2016 has indeed been an eventful year - one that will not be forgotten in a hurry. Twoevents that dominated global headlines were the surprise election of the republicancandidate as the President of the USA and the unexpected result of the referendum in theUK to opt out of the European Union popularly known as BREXIT. Both these events arebound to impact not only global geo-politics but also economy in the years ahead.
Amidst these upheavals the world economy continued to hover around the 3 percentgrowth mark. The US economy continued its positive momentum as confidence returned whilein China the economy grew by 6.7 percent marginally lower than 6.9 percent in 2015. TheIndian economy continued to surge ahead with another year of over 7 percent growth in GDP.The demonetisation in the month of November 2016 affected growth across industries andsectors but is expected to be a bold and decisive step in the right direction. GST isanother such step that will create a unified market and level the playing field in days tocome.
As far as the gems and jewellery industry is concerned demand in the US remainedmostly subdued though the holiday season elicited moderate response. In China there wasan overall decline in demand in 2016 but 2017 began positively with a strong Chinese NewYear as the effects of the government's anti-corruption campaign on gold jewellery faded.This led to a rise in seasonal re-stocking demand which in turn led to recovery for mostIndian cutters in the last quarter of the financial year after the initial shock ofdemonetisation. While there was a decline in consumer demand post demonetisation in Indiafestive sales in the month of October 2016 were robust due to attractive gold prices. Onthe supply side most miners liquidated excess rough inventories of 2015 during the yearand also ramped up production in 2017 leading to an output level similar to that of threeyears ago.
At Asian Star we have been focussed on our long-term growth strategy: consolidatingour edge in manufacturing focussing on quality leveraging design as a differentiator indiamond jewellery and expanding our global presence to cover new geographies. While theoperating environment continues to remain challenging our focussed strategy has ensuredwe deliver consistent performance.
For the year 2016-17 our Consolidated Turnover increased to X 3493.86 crore up fromX 3302. 20 crore in the previous year an increase of 5.8 percent. PAT for the year was X66.13 crore against a PAT of X 74.32 crore in 2015-16. The moderate decline was due topressure on prices as a result of challenging economy and market conditions.
Good corporate governance and financial discipline continue to remain firm pillars atAsian Star. We strictly monitor our working cycle and enjoy high ranking with our bankers.We are 293 in Dun & Bradstreet's Top 500 companies in 2017. Our uncompromising focuson quality has resulted in the Company becoming approved manufacturers of CANADAMARK andAUSTRALIAN DIAMONDS which will go a long way in establishing us as an ethical andresponsible diamantaire.
The outlook for business remains largely challenging and yet there are distinct signsof optimism. We are excited about further accelerating the growth momentum in our diamondjewellery business from an impressive 21 percent this year. Another interesting growthopportunity is in new and hitherto unexplored markets like The Netherlands Mexico andPoland where we have already started working with leading jewellers. We have also starteda new marketing arm in South Korea to focus on this fast emerging new growth hot-spot inAsia. As far as our diamond business is concerned we remain cautiously optimistic andexpect demand to pick up in the US and China.
I thank you for your continued support and assure you that we remain committed todelivering value for all our stakeholders.
Vipul P. Shah
CEO & Managing Director