Sona Koyo Steering Systems Ltd. Business Report FY ended Mar. 2016

Financial Overview

(in million INR)

	FY ended Mar. 31, 2016	FY ended Mar. 31, 2015	Rate of change (%)	Factors
Net Sales	15,342.8	15,578.4	(1.5)	1)
Profit before tax	794.5	857.1	(7.3)	-

Factors
1) Net Sales
-The Company's sales for the fiscal year ended March 31, 2016 decreased by 1.5% from the previous fiscal year to INR 15,342.8 million. The decrease in sales was due to the shift in customer preferences for specific vehicle models.

-The Company operates primarily in the Indian market. The Company's yearly exports have consistently amounted to less than ten percent of its total sales turnover.

Activity of Subsidiaries

JTEKT Sona Automotive India Limited (JSAI)
-In the fiscal year ended March 31, 2016, JSAI began production of Column-type Electric Power Steering systems for the Mahindra "KUV100".

-JSAI received a global excellence award for “Best improvement in Productivity” from JTEKT Corporation, Japan, by maintaining a high rate of continuous production throughout the fiscal year ended March 31, 2016 among all JTEKT companies across the world.

Sona Fuji Kiko Automotive Limited (SFAL)
-SFAL began production of jacket column assemblies for the Mahindra "KUV100" and manual column assemblies for the TKML's "Innova Crysta" during the fiscal year ended March 31, 2016.

Recent Developments

-Capacity utilization based on product line

(FY ended Mar. 31, 2016)

Product line	Capacity utilization (%)
Steering components	58
Driveline components	32

Contracts

-The Company is participating such as Mahindra’s “KUV100” and “TUV300”, Toyota’s Innova/Fortuner, and Maruti Suzuki’s “Vitara Brezza”, were launched either in the last quarter of the fiscal year ended March 31, 2016 or are being launched in the first quarter of the fiscal year ended March 31, 2017.

Awards

-In 2016, the Company was recognized by Maruti Suzuki and received awards for “Quality Improvement” and “Design and Development” at a Bangkok supplier conference.

-Mahindra & Mahindra recognized the Company’s contribution in its two new vehicle launches during the fiscal year ended March 31, 2016 with the “TUV300” and “KUV100” at the Barcelona Supplier conference.

-JSAI received a global excellence award for “Best improvement in Productivity” from JTEKT Corporation, Japan, by maintaining a high rate of continuous production throughout the fiscal year ended March 31, 2016 among all JTEKT companies across the world.

R&D Expenditure

(in million INR)

	FY ended Mar. 31, 2016	FY ended Mar. 31, 2015	FY ended Mar. 31, 2014
Overall	27.6	24.0	30.7

-The Company was engaged in the following automotive research and development activities during the fiscal year ended March 31, 2016:

Studying advanced driver assistance systems and steering systems for automated vehicles
Determining factors which cause oil degradation in hydraulic power steering systems
Developing a method to process ADC12 aluminum alloy through Rheo Pressure die casting

Capital Expenditures

(in million INR)

	FY ended Mar. 31, 2016	FY ended Mar. 31, 2015	FY ended Mar. 31, 2014
Sona Koyo Steering Systems Ltd.	806	650	855

-The capital expenditure for the fiscal year ended March 31, 2016 was principally incurred towards new product development, backwards integration at the Dharuhera-3 facility, civil work at the Dharuhera-2 facility, testing equipment for research and development, and purchase of land in Gujarat.

Investments in India

-The Company has invested in a land bank of approximately 30 acres in Gujarat in order to be closer to the customer as most of the Company’s automotive customers expand in the state of Gujarat. The land is ideally located on the main SH-7 highway and is approximately 12 km from the Suzuki plant and 6 km from the Honda plant.