We take absolute pleasure in reaching out to you through this annual report and also feel proud to announce a successful conclusion to 2021-22. KMEW maintained a track record of being India's young and leading marine time industry service provider, through its fleet of vessels well supported by professionals who work round the long to make the Company reach new heights.

Being in an industry historically dominated by large PSU corporations on one hand and small unorganised players on the other, we have won the trust of our customers with valuable engineering inputs and through sustainable operations to help the marine trade function without any adverse implications, and we are proud of this achievement.

Successful Initial Public Offering

We are grateful for the overwhelmingly positive response to our initial public offering (IPO), which was oversubscribed 2.97 times and today is a family of 596 shareholders. As a company, we are honoured by your trust, and this response reinstates our faith in the business strategy and a promising future. This is a big moment for all of us at KMEW, heralding a new beginning in our 7 years of services since inception. The support we receive from you continues to inspire us to work harder.

Global overview

To say the world is in uncharted waters would be an understatement. The adverse impact of a mix of the pandemic, armed conflict and climate change has exposed the fragility of the global system that we had largely considered as having competently learned how to manage itself. It has now dawned on governments across the world that the implications of this multidimensional crisis are hard to predict, may complicate further and that signs of its damaging effects — uncontrolled inflation, disrupted food supplies, increased human displacement, exposed healthcare machinery, stalled education levels and faltering job creation ecosystems — are evident and testing the resilience of every nation.

The overarching takeaway is that despite global instability, India has fared better than almost any other major nation. While there were situations over the past 24 months when it appeared that events were getting out of control, we must give credit where credit is due — India was able to bounce back each time, a testimony to our nation's resilience.

Future demand outlook and our diversification strategy

As far as the future prospects, we are confident that the Indian port infrastructure is expected to grow in the long-term. This will provide an accelerating growth opportunity to ancillary support industries such as dredging companies. The government is also focusing on expanding the sea infrastructure to allow direct trade lines to its ports. This will avoid transit ports thereby reducing the lead times for critical supplies and improve the financial viability of the local ports and also further the growth of geographies. Government is intending to reduce the project timelines of these infra projects by incentivising the ancillary industries for speedy execution and delivery. Few of the estimated market sizes are:

(a) Port Ancillary Craft Market Size (500 Plus crafts, Rs. 2,000 Crores Annual Basis)

(b) Dredging Market (Govt and Private Port, Defence, Shipyard and Oil PSU Business Rs. 5,000 Crores annual basis, and

(c) River Dredging Potential Business (Rs. 5,000 Cr annual basis).

KMEW is proud of its portfolio of its legacy services which have gained huge national importance for the reasons of national security, trade and service opportunities. Our portfolio of services includes dredging and other key port related ancillary services, shipbuilding, conducting hydrographic surveys, pilotage services, patrolling services, ship mooring services, repair, refit services of naval and merchant ships, and providing technical solutions for maintenance and operations of vessels, etc. In the years to come, these services will strongly emerge as opportunities of great potential for the company's growth story for our industry.

Considering the bright future outlook, we have strategised to diversify into new business segments like developing Fishing Harbours, river dredging, rock dredging, entering into Cutter Suction Dredger (CSD) Market, ship building etc. They all are in our consideration for our medium to long term growth story. KMEW has been able to exhibit its operational and managerial expertise in managing various services with firm commitment. Our critical focus on having a judicious capital management has helped us in undertaking prudent investment decisions on acquisition of new vessels and technology. We have demonstrated our competency through various projects undertaken across geographies and fierce global competition

Operation front at KMEW

We are delighted to report that the Company has shown an immense resilience in its financial performance, even under market distress. Our operational revenue was up by 84% and EBIDTA up by 53% on Y-o-Y FY22 basis. Our capital management strategy to reduce debt overhang by repaying the debts before the contract tenure has helped us to reduce the cost of debt to 7.5% vis-a-vis over 15% earlier. All thanks to our competent and professional team of all disciplines and their dedication to performance excellence.

KMEW also considers FY22 as a watershed year. We have secured the largest dredging project in our history - the award of our first International contract in assistance with the Government of India to build the strategic port at Sittwe, Myanmar. The project is a collaboration between India and Myanmar and is valued at Rs. 118 Crores with a project tenure of 2.5 years and further extendable by an additional 2 years. The project is financed by the Ministry of External Affairs as part of its Kaladan MultiModal Transit Transport Project, located near the mouth of the Kaladan River.

Currently, we have a strong order book of more than Rs. 210 crores with an average tenure of 2.5 years. On the operations side, FY22 saw us successfully executing 4 dredging contracts and completed more than 6 million cubic meters of dredging.

We have invested in expanding our fleet assets with new additions to the current fleet strength of 9. Two more fleets are in pipeline to be ready by December 2022.

We have been able to manage and maintain healthy financial and operational jurisprudence. All our contracts have a project duration between 36 Months to 84 Months. On a cautious note, our investments in assets are committed only after award of secured long term government contract. Our strong receivable cycle ensure that all liabilities are accounted in less than 45 days as evidenced for last 7 years with GOI.

We have sufficient financial, operational and managerial muscle to compete and bid for single Contract worth Rs.200 Cr thus assuring us of little to no competition. Our long-term debts are

Vision 2025

• Strategic tie ups with strategic Partners to create Special Purpose Vehicles (SPVs) with the objective to enter sand mining and Cutter Suction Dredger (CSD) Market

• Venture into Costal /Inland Dredging,

• Optimize Capacity Utilization.

• Expansion of our geographical presence to nearby countries.

• Enhancement of the Fleet.

• Reducing Capital & Operational Costs.

• Enhancement of market share in maintenance dredging and more participation in capital dredging in India aligned with contract duration so that it is ensure that the entire debt is repaid within 60-70% of contract completion.

Outlook

The Indian dredging and marine time industry is likely to experience significant expansion in the coming years. The government's plans to create new waterways and ports, as well as upgrade and expand the current ports, will account for the majority of this expansion. The demand for dredging is estimated to reach about 170 million cubic me-tres in the coming years at existing major ports. In addition, at least eight dredging projects are being considered at existing non-major ports, with an estimated 18 million cubic metres of material to be dredged as part of these projects. Furthermore, the six new ports planned under Sagarmala will create opportunities in the dredging market.

The identification of 106 additional national waterways has created significant potential. Over 200 million cubic metres of dredging volu-me has been assessed for the next decade for the existing five waterways as well as the 32 new waterways that have been identified as viable for development. Given this increase in dredging re-quirements, the sector presents ample opportunities.

Employees and Society Welfare

We recognise and appreciate our human resources and their constant value-additions. They are our strategic business partners and play a prominent role in supporting and driving our business strategies. Although our major challenge will be to find the right mix of people with domain expertise and skill- sets appropriate for projects requiring high degree of technical skills. We aim to develop competencies of our people by training them in the latest developments in their respective domain.

We have always ensured on boarding the right talent across all the levels of the organisation. We have also provided right work environment for the growth of our employees, ensuring complete job satisfaction. Our employees adapted the 'new covid normal' situation in a very quick time and continued to display same levels of commitment even during the lockdowns and the subsequent waves of pandemic.

Thanking note

We are all passing through a crisis of unprecedented magnitude, and we would like to thank Team "KMEW"as well as our customers, vendors and other stakeholders for the confidence and trust they have reposed in us. We also thank our fellow Board Members for their invaluable support in guiding the Company and enabling another year of growth.

Mr. Saurabh Daswani

Managing Director