Accounting Policies of Spinaroo Commercial Ltd. Company

Mar 31, 2026

2. SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation and presentation of the financial statements:

The financial statements are prepared in accordance with Generally Accepted Accounting Principles
(GAAP) in India.

The financial statements are prepared under the historical cost convention, on the basis of a going
concern and as per applicable accounting standards and relevant presentational requirements of the
Companies Act, 2013. The Company follows mercantile system of accounting and recognizes income
and expenditure on accrual basis.

b) Recognition of Income & Expenditure:

Items of Income & Expenditure are recognized on accrual basis in accordance with the applicable
Accounting Standards.

Revenue is recognized when it is reliably measurable and it is probable that the economic benefits
associated with the transaction will flow to the Company.

Expenses are recognized in the Statement of Profit and Loss in the period in which they are incurred,
in accordance with the accrual and matching principles.

c) Property, Plant and Equipment:

All Property, Plant and Equipment have been valued at cost net of accumulated depreciation and
impairment losses, if any. Cost includes taxes, duties, freight and incidental expenses (including
borrowing costs, if applicable) related to acquisition and installation of the assets.

d) Intangible Assets:

Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. Cost
comprises of purchase price and directly attributable expenses on making the asset ready for its
intended use.

e) Depreciation and Amortization:

i. Depreciation on Property, Plant and Equipment & amortization of Intangible Assets is provided
under Written Down Value method. Depreciation for the current year is provided based on the
useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Amortisation of
intangible assets is provided based on rates based on estimated useful life of the assets.

ii. Depreciation/ amortization on Property, Plant and Equipment & Intangible Assets added, sold or
discarded during the year has been provided on pro-rata basis.

f) Inventories:

Inventories are valued at lower of cost and net realizable value.

Cost of inventories includes all costs of purchase, costs of conversion, and other costs incurred in
bringing the inventories to its present location and condition.

• Raw materials and components are valued at cost determined on a FIFO (First-In, First-Out)
basis.

• Work-in-progress and finished goods include direct materials, direct labour, and a proportion
of manufacturing overheads based on normal operating capacity.

• Stores and spares are valued at cost, net of obsolescence, if any.

• Net realizable value (NRV) is the estimated selling price in the ordinary course of business,
less the estimated cost of completion and the estimated costs necessary to make the sale.

g) Retirement Benefits:

Retirement benefits in the form of gratuity are classified as defined benefit obligations and are
recognized based on actuarial valuation conducted using the Projected Unit Credit Method as at the
balance sheet date. Actuarial gains and losses are recognized immediately in the Statement of Profit
and Loss and are not deferred.

h) Taxes on Income:

Income taxes are accounted for in accordance with Accounting Standard 22 on "Accounting for Taxes
on Income". Current tax is measured at the amount expected to be paid, using the applicable tax rates
and laws. The deferred tax liabilities are recognized based on the principles of prudence. Deferred tax
asset and liability are calculated by applying the rate and tax laws that have been enacted or
substantively enacted by the Balance Sheet date.

i) Borrowing Cost:

Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalized for
the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily
takes substantial period of time to get ready for its intended use.All other Borrowing costs are
recognized as expense in the period in which they are incurred.

j) Earnings per Share:

The company reports basic and diluted Earnings per Shares (BEPS/DEPS) in accordance with
Accounting Standard 20 on "Earning per share". Basic EPS is computed by dividing the net profit
after tax for the year by weighted average number of equity shares outstanding for the year. Diluted
EPS is same as Basic EPS.