1.1 Corporate information
KAPSTON SERVICES LIMITED ("the Company") (CIN: L15400TG2009PLC062658) is engaged in the business
of rendering security and related services, training and facility management, Housekeeping and cleaning
services and IT staffing services. The company has registered office at Hyderabad and provides services
in major cities all over India.
These Standalone financial statements were authorized by the directors on 27 May, 2026.
Material accounting policies
This note provides a list of material accounting policies adopted in the preparation of these Standalone
financial statements.
1.2 Basis of preparation and presentation of Financial Statements
The Standalone financial statements of Kapston Services Limited have been prepared and presented in
accordance with and in compliance in all material aspects, with the Indian Accounting Standards ("Ind
AS") notified under Section 133 of the Companies Act, 2013 (the "Act") read along with the Companies
(Indian Accounting Standards) Rules 2015, and presentation requirements of Division II of Schedule III to
the Companies Act, 2013, and as amended from time to time together with the comparative period data
as at and for the year ended 31 March 2025.
These Standalone financial statements have been prepared by the Company as a going concern on
the basis of relevant Ind AS that are effective at the Company's annual reporting date, 31 March 2026.
These financial statements for the year ended 31 March 2026 were approved by the Company's Board of
Directors on 27 May, 2026.
1.3 Basis of Measurement
The financial statements have been prepared under the historical cost convention on an accrual and
going concern basis, except for the items where the relevant Ind AS requires the financial instruments
to be classified as fair value through profit or loss ('FVTPL') and are measured at fair value, including the
following material items:
a. Certain financial assets are measured either at fair value or at amortized cost depending on the
classification;
b. Employee defined benefit assets/(liability) are recognized as the net total of the fair value of plan assets,
plus actuarial losses, less actuarial gains and the present value of the defined benefit obligation and
c. Long-term borrowings are measured at amortized cost using the effective interest rate method.
d. Right of use assets are recognized at the present value of lease payments that are not paid at that
date. This amount is adjusted for any lease payments made at or before the commencement date, lease
incentives received and initial direct costs, incurred if any.
Accounting policies have been applied consistently to all periods presented in these financial statements.
The financial statements are based on the classification provisions contained in Ind AS 1, 'Presentation of
Financial Statements' and division II of schedule III of the Companies Act 2013. For the purpose of clarity,
various items are aggregated in the statements of profit and loss and balance sheet. These items are
disaggregated separately in the notes to the financial statements, where applicable or required.
1.4 Functional and presentation currency
These Standalone financial statements are presented in Indian Rupees (INR), which is also the Company's
functional currency. All financial information presented in Indian rupees have been rounded-off to two
decimal places to the nearest lakhs except share data or as otherwise stated.
1.5 Use of estimates and judgments.
In preparing these Standalone financial statements, management has made judgements, estimates
and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from those estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised prospectively.
Judgements
Information about judgements made in applying accounting policies that have the most significant
effects on the amounts recognised in the financial statements is included in the following notes:
- Note 1.19- lease classification.
- Note 1.19 - leases: whether an arrangement contains a lease and lease classification
Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a
material adjustment within the next financial year are included in the following notes:
- Note 38 - measurement of defined benefit obligations: key actuarial assumptions;
- Note 1.10 - determining an asset's expected useful life and the expected residual value at the end of its
life
1.6 Measurement of fair values
Accounting polices and disclosures require measurement of fair value for both financial and non-financial
assets.
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 asset or transfer the liability takes place either:
- In the principal market for the asset or liability or
- In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company. The fair value of an
asset or a liability is measured using the assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in their economic best interest.
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 or by selling it to another
market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient
data is available to measure fair value, maximising the use of relevant observable inputs and minimising
the use of unobservable inputs
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the
valuation techniques as follows.
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
When measuring the fair value of an asset or a liability, the Company uses observable market data as far
as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of
the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of
the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting
period during which the change has occurred.
Further information about the assumptions made in the measuring fair values is included in the following
notes:
- Note 41 - Financial instruments
1.7 Current and non-current classification
'The Schedule III to the Act requires assets and liabilities to be classified as either current or non¬
current. The Company presents assets and liabilities in the balance sheet based on current/ non-current
classification.
Assets: An asset is classified as current when it satisfies any of the following criteria:
a. It is expected to be realized in, or is intended for sale or consumption in, the Company's normal
operating cycle;
b. It is held primarily for the purpose of being traded;
c. It is expected to be realized within twelve months after the reporting date; or
d. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for
at least twelve months after the reporting date.
Liabilities: A liability is classified as current when it satisfies any of the following criteria:
a. It is expected to be settled in the Company's normal operating cycle;
b. It is held primarily for the purpose of being traded;
c. It is due to be settled within twelve months after the reporting date; or
d. the Company does not have an unconditional right to defer settlement of liability for atleast twelve
months from the reporting date.
All other liabilities are classified as non-current. 'Deferred tax assets/liabilities are classified as non-current.
1.8 Operating Cycle
Operating cycle is the time between the acquisition of assets for processing and realisation in cash or
cash equivalents. The Company has ascertained its operating cycle as 12 months for the purpose of
current or non-current classification of assets and liabilities
1.9 Foreign Currency Transaction
Transactions in foreign currencies are translated to the respective functional currencies of entities
within the Company at exchange rates at the dates of the transactions. Monetary assets and liabilities
denominated in foreign currencies at the reporting date are translated into the functional currency at
the exchange rate at that date. Exchange differences arising on the settlement of monetary items or
on translating monetary items at rates different from those at which they were translated on initial
recognition during the period or in previous financial statements are recognized in the statement of
profit and loss in the period in which they arise.
Non-monetary assets and liabilities denominated in a foreign currency and measured at historical cost
are translated at the exchange rate prevalent at the date of transaction, if any.
1.10 Property Plant & Equipment
Recognition and measurement
Freehold land is carried at historical cost. All other items of property, plant and equipment are measured
at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price,
asset retirement obligation and costs directly attributable towards bringing the asset to its working
condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase
price. General and specific borrowing costs directly attributable to the construction of a qualifying asset
are capitalized as part of the cost.
Subsequent expenditure related to an item of property, plant and equipment is added to its carrying
value only when it increases the future benefits from the existing asset beyond its previously assessed
standard or period of performance. All other expenses on existing property, plant and equipment,
including day-to-day repairs, maintenance expenditure and cost of replacing parts, are charged to the
statement of profit and loss in the year during which such expenses are incurred.
Based on technical assessment, the useful lives as given above best represent the period over which the
management expects to use these assets. The estimated useful lives for these assets may therefore be different
from the useful lives prescribed under Part C of Schedule II of the Companies Act 2013.
The residual values are generally not more than 5% of the original cost of the asset. The asset's residual values,
useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year-
end and adjusted prospectively, if appropriate.
Where, during any financial year, any addition has been made to any asset, or where any asset has been
sold, discarded, demolished or destroyed, or significant components replaced; depreciation on such assets is
calculated on a pro rata basis as individual assets with specific useful life from the month of such addition or,
as the case may be, up to the month on which such asset has been sold, discarded, demolished or destroyed
or replaced.
Derecognition:
An item of property, plant and equipment and any significant part, initially recognised, is derecognised upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising
on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is recognised in the standalone statement of profit and loss when the asset is derecognised.
1.11 Intangible assets
Intangible assets that are acquired by the Company and that have finite useful lives are measured at cost
less accumulated amortization and accumulated impairment losses.
Amortization
Amortization is recognized in the statement of profit and loss on a written down value basis over the
estimated useful lives of intangible assets Intangible assets that are not available for use are amortized
from the date they are available for use.
1.12 Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
a. Financial assets
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded
at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial
asset. Purchases or sales of financial assets that require delivery of assets within a time frame established
by regulation or convention in the market place (regular way trades) are recognised on the trade date,
i.e., the date that the Company commits to purchase or sell the asset.
Subsequent measurement
For the Purpose of Subsequent measurement, financial assets are classified in four categories.
• Debt Instrument at amortized cost
• Debt Instrument at FVTOCI
• Debt instruments, Derivatives and Equity instruments at FVTPL and
• Equity Instruments measured at FVTOCI.
Debt instruments at amortised cost
A "debt instrument" is measured at the amortised cost if both the following conditions are met:
a. the asset is held within a business model whose objective is to hold assets for collecting contractual
cash flows; and
b. contractual terms of the asset give rise on specifi ed dates to cash flows that are solely payments of
principal and interest ("SPPI") on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective
interest rate method and are subject to impairment. Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an integral part of the eff ective interest rate.
Interest income from these financial assets is included in finance income using the effective interest rate
method. Any gain or loss arising on derecognition is recognised directly in statement of profit and loss and
presented in other income. The losses arising from impairment are recognised in the statement of profit and
loss. This category generally applies to trade and other receivables
Debt instrument at FVTOCI
A "debt instrument" is classified as at the FVTOCI if both of the following criteria are met:
a. the objective of the business model is achieved both by collecting contractual cash flows and selling
the financial assets; and
b. the asset's contractual cash flows represent SPPI.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting
date at fair value. Fair value movements are recognised in the OCI. However, the Company recognises interest
income, impairment losses and reversals and foreign exchange gain or loss in the statement of profit and
loss. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified to the
statement of profit and loss. Interest earned while holding a FVTOCI debt instrument is reported as interest
income using the effective interest rate method.
Debt instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for
categorisation as at amortised cost or as FVTOCI, is classified as at FVTPL. In addition, the Company may elect
to designate a debt instrument, which otherwise meets amortised cost or FVTOCI criteria, as at FVTPL. However,
such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency
(referred to as an "accounting mismatch").
Debt instruments included within the FVTPL category are measured at fair value with all changes recognised
in the statement of profit and loss.
Equity investments
All equity investments within the scope of Ind AS 109 are measured at fair value. Equity instruments which are
held for trading and contingent consideration recognised by an acquirer in a business combination to which
Ind AS 103 applies are classified as at FVTPL. For all other equity instruments, the Company may make an
irrevocable election to present in OCI subsequent changes in the fair value. The Company makes such election
on an instrument-by-instrument basis. The classification is made upon initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to
the statement of profi t and loss, even on sale of investment. However, on sale the Company may transfer the
cumulative gain or loss within equity. Equity investments designated as FVTOCI are not subject to impairment
assessment. Equity instruments included within the FVTPL category are measured at fair value with all changes
recognised in the statement of profit and loss.
Investment in subsidiaries, associates and joint ventures
A subsidiary is an entity over which the Company has control. The Company controls an investee entity when it
is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect
those returns through its power over the entity.
An associate is an entity over which the Company has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but is not control or joint control of
those policies. This is generally the case where the Company holds between 20% to 50% of the voting rights.
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of
an arrangement, which exists only when decisions about the relevant activities require the unanimous consent
of the parties sharing control.
The considerations made in determining whether significant influence or joint control exist are similar to those
necessary to determine control over the subsidiaries.
Investments in subsidiaries, associates and joint ventures are accounted for at cost less impairment loss, if any.
The said investments are tested for impairment whenever circumstances indicate that their carrying value may
exceed the recoverable amount.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily derecognised (i.e., removed from the Company's balance sheet) when:
(i) The rights to receive cash flows from the asset have expired, or
(ii) The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to
pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangements
and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the
Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass¬
through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When
it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred
control of the asset, the Company continues to recognise the transferred asset to the extent of the Company's
continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset
and the associated liability are measured on a basis that reflects the rights and obligations that the Company
has retained.
b. Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or
loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective
hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
The Company's financial liabilities include trade and other payables, loans and borrowings including bank
overdrafts, financial guarantee contracts.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below
Financial Liabilities at Fair value through Profit and Loss
Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated
upon initial recognition as at FVTPL. Financial liabilities are classified as held for trading if they are incurred
for the purpose of repurchasing in the near term. This category also includes derivative financial instruments
entered into by the Company that are not designated as hedging instruments in hedge relationships as
defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they
are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the statement of profit and loss.
Financial liabilities designated upon initial recognition at FVTPL are designated as such at the initial date of
recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value
gains or losses attributable to changes in own credit risk are recognised in OCI. These gains or losses are
not subsequently transferred to the statement of profit and loss. However, the Company may transfer the
cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the
statement of profit and loss. The Company has not designated any financial liability as FVTPL.
Loans and borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in the statement of profit and loss over the period of the borrowings using the effective
interest method.
Subsequent measurement
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost
using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as
well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit
and loss.
Derecognition
Financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as
the derecognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the statement of profit and loss.
Offsetting:
Financial assets and financial liabilities are offset, and the net amount is reported in the standalone balance
sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to
settle on a net basis, to realise the assets and settle the liabilities simultaneously. The legally enforceable right
must not be contingent on future events and must be enforceable in the normal course of business and in the
event of default, insolvency or bankruptcy of the Company of the counterparty.
1.13 Inventories
Inventories (raw materials, consumables and stores and spares) are valued at lower of cost and net
realisable value. Cost of inventories comprises purchase price and other costs incurred in bringing the
inventories to their present location and condition. Cost is determined using the weighted average
method.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated
costs to sell
1.14 Impairment of non-financial assets
' The Company's non-financial assets, other than inventories and deferred tax assets, are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists,
then the asset's recoverable amount is estimated.
'For impairment testing, assets that do not generate independent cash inflows are grouped together
into cash-generating units (CGUs). Each CGU represents the smallest group of assets that generates cash
inflows that are largely independent of the cash inflows of other assets or CGUs.
The Company bases its impairment calculation on detailed budgets and forecast calculations, which are
prepared separately for each of the Company's CGUs to which the individual assets are allocated. These
budgets and forecast calculations generally cover a period of five years. For longer periods, a long¬
term growth rate is calculated and applied to project future cash flows after the fifth year. To estimate
cash flow projections beyond periods covered by the most recent budgets/forecasts, the Company
extrapolates cash flow projections in the budget using a steady or declining growth rate for subsequent
years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long¬
term average growth rate for the products, industries, or country or countries in which the Company
operates, or for the market in which the asset is used.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value
less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the CGU (or the asset).
An impairment loss is recognized in the statement of profit and loss if the estimated recoverable amount
of an asset or its cash-generating unit is lower than its carrying amount. Impairment losses recognized
in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill
allocated to the units and then to reduce the carrying amount of the other assets in the unit on a pro¬
rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses
recognized in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates
used to determine the recoverable amount. An impairment loss is reversed only to the extent that the
asset's carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortization, if no impairment loss has been recognized.
1.15 Cash & Cash Equivalents
Cash and bank balances comprise of cash balance in hand, in current accounts with banks, demand
deposit, short-term deposits, Margin Money deposits and unclaimed dividend accounts. For this purpose,
"short-term" means investments having maturity of three months or less from the date of investment.
Bank overdrafts that are repayable on demand and form an integral part of our cash management are
included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
The Margin money deposits and unclaimed dividend balances shall be disclosed as restricted cash
balances.
1.16 Employee Benefits
a. Short term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised
for the amount expected to be paid if the Company has a present legal or constructive obligation
to pay this amount as a result of past service provided by the employee and the obligation can be
estimated reliably.
b. Defined Contribution Plan
The Company's contributions to defined contribution plans are charged to the statement of profit and
loss as and when the services are received from the employees.
c. Defined Benefit Plans
The liability in respect of defined benefit plans and other post-employment benefits is calculated using
the projected unit credit method consistent with the advice of qualified actuaries. The present value of
the defined benefit obligation is determined by discounting the estimated future cash outflows using
interest rates based on prevailing market yields of Indian Government Bonds and that have terms to
maturity approximating to the terms of the related defined benefit obligation. The current service cost
of the defined benefit plan, recognised in the statement of profit and loss in employee benefit expense,
reflects the increase in the defined benefit obligation resulting from employee service in the current
year, benefit changes, curtailments and settlements. Past service costs are recognised immediately in
income. The net interest cost is calculated by applying the discount rate to the net balance of the defined
benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense
in the statement of profit and loss. Actuarial gains and losses arising from experience adjustments and
changes in actuarial assumptions are charged or credited to equity in other comprehensive income in
the period in which they arise.
d. Termination benefits
Termination benefits are recognized as an expense when the Company is demonstrably committed,
without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment
before the normal retirement date, or to provide termination benefits as a result of an offer made to
encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognized as
an expense if the Company has made an offer encouraging voluntary redundancy, it is probable that
the offer will be accepted, and the number of acceptances can be estimated reliably.
e. Other long-term employee benefits
The Company's net obligation in respect of other long term employee benefits is the amount of future
benefit that employees have earned in return for their service in the curr ent and previous periods. That
benefit is discounted to determine its present value. Re-measurements are recognized in the statement
of profit and loss in the period in which they arise.
|