It give us great pleasure to present the report of the performance of the Company forthe financial year 2016-17 that despite testing times UDTL delivered good results inrespect to previous year.
World economic growth remained weak in 2016 with uncertainties such as the USelections the UK Brexit vote Eurozone financial fragility and Chinese economicrebalancing weighing heavily on the system. This in turn constrains the demand for oilwith oil supply continuing to exceed demand and producing another year of weak oil prices.This has resulted into lower growth in drilling and oil exploration. Since a newregulatory regime in US requiring stakeholders to maximize economic recovery rather thansimply total volume came into force in 2016. This will mean companies cooperating andcollaborating to maximize recovery or minimize costs throughout the project cycle in orderto improve the long-term outlook. This in turn we being a low cost manufacturer ofdrilling related equipment will give us a big break in international market in the comingyears.
The global economy in recent couple of years saw a steep decline in oil prices whichhad significant impact on energy businesses and in turn your Company too was affectedsince most of clientele of your Company comes from Oil & Energy sector. This coupledwith slowing growth in some of the leading global economies impacted currencies also tosome extent which primarily affected your Company clients and your Company was also boundto be affected albeit not in absolute proportion. But there was positive news in termsof faster-than- anticipated economic growth recovery in emerging economies and speciallydeveloped economies which paved way for global economic recovery. Indian Government hastaken two major steps i.e. adopting GST - One tax One Nation and other is Demonetization.Considering this your company is able to deliver industrial leading performance throughconsistent efficiency in operation. It is in this context that your Company continues itsquest for sustained growth. Despite all UDTL achieved a net profits of ? 20.85 crore forshareholders and earned foreign exchange of ? 79.53 crore for the country during the year.
UDTL is amongst one of India's private sector Company focusing on manufacture ofhigh-tech machines and tools being consumed by Oil Gas Drilling and allied industrieswhich comprises of key players of Indian economy. It is a significant player in thesegment and has been a preferred vendor for its clients in India. Built on strong valuesUDTL is deeply rooted in the culture of safety integrity and commitment and is dedicatedto its vision of partnering India's economic growth and social well-being.
Over the last five years the business has been considerably reshaped and advanced toestablish UDTL as a Drilling equipment manufacturing company in the country. The yearahead will be eventful with a number of material catalysts which have potential to addfurther value to the company. We have created a strong platform for future growth withactive positions in our field and have a large number of patents providing significantpositions of technical and commercial value.
United Drilling Tools Limited (UDTL) continue to contribute in India's journey towardseconomic and social well-being and remains committed to invest and innovate for India.Your Company is striving to meet and exceed global benchmarks in product quality andcustomer service with inspiring ideas and strategic investments. In manufacturing UDTL isachieving superior outcomes that facilitate India's drive for global leadership.
We can only deliver value for all stakeholders by operating in a safe secure andenvironmentally and socially responsible way. we are committed to bringing lasting andpositive social and economic benefits through new and more affordable and competitivetechnology innovation employment training and state of art manufacturing facilities.
We are taking advantage of the lower cost environment as we continue to shape thebusiness for the future. We actively assess new business possibilities whether they bepotential additions to our future expansion opportunities and cash flow generating assets.
We have invested for years in creating growth engines for the future. Today yourCompany is competing with leading global players in its field and has come a long way tobecome a high-tech domestic Company manufacturing equipment and machineries for the oiland energy sector. Your company has been able to achieve more than 70% of indigenous inmost of its products thus saving substantial amount of foreign exchange and reducing thecost of these high-tech machineries through technology adoption and new productdevelopment.
Our strategy is to deliver value for stakeholders by building and maintaining abalanced of manufacturing growth increasing production of high tech patented products andinvesting in research and new assets. The management of Safety Health and Environment(SHE) remains a high priority.
Your continued support is an important barometer of UDTL's success and its growthoutlook. With the successful closure of another year with FY'2016-17 I assure you thatthe Company will continue doing the best and ensuring strong value creation for all ofyou.
I am grateful to all stakeholders- customers employees suppliers partners andinvestors for their continuing support to UDTL.
Mr. Pramod Kumar Gupta
(CHAIRMAN & MANAGING DIRECTOR)