It has been another year of rough weather and turbulence for the diamond industry. Theoverall challenging macro-economic conditions created by modest growth in majorhigh-income economies combined with a sharp fall in global trade and weakening of allBRICS economies with the exception of India impacted demand adversely.
In 2015 global growth decelerated to 3.1 percent from 3.4 percent in 2014. Over 70percent of global growth emanates from developing markets and emerging economies. Theemerging and developing economies decelerated to 4 percent in 2015 against 4.6 percent in2014.
The trepidation in the global economy was compounded by challenging operatingenvironment. The diamond industry globally also had to face the paradoxical situationwhere on the one hand miners held on firmly to their selling prices of rough on theother hand retail prices came down substantially. This led to an evident squeeze onprofitability. The weakening of the Indian Rupee has made cost of import of roughconsistently higher compared to a few years ago. In China too the devaluation of Yuan hasresulted in higher costs of import for diamond jewellery.
Evidently a rough year.
And yet amidst and in spite of this rough at Asian Star we emerged as a gem.
We have been largely successful in overcoming the difficulties through our resilienceand resoluteness. A combination of adaptable portfolio strong financial discipline andtrust of leading mining companies in the world has been instrumental as we navigate therough weather. The fact that we have overcome the challenging transactional environment isclearly borne by the fact and reflected in our performance for the year.
For the year 2015-16 our financial performance once again shone through.
Our Consolidated Turnover for the year increased to Rs. 3300.83 crores against Rs.3221.26 crores in the previous year an increase of 2.5 percent.
Impacted by higher costs and pressure on prices our PAT (excluding Other Income andExceptional Items) marginally declined to Rs. 73.14 crores compared to Rs. 74.62 crores inthe previous year a decline of 2 percent.
Considering the stiff headwinds unleashed by the global economy as well as turbulentwaves of industry challenges this performance is remarkable.
As I look ahead into the near-term future I do see silver lining on the dark clouds.There are clear signs of economic recovery in major global markets. In India the economyis fast surging ahead. In China demand is expected to pick up by 2017 while in the USAthe largest diamond market in the world key parameters of employment housing andconsumer spending are all showing positive signs. Further supply is forecast to remainlimited as no new mines are being discovered resulting in a more demand-supplyequilibrium. However even though these are de nite signs of optimism at Asian Star weremain cautious. What we can assure is the fact that we are prepared and equipped toovercome the challenges and as things improve capitalise on the opportunities. We havethe necessary experience and expertise knowledge and insight presence and reachcapabilities and capacities agility and dexterity and above all the con dence andconviction to overcome challenges and outlast the difficult times.
I thank you all for your trust and faith in Asian Star.
Vipul P. Shah
CEO & Managing Director