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SELVAS PHOTOGRAPHICS LIMITED
CHAIRMAN'S LETTER TO THE SHAREHOLDERS
Dear Selvas Family Members,
I shall begin my address to you by paying homage to our brave soldiers who
have sacrificed their lives for the nation.
The year in retrospect was listless for your Company and for the industry
as well. For most part of the year, the economic slowdown had its adverse
impact on demand, prices and liquidity. The GDP grew at 5.8% and rate of
industrial growth dipped below 4% in FY 98-99. The photogoods industry was
no exception in the slowdown which gripped most of the businesses, other
than Information Technology, Fast Moving Consumer Goods and
Pharmaceuticals. Infact, type drop in demand in the photogoods also led to
pressure on prices as the competition moved from quality to price
reductions in order to grow the market share. The union budget move of
increasing excise duty and not allowing modvat recovery to the fullest
extent added to the woes of the photogoods industry. Also, it should not be
forgotten that this industry has to survive in a time period of volatile
exchange rate scenario, as it imports all its raw material. Thus, the year
gone by was one of the most difficult witnessed in the Company's history,
where all the negative factors co-existed.
Your Company continued to focus on the strategic improvements, as outlined
last year. We took initiatives in broadbasing the Clientele in the Private
as well as Public Sector in the Medical X-Ray films segment. The efforts on
increasing presence among the Doctors and Radiologists community were
strengthened by various programs. This enabled us to sustain the market
share in a difficult time period. The industrial X-Ray film market is
largely dependent on investment in the economy and the current level of
investments in the economy are a cause of concern. Despite sluggish market,
we did relatively better in the industrial X-Ray segment also.
As we move forward in the new year, 1999-2000, there is a brisk improvement
in the Indian Economy. The GDP growth rate is estimated at 6.1% by the CII.
The agricultural and industrial production rate are inching up. The
liquidity problems are soon becoming a matter of past. These should have a
positive impact on the demand for photogoods and in particular for the
Medical and Industrial X-Ray films. Hopefully, a new stable government
would also bring the much needed insurance reforms opening up the mega
future for your Company's products in the Medical X-Ray films. We
therefore, look forward to a better current year, in terms of sales and
profit growth. We have kept, shareholder value as uppermost factor and
despite a not so encouraging performance have proposed a reasonable
dividend and shall look at all avenues which would lead to betterment of
shareholder wealth in time to come.
Place: Mumbai ANIL V. CHOKSI
Dated: 2nd August, 1999 Chairman
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