Corporate Governance

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Bajaj Auto Limited.

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 Introduction to Bajaj groups and
Company
Bajaj Auto is the flagship of the Bajaj group of companies.
The group comprises of 34 companies and was founded in
the year 1926. 
The companies in the group are:  Bajaj Sevashram Pvt. Ltd.
• Bajaj Auto Jamnalal Sons Pvt. Ltd.
Rahul Securities Pvt Ltd
Shekhar Holdings Pvt Ltd
Ltd. Madhur Securities Pvt Ltd
Niraj Holdings Pvt Ltd
Shishir Holdings Pvt Ltd
• Bajaj Kamalnayan Investments & Trading
Pvt Ltd
Sanraj Nayan Investments Pvt. Ltd.
Holdings & Hercules Hoists Ltd.
Hind Musafir Agency Pvt. Ltd.

Investment Bajaj International Pvt. Ltd.

Bachhraj Factories Pvt. Ltd.
Baroda Industries Pvt. Ltd.
Ltd. Jeevan Ltd.
Bachhraj & Co Pvt Ltd
The Hindustan Housing Co. Ltd.
• Bajaj Finserv
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Hospet Steels Ltd
 Introduction to Company
• The Bajaj Group is amongst the top 10 business
houses in India.

• Its footprint stretches over a wide range of

industries, spanning automobiles (two-wheelers
and three-wheelers), home appliances, lighting,
iron and steel, insurance, travel and finance.

• The group's flagship company, Bajaj Auto, is

ranked as the world's fourth largest two- and
three- wheeler manufacturer and the Bajaj brand
is well-known across several countries in Latin
America, Africa, Middle East, South and South
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 Company History
• Founded in 1926, at the height of India's
movement for independence from the
British, the group has an illustrious history.

• The integrity, dedication, resourcefulness

and determination to succeed which are
characteristic of the group today, are often
traced back to its birth during those days of
relentless devotion to a common cause.

• Jamnalal Bajaj, founder of the group, was a

close confidant and disciple of Mahatma
Gandhi. In fact, Gandhiji had adopted him as
his son. This close relationship and his deep
involvement in the independence
movement did not leave Jamnalal Bajaj with
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much time to spend on his newly launched
 Evolution

• His son, Kamalnayan

Bajaj, then 27, took
over the reigns of
business in 1942. He
too was close to
Gandhiji and it was
only after
Independence in 1947,
that he was able to
give his full attention
to the business.
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 Rajiv Bajaj MD & CEO, Bajaj Auto
Ltd.
• Rajiv Bajaj, 42, is the eldest son of
India’s leading industrialist Rahul
Bajaj.

• When he joined his family business

in the late 90s, Bajaj, India’s
undisputed two wheeler maker of
several leaders was slowly losing
ground to motorcycles made by
international joint venture
companies.

• Rajiv fought back making his own

motorcycles and today, Bajaj’s
Pulsar is a sought after bike by the
Indian youth.

• An engineer at heart, Rajiv dislikes

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 Major Stakeholders

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 Major Stakeholder

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 Shares held by non-executive
directors

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 Board Members

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• As on 31 March 2012, the Board of
Bajaj Auto consisted of sixteen
directors, of whom four directors
were executive.

• Nine out of twelve non-executive

directors were independent.

• The Board has no institutional

nominee directors.
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 Board Procedures

• During 2011-12, the Board of Directors met six

times: on 18 May 2011, 14 July 2011, 16
September 2011, 20 October 2011, 19 January
2012 and 27 March 2012.

• The gap between any two meetings has been less

than four months.

• The Board meeting held on 27 March 2012 was

done with Video Conferencing facility in terms of
the circulars issued by Ministry of Corporate
Affairs.
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 Audit Committee
• After the demerger of erstwhile BAL
in 2008, the new Bajaj Auto set up its
audit committee in 2008.

• The company has been reviewing the

working of the committee from time
to time to bring about greater
effectiveness in order to comply with
various requirements under the
Companies Act, 1956 and clause 49
of the listing agreement.
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 Remuneration and Nomination
Committee
• Bajaj Auto constituted the remuneration committee of the Board
on 30 January 2008.Subsequently, the Board of Directors at its
meeting held on 16 January 2009 extended the terms of reference
of the said committee to include nomination functions and
restyled the said committee as ‘Remuneration and Nomination
Committee’.

• The committee has the following members:

• 1. D J Balaji Rao, Chairman Independent
• 2. S H Khan Independent
• 3. Naresh Chandra Independent
• 4. Rahul Bajaj Non-Executive.

• During the year, the committee met twice on 16 September 2011

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and 27 March 2012. S H Khan attended the meeting of 27 March
 Corporate Governance

• Bajaj Group’s commitment to good

corporate governance practices
predates SEBI and clause 49 of the
listing agreements. Transparency,
fairness, disclosure and
accountability are the main thrust to
the working of the Bajaj Group.

• Bajaj Auto Limited (‘BAL’ or ‘The

Company’
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or ‘Bajaj Auto’) maintains
 Analysis: Measuring Goodwill
• Based on environmental and social impact
performance, Bajaj Auto Limited has received
an overall Scientific Rating of 4.1, which is 18%
lower than the average for all Company Ratings.

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 SOCIAL PERFORMANCE
ENVIRONMENTAL PERFORMANCE Transparency 2
Transparency 1.6 Management 4.6
Environmental Governance 4.6
Management 4 Policies 6
Reporting 4
Governance 4 Supply Chain 4
Policies 4 Workers 5.3
Reporting 4 General 5
Occupational Health and
Supply Chain 4 5
Safety
Resource Use 5.5 Diversity and Equal
Opportunity 7
General Resource
Management 6 Human Rights 4.2
General Human Rights 5
Materials 4 Freedom of Assoc. &
Collect. Bargaining 4
Water 6
Energy Child Labor 4
6
Forced and Compulsory
Environmental Impacts Labor 4
4
Indigenous Rights 4
Biodiversity 4 Community 4.8
Emissions 4 Public Policy 4
Stakeholder Engagement 4
General Emissions
4 Community Relationships 6.5
Greenhouse Gases Consumers 4.3
4 Customer Health and
Safety 5
Criteria and Hazardous Air
Pollutants 4 Product and Service
Labeling 4

Water Pollution Marketing

4 Communications 4

Waste 4
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 Analysis: CRISIL Rating

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 CRISIL RATING FOR BAL
• CRISIL’s ratings on the debt instruments of Bajaj
Auto Ltd (Bajaj Auto) continue to reflect Bajaj
Auto’s established position in India’s motorcycle
and passenger carrier three-wheeler segments,
and robust financial risk profile marked by a
strong capital structure and ample liquidity.

• These rating strengths are partially offset by Bajaj

Auto’s moderate presence in the executive
segment of the motorcycles market.

• The company is likely to maintain its near debt-

free status over the medium term, given that its
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average capital expenditure (capex) requirements
•  Bajaj Auto’s substantial portfolio of
liquid investments and cash
surpluses (over Rs.55 billion as on
March 31, 2012) provides steady
treasury income, besides enhancing
its financial flexibility. CRISIL believes
that Bajaj Auto’s robust financial risk
profile helps the company to
withstand any competitive
challenges in terms of pricing
flexibility, the necessary expenditure
for product launches and upgrades,
or any sluggishness in revenue
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 References

• http://
www.moneycontrol.com/news_html_files/news_attachm

• Bajaj Auto limited Annual Report 2011-2012

• http://www.bajajauto.com/bajaj_corporate.asp

• http://
crisil.com/Ratings/RatingList/RatingDocs/BajajAutoLtd_

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 Ninad V Deogharkar.
PG-11-068

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