Dolphin Offshore Enterprises (India) Ltd Management Discussions

Industry Overview

The Indian oil and gas sector is undergoing a transformative phase driven by progressive policy and growing demand. The Oilfields Amendment Bill passed in Lok Sabha in March 2025 has redefined the sectors trajectory. By expanding the definition of mineral oils to include shale gas and unconventional hydrocarbons, streamlining dispute resolution and incentivize enhanced oil recovery techniques, this legislation is unlocking new opportunities for exploration and production.

Indian Government is aggressively focusing on energy security by

o Increasing domestic hydrocarbon exploration and production

o Reducing import dependency and

o Promoting investments in the upstream sector

Government Support & Policies: The Indian government has introduced various policies to boost oil and gas investments, allowing 100% FDI in key segments and raising the FDI cap for public sector refining projects to 49%.

According to IEA (India Energy Outlook 2021), primary energy demand is expected to nearly double to 1,123 million tonnes of oil equivalent, as the countrys gross domestic product (GDP) is expected to increase to US$ 8.6 trillion by 2040.

Offshore oil and gas activities are experiencing significant expansion globally, with a substantial increase in investments and project development. This growth is driven by rising global energy demand and the pursuit of carbon-friendly production sources.

While the heartlands of the Gulf of Mexico and the North Sea retain leadership positions, more than 40 countries are now known to possess hydrocarbon resources, and developing and newly industrializing countries figure prominently on the resource map.

The global market for chartering offshore support vessels (OSVs), Diving support vessels (DSVs) and Platform Supply Vessels (PSVs) is a critical component of the Maritime and energy industries taken ahead primarily by demand from offshore oil and gas sector. These vessels are specialized ships or vessels designed to provide various services and support to gas exploration and offshore oil production processes. These vessels play a fundamental role in the logistics and operations of offshore oil and gas platforms and their installation. The Global market for the same is substantial and projected to grow. Driven by increased offshore exploration and production activities, as well as the expansion of renewable energy projects, the demand for these vessels is expected to rise in the coming years.

With substantial increase in demand for chartering of these vessels opportunity for Dolphin being in the said business has been increasing significantly higher going forward.

Dolphin Offshore Enterprises (India) Limited (DOEIL) has been a leading provider of integrated services to the offshore oil and gas industry for over 45 years. The company has built a strong reputation for delivering comprehensive underwater services, including air diving, mixed gas diving, and saturation diving, which are essential for offshore construction, maintenance, and repair operations. Over the decades, DOEIL has worked around the world in countries like India, Thailand, Mexico, Malaysia, Indonesia, and several African countries, showcasing its global operational capabilities.

DOEILs had a strong client list in the energy and defence sectors such as ONGC, Oil India, Reliance Industries, Cairn India, Mazagon Dock Shipbuilders Ltd (MDL), and the Indian Navy.

The company also boasts significant infrastructure to support its operations, including a 7.8 acres yard located in the East Godavari District of Andhra Pradesh and a 2,227.50 square meter facility in Thane District, Mumbai.

Verticals and Segments in which the Company has started operations recently:

1. Prabha- DP2 Accommodation Barge (Previously known as Vikrant Dolphin)

Prabha is a Dynamically Positioned Vessel (DP2) accommodation Work Barge with a capacity of 275 People, Deck Space of 1200 sq. meter and 450 ton croreand the I same is owned by Beluga International DMCC, UAE which is 100% subsidiary of I DOEIL. A Dynamic Positioning system is able to control the position and heading I of a vessel by using thrusters that are constantly active and automatically balance I the environmental forces (wind, waves, current etc.). Environmental forces tend B to move the vessel off the desired position while the automatically controlled thrust balances those forces and keeps the vessel in position.

Right now, there are only few barges like this which are available globally and hence it comes with a great use case.

2. AHTS

Anchor Handling Tug Supply (AHTS) vessels have several critical uses, particularly in the offshore oil and gas industry. Dolphin has acquired 37% stake in an Anchor Handling Tug through its wholly owned subsidiary Beluga International DMCC in partnership with HF Offshore GMBH, Germany. The said AHTS has a capacity to accommodate 20 People, Deck Space of 500 sq. meter, 133 MT Bollard Pull, 10,800 Horse Power and Fire Fighting capabilities.

The primary uses of the AHTS vessels are Anchor Handling, Towing Operations, Supply and Transportation, Emergency Response, Subsea Operations, Heavy-Lift Operations, Dynamic Positioning and Support for Offshore Construction Projects etc.

In summary, AHTS vessels are versatile workhorses in the offshore oil and gas industry, performing a wide range of critical tasks that ensure the successful and safe operation of offshore projects. Their adaptability and power make them indispensable for both routine and emergency offshore operations.

Verticals and Segments in which the Company will start operations in immediate future:

3. Platform Supply Vessels (PSV) and other Marine Operations

Platform Supply Vessels (PSVs) are currently in high demand due to increased activity on offshore oil and gas platforms.

The contract tenures for Platform Supply Vessels (PSVs) and Anchor Handling Tug Supply (AHTS) vessels generally range from 1 to 5 years, providing Dolphin Offshore Enterprises with a stable and predictable revenue stream. These medium- to long-term contracts offer financial visibility and reduce exposure to short-term market volatility, making them a reliable asset class in the offshore oil and gas services sector.

4. DSV

A Diving Support Vessel (DSV) is a specialized type of ship designed specifically to support underwater diving operations, primarily in offshore oil and gas fields, subsea construction, and maintenance activities. These vessels are equipped with a range of sophisticated systems and equipment to ensure the safety, efficiency, and success of complex underwater tasks.

One of the core features of a DSV is its Dynamic Positioning (DP) System, which allows the vessel to maintain a precise position over the work site without the need for anchoring. This is critical for diver safety and operational accuracy, especially in deep or hazardous waters. The vessel is also fitted with advanced diving equipment, including saturation diving systems, decompression chambers, and emergency medical facilities, allowing divers to work at great depths for extended periods while minimizing health risks.

The work deck is specially designed to accommodate a variety of tools and heavy equipment necessary for subsea operations, while accommodation quarters provide comfortable living space for the crew and diving teams during extended missions at sea. To ensure operational coordination and diver safety, robust communication systems are installed to maintain constant contact between divers underwater, the vessel.

In response to this market opportunity, Dolphin Offshore Enterprises (India) Limited is planning a capital investment of approximately Rs.500 crore over the next 12 to 15 months to acquire two DSVs/PSVs & two Anchor Handling Tug Supply (AHTS) vessels.

This strategic expansion will be financed through a combination of debt and equity, aligning with the companys growth ambitions and current market dynamics.

We may resume providing diving and underwater services like underwater construction services, Installation and replacement of risers and conductors, Rig support Diving Services, Air Diving, Mixed Gas Diving, Saturation Diving, Installation of hanger clamps & subsea clamps, Installation of seals at bell mouth, Installation and replacement of pipelines, Diving support and inspection for pipe laying, Diving support for platform frame and leg fixing and laying of composite power cables.

Your Company has two (2) Saturation Diving systems.

Strength and Opportunities:

- Prabha- DP2 Accommodation Barge (Previously known as Vikrant Dolphin)

- Offering Marines Operations and Management Services

- Logistics support to Marine Operations

- Diving and Underwater Services

- Platform Supply Vessels (PSV) and other Marine Operations Marine Operations - Geographical Opportunity

Outlook:

Your company wants to inform you that Prabha Barge has been completely refurbished now and has entered in to a 3 year contract. It has started generating revenue on daily rental basis with USD 30,000 net of opex.

AHTS has also been refurbished and post refurbishment it has started generating revenues.

In future, company will be a global provider of integrated services to the oil and gas industry, with a diversified portfolio for undertaking turnkey projects involving Underwater &, Marine Marine Operations and Offshore Construction. We will harness our knowledge and energy to provide world class quality, safety and environmental protection standards. We will constantly upgrade procedures, skills, systems and technology to create greater value for our clients, suppliers, employees and shareholders.

Group Structure:

> Deep Industries Limited, Ultimate Parent Company is specialized in providing various Onshore Oil & Gas support services since more than 30 years. The Services portfolio includes Natural Gas Compression, Natural Gas Dehydration, Natural Gas Processing, Workover and Drilling Rigs Services, and Integrated Project Management Services. Deep is now One Stop Solution Provider for every need of Oil and Gas field operations and services. Its comprehensive services portfolio is well supported by wide range of Equipments used right from Exploration & Production to Mid-Stream Services along with skilled manpower while maintaining safety and quality.

> Deep Onshore Services Private Limited (DOSPL), Holding Company and a Wholly Owned Subsidiary (WOS) of Deep Industries Limited. DOSPL acquired Dolphin Offshore Enterprises (India) Limited. It is a strategic acquisition expanding business footprint into offshore services segment.

> Dolphin Offshore Enterprises (Mauritius) Private Limited, based in Ebene, Mauritius is a wholly owned subsidiary Company, engaged in investment holding, Leasing of Barge and shipping activities.

> Beluga Internationa! DMCC, based in Dubai (UAE) is a wholly owned subsidiary of the Company, incorporated in the month of January 2024. The Company is incorporated for the purpose of carrying out the activities relating to ship charter including renting and leasing of water-transport boats, Barges & Tugs and for passenger transport or cargo, whether owned by the company or being re-chartered.

Risks and Concerns

Risks and uncertainties are an inherent part of every business, and yet it is important to identify the risks and take proactive steps to measure, minimize and mitigate them. The offshore vessel business, which involves the operation of ships that support offshore oil and gas exploration, construction, and production, is critical but comes with several risks and concerns. These risks span various areas, including financial, operational, environmental, regulatory, and reputational aspects.

Here are the key risks and concerns:

1. Market and Economic Risks

- Volatility in Oil Prices: Offshore vessels heavily rely on the oil and gas industry. Fluctuations in oil prices can lead to reduced demand for vessels, affecting profitability.

- Economic Downturns: Global economic slowdowns can lead to reduced investment in offshore projects, leading to lower utilization rates for offshore vessels.

2. Operational Risks

- Accidents and Collisions: Offshore operations are complex and hazardous. Collisions, groundings, or accidents can result in significant financial losses and environmental damage.

- Technical Failures: The failure of critical vessel systems or equipment can lead to costly downtimes and potentially dangerous situations.

- Weather and Sea Conditions: Adverse weather and harsh sea conditions can disrupt operations, damage vessels, and pose safety risks to crew members.

3. Safety and Security Risks

- Piracy and Armed Attacks: Vessels operating in certain regions may face the threat of piracy or armed attacks, leading to potential loss of assets and crew.

- Cybersecurity: Increasing digitalization of vessel operations raises the risk of cyber-attacks, which could disruptoperations or lead to data breaches.

4. Financial Risks

- High Capital Costs: Offshore vessels are expensive to build and maintain, requiring significant capital investment.

Financing these assets can be challenging, especially during downturns.

- Liquidity Risks: Operators may face liquidity issues if they are unable to secure contracts or if payments from clients are delayed.

- Insurance Costs: The high risks associated with offshore operations can lead to substantial insurance premiums.

5. Technological Risks

- Rapid Technological Change: The need to keep up with rapid advancements in technology requires continuous investment in new equipment and training, which can be costly.

- Obsolescence: Older vessels may become obsolete due to new regulations or advances in technology, requiring costly upgrades or replacements.

In summary, the offshore vessel business is exposed to a wide range of risks that require careful management. Companies must have robust risk mitigation strategies, including safety protocols, financial planning, regulatory compliance, and environmental stewardship, to navigate these challenges successfully.

Internal control systems and their adequacy

The Company has put in a place an adequate and effective Internal Control Mechanism to ensure efficient conduct of its operations, security of assets, prevention and detection of frauds/errors, preserving accuracy and completeness of the accounting and business records and timely preparation of financial statements and related information. These internal control systems are then further supplemented by Internal Audit carried out by the Internal Auditor of the Company and periodical review by the management. The Company has put in place Proper and adequate controls, which are reviewed at regular intervals to ensure that the business decisions and transactions are properly authorized, correctly and timely reported and the assets are safeguarded from loss, damage and misuse.

In addition to above, the Company has formulated a Vigil Mechanism and Whistle Blower Policy for its Directors and employees of the Company for reporting genuine concern about unethical practices and suspected mal-practices

Discussion on financial performance Revenue from Operations

( Rs. in Lakhs)

Nature of Services	FY 2024-25	FY 2023-24	Change	Change%
Sale of Spares and services to the offshore oil and gas industry	1,488.48	646.74	841.74	130%
Total Business Income	1,488.48	646.74	841.74	130%

( Rs. in Lakhs)

Particulars	For 2024-25	For 2023-24
Revenue From Operation & Other Income	2,077.97	1,096.52
Earnings Before Interest, Taxes Depreciation & Amortization (EBITDA) after exceptional items	570.77	273.51
Earnings before Depreciation, Taxes and Amortization (EBTDA) after exceptional items	453.95	180.77
Profit before tax (PBT)	433.18	43.23
Profit after tax (PAT)	324.16	574.16

The Companys revenue from Operations has been reached to Rs.. 1,488.48 Lakhs.

Further, the Companys Other Income increased from Rs.449.78 Lakhs to 589.49 Lakhs whereby Other Expenses has decreased from Rs.814.86 Lakhs to Rs.173.30 Lakhs.

The Companys Operating Expenses have rose from Rs.144.58 Lakhs to Rs. 1,298.92 Lakhs which commensurate with the increase in Revenue from Operations.

Material developments in Human Resources / Industrial Relations

The Company values its Human Resources most and continued in its endeavors to ensure work-life balance of its employees. The Company believes that employees are the key to achievement of Companys objectives and strategies. The Company provides to the employees a fair and equitable work environment and support from their peers with a view to develop their capabilities leaving them with the freedom to act and to take responsibilities for the task assigned. We provide our employees outstanding career development opportunities and reward to the staff for their good performance and loyalty to the organization. In order to meet steady flow of talent, Company has appointed experienced professionals in Technical as well as Commercial Departments. Apart from that, as a strategic policy, every year, Company hires new pool of talent from reputed technical / petroleum institutes through campus selection process. Other than Key Managerial Personnel, there were no any other employees in the Company as on 31st March, 2025.

Health, Safety & Environment

Being a service provider to high-risk industry, safety of employees is utmost priority of our Company. While carrying out operations, Company ensures compliance to all Rules and Regulations regarding Health, Safety and Environment protection. Imparting essential health and safety training such as MVT, Firefighting etc. is being followed on regular basis.

STATUTORY REPORTS

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios and any change in Return on Net Worth, along with detailed explanations thereof.

Sr. Financial Ratios	Key Financial Ratios		Changes	Explanation
No.	2024-25	2023-24
1. Debtors Turnover Ratio (In times)	(0.13)	(0.06)	128.12%	The improvement in Trade Receivable Turnover Ratio is due to increase in revenue from operations vis-a-vis almost same level of trade receivables.
2. Inventory Turnover (in Times)	-	-	-	-
3. Interest Coverage Ratio (%)	3.02	14.40	(79.03%)	The reduction in Debt Service Coverage Ratio is primarily due to decrease in Earnings available for debt servicing.
4. Current Ratio (in times)	20.90	30.29	(31%)	The decrease in current ratio is primarily due to reduction in current assets as well as increase in current liabilities
5. Debt Equity Ratio (In times)	0.31	0.00	NA	There is a loan outstanding loan from parent company at the end of FY 2024-25 which consists of entire debt of Rs. 4,735 Lakhs.
6. Operating Profit Margin (%)	-	-	-	-
7. Net Profit Margin (%)	15.60	52.36	(70.21%)	The reduction in Net Profit Ratio (%) is due to lower profits and higher total income as compared to previous year.
8. Return on Capital Employed (%)	2.75%	0.91%	202.11%	Return on Capital Employed has improved by 184 basis points mainly due to better utilization of equity capital and borrowed money on profitable projects.

Disclosure of Accounting Treatment

Standard Accounting procedure has been followed.

Cautionary Statement

Statements made in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations and predictions may be forward looking statements within the meaning of applicable laws and regulations. The Companys actual results, achievements may differ materially from those projected in any such forward looking Statements. The Company assumes no responsibility to publicly amend or revise any forward-looking statements on the basis of subsequent developments, information or events.

By order of the Board of Directors For Dolphin Offshore Enterprises (India) Limited

	Sd/-
	Dharen Savla
Date: 22/07/2025	Chairman & Director
Place Ahmedabad	DIN - 00145587