Blue Diamonds Jewellery Worldwide PLC has, in the face of many challenges posted a modest profit after tax of Rs. 10.4 million in the year ended March 31, 2008, up from Rs. 8.5 million a year earlier, according to the company’s recently published annual report.

Noting that the period under review had many challenges, culminating in the global recession and the financial crisis, the company’s chairman, Mr. Lalith Kotelawela, said that in such a situation, ``the first thing the trade and consumers will stop buying is jewellery.’’

Nevertheless, Blue Diamonds, thanks to proper planning and vigorous marketing, had achieved a modest profit for the year, growing it 23% from the previous year’s profit.

Kotelawela said the year saw the company having to face unsteady prices in its basic raw materials, gold and diamonds.

He reported that the company, considered the country’s largest jewellery exporter, had won three prestigious export awards during the year, added new markets like France and Cyprus to its existing network and designed and produced a range of new products introduced to international markets.

These had contributed a 7% increase to gross turnover.

Their product development division was working on a range of exciting products to be shortly introduced to international markets combining coloured gemstones and diamonds set in the floating diamonds concept.

``In regard to the expansion of our business, the marketing division has made inroads into markets like Seychelles, Mauritius, India and the Russian Federation,’’ he said.

Despite being out of the red in recent years, Blue Diamonds carries accumulated losses of Rs.849 million in its balance sheet and a string of contingent liabilities stemming from its dispute with its former Deputy Charman, Mr. D.R. Senanayake, resulting in a number of pending court cases where billions of rupees have been claimed.

The company in turn is similarly making a heavy claim on Senanayake.

``No provisions is made in the financial statements (for these claims) as the lawyers are of the opinion the outcome of or the potential liability on any of these cases cannot be assessed at this stage,’’ the report said.

The stated capital of Blue Diamonds is Rs. 877.4 million and the company carries reserves of Rs. 135 million in its balance sheet. Net assets per one-rupee share were up to Rs. 1.93 from Rs. 1.81 a year earlier.

The company’s voting shares traded at a high of Rs. 3.60 and a low of Rs. 1.90 during the year while the non-voting shares traded between Rs. 1.10 and Rs. 0.70. This compared to a trading range of Rs. 6 to Rs. 2.60 for the voting shares and Rs. 2.20 to 0.90 for the non-voting the previous year.

Dr. T. Senthilverl is the single largest voting shareholder of the company with 14.53% with the other major shareholders being companies of the Ceylinco-Seylan Group. Seraka Investments is the biggest non-voting shareholder with 16.20% with Ceylinco Insurance (13.60%) and Senthilverl (7.62%) and Ceylinco-Seylan companies among the other big shareholders.