Dear Shareowners,

India is undergoing significant structural reforms with a major focus on infrastructure development, particularly within the Port sector. These improvements in capacity and efficiency are creating tremendous opportunities in this high entry barrier industry, underscoring the strategic importance of economic growth.

At Knowledge Marine & Engineering Works Limited (KMEW), we have always been optimistic about India's growth and the vast opportunities it offers to emerging players like us. This year's business expansion - entering new segments such as Inland Waterways, and the successful completion of Maintenance dredging at Sittwe Port, Myanmar and Rock Dredging at Mangrol Fishing Harbor projects - reflects our sustained efforts in this direction and marks the beginning of a new era.

Our constant expansion strategy and foray into new segments have allowed us to develop expertise in driving our fleet. As on financial year closing, we own and operate 16 Fleets out of which 3 are under construction. Out of 16 vessels, 6 are dredgers and 10 are port ancillary crafts, and we are committed to expanding this to 40 or more crafts in the coming years. The repetition of orders and high utilization of our vessels have further ensured our profitability.

We have successfully added three more vessels to our fleet, and we are immensely proud to share an update on our Company's performance. Our journey this year has truly embodied our vision to become a global player in marine services, providing holistic, innovative, and environmentally sustainable solutions that will guide us into the future.

Reviewing the year gone-by

FY24 has been a year of significant expansion for our business, both in international and domestic markets. We proudly secured our Independent First international contract from the Myanmar Port Authority for the dredging and enhancement of the Yangon River Channel. This contract marked our first independent project, which we successfully executed on time. This accomplishment led to a subsequent maintenance contract for the river, doubling the previous order value. This achievement underscores our ability to secure high-value orders and maintain an excellent track record of timely execution.

Another major milestone in our international ventures is our entry into the Bahrain market with a robust order book of approximately Rs. 45,000 Lakhs for the next five years, significantly enhancing our business visibility and sustainability. We have successfully deployed our vessel and are executing substantial sand dredging projects for Bahrain infrastructure companies. We anticipate this will fully contribute to our topline over the next five years. These contract wins are a testament to our triumph in converting waste to wealth.

Our unwavering dedication to expanding into new segments has led us to enter the Inland Waterways sector. We are aggressively pursuing more opportunities in this market. The supervision of these projects by the World Bank provides the project financial stability. The Inland Waterways sector presents significant opportunities, given its vast 14,500 km of navigable waterways, of which we have secured a 220 km stretch. Approximately 126 million metric tonnes (MMT) of cargo are moved annually by Inland Water Transport (IWT), a fuel-efficient and environmentally-friendly mode of transport. The size of this market, coupled with the limited number of players possessing the required technical know-how, capital, and equipment, creates a substantial opportunity for KMEW to gain a competitive edge both nationally and globally.

In addition to our expansion into new segments, we continue to focus on enhancing our current port operations. We leverage our contract wins to secure more orders or extend contract tenures, with a key focus on winning at higher prices. This year, we added a new customer, the Mumbai Port Authority, with a seven-year tenure. Our existing contract at Vishakhapatnam Port has been extended by three more years at a higher bid, demonstrating our reliability and excellence. Additionally, we secured an order from the Paradip Port Authority for the supply of a 20-knot speed patrol boat for a period of 5 years.

We are immensely proud of our accomplishments this year, which embody our vision of becoming a global player in marine services. Our focus on providing holistic, innovative, and environmentally sustainable solutions will guide us into the future.

Financial overview

We are pleased to share with you the highlights of our financial performance and strategic progress in FY24. Despite external site conditions impacting our revenue, we achieved a revenue of approximately Rs.16,400 Lakhs and recorded an EBITDA of around Rs. 5,000 Lakhs, maintaining strong EBITDA margins at 30%. This underscores our commitment to stability and operational efficiency.

Our profit after tax (PAT) reached Rs.3,300 Lakhs, with our PAT margin rising to 20%. While our net debt increased due to the acquisition of new vessels and entering into international markets, we have strategically aligned our existing debt facilities with specific fleet contracts, ensuring timely repayment before the completion of each contract. This approach reflects our strategic vision of establishing a sustainable and reliable dredging and marine engineering company in India.

Looking ahead, we remain optimistic about our revenue outlook and expect improved performance in the coming years, with continued EBITDA margins of around 30%. Our confidence is bolstered by a robust order book of Rs.73,300 Lakhs, including significant wins of Rs.69,400 Lakhs in FY24. These contracts, with an average tenure of 3-4 years, provide a strong foundation for our future growth and strengthen our position both nationally and internationally as a global leader in marine services.

We are immensely proud of our accomplishments this year, which reflect our vision of becoming a global player in marine services.

Economic Overview Global Economy

According to IMF, global growth is projected to stay at

3.1%in 2024 and rise to 3.2%in 2025. Elevated central bank rates to fight inflation and a withdrawal of fiscal support amid high debt weigh on economic activity. Inflation is falling faster than expected in most regions, amid unwinding supply-side issues and restrictive monetary policy. The global economy has been surprisingly resilient, despite significant central bank interest rate hikes to restore price stability

Indian Economy

India is one of the fastest growing major economies and is currently ranked as the world's sixth largest economy. Projections of growth, over the medium term, remain encouraging and optimistic for India. The underlying strengths are indicative of the potential of India to achieve a USD 5 trillion economy by 2025.

The recent economic survey highlights a decline in the unemployment rate. This represents a strong recovery from the COVID-19 pandemic's economic effects with formal sector employment growth reflected in the more than doubling. As the global job landscape evolves, particularly due to AI, India must invest in research and guide technological progress towards equitable prosperity.

The global economy is expected to witness a synchronous rebound in 2025 as major election uncertainties are out of the way and central banks in the West likely announce a couple of rate cuts later in 2024. India will likely see improved capital flows boosting private investment and a rebound in exports. The World Bank said that India will continue to be the fastest-growing among the world's largest economies, though its pace of expansion is expected to moderate. It is projected to grow an average of 6.7% per fiscal year from 2024 through 2026 – making South Asia the world's fastest-growing region

However, growth is projected to pick up slightly through FY 25-26 as inflation moderates back towards the midpoint of the tolerance range, and the benefits of reforms start to materialize. India is expected to maintain its position as the fastest-growing economy (in terms of both aggregate and per capita GDP) among the largest Emerging Market and Developing Economies (EMDEs).

Indian Dredging Industry and Outlook

According to Future Market Insights (FMI), the global dredging market value in 2023 was USD 16.14 billion, up from USD 15.24 billion in 2019. The market is expected to expand at a CAGR of 2.15% from 2024 to 2034, with the industry projected to grow from USD 16.68 billion in 2024 to USD 20.63 billion by 2034.

The Indian port sector has been experiencing significant growth, leading to a surge in demand for dredging activities. Currently, about 84.20 million cubic meters (mcum) of dredging is conducted at major ports, 10 mcum at inland waterways, and over 80 mcum at non-major ports.

This demand is largely driven by capacity augmentation plans at existing and upcoming Greenfield ports. Many key ports are implementing measures to deepen and widen their navigational channels to attract deep draft vessels. It is estimated that about 100 mcum of capital dredging will be carried out in the near future, with approximately 200 mcum of capacity available for maintenance dredging. The annual maintenance dredging for major ports and waterways is around 100 million cubic meters, for which about INR 1,000 crore is spent each year by the Ports and Inland Waterways Authority of India.

With India's ambitions to deepen the maritime and waterways economy, dredging has become a core requirement. Both inland waterways and ports are grappling with the issue of low draft depth, making the development of indigenous dredgers and project monitoring systems a priority for the ministry. The online portal developed by the National Technology Centre for Ports, Waterways, and Coasts will enhance synergy among multiple inputs, such as daily dredging and pre- and post-dredging survey data, ultimately producing real-time reports.

In summary, the growing Indian port sector and its ongoing capacity augmentation efforts present ample opportunities for the dredging industry. With substantial capital and maintenance dredging activities projected, the sector is poised for significant growth, supported by innovative technological solutions and strategic initiative, the Global Dredging market is anticipated to rise at a considerable rate during the forecast period, between 2024 and 2031.

Government Initiatives

India is poised to become a global economic superpower, with a robust maritime sector playing a crucial role in this journey. The principle of Atma Nirbharta emphasizes self-reliance, extending to the shipping and shipbuilding industries. Despite significant efforts and developments in port infrastructure and inland waterways, we remain dependent on foreign vessels and have yet to capture a significant share of the global shipbuilding market. Recognizing this, the Ministry is now focusing on enhancing our shipbuilding and ship repair infrastructure to meet the ambitious goals of MIV 2030 and MAKV 2047.

One of government's key projects is Sagarmala, which aims to improve ports and waterways infrastructure. There are 839 projects worth approximately Rs.5.8 lakh crore slated for implementation under the Sagarmala Programme. Of these, 241 projects worth around Rs.1.22 lakh crore have been completed. According to the latest report, a total of 171 projects worth Rs.4,525 crore have been supported under the Sagarmala scheme for partial funding, with 55 projects already completed. Additionally, under the Sagarmala Programme, the development of 63 infrastructure projects at 57 locations to facilitate passenger and cargo transportation through RoPax and Passenger ferry services have been undertaken. Ten projects have already been completed, and four locations are now operational.

Several measures have been implemented to improve the performance of ports in recent years through initiatives such as Sagarmala, Bharatmala, PM Gati Shakti, and the National Logistics Policy 2022. These initiatives aim to reduce the cost of logistics and improve performance. The impact of these initiatives is evident in enhanced port efficiency. Turnaround time, a key indicator of port efficiency, has seen significant improvement. Over the past decade, the average turnaround time for major ports has decreased by about 50%, dropping from 4.3 days in 2012-13 to 2.1 days in 2022-23.

These government initiatives are set to greatly benefit the dredging industry. Improved port infrastructure and the development of inland waterways will necessitate extensive dredging activities to ensure navigable depths and efficient cargo movement. The focus on self-reliance in the maritime sector, coupled with substantial investments under the Sagarmala Programme, will drive demand for dredging services. Additionally, the reduction in turnaround times at ports will further boost the efficiency and attractiveness of Indian ports, creating more opportunities for the dredging industry to support ongoing and future projects.

In summary, the government's initiatives and strategic investments in the maritime sector are not only enhancing port efficiency and reducing logistics costs but also creating a thriving environment for the dredging industry. As India continues its journey towards becoming a global economic superpower, the dredging industry stands to benefit immensely from these progressive developments.

Survival Strategies

Future is promised to no one and therefore belongs to people who are ready to create it. At KMEW, we have built a well-integrated Company with a business model relevant for all market cycles through the following initiatives:

• By retaining our industry pre-eminence through quality services supported by robust technical capabilities, rich project management skills and large, complex project execution.

• Improved the consistency and discipline of its business practices across all business verticals.

• Increased capacity to execute contracts through the addition of engineers and technical members on the one hand and the expansion of design centre on the other.

• Pursue continuous improvement in everything we do.

Sound Governance & Sustainability

We are committed to high standards in corporate governance and aim to implement best practices beyond compliance requirements. Our Board currently comprises of professional directors, from varied background and considerable working experience. The Company had also adopted various measures for a cordial working relation between the workers and the management. Workshops are being organized on a regular basis to impart training to the Company's personnel and also to make them aware of the developments in the Industry.

As a socially responsible corporate citizen, we always undertake significant steps to uplift the morale of the people and betterment of the environment in our surrounding.

Concluding note

To conclude, we would like to thank everyone who have believed in our company and would like to mention that Company will never deviate from its fundamentals. We remain committed to protect our margins in the future also. Our team is our strength and the same is growing every day. We are maintaining repeat orders from three countries right now, Myanmar, India and Bahrain. We are set to grow in the same countries and add another country in the next 2 years and keep our promises intact. With warm regards