Date 09/04/2011 Rahul Bajaj committee

Board of Directors
Rahul Bajaj Chairman The commitment of Bajaj Group to the highest standards of good corporate governance practices predates SEBI and clause 49 of the listing agreements. Transparency, fairness, disclosure and accountability are central to the working of the Bajaj Group. Bajaj Auto Limited maintains the same tradition and commitment transparency in business operations for good corporate governance, the companys policy is to have an appropriate blend of executive and independent directors to maintain the independence of the board, and to separate the board functions of governance and management

Corporate social responsibility

During the year, your company continued affirmative action and corporate social responsibility initiatives in various fields

Education
The company has launched a programme that would help SC / ST students achieve academic excellence and make them on par with those, who can afford coaching for entrance to IITs. During the year under review, one student with a brilliant academic record was identified from the underprivileged and low-income group, for reimbursement of complete fees for the preparation of IIT entrance test under the guidance of IITians Prashikshan Kendra

Other social activities

During the year, our employees volunteered for blood donation camp at Deenanath Mangeshkar Hospital, Pune and Dr Susheela Tiwari Hospital, Pantnagar
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Health
Government of India Ministry of Health and Family Welfare National Aids Control Organisation (NACO) and CII have initiated Public Private Partnership (PPP) in order to provide better healthcare to AIDs patients. Your company has signed a tripartite MoU with NACO and Yeshwantrao Chavan Municipal Hospital (YCMH) in Pimpri to set up an Anti Retroviral Treatment Centre (ART Centre) at YCMH in Pimpri, Pune with the cooperation of Pimpri Chinchwad Municipal Corporation for HIV patients. Many dignitaries

Community Care
In line with our commitment to enrich the life of all with whom we deal, we showed sensitivity to the employees, who opted for voluntary retirement at our Akurdi Plant. Soon after the Akurdi employees expressed their interest in accepting the Voluntary Retirement Scheme, the company organized a series of interactive meetings with leading financial institutions. The officers explained the need to prudently and safely invest the monies received, considering the various options available today.

Rural and community development activities and empowerment of women

The company continued with its rural development activities in Pune and Aurangabad districts of Maharashtra through its trust, Jankidevi Bajaj Gram Vikas Sanstha (JBGVS).JBGVS aims at an integrated development of 43 selected villages, to be carried out by the villagers under their own leadership and through united efforts forged by local organisations with JBGVS acting as a catalyst.

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Kumar Mangalam Committee

There are some Indian companies, which have voluntarily established high standards of corporate governance, but there are many more, whose practices are a matter of concern. There is also an increasing concern about standards of financial reporting and accountability, especially after losses suffered by investors and lenders in the recent past, which could have been avoided, with better and more transparent reporting practices. Investors have suffered on account of unscrupulous management of the companies, which have raised capital from the market at high valuations and have performed much worse than the reported figures leave alone the financial projections at the time of raising money. Another example of bad governance has been the allotment of promoters shares, on preferential basis at preferential prices, disproportionate to market valuation of shares, leading to further dilution of wealth of minority shareholders. This practice however was later contained.

Objective of committee
In the opinion of the Committee, the imperative for corporate governance lies not merely in drafting a code of corporate governance, but in practising it. Even now, some companies, are following exemplary practices, without the existence of formal guidelines on this subject. Structures and rules are important because they provide a framework, which will encourage and enforce good governance; but alone, these cannot raise the standards of corporate governance. What counts is the way in which these are put to use. The Committee is thus of the firm view, that the best results would be achieved when the companies begin to treat the code not as a mere structure, but as a way of life. . It follows that the real onus of achieving the desired level of corporate governance, lies in the proactive initiatives taken by the companies themselves and
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not in the external measures like breadth and depth of a code or stringency of enforcement of norms. The extent of discipline, transparency and fairness, and the willingness shown by the companies, will be the crucial factors in achieving the desired confidence of stakeholders and the goals of the company.

Functions of the Management

The management comprises the Chief Executive, Executive-directors and the key managers of the company, involved in day-to-day activities of the company. The Committee recommends that the management should carry out the following functions: Assisting the board in its decision making process in respect of the companys strategy, policies, code of conduct and performance targets, by providing necessary inputs. Implementing the policies and code of conduct of the board. Managing the day to day affairs of the company to best achieve the targets and goals set by the board, to maximize the shareholder value. Providing timely, accurate, substantive and material information, including financial matters and

The Recommendations
The recommendations are being made by the Committee keeping in view the fact that, any code of Corporate Governance should be dynamic, and should change with changing context and times. This code is the first formal and comprehensive attempt, in the context of prevailing conditions of governance in Indian companies, as well as the state of capital markets. This code may need to be reviewed from time to time, keeping pace with the changing expectations of the stakeholders and increasing sophistication achieved in capital markets.

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ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (OECD)

Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into force on 30th September 1961, the Organization for Economic Co-operation and Development (OECD) shall promote policies designed: To achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; To contribute to sound economic expansion in Member as well as nonmember countries in the process of economic development; and to contribute to the expansion of world trade on a multilateral, nondiscriminatory basis in accordance with international obligations. Over the past decade, the world has witnessed a significant transformation in the role of the private sector in economic development and job creation. As more and more countries have adopted market-based approaches to economic policy, awareness of the importance of private corporations for the welfare of individuals has increased. Corporations create jobs, generate tax income, produce a wide array of goods and services at reasonable prices, and increasingly manage our savings and secure our retirement income. Amid growing reliance world wide on the private sector, the issue of corporate governance has similarly risen in prominence.

Framework of OECD
The corporate governance framework should promote transparent and efficient markets, be consistent with the rule of law and clearly articulate the division of responsibilities among different supervisory, regulatory and enforcement authorities.
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A. The corporate governance framework should be developed with a view to its impact on overall economic performance, market integrity and the incentives it creates for market participants and the promotion of transparent and efficient markets. B. The legal and regulatory requirements that affect corporate governance practices in a jurisdiction should be consistent with the rule of law, transparent and enforceable. C. The division of responsibilities among different authorities in a jurisdiction should be clearly articulated and ensure that the public interest is served. D. Supervisory, regulatory and enforcement authorities should have the authority, integrity and resources to fulfil their duties in a professional and objective manner. Moreover, their rulings should be timely, transparent and fully explained

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