bhukhanvala tools pvt ltd Management discussions


BHUKHANVALA TOOLS PRIVATE LIMITED ANNUAL REPORT 2006-2007 MANAGEMENT DISCUSSION AND ANALYSIS PERFORMANCE: Sales for the year were Rs 15,462 lacs as against Rs. 11,488 lass in the previous year. Loss for the year is Rs.888 lacs as against Profit of Rs.232 lacs in the previous year. During the year there were steep increases in the prices of various metal powders. This has affected the raw material input cost for the diamond tool division. Due to entry level pricing strategy adopted for some key customers in European region ,it did not allow any flexibility to increase the sales prices to compensate for the steep increase in the raw materials. In addition strengthening of Rupee has also affected the margin on Exports. The approval from regulatory authorities for repositioning Twinner in North America was received during later part of the financial year. This has resulted in loss of sales in the first half. The incidence of period cost has affected the margin. The company has modified bond composition to compensate for the steep increase in some of the metal powders. The sales prices for the customers in European region have been revised for compensating for some of the steep increase in input cost and for strengthening of the Indian Rupee.