Rane Group Business Report FY ended Mar. 2013-2015

Recent Years

Financial Overview (FY ended March 31, 2015)

-In the fiscal year ended March 31, 2015, the Group's net revenue from operations increased by 14.7% over the previous year to INR 22,108.8 million.

Financial Overview (FY ended March 31, 2014)

-In the fiscal year ended March 31, 2014, the Group's net revenue from operations totaled INR 19,275.3 million, a decrease of 0.5% from the previous year. The growth in exports was offset by decreases in sales for OEMs and the aftermarket.

Restructuring

Kar Mobiles merged into Rane Engine Valve
-In May 2014, the Company announced that its subsidiary, Kar Mobiles Limited, would merge with another of its subsidiaries, Rane Engine Valve Limited, effective April 1, 2014.

Conversion of Rane TRW Steering and Rane NSK Steering
-During the fiscal year ended March 31, 2015, both Rane TRW Steering Systems and Rane NSK Steering Systems were converted from public limited companies to private limited companies

Rane Diecast was merged into Rane (Madras)
-The Company announced that it has merged Rane Diecast Ltd. with Rane (Madras) Ltd., effective April 1, 2013. Rane Diecast Ltd. manufactured precision high pressure aluminum diecast products mainly for overseas market.

Developments in India

Rane NSK Steering Systems Limited
-Rane NSK Steering Systems developed and launched eight new products during the fiscal year ended March 31, 2015. These new launches generated INR 28 million in revenue during the fiscal year with the potential for additional revenue in the following years.

Rane TRW Steering Systems Limited
-In the fiscal year ended March 2014, a new plant in Chennai has commenced its operation with a capacity of 268,000 units per annum for manufacturing air bags.

-Rane TRW Steering Systems Limited began exporting seat belts and buckles to Brazil in the fiscal year ended March 31, 2013.

Rane (Madras) Limited

-During the fiscal year ended March 31, 2013, Rane (Madras) Limited started production of hydro-static steering gears and cylinders for commercial vehicles and farm tractors.

-In the fiscal year ended March 31, 2013, Rane (Madras) Limited began to export its products to Brazil with a focus of penetrating South American markets.

Rane Brake Lining Limited
-During the fiscal year ended March 31, 2013, Rane Brake Lining Limited launched multiple new products including:

  • Brake linings and disc pads for passenger car, MUV, and M&HCV applications
  • Asbestos-free brake lining for low floor buses
  • Asbestos-free disc pads for passenger cars and small commercial vehicles

Major Awards

Year Awarding Company Award
Rane (Madras) Limited
FY ended March 2015 Tata Best Supplier Award for Delivery
FY ended March 2014 Mahindra & Mahindra Best supplier award for best practices in "Sustainability Initiatives"
Apollo Tyres, Commercial Vehicle magazine Auto Component market of the year 2013
FY ended March 2013 Tata Overall Performance Award
Rane Engine Valve Limited
FY ended March 2014 Ashok Leyland Best Kaizen Award
FY ended March 2013 VE Power Train (joint venture between Volvo Group and Eicher Motors) Best Cost Co-operation 2012
Volkswagen "A" rating for its quality management system
Rane Brake Lining Limited
FY ended March 2014 Brakes India Limited Best Performance in Proprietary Category
Ashok Leyland Best Sales Support award
Rane TRW Steering Systems Limited
FY ended March 2015 Renault-Nissan Award for Component Exports for steering gears used on Renault Duster
EDI Excellence
FY ended March 2014 GM Best Practices Recognition
Rane NSK Steering Systems Limited
FY ended March 2015 Volvo Eicher Commercial Vehicles Outstanding Contribution towards Supply Chain Management
FY ended March 2014 Volvo Eicher Commercial Vehicles Outstanding Contribution to New Product Development
Toyota Kirloskar Certificate of appreciation for achieving Quality & Delivery Targets
2013 Toyota Kirloskar Best Kaizen Award

Contracts

Rane TRW Steering Systems
-In the fiscal year ended March 31, 2015, Rane TRW Steering Systems' Inflatable Restraint Systems were nominated for use in multiple Renault platforms.

Rane Engine Valve Limited
-In the fiscal year ended March 31, 2014, Rane Engine Valve Limited acquired business order from Renault for its A-level small car to debut in 2015.

R&D Expenditure

(in million INR)
FY ended Mar. 31, 2015 FY ended Mar. 31, 2014 FY ended Mar. 31, 2013
Rane (Madras) Limited 123.8 83.9 66.0
Rane Engine Valve Limited 25.5 9.7 7.2
Rane Brake Lining Limited 100.1 190.4 68.0

-In the fiscal year ended March 31, 2015, the Company's R&D expenditures were 1.1% of the Company's total sales revenue. The Company plans to increase the percentage of R&D expenditures to 2.0% of total revenue by 2020.

-As of March 2014, the Group has been increasing its R&D expenditure from 0.5% to 1.5% of its yearly sales.

R&D Facilities

Rane (Madras) Limited
-During the fiscal year ended March 31, 2015, Rane (Madras) Limited established a new R&D facility in Pondicherry dedicated towards steering systems.

R&D Activities

Rane (Madras) Limited
-Specific R&D activities that Rane (Madras) limited focused on in the fiscal year ended March 31, 2015:

  • Development of springless ball joints for commercial vehicles
  • Development of fine adjuster sleeve for drag links in commercial vehicles
  • Creation of concept design of cab tilt cylinders

-Specific R&D activities that Rane (Madras) Limited focused on in the fiscal year ended March 31, 2014:

  • Developing EPS for small commercial vehicles and farm tractors

-Specific R&D activities that Rane (Madras) Limited focused on in the fiscal year ended March 31, 2013:

  • Developing product technology for mechanical rack & pinion for deployment with Electric Power Steering (EPS), with focus on attenuating friction and noise
  • Developing EPS for small commercial vehicles and farm tractors
  • Developing hydraulic products for commercial vehicles, farm tractors and off-road vehicles
  • Developing ball joints for vehicular suspension application
  • Enhancing capabilities in the design of suspension control arms
  • Studying various methods to reduce weight in components such as using engineering plastics in place of metals and high-strength steel to reduce the size of parts

Rane Engine Valve Limited
-Specific R&D activities that Rane Engine Valve Limited focused on in the fiscal year ended March 31, 2015:

  • Continued development of R&D infrastructure for materials engineering, engine and rig testing
  • Development of new materials and processes for valve technology
  • Research on weight, friction, and wear reduction.

-In the fiscal year ended March 2014, the Company re-established the R&D infrastructure with engine testing, rig testing and material test laboratory. The Company also developed the following items:

  • Valves for Euro 6 application
  • CNG valves for European customers
  • Prototypes for forged tappets using thin walled structure

-During the fiscal year ended March 31, 2013, Rane Engine Valve cooperated with various customers to design valves.

Rane Brake Lining Limited

-Rane Brake Lining Limited's research and development activities in the fiscal year ended March 31, 2015 focused on new manufacturing technologies for disc pads and brake linings for passenger and utility vehicles.

-In the fiscal year ended March 31, 2014, Rane Brake Lining was actively engaged in the development of new friction materials to satisfy specific customer requirements on quality and NVH while also being cost-effective.

-In the fiscal year ended March 31, 2013, Rane Brake Lining focused on the development of alternate and green materials with global suppliers to improve the performance and costs of brake linings and disc pads.

Technological Alliance

Rane Brake Lining Limited
-As of March 2014, the Company receives technical service and knowledge relating to design and manufacture of disc pads and brake linings from Nisshinbo Brake Inc.

Capital Expenditure

-The Company's capital expenditure for the fiscal year ended March 31, 2015 totaled INR 1,520 million. The Company plans to invest INR 2,070 million in capital expenditures for the fiscal year ending March 31, 2016.

-In June 2013, the Company announced that it will make a capital investment of INR 5.88 billion (approximately USD 97 million) over the next three years ending 2016. Most of the investment will be used to expand its production capacity of automotive products, including steering gears, electric power steerings (EPSs), and friction material products such as brake linings and disc pads. The group plans to allocate the funds to its seven subsidiaries:

  • Rane Madras and Rane NSK Steering Systems will receive INR 1.6 billion and INR 1.5 billion, respectively, to boost their production capacities.
  • Rane Brake Linings will receive about INR 1.1 billion to improve its R&D capability and expanding its export business.
  • Rane Engine Valve, Rane TRW Steering Systems, Rane Diecast, and Kar Mobiles will account for the remaining amount.

Investment in India

Rane (Madras) Limited
-In the fiscal year ended March 2015, Rane (Madras) Limited constructed a new die casting plant in Telangana and a new hydraulic steering system facility in Mysore. Rane (Madras) Limited also acquired a plot that will be used for a second die casting plant at Sadashivpet.

-In the fiscal year ended March 2014, Rane (Madras) Limited implemented the following investment activities:

  • Rane (Madras) expanded manufacturing capacity for recirculating ball joint steering gears, along with productivity improvement projects. Such initiatives undertaken during the fiscal year has resulted in enhancement of capacity by nearly 10% with no additional machine procurement.
  • In die-casting division, a fully automated 850 tonne high pressure die casting machine was installed to improve the volume and productivity.

-During the fiscal year ended March 31, 2013, Rane (Madras) Limited invested INR 120 million towards improving the production capacity of hydrostatic steering gears and cylinders.

Rane TRW Steering Systems Limited

-In the fiscal year ended March 31, 2015, Rane TRW Steering Systems installed new production lines for driver air bags and passenger air bags for an application with Ford.

-In April 2014, TRW Automotive Holdings Corp. announced that its joint venture 'Rane TRW Steering Systems Limited' (RTSSL) with the Company in India has expanded its production capabilities to manufacture airbags and the latest generation of seat belt systems. RTSSL is applying TRW's global manufacturing standards to produce driver and passenger airbags and seat belts at the facility and will make approximately 320,000 units per annum initially. An increase in manufacturing capacity to approximately 810,000 units is expected to occur between 2017 and 2019. (From a press release on April 28, 2014)

-In the fiscal year ended March 2014, the Company announced that Rane TRW Steering Systems will invest INR 350 million for manufacturing seatbelt and airbags during the period between 2013 and 2018.

-During the fiscal year ended March 31, 2013, Rane TRW Steering Systems Limited installed a new production line for inflatable restraint systems. This increased the annual production capacity of airbags for passenger vehicles to 320,000 units.

-In the fiscal year ended March 31, 2013, Rane TRW Steering Systems Limited increased its production capacity for seat belts by 35% from 704,000 units to 950,000 units.

Rane Brake Lining Limited
-During the fiscal year ended March 31, 2015, Rane Brake Lining Limited increased the production capacity of disc pads at its production facility in Puducherry.

-From the fiscal year ended March 2014, Rane Brake Lining plans to increase production capacity of disc pads for passenger cars, heavy commercial vehicles and two-wheeler segments over the next three years.

Rane NSK Steering Systems Limited
-During the fiscal year ended March 31, 2015, Rane NSK Steering Systems expanded the production area within its existing facility in Bawal to support additional in-sourcing and localization projects.

-In the fiscal year ending in March 31, 2016, Rane NSK Steering Systems expects to have capital expenditures of INR 558 million primarily for machinery involved in new product launches.

-In the fiscal year ended March 31, 2013, Rane NSK Steering Systems Limited achieved an increase of 24% in annual production capacity of electric power steering worm lines by improving cycle time.

Rane Engine Valve Limited
-In the fiscal year ended March 31, 2015 Rane Engine Valve Limited established a new manufacturing facility at Tumkur to expand its large engine valve portfolio.

-During the fiscal year ended March 31, 2015, Rane Engine Valve Limited expanded its plant in Ponneri to increase the facility's production capacity by 36,000 engine valves per day.

-Rane Engine Valve Limited expanded its production capacity at its plant in Trichy by 10% by commissioning a new line in March 2013.

-The former entity Kar Mobiles Limited commissioned two new production lines at its facility in Tumkur during the fiscal year ended March 31, 2013, leading to an increase in valve production to 1.8 million units per year.