Significant Accounting Policies
• Company Overview
JAYATMA INDUSTRIES LIMITED (formerly known as SANTARAM SPINNERS LIMITED) ("the company"), is a
public limited Company incorporated as private limited company in 1983 and subsequently converted to
public limited company in 1994. The company's shares are listed on Bombay Stock Exchange. The registered
office of the Company is located at 4th Floor 1, Laxminagar, Co.op Hou. Society, Bs Naranpura Post Office,
Naranpura, Ahmedabad-380013. The company is engaged in manufacturing and trading of cotton - Kapas,
ginning cotton bales, raw oil and its agro by- products and yarn.
• Basis for Preparation of Financial statements
These financial statements have been prepared in accordance with the generally accepted accounting
principles in India, on the basis of going concern under the historical cost convention and also on accrual
basis. These financial statements comply, in all material aspects, with the provisions the Companies Act, 2013
(to the extent applicable) and also accounting standards prescribed by the Companies (Accounting Standards)
Rules, 2006, which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of
General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs.
All assets and liabilities have been classified as current or non-current as per the Company's normal operating
cycle of less than twelve months, hence a period of twelve months has been considered for bifurcation of
assets and liabilities into current and non-current as required by Schedule III to the Companies Act, 2013 for
preparation of Financial Statements The accounting policies adopted in the preparation of financial
statements are consistent with those of previous year, except for the change in accounting policy explained
below
• Use of Estimates
The preparation of financial statements is conformity with generally accepted accounting principles require
management to make assumptions and estimates, which it believes are reasonable under the circumstances
that affect the reported amounts of assets and liabilities on the date of financial statements and the reported
amounts of revenue and expenses during the period. Actual results could differ from those estimates.
Difference between the actual results and estimates are recognized in the period in which the results are
known /materialized.
• Property, Plant and Equipment
Property, plant and equipment are stated at acquisition cost net of tax / duty credit availed, less accumulated
depreciation and accumulated impairment losses, if any. Properties in the course of construction are carried
at cost, less any recognized impairment losses. All costs, including borrowing costs incurred up to the date the
asset is ready for its intended use, is capitalized along with respective asset.
Depreciation is recognized based on the cost of assets less their residual values over their useful lives, using
the straight-line method. The useful life of property, plant and equipment is considered based on life
prescribed in schedule II to the Companies Act, 2013 for year 2023-2024.
• Financial Instruments
Financial assets and financial liabilities are recognized when an entity becomes a party to the contractual
provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets
and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the
financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value
through profit or loss are recognized immediately in profit or loss.
• Financial Assets
> Classification
The Company classifies its financial assets in the following measurement categories:
• Those to be measured subsequently at fair value (either through OCI, or through profit or
loss), and
• Those measured at amortized cost.
• Those measured at carrying cost for equity instruments of subsidiaries, and joint ventures.
> Initial recognition and measurement
All financial assets, are recognized initially at fair value.
• Financial liabilities and equity instruments
Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in
accordance with the substance of the contractual arrangements and the definitions of a financial liability and
an equity instrument.
Equity instruments
The Company subsequently measures all equity investments at fair value. Where the Company's
management has elected to present fair value gains and losses on equity investments in OCI, there is no
subsequent reclassification of fair value gains and losses to the Standalone Statement of Profit and Loss.
When the financial asset is derecognized, the cumulative gain or loss previously recognised in OCI is
reclassified to equity. Dividends from such investments are recognised in the Standalone Statement of Profit
and Loss within other income when the Company's right to receive payments is established. Impairment
losses (and reversal of impairment losses) on equity investments measured at FVTOCI are not reported
separately from other changes in fair value.
Financial liabilities
The Company's financial liabilities comprise borrowings, trade payables and other liabilities.
These are initially measured at fair value, net of transaction costs, and are subsequently measured at
amortized cost using the EIR method. The EIR is a method of calculating the amortized cost of a financial
liability and of allocating interest expense over the relevant period at effective interest rate. The effective
interest rate is the rate that exactly discounts estimated future cash payments through the expected life of
the financial liability, or, where appropriate, a shorter period.
Financial liabilities at amortized cost
Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at
amortized cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that
are subsequently measured at amortized cost are determined based on the effective interest method.
Interest expense that is not capitalized as part of costs of an asset is included in the 'Finance costs' line item.
Trade and other payables are recognized at the transaction cost, which is its fair value.
• Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on
the presumption that the transaction to sell the financial asset or settle the financial liability takes place
either:
• In the principal market, or
• In the absence of a principal market, in the most advantageous market
The principal or the most advantageous market must be accessible by the Company.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate
economic benefits by using the asset in its highest and best use.
• Revenue recognition
The Company has adopted Ind AS 115 from 1st April, 2018 and opted for modified retrospective application
with the cumulative effect of initially applying this standard recognized at the date of initial application. The
standard has been applied to all open contracts as on 1st April, 2018, and subsequent contracts with
customers from that date.
Performance obligation:
The revenue is recognized on fulfilment of performance obligation.
• Sale of products:
The Company earns revenue primarily from sale of cotton and blended yarns.
Payment for the sale is made as per the credit terms in the agreements with the customers. The credit period
is generally short term, thus there is no significant financing component.
The Company's contracts with customers do not provide for any right to returns, refunds or similar
obligations. The Company's obligation to repair or replace faulty products under standard warranty terms is
recognized as a provision.
Revenue is recognized when the performance obligations are satisfied and the control of the product is
transferred, being when the goods are delivered as per the relevant terms of the contract at which point in
time the Company has a right to payment for the asset, customer has possession and legal title to the asset,
customer bears significant risk and rewards of ownership and the customer has accepted the asset or the
Company has objective evidence that all criteria for acceptance have been satisfied.
• Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which
are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as the assets are substantially ready for their intended use
or sale. Interest income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
• Taxation
Tax on Income comprises current and deferred tax. It is recognized in statement of profit and loss except to
the extent that it relates to a business combination, or items recognized directly in equity or in other
comprehensive income.
• Current tax
Tax on income for the current period is determined on the basis on estimated taxable income and tax credits
computed in accordance with the provisions of the relevant tax laws and based on the expected outcome of
assessments / appeals. Current income tax assets and liabilities are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount
that are enacted or substantively enacted, at the reporting date. Management periodically evaluates
positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to
interpretation and establishes provisions where appropriate.
• Deferred tax
Deferred tax is recognized for the future tax consequences of deductible temporary differences between the
carrying values of assets and liabilities and their respective tax bases at the reporting date, using the tax rates
and laws that are enacted or substantively enacted as on reporting date. Deferred tax assets are recognized
to the extent that it is probable that future taxable income will be available against which the deductible
temporary differences can be utilized. Deferred tax relating to items recognized outside the statement of
profit and loss is either in other comprehensive income or directly in equity. The carrying amount of deferred
tax assets is reviewed at each reporting date.
• Earnings per share
The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to the ordinary shareholders of the company by the
weighted average number of ordinary shares outstanding during the period. Where ordinary shares are
issued but not fully paid, they are treated in the calculation of basic earnings per share as a fraction of an
ordinary share to the extent that they were entitled to participate in dividends during the period relative to a
fully paid ordinary share. Diluted earnings per share is computed by dividing the net profit after tax by the
weighted average number of equity shares considered for deriving basic EPS and also weighted average
number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a
later date. Dilutive potential equity shares are determined independently for each period presented.
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