Company is in the business of financing, and consequently, does
not hold any inventory. Therefore, the provisions of clause 4 (ii) of
the said order are not applicable to the Company.

3. The Company has not granted/taken any loans, secured or unsecured,
to companies, firms or other parties covered in the register maintained
under section 301 of the Act. Therefore, the provisions of clause 4
(iii) [(b),(c) and (d)/(f) and (g)] of the said order are not
applicable to the Company.

4. In our opinion, and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of fixed assets and for the sale of services. Further, on the
basis of our examination of the books and records of the Company, and
according to the information and explanations given to us, we have
neither come across, nor have been informed of, any continuing failure
to correct major weaknesses in the aforesaid internal control system.

5. a) According to the information and explanations given to us, we
are of the opinion that the particulars of all contracts or
arrangements that need to be entered into the register maintained under
section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion, and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of rupees five lakh in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.

6. In our opinion, and according to the information and explanations
given to us, the Company has complied with the provisions of sections
58A and 58AA or any other relevant provisions of the Act and the
''Companies (Acceptance of Deposits) Rules, 1975'' with regard to the
deposits accepted from the public. According to the information and
explanations given to us, no order has been passed by the Company Law
Board or National Company Law Tribunal or Reserve Bank of India or any
Court or any other Tribunal on the Company in respect of the aforesaid
deposits.

7. In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.

8. The Central Government of India has not prescribed the maintenance
of cost records under clause (d) of sub-section (1) of section 209 of
the Act for any of the products of the Company.

9. a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, the Company
is regular in depositing the undisputed statutory dues, including
provident fund, investor education and protection fund, employees''
state insurance, income tax, sales tax, wealth tax, service tax,
customs duty, excise duty and other material statutory dues, as
applicable, with the appropriate authorities.

b) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of sales
tax, employee state insurance and service tax as at 31 March 2014 which
have not been deposited on account of a dispute are as follows:

(Rs. In Crore)

Name of the Period to which the Forum where the
statute Nature of
dues Amount amount relates dispute is
pending

Sales Tax Value
Added Tax
liability 2.48 Year 2005-06 to
2012-13 Commissioner
Appeals

Employee
State
Insurance 4.46 Year 1999-2000 to
2006-07 Employee State
ESIC Corporation Insurance Court

Employee
State
Insurance 0.68 Year 1991-92 to
2002-03 Deputy Director
Employee State
Corporation Insurance
Corporation

Central
Excise Service Tax 0.76 Year 2007-08 to
2011-12 Customs, Excise
and Service Tax
Appellate
Tribunal

10. The Company has no accumulated losses as at the end of the
financial year and it has not incurred any cash losses in the financial
year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the Balance Sheet date.

12. In our opinion, the Company has maintained adequate documents and
records in the cases where it has granted loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities.

13. As the provisions of any special statute applicable to chit
fund/nidhi/mutual benefit fund/societies are not applicable to the
Company, the provisions of clause 4(xiii) of the Order are not
applicable to the Company.

14. In our opinion, the Company has maintained proper records of
transactions and contracts relating to dealing or trading in shares,
securities, debentures and other investments during the year and timely
entries have been made therein. Further, such securities have been held
by the Company in its own name or are in the process of transfer in its
name, except to the extent of the exemption granted under section 49 of
the Act.

15. In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
Accordingly, the provisions of clause 4(xv) of the Order are not
applicable to the Company.

16. In our opinion, and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.

17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that the no funds raised on short-term basis have been used for
long-term investment.

18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Act during the year. Accordingly, the provisions of clause
4(xviii) of the Order are not applicable to the Company.

19. The Company has created security in respect of debentures issued
and outstanding at the year-end.

20. The Company has not raised any money by public issues during the
year. Accordingly, the provisions of clause 4(xx) of the Order are not
applicable to the Company.

21. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud by the Company and
no material fraud on the Company was noticed or reported during the
year, although there have been few instances of loans becoming doubtful
of recovery consequent upon fraudulent misrepresentation by borrowers,
the amounts whereof are not material in the context of the size of the
Company and the nature of its business and which have been provided
for.

For Dalal & Shah

Firm Registration Number: 102021W

Chartered Accountants

Anish Amin

Partner

Membership Number 40451

Pune: 14 May 2014