Notes to Accounts of Ishan International Ltd.

Mar 31, 2025

i The Company doesn''t have any holding company, ultimate holding company, subsidiaries, associates of the holding company or associates of the ultimate holding company for current year and/or previous year.

ii There are no unpaid calls from any director or officers of the company for current and previous year.

Terms / Rights attached to equity shares:

ⁱ Voting :The Company has only one class of equity shares having a par value of Rs. 1/- per share. Each holder of equity shares is entitled to one vote per share.

ii Liquidation :In the event of liquidation of the Company, the holders of equity shares will be entitled to receive all of the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

iii Dividend: The Board of Directors do not propose dividend for financial period ended on 31st March, 2025

Disclosure as per Accounting Standards AS 15

Defined Contribution plan : Company contribution to Provident Fund is charged to the profit and loss account of the year when the contributions to the respective fund are due. Defined Benefit Plan : Gratuity liabilities are provided for based on acturial valuation. The acturial valuation is done on Projected Unit Credit Method.

Actuarial gains or losses are recognized immediately in the statements of the profit and loss account as income or expense.

34 As per Ind AS 109 "Financial Instrumentâ the company is required to consider "Provision for Expected Credit Lossâ on all financial assets on the basis of expected probability of recoverability of such financial instrument. During the year ended on 31st March, 2025, the company has provided Rs. 135.81 Lacs towards Expected Credit Loss in the financial statement and routed through the reserves and surplus of the company

35 The Company had extended advances aggregating ^63.75 crores to two suppliers against procurement of materials. Subsequently, the intended customer declined to accept materials from the said suppliers. In response, the Company, in consultation with the original advance recipients, identified alternate vendors who would supply the required materials, with settlement to be made by the parties to whom the advances were originally issued.

As of 31st March 2025, advances amounting to ^44.87 crores remain unsettled and are classified under "Other Current Assets" in the financial statements. The management is actively pursuing resolution of these outstanding amounts and as of date advances amounting to ^24.64 Crores remain unsettled

36 Contingent Liabilities and Provisions ( to the extent not provided for)

38 The management is actively in consultation with the authorised dealer bank for seeking an extension of time from the Reserve Bank of India (RBI) in respect of delays in the realization of export receivables from certain foreign customers, which have remained outstanding for a period exceeding 270 days from their respective due dates. The Company is in the process of completing the necessary formalities and documentation for submission to the RBI through the bank and expects to regularize the matter shortly

The Company had entered into a continuous supply arrangement and all terms and conditions mutually decided with Reliance Industries Limited (customer) for the supply of various products, valued at Rs. 51.42 (Rs. 60.68 cr including GST & TDS) crores. Under this arrangement, materials were supplied directly from the supplierâs location to Reliance Industries Limited following a "Bill to Ship to" model.

Our vendors, under our instructions, delivered materials directly to Reliance Industries Limited on a regular basis, with each delivery supported by a valid invoice and e-way bill.

As this was a continuous supply arrangement, we issue periodic invoices that consolidate all deliveries made to Reliance Industries within the billing period, ensuring accurate and efficient accounting of supplies.

The advance received from RIL was Rs. 51.42 cr (Rs. 60.68 crores including GST & TDS) against which supplies made till 31st March, 2025 was Rs. 51.42 cr.

Order is stand fulfilled and completed as of 31.03.2025

41 The business operations of Corporate Office premises are conducted on a sub-leased premises. Our inability to continue operating from such premises, or to seek renewal or extension of such leases may materially affect our business operations.Corporate Office is located at 1616, WTT Building, 16th Floor, Sector 16, Noida, Uttar Pradesh - 201301 wherein the company has brought out the said premises by paying the sales consideration to the ET Infra Developers Private Limited. However, as per the original lease agreement dated August 03, 2010 is required to enter into a sub-lease agreement with the company till the registration of ownership is registered with the Nodia Government. Hence, the Company has entered into a sub-lease agreement with ET necessary stamp duty on the above mentioned premises and also notarized the said sub-lease agreement. However, the ownership of the above mentioned premises yet to be registered in the name of the Company as the stamp duty payment and other formalities related to the title transfer is to be completed at the Lessorâs end. In necessary formalities with the Nodia Government for the company to claim the ownership on above mentioned premises. Further, the Company has obtained various secured loans from Bank of India. In this regards, corporate office is mortgaged and hypothecated with Bank of India. Thought, our company repays the secured loan amount in a timely manner as per the terms and conditions of the loan agreement and have provided all the necessary documents relating to the sub-lease agreement, stamp-duty payment, possession letter as provided by the Lessee, we cannot assure that the bank may invoke the mortgage. If any such events occur, Company''s operations and cash flows may be adversely impact and may divert management attention from the business operations. Given that business operations are conducted on above mentioned premises, any adverse impact on, or deficiency in the title and/or ownership rights or breach of the terms of any sublease agreements may materially affect the business operations.

42 The Company is engaged primarily in business of engineering, procurement and construction (EPC), engineering Goods and spares, construction material, pollution control and renewable energy projects. Accordingly, there are no separate reportable segments as per Indian Accounting standards (Ind AS) 108 dealing with the segment reporting

43 Financial Risk Management objectives and policies:

The Companyâs financial risk management is an integral part of how to plan and execute its business strategies. The Companyâs financial risk management policy is set by the Managing Board.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits , receivables, payables and loans and borrowings.

i Market Risk (Interest rate risk):

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates

According to the Companyâs interest rate risk exposure is only for floating rate borrowings. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 0.50% increase or decrease is used when reporting interest rate risk internally to key management personnel and represents managementâs assessment of the reasonably possible change in interest rates.

ii Credit Risks

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding- looking information such as:

i) Actual or expected significant adverse changes in business,

ii) Actual or expected significant changes in the operating results of the counter-party,

iii) Financial or economic conditions that are expected to cause a significant change to the counter-partyâs ability to meet its obligations.

iv) Significant increase in credit risk on other financial instruments of the same counter-party,

Financial assets are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the company.

The Company measures the expected credit loss of trade receivables and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Subject to notes and balance written off, based on the historical data, loss on collection of other receivable is provided as follows:

iii Liquidity Risks

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of fundi ng through an adequate amount of committed credit facilities to meet obligations when due. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows.

45 Additional Regulatory Information

The disclosures required by amendment to Division II of Schedule III of the Companies Act,2013 are given only to the extent applicable:

i. Title deeds of immovable property other than proper taken on lease by duly executed lease agreement are held in the name of the company.

ii. During the year there has been no change in the aggregate of the net carrying value of assets on account of revaluation in respect of Property, Plant & Equipment and intangible assets.

iii. There are no intangible assets under development in the Company during the current reporting period.

iv. No proceedings have been initiated or pending against the company for holding any benami property under the Benami transactions (Prohibition) Act,1988 (45 of 1988) and the rules made thereunder

v. The company does have borrowings from banks against the security of current assets.

vi. The Company has not been declared as a willful defaulter by any bank or financial institution or other lender in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.

vii. The company has not entered in to any transaction with companies struck off under section 248 of the Companies Act,2013.

viii. There are no charges or satisfaction of charges yet to be registered with Registrar of Companies beyond the statutory period.

ix. The borrowing taken by the company from the banks has been used for the specific purpose for which it was taken at the balance sheet date.

x. There are no transactions that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 which have not been recorded in the books of account

Mar 31, 2024

u Provisions, contingent Liabilities and Contingent Assets

Provisions are recognised only when

(i) the Company has a present obligation (legal or constructive) as a result of a past event; (ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

(ii) a reliable estimate can be made of the amount of the obligation.

Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money is material, the carrying amount of the provision is the present value of those cash flows.

Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in case of:

(i) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and

(ii) a present obligation arising from past events, when no reliable estimate is possible. Contingent assets are disclosed where an inflow of economic benefits is probable.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under such contract, the present obligation under the contract is recognised and measured as a provision.

v Statement of Cash Flows

Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method, adjusting the profit before tax excluding exceptional items for the effects of:

(i) changes during the period in inventories and operating receivables and payables transactions of a non-cash nature;

(ii) non-cash items such as depreciation, provisions, unrealised foreign currency gains and losses; and

(iii) all other items for which the cash effects are investing or financing cash flows.

Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as at the date of Balance Sheet.

34 As per Ind AS 109 "Financial Instrument" the company is required to consider "Provision for Expected Credit Lossâ on all financial assets on the basis of expected probability of recoverability of such financial instrument. During the period ended on 31st March, 2024 total outstanding receivables for more than 365 days are 534.07 Lakhs, the company has provided Rs. 182.18 Lakhs towards Expected Credit Loss in the financial statement out of which the company has provided for the Expected credit loss of Rs. 72.74 Lakhs through the reserves and surplus of the company and rest amount of Rs. 109.44 Lakhs has been provided through profit and loss account

35 The Company had entered in to Joint Venture with M/s SD Corporation on 13th February, 202 3 where in company holds majority stake. However, due to non-generation of any business and not seeing any bright future the Joint venture was revoked on 6th June, 202 3, as SD Corporation could not generate any business so it was agreed upon in the cancellation agreement dated 6th June, 2023 that the amount of Rs. 350 Lakhs invested in the joint venture has been recovered fully during year ended March, 2024

³⁶ The company has made a strategic investment as approved in the AGM dated 21^st September 2023 of an amount of Rs. 355 Lakhs in M/s Race Envision Pvt. Ltd. in which the company sees great opportunities. The investment has been made through rights issue

42 In the opinion of the Board, except otherwise stated all assets other than fixed assets and non current investments, have a realisable value in the ordinary course of business which is not different from the amount at which it is stated. The provision for current liabilities and other liabilities is adequate and not in excess of amount reasonably necessary.

43 The business operations of Corporate Office premises are conducted on a sub-leased premises. Our inability to continue operating from such premises, or to seek renewal or extension of such leases may materially affect our business operations.Corporate Office is located at 1616, WTT Building, 16th Floor, Sector 16, Noida, Uttar Pradesh - 201301 wherein the company has brought out the said premises by paying the sales consideration to the ET Infra Developers Private Limited. However, as per the original lease agreement dated August 03, 2010 is required to enter into a sub-lease agreement with the company till the registration of ownership is registered with the Nodia Government. Hence, the Company has entered into a sub-lease agreement with ET necessary stamp duty on the above mentioned premises and also notarized the said sub-lease agreement. However, the ownership of the above mentioned premises yet to be registered in the name of the Company as the stamp duty payment and other formalities related to the title transfer is to be completed at the Lessorâs end.

In necessary formalities with the Nodia Government for the company to claim the ownership on above mentioned premises. Further, the Company has obtained various secured loans from Bank of India. In this regards, corporate office is mortgaged and hypothecated with Bank of India. Thought, our company repays the secured loan amount in a timely manner as per the terms and conditions of the loan agreement and have provided all the necessary documents relating to the sub-lease agreement, stamp-duty payment, possession letter as provided

44 The Company is engaged primarily in business of EPC Contracting and accordingly there are no separate reportable segments as per Indian Accounting standards (Ind AS) 108 dealing with the segment reporting

45 Financial Risk Management objectives and policies:

The Companyâs financial risk management is an integral part of how to plan and execute its business strategies. The Companyâs financial risk management policy is set by the Managing Board.

i Market Risk (Interest rate risk):

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates

47 Additional Regulatory Information