Waterbase Ltd

Varun Aditya Thapar

Chairman

We are committed to doing things the right and ethical way, as this is the road to consistent and responsible growth that creates long term value for our shareholders, our business partners and society at large.

Dear Shareholders

As our nation transitions from India@75 to India@100 and aspires to be a USD 7 trillion economy by 2030, prosperity for the country and its citizens are important outcomes. Your Company's contribution to the Shrimp aquaculture sector over the past three decades positions it to continue building the food security for the world and to earn precious forex for our nation. Despite a volatile external environment, your Company has continued to focus on enhancing its long-term sustainability.

Market Context

The baseline forecast for the world economy is to grow at 3.2% during 2024, at the same pace as in 2023. India is acknowledged as one of the fastest growing economies with an estimated GDP (Gross Domestic Product) growth of 7.6% in FY 2023-24. However, the growth outlook is cautiously optimistic in the wake of continuing geo-political crises across various regions.

In the shrimp aquaculture sector, oversupply from Ecuador and customer response to geo-political disruptions over the last 2 years have led to inventory build-up and price disruptions. India's seafood exports witnessed a 3% rise in volume but an 8% decline in value for the fiscal year 2023-24, totalling 1,781,602 MT valued at USD 7.38 billion. Frozen shrimp remained the top item, with the US leading as the largest market for Indian produce, followed by China and the European Union.

Performance snapshot

As we gather to reflect on the past year, it is crucial to acknowledge the challenges and uncertainties that have pervaded our sector. The global shrimp market has faced significant headwinds. This has created a challenging environment for many, including our company. However, amidst this backdrop of gloom, there is a beacon of hope and promise. Our company is scaling back up, driven by the strength and efficiency of our processing unit. This progress fills us with optimism that we can elevate our business to greater heights in the future.

Despite the tough market conditions, our company's resilience is evident in our financial performance. We achieved a notable revenue increase of 11.6%, a testament to our strategic initiatives and the unwavering dedication of our team. This growth is particularly significant given the oversupply issues that have plagued the market. However, it is important to acknowledge that we reported a loss of Rs.13.24 Crores (PAT). This outcome reflects the intense cost pressures and market volatilities we have faced.

Research and development

Our investment in R&D has been pivotal to our success. We have dedicated substantial resources to advance our understanding and capabilities in shrimp nutrition. This year, our R&D team has successfully launched two farmcare products using sustainable raw materials, ensuring that they not only meet the nutritional requirements necessary for high-performance shrimp farming but are also environmentally friendly. The company's rigorous in-process monitoring protocols guarantee a high-quality standard for all products. Periodic identification and implementation of innovative solutions enhance quality assurance across operations.

Digital Transformation

We believe that the Indian shrimp farming, is at the cusp of far-reaching transformation in response to the new opportunities and the threats emanating from sustainability, climate change, digitalisation, etc. This provides ‘Waterbase' with opportunities to further strengthen its presence in its existing business by leveragingitslongandtrustedassociationwiththeIndian aquafarming community while adopting technology-driven business models. Digital preparedness has been at the forefront of our Company's future-ready strategy.

Sustainability and Community Development

We are committed to doing things the right and ethical way, as this is the road to consistent and responsible growth that creates long term value for our shareholders, our business partners and society at large. We are committed to reducing our environmental impact in manufacturing through responsible sourcing and sustainable practices. Some of the activities that your Company is undertaking through CSR has resulted in significant enhancement to the lives of many school drop-out girls and women through the "Kashvi Programme".

Future outlook

The revamped processing unit represents a critical component of our strategy to achieve scalability and operational efficiency. By modernizing our facilities and incorporating advanced technologies, we aim to enhance our processing capabilities, ensuring higher quality and greater productivity. This transformation is expected to not only improve our operational metrics but also position us more competitively in the market. Parallel to this, we are committed to rebuilding our feed business.

By way of participation in the entire shrimp value chain, we aim to create a more balanced and resilient revenue portfolio.

Thanking note

As I reflect back on the year, I would like to convey special thanks to all our customers and channel partners for their unstinted support during the year. I also would like to thank our vendors and bankers whose efforts made sure that our products were available at the right time and place. On behalf of the Board of Directors, my sincere thanks to our employees and their families for their support during these tough times. My heartfelt thanks and appreciation to our shareholders family, for your continued trust and confidence in the Company.