Knowledge Marine & Engineering Works Limited has secured a significant regulatory approval that positions the company for enhanced financial performance and growth opportunities. The marine engineering specialist has received approval from the Income Tax authorities to transition from the traditional corporate tax structure to the tonnage tax scheme, anticipated to lower tax obligations and enhance growth through capital expenditure for a decade.

Regulatory Approval Details

The approval, granted under section 115VP(3) of the Income Tax Act, will remain effective for a 10-year period beginning from Assessment Year 2026-27. This regulatory shift represents a strategic milestone for Knowledge Marine & Engineering Works, as the tonnage tax regime offers a simplified taxation method specifically designed for shipping companies.

Understanding the Tonnage Tax Framework

The tonnage tax scheme represents a fundamental shift in how shipping companies calculate their tax obligations. Unlike traditional profit-based corporate taxation, this method calculates tax based on the net tonnage of vessels operated by the company. This approach is expected to reduce tax liability for Knowledge Marine & Engineering Works and provide enhanced opportunities for capital expenditure-driven growth.

Strategic Benefits and Growth Enhancement

The transition to tonnage tax regime is expected to deliver multiple advantages for the company over the decade-long approval period:

The regime may improve profitability by potentially freeing up cash resources for reinvestment, providing enhanced financial flexibility for fleet expansion and operational growth. The streamlined cost structure could enable more competitive pricing in project bids, potentially enhancing the probability of winning tenders and facilitating fleet expansion to meet industry demand.

Company Background and Market Position

Incorporated in 2015, Knowledge Marine & Engineering Works operates in marine craft ownership, dredging services, and repair and maintenance of marine crafts and infrastructure. The company has evolved from a small ship-repair unit to a comprehensive ship-owning enterprise, establishing itself as a player in the small marine craft business segment and dredging services across India.

This approval for the tonnage tax regime marks a significant development for Knowledge Marine & Engineering Works, potentially positioning the company for improved financial performance and sustained growth through enhanced capital expenditure capabilities over the coming decade.

Knowledge Marine & Engineering Works Limited has secured a major work order worth ₹58.39 crores from Dredging Corporation of India Limited (DCIL) for complex rock dredging operations at Jawaharlal Nehru Port. The contract represents a significant milestone for the marine engineering company and showcases its technical capabilities in challenging underwater operations.

Contract Overview and Scope

The work order encompasses the removal of rock pinnacles and high spots at the Coastal Berth of Jawaharlal Nehru Port, followed by disposal of dredged material at the designated DS-3 Dumping Ground. The project specifications highlight the technical complexity involved:

Technical Challenges and Equipment Deployment

The project represents one of the most technically demanding rock dredging assignments undertaken in Indian waters. The rock formation targeted for dredging exhibits compressive strengths exceeding 170 megapascals, requiring specialized underwater controlled blasting methodology due to its proximity to critical port infrastructure.

Knowledge Marine & Engineering Works will deploy an integrated fleet of advanced marine assets for the operation:

• Dedicated drilling and blasting barge
• Trailing suction hopper dredgers (TSHDs)
• Backhole dredger
• Self-propelled hopper barges
• Secured explosives storage facilities

The company has 60 days to mobilize equipment and obtain all requisite permissions before commencing operations.

Management Commentary and Strategic Positioning

CEO Sujay Kewalramani emphasized the company's positioning as a comprehensive solution provider for technically demanding port sector projects. He noted that this assignment had been attempted by several dredging contractors previously but remained largely unsuccessful due to its extraordinary complexity.

Kewalramani highlighted that the project will require development of an exceptionally intricate underwater controlled blasting methodology, given its immediate proximity to critical port infrastructure. The company plans to engage India's most eminent rock drilling and blasting specialists for the execution.

Track Record and Capabilities

Knowledge Marine & Engineering Works possesses demonstrated experience in similar challenging environments, having successfully completed rock dredging works at Mangrol Fishing Harbour. The company has established credentials through the successful dredging of over 137,000 cubic meters of rock at that location, reinforcing its technical credibility and operational competence.

Company Background

Incorporated in 2015, Knowledge Marine & Engineering Works operates in marine crafts ownership, dredging, repair and maintenance services for marine crafts and infrastructure. The company has evolved from a small ship-repair unit to a comprehensive ship-owning entity with a multi-million order book from esteemed clients including Ministry of External Affairs, various port trusts, and Dredging Corporation of India.