==> picture [103 x 52] intentionally omitted <==

Newgen Software Technologies Limited

CIN: L72200DL1992PLC049074 Regd. Office: A-6, Satsang Vihar Marg, Qutab Institutional Area, New Delhi - 110 067, INDIA Email: [email protected] URL: https://newgensoft.com Tel.: (+91)-11-4077 0100, (+91)-11-2696 3571, 2696 4733, Fax: (+91)-11-2685 6936

Date: 30[th] June 2021

BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai – 400001	National Stock Exchange of India Limited Exchange Plaza, Plot No. C/1, G Block, Bandra- Kurla Complex Bandra (E), Mumbai – 400051
Ref.: Newgen Software Technologies Limited (NEWGEN/INE619B01017) Scrip Code–540900	Ref.: Newgen Software Technologies Limited (NEWGEN/INE619B01017)

Sub.: Notice of 29[th] Annual General Meeting and Annual Report for the Financial Year 2020-21.

Dear Sir/ Ma'am,

This is to inform you that the 29[th] Annual General Meeting (“AGM”) of the Company will be held on Tuesday, 27[th] July 2021 at 11:00 A.M. (IST) through Video Conferencing (“VC”) or Other Audio-Visual Means (“OAVM”) in accordance with the relevant circulars issued by Ministry of Corporate Affairs and Securities and Exchange Board of India (“SEBI”).

Pursuant to Regulation 34(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are submitting herewith the Notice of AGM along with Annual Report of the Company for the financial year 202021 which is being sent through electronic mode to the members. The AGM Notice and Annual Report are available on the Company’s website at: https://newgensoft.com.

This is for your kind information and record.

Thanking you.

For Newgen Software Technologies Limited

==> picture [164 x 47] intentionally omitted <==

Aman Mourya Company Secretary

==> picture [64 x 40] intentionally omitted <==

NEWGEN SOFTWARE TECHNOLOGIES LIMITED

CIN: L72200DL1992PLC049074 Regd. Office: A-6, Satsang Vihar Marg, Qutab Institutional Area, New Delhi - 110 067, INDIA Email: [email protected] URL: htps://newgensof.com

Tel.: (+91)-11-40770100, (+91)-11-2696 3571, 2696 4733, Fax: (+91)-11-2685 6936

NOTICE OF 29[TH] ANNUAL GENERAL MEETING

NOTICE is hereby given that the 29[th] Annual General Meeting (“AGM”) of Newgen Software Technologies Limited (“the Company”) will be held on Tuesday, the 27[th] day of July 2021, at 11:00 A.M. (IST) through Video Conferencing (VC) or Other Audio-Visual means (OAVM) to transact the businesses mentioned below. The deemed venue of the AGM shall be the Registered Office of the Company.

ORDINARY BUSINESS:

1. To receive, consider and adopt:

incremental fee, time to time, based on the performance of the statutory auditors, nature & volume of work and on such other terms as may be mutually decided between the Auditors and the Board of Directors of the Company.

RESOLVED FURTHER THAT, the Board of Directors of the Company be and is hereby also authorized to do all such acts, deeds and matters as may be necessary, proper or expedient to give effect to this resolution.”

a) the Audited Standalone Financial Statements of the Company for the Financial Year ended 31[st] March 2021 and the Reports of the Board of Directors and Auditors thereon.
b) the Audited Consolidated Financial Statements of the Company for the financial year ended 31[st] March 2021 and the report of Auditors thereon.

2. To declare a Dividend of c 3.5 per equity share having Face value of b 10/- each of the Company for the Financial Year ended 31[st] March 2021.

3. To appoint a director in place of Mr. T.S. Varadarajan (DIN: 00263115), who retires by rotation and being eligible, offers himself for re-appointment.

4. To appoint Statutory Auditors of the Company and fix their remuneration and in this regard, pass the following resolution as an Ordinary Resolution .

“ RESOLVED THAT , pursuant to the provisions of Section 139, 142 and all other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) and pursuant to the recommendations of the Audit Committee and Board of Directors, M/s Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No 001076N/N500013) be and are hereby appointed as Statutory Auditors of the Company, in place of retiring auditors M/s B S R & Associates LLP, Chartered Accountants (Firm Registration No 116231W/W-100024), to hold office for a term of 5 (five) years from the conclusion of this 29[th] Annual General Meeting till the conclusion of 34[th] Annual General Meeting.

RESOLVED FURTHER THAT , the Board of Directors of the Company be and is hereby authorized to fix remuneration of the Statutory Auditors during their tenure, to reimburse their travelling and out of pocket expenses and to finalize & approve

By order of the Board For Newgen Software Technologies Limited

Date: 25[th] June 2021 Aman Mourya Registered Office: A-6, Satsang Vihar Marg, Company Secretary Qutab Institutional Area, New Delhi – 110067 FCS: 9975

NOTES:

Explanatory Statements pursuant to Section 102 of the Companies Act, 2013, which sets out details of material facts relating to the business to be transacted at this AGM, is annexed hereto.
In view of the continuing COVID-19 pandemic, Ministry of Corporate Affairs (“MCA”) has vide its General Circular Nos.14/2020 dated 8[th] April 2020, 17/2020 dated 13[th] April 2020, 20/2020 dated 5[th] May 2020 and 02/2021 dated 13[th] January 2021 and all other relevant circulars issued from time to time, permitted the holding of the AGM through VC / OAVM without the physical presence of the Members at a common venue. In compliance with applicable provisions of the Companies Act, 2013 (“the Act”) read with the aforesaid MCA Circulars and SEBI Listing Regulations, the 29[th] AGM of the Company is being conducted through VC/OAVM facility.
Company has appointed KFin Technologies Private Limited, Registrar and Share Transfer Agent (“Registrar” or “KFintech”), to provide VC/OAVM facility for the AGM and the attendant enablers for conducting of the AGM.
Since this AGM is being held pursuant to the MCA Circulars through VC / OAVM, physical attendance of Members has been dispensed with. Accordingly, the facility for appointment of proxies by the Members will not be available for the 29[th] AGM and hence the Proxy Form is not annexed to this Notice. However, Body Corporates are entitled to appoint authorized representatives to attend the AGM through VC/OAVM and participate thereat and cast their votes through e-voting.

( 1 )

Body Corporates who intends to authorize representatives to participate and vote on their behalf in the meeting to be held through VC/OAVM are requested to send, in advance, a duly certified copy of the relevant board resolution/letter of authority/ power of attorney to the Company at investors@newgensof. com, through its registered E-mail Address with a copy marked to [email protected]. The scanned image of the abovementioned documents should be in the naming format “Corporate Name_Event No.”Institutional shareholders are encouraged to attend and vote at the AGM.
Attendance of the members (members’ login) attending the AGM through VC/ OAVM shall be reckoned for the purpose of Quorum under Section 103 of the Act and hence no attendance slip is attached with this notice.
Since this AGM will be held through VC/OAVM facility, the Route Map is not annexed with this Notice.
The Final Dividend of b 3.5 per equity share, i.e.@ 35% on the paid-up equity share capital, for the financial year ended 31[st ] March 2021, as recommended by the Board of Directors, if declared at the AGM, will be paid within a period of 30 (thirty) days from the date of declaration to the members whose name appear, subject to deduction of tax at source:
a) as beneficial owners of the shares as per list to be furnished by the depositories in respect of the shares held in demat form on the closing hours of the business on 16[th] July 2021; and
b) as members in respect of shares held in physical form, after giving effect to all the valid transmission requests lodged with the Company/Registrar as on the close of business hours on 16[th] July 2021.
Pursuant to the Income Tax Act, 1961 as amended by Finance Act, 2020, dividend income will be taxable in the hands of shareholders effective from 1[st] April 2020 and the Company is required to deduct tax at source from dividend paid to shareholders at the prescribed rates. For the prescribed rates for various categories, the shareholders are requested to visit https://www.incometaxindia.gov.in/Pages/acts/income-taxact.aspx. The shareholders are requested to update their PAN with the Company’s Registrar (in case of shares held in physical mode) and depositories (in case of shares held in demat mode).
For Resident shareholders, taxes shall be deducted at source under Section 194 of the Income Tax Act, 1961 as below: -
a) Shareholder having valid PAN: - 10% or as notified by the Government of India.
b) Shareholder not having valid PAN: - 20% or as notified by the Government of India.

However, no tax shall be deducted on the dividend payable to a resident individual shareholder, if the total dividend to be received by them during the financial year does not exceed `5,000/- and also in case where resident individual shareholder having valid PAN and who is not liable to pay income tax can submit a yearly declaration in Form No. 15G/15H along with PAN copy, to avail the benefit of non-deduction of tax at source, by sending an E-mail to [email protected] on or before

11:59 P.M.(IST) on 20[th] July 2021. For FAQs on TDS deducted on Dividend members can visit Company’s website: htps:// newgensof.com/company/investor-relatons/#governance

In case of Non-resident shareholders, taxes are required to be withheld in accordance with the provisions of Income Tax Act, 1961, at the rate in force. The withholding tax shall be at the rate of 20% (plus applicable surcharge and cess) or as notified by the Government of India on the amount of dividend payable. Non-resident shareholders can avail beneficial rates, if applicable under any applicable laws, under tax treaty between India and their country of residence, subject to providing necessary documents i.e. (a) No Permanent Establishment and Beneficial Ownership Declaration;(b) Tax Residency Certificate;(c) Form 10F along with copy of PAN duly attested by the shareholder or any other document which may be required to avail the tax treaty benefits. The aforesaid declarations and documents need to be submitted by sending an E-mail to [email protected] on or before 11:59 P.M. (IST) on 20[th] July 2021.

Beneficial Ownership : In case of equity share(s) held in the Company as a beneficiary; and are not subject to TDS under Section 196 of the Income Tax Act, 1961 the person shall submit self-attested copy of the documentary evidence supporting the exemption status along with self-attested copy of PAN Card. The said declarations and documents need to be submitted by sending an E-mail to [email protected] on or before 11:59 P.M. (IST) on 20[th] July 2021.

Benefit under Rule 37BA(2) of the Income-tax Rules, 1962: In case where shares are held by intermediaries/ stock brokers and TDS is to be applied by the Company in the PAN of the beneficial shareholders then intermediaries/ stock brokers and beneficial shareholders will have to provide a declaration under Rule 37BA(2) of the Income-tax Rules, 1962. The said declarations and documents need to be submitted by sending an E-mail to [email protected] on or before 11:59 P.M. (IST) on 20[th] July 2021.

Members holding shares in electronic form are informed that bank particulars registered against their respective depository accounts will be used by the Company for payment of dividend(s). The Company or its Registrar cannot act on any request received directly from the members holding shares in electronic form for any change of bank particulars or bank mandates. Such changes are to be advised only to the respective depository participant of the members. In the event the Company is unable to pay the dividend to any Member directly in their bank accounts through Electronic Clearing Service or any other means, due to non-registration of the Electronic Bank Mandate, the Company shall dispatch the dividend warrant/ Bankers’ cheque/ demand draft to such Member, at the earliest once possible.
Members wishing to claim dividends that remain unclaimed are requested to correspond with the Registrar or to the Company Secretary, at the Company’s registered office. Members are requested to note that dividends that are not claimed within 7(seven) years from the date of transfer to the Company’s Unpaid Dividend Account, will, as per Section 124 of the Act, be transferred to the Investor Education and Protection Fund (IEPF). Shares on which dividend remains unclaimed for 7(seven) consecutive years will be transferred to the IEPF as per Section 124 of the Act, and the applicable rules.

( 2 )

Members holding shares in physical form and desirous of either registering bank particulars or changing bank particulars already registered against their respective folios for payment of dividend(s) are requested to write to the Company’s Registrar at [email protected] and marking copy to investors@ newgensof.com. In case, any member is unable to submit or update their bank particulars, their Dividend warrants shall be dispatched upon normalization of the postal services, post COVID-19.
The details of unpaid and unclaimed amounts lying with the Company has been published on the Company’s website: htps://newgensof.com. Concern members are requested to claim dividend, if any, remaining unclaimed or unpaid.
Members may utilize the facility extended by the Registrar for redressal of their queries including change of address, if any, by visiting at htps://karisma.kfntech.com/and clicking on ‘Investor Relations’ section for query registration through free identity registration process. Members may also write [email protected] clearly mentioning their DP ID/ Client ID.
In terms of Section 152 of the Act, Mr. T.S. Varadarajan (DIN: 00263115), Whole-Time Director of the Company, retires by rotation at the AGM and being eligible, offers himself for reappointment. The Nomination & Remuneration Committee and Board of Directors of the Company recommends his re-appointment.
Details of Directors seeking appointment/re-appointment in the AGM pursuant to the Secretarial Standard on General Meetings (SS-2) and Regulations 26(4) and 36(3) of the SEBI Listing Regulations are attached with this Notice as “Annexure-1”.
The Auditor’s Certificate certifying that the Stock option schemes of the Company are being implemented in accordance with the provisions of SEBI (Share Based Employee Benefit) Regulations, 2014 and in accordance with the resolution(s) of the members of the Company, will be placed at the AGM.
Members desiring any information/clarification on the financial statements or any of the resolutions as detailed in the Notice are requested to write to the Company on or before 25[th ] July 2021 through an E-mail to [email protected], specifying his/her name along with Demat account details. The same shall be replied by the Company suitably.
The Register of Directors and Key Managerial Personnel and their shareholding maintained under Section 170 of the Act, the Register of contracts or arrangements in which directors are interested under Section 189 of the Act, and all other documents mentioned in the Notice will be available for inspection in electronic mode. Members can inspect the same by sending an E-mail to [email protected].
In compliance with the MCA Circulars dated 5[th] May 2020 and SEBI Circulars dated 12[th] May 2020 and 15[th] January 2021, Notice of the AGM and Annual Report 2020-21 are being sent only via electronic mode to those members whose E-mail addresses are registered with the Company/ Registrar or the Depository Participant(s). Members may note that the Notice and Annual Report 2020-21 will also be available on the Company’s website: htps://newgensof.com. The Notice can also be accessed from the websites of the Stock Exchanges i.e. BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) at www. bseindia.com and www.nseindia.com respectively, and will also be available on the website of e-voting agency KFintech at htps://evotng.karvy.com/.
The Annual Report along with the Notice of AGM is being sent to the members, whose name appear in the register of members/ depositories as at closing hours of business on 25[th] June 2021.
a. Those members who have registered/not registered their E-mail address and mobile number including postal address and bank details may please contact and validate/update their details with the Depository Participant in case of shares held in electronic form and with the Company’s Registrar in case the shares held in physical form.
b. Members who have not registered their E-mail address and in consequence, the Annual Report and Notice of AGM could not be served, may temporarily get their E-mail address and mobile number provided with the Company’s Registrar, by clicking the link: htps://karisma. kfntech.com/E-mailreg for sending the same. Members are requested to follow the process as guided to capture the E-mail address and mobile number for sending the soft copy of the notice and e-voting instructions along with the User ID and Password. In case of any query, member may write to [email protected].
c. Members are also requested to visit the website of the Company htps://newgensof.com. or the website of the Company’s Registrar htps://karisma.kfntech.com/ for downloading the Annual Report and Notice of the AGM.
d. Alternatively, members may send an E-mail request at [email protected] along with scanned copy of the signed request letter providing the E-mail address, mobile number, self-attested PAN copy and Client Master copy in case of electronic folio and copy of share certificate in case of physical folio for sending the Annual report, Notice of AGM and the e-voting instructions.
SEBI has mandated submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested to submit the PAN to their Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form are requested to submit their PAN details to the Company’s Registrar.

( 3 )

In terms of the SEBI Listing Regulations, securities of listed companies can only be transferred in dematerialized form effective from 1[st] April 2019. In view of the above, members are advised to dematerialize their shares held by them in physical form. Members can also write to the Company’s Registrar in this regard.
To prevent fraudulent transactions, members are advised to exercise due diligence and notify to their Depositories Participants (DPs) in respect of their electronic share accounts and to the Company’s Registrar (for shareholders holding shares in physical mode) of any change in address or demise of any member as soon as possible. Members are also advised to not leave their demat account(s) dormant for long. Periodic statement of holdings should be obtained from the concerned DPs and holdings should be verified from time to time.
In case of joint holders attending the meeting, member whose name appears as the first holder in the order of names as per the Register of Members of the Company will be entitled to vote.
The recorded transcript of this AGM shall also be made available on the website of the Company at htps://newgensof.com, as soon as possible after the conclusion of the meeting.
Instructions for Members for Attending the AGM through Video Conferencing are as under:
a) Member will be provided with a facility to attend the AGM through VC / OAVM platform provided by KFintech. Members may access the same at htps://emeetngs. kfntech.com/ by using the e-voting login credentials provided in the email received from the Company/ KFintech. After logging in, click on the Video Conference tab and select the EVENT of the Company. Click on the video symbol and accept the meeting etiquettes to join the meeting. Please note that the members who do not have the User ID and Password for e-Voting or have forgotten the User ID and Password may retrieve the same by following the remote e-Voting instructions mentioned below.
b) Facility for joining AGM though VC/ OAVM shall open 15 minutes before the time scheduled for the AGM and will be available for Members after 15 minutes of start of AGM on first come first served basis. Members are encouraged to join the Meeting through Laptops/ Desktops with Google Chrome (preferred browser), Safari, Internet Explorer, Microsoft Edge, Mozilla Firefox 22. Please note that Participants Connecting from Mobile Devices or Tablets or through Laptop connecting via Mobile Hotspot may experience Audio/Video loss due to Fluctuation in their respective network. It is therefore recommended to use Stable Wi-Fi or LAN Connection to mitigate any kind of aforesaid glitches.
c) Members are requested to participate in the AGM on a first come first served basis, as participation through VC is restricted upto 2000 members only. However, members holding 2% or more shareholding (Large Shareholders),

Promoters, Institutional investors, Directors, Key Managerial Personnel (KMP), Chairpersons of the Audit, Nomination & Remuneration and Stakeholder’s Relationship Committee, Auditors, etc. are allowed to attend the AGM without restriction on account of first come first served principle.

d) Post your Question : The Members who wish to post their questions prior to the meeting can do the same by visiting htps://emeetngs.kfntech.com. Please login through the user id and password provided in the mail received from Kfintech. On successful login, select ‘Post Your Question’ option which will be open from 24[th] July 2021 to 25[th] July 2021. Members may also send their questions to the company at [email protected].
e) Speaker Registration: The Members who wish to speak during the meeting may register themselves as speakers for the AGM to express their views. They can visit htps:// emeetngs.kfntech.com and login through the user id and password provided in the mail received from Kfintech. On successful login, select ‘Speaker Registration’ which will open from 24[th] July 2021 to 25[th] July 2021(upto 5:00 P.M. IST). Members shall be provided a ‘queue number’ before the meeting. The Company reserves the right to restrict the speakers at the AGM to only those Members who have registered themselves, depending on the availability of time for the AGM.
f) Members who have voted through Remote e-Voting will also be eligible to attend the AGM.
Instructions for members for e-Voting during the AGM session:
a) The Members who have not cast their vote through remote e-voting shall be eligible to cast their vote through e-voting system available during the AGM. E-voting during the AGM is integrated with the VC / OAVM platform. The Members may click on the voting icon displayed on the screen to cast their votes.
b) A Member can opt for only single mode of voting i.e., through Remote e-voting or voting at the AGM. If a Member casts votes by both modes, then voting done through Remote e-voting shall prevail and vote at the AGM shall be treated as invalid.

29. Cut-off Date for electronic means/Remote e-voting:

a) The remote e-voting /voting rights of the members/ beneficial owners shall be reckoned on the equity shares held by them as at close of business hours on the Cut-off Date i.e. Friday, 16[th] July 2021 only.
b) A person who is not a member as on the Cut-off Date should treat this Notice for information purposes only.

30. Voting through electronic means / Remote e-voting:

a) In compliance with the provisions of Section 108 of the Act, read with Rule 20 of the Companies (Management and Administration) Rules, 2014, as amended from time to time, Regulation 44 of the SEBI Listing Regulations and

( 4 )

in terms of SEBI vide circular no. SEBI/HO/CFD/CMD/ CIR/P/2020/242 dated 9[th] December 2020 in relation to e-Voting Facility Provided by Listed Entities, the Members are provided with the facility to cast their vote electronically, through the e-Voting services provided by KFintech, on all the resolutions set forth in this Notice. The instructions for e-voting are given herein below.

b) However, in pursuant to SEBI circular no. SEBI/HO/ CFD/CMD/CIR/P/2020/242 dated 9[th] December 2020 on “e-Voting facility provided by Listed Companies”, e-Voting process has been enabled to all the individual demat account holders, by way of single login credential, through their demat accounts / websites of Depositories / DPs to increase the efficiency of the voting process.
c) Individual demat account holders would be able to cast their vote without having to register again with the e-Voting service provider (ESP) thereby not only facilitating seamless authentication but also ease and convenience of participating in e-Voting process. Shareholders are advised to update their mobile number and e-mail ID with their DPs to access e-Voting facility.
d) The remote e-Voting period commences Saturday, 24[th ] July 2021 at 9:00 A.M. (IST) and closes on Monday, 26[th ] July 2021 at 5:00 P.M. (IST).
e) The remote e-voting module shall be disabled by Company’s Registrar for voting at 5:00 P.M. (IST) on Monday, 26[th] July 2021.
f) The voting rights of Members shall be in proportion to their shares in the paid-up equity share capital of the Company as on the cut-off date.
g) Once the vote on a resolution is cast by a member, the member shall not be allowed to change it subsequently. In case of voting by both the modes, vote casted through remote e-voting will be considered final.
h) Any person holding shares in physical form and nonindividual shareholders, who acquires shares of the Company and becomes a Member of the Company after sending of the Notice and holding shares as of the cut-off date, may obtain the login ID and password by sending a request at [email protected]. However, if he / she is already registered with KFintech for remote e-Voting then he /she can use his / her existing User ID and password for casting the vote.
i) In case of Individual Shareholders holding securities in demat mode and who acquires shares of the Company and becomes a Member of the Company after sending of the Notice and holding shares as of the cut-off date may follow steps mentioned below under “Login method for remote e-Voting and joining virtual meeting for Individual shareholders holding securities in demat mode.”
j) The details of the process and manner for remote e-Voting and e-AGM are explained herein below:

Step 1: Access to Depositories e-Voting system in case of individual shareholders holding shares in demat mode.

Step 2: Access to KFintech e-Voting system in case of shareholders holding shares in physical and nonindividual shareholders in demat mode.

Details on Step 1 are mentoned below:

Type of shareholders		Login Method	Login Method	Login Method
Individual Shareholders holding securites in demat mode with NSDL	1.	User already registered for IDeAS facility:
	I.	Visit URL:htps://eservices.nsdl.com.
	II.	Click on the “Benefcial Owner” icon under “Login” under ‘IDeAS’ secton.
	III.	On the new page, enter User ID and Password. Post successful authentcaton, click on “Access to e-Votng”
	IV.	Click on company name or e-Votng service provider and you will be re- directed to e-Votng service provider website for castng the vote during the remote e-Votng period.
	2.	User not registered for e-Services		IDeAS
	I.	To register click on link: eservices.nsdl.com		htps://
	II.	Select “Register Online for IDeAS” or click at:htps://eservices.nsdl.com/ SecureWeb/IdeasDirectReg.jsp
	III.	Proceed with completng the required felds.
	IV.	Follow stepsgiven inpoints 1
	3.	Alternatvely by directly accessing the e-Votng website of NSDL
	I.	Open URL: com/	htps://www.evotng.nsdl.
	II.	Click on the icon “Login” which is available under ‘Shareholder/ Member’ secton.
	III.	A new screen will open. You will have to enter your User ID (i.e. your sixteen digit demat account number held with NSDL), Password / OTP and a Verifcaton Code as shown on the screen.
	IV.	Post successful authentcaton, you will be requested to select the name of the company and the e-Votng Service Provider name,i.e.KFintech.
	V.	On successful selecton, you will be redirected to KFintech e-Votng page for castng your vote during the remote e-Votng

( 5 )

Individual Shareholders holding securites in demat mode with CDSL	1.	Existng user who have opted for Easi/ Easiest
	I.	Visit URL:htps://web.cdslindia. com/myeasi/home/loginor URL: www.cdslindia.com
	II.	Click on New System Myeasi
	III.	Login with your registered user id andpassword.
	IV.	The user will see the e-Votng Menu. The Menu will have links of ESP i.e.KFintech e-Votng portal.
	V.	Click on e-Votng service provider name to castyour vote.
	2.	User not registered for Easi/ Easiest
	I.	Opton to register is available at: htps://web.cdslindia.com/myeasi/ Registraton/EasiRegistraton
	II.	Proceed with completng the required felds.
	III.	Follow the stepsgiven inpoint 1
	3.	Alternatvely, by directly accessing the e-Votng website of CDSL
	I.	Visit URL:www.cdslindia.com
	II.	Provide your demat Account Number and PAN No.
	III.	System will authentcate user by sending OTP on registered Mobile & Email as recorded in the demat Account.
	IV.	Afer successful authentcaton, user will be provided links for the respectve ESP, i.e.KFintechwhere the e- Votngis inprogress.
Individual Shareholder login through their demat accounts / Website of Depository Partcipant	I.	You can also login using the login credentals of your demat account through your DP registered with NSDL/CDSL for e-Votngfacility.
	II.	Once logged-in, you will be able to see e-Votng opton.Once you click on e-Votng opton, you will be redirected to NSDL / CDSL Depository site afer successful authentcaton, wherein you can see e-Votngfeature.
	III.	Click on optons available against company name or e-Votng service provider –Kfntechand you will be redirected to e-Votng website ofKFintechfor castng your vote during the remote e-Votng period without any further authentcaton.

Important note: Members who are unable to retrieve User ID / Password are advised to use Forgot user ID and Forgot Password option available at respective websites.

Helpdesk for Individual Shareholders holding securities in demat mode for any technical issues related to login through Depository i.e. NSDL and CDSL.

Login type	Helpdesk details
Securites held with NSDL	Please contact NSDL helpdesk by sending a request atevotng@nsdl. co.inor call at toll free no.:1800 1020 990and1800 22 44 30
Securites held with CDSL	Please contact CDSL helpdesk by sending a request at helpdesk. [email protected] contact at 022- 23058738or022-23058542-43

Details on Step 2 are mentoned below:

Login method for e-Voting for shareholders other than Individual’s shareholders holding securities in demat mode and shareholders holding securities in physical mode.

(A) Members whose email IDs are registered with the Company/ Depository Participants (s), will receive an email from KFintech which will include details of E-Voting Event Number (EVEN), USER ID and password. They will have to follow the following process:

i. Launch internet browser by typing the URL: htps://emeetngs.kfntech.com/

ii. Enter the login credentials (i.e. User ID and password). In case of physical folio, User ID will be EVEN (E-Voting Event Number) xxxx, followed by folio number. In case of Demat account, User ID will be your DP ID and Client ID. However, if you are already registered with KFintech for e-voting, you can use your existing User ID and password for casting the vote.

iii. After entering these details appropriately, click on “LOGIN”.

iv. You will now reach password change Menu wherein you are required to mandatorily change your password. The new password shall comprise of minimum 8 characters with at least one upper case (A- Z), one lower case (a-z), one numeric value (0-9) and a special character (@,#,$, etc.,). The system will prompt you to change your password and update your contact details like mobile number, email ID etc. on first login. You may also enter a secret question and answer of your choice to retrieve your password in case you forget it. It is strongly recommended that you do not share your password with any other person and that you take utmost care to keep your password confidential.

v. You need to login again with the new credentials.

vi. On successful login, the system will prompt you to select the “EVEN” i.e., ‘NEWGEN SOFTWARE TECHNOLOGIES LIMITED- AGM’ and click on “Submit”

( 6 )

vii. On the voting page, enter the number of shares (which represents the number of votes) as on the Cut-off Date under “FOR/AGAINST” or alternatively, you may partially enter any number in “FOR” and partially “AGAINST” but the total number in “FOR/ AGAINST” taken together shall not exceed your total shareholding as mentioned herein above. You may also choose the option ABSTAIN. If the Member does not indicate either “FOR” or “AGAINST” it will be treated as “ABSTAIN” and the shares held will not be counted under either head.

viii. Members holding multiple folios/demat accounts shall choose the voting process separately for each folio/ demat accounts.

ix. Voting has to be done for each item of the notice separately. In case you do not desire to cast your vote on any specific item, it will be treated as abstained.

x. You may then cast your vote by selecting an appropriate option and click on “Submit”.

xi. A confirmation box will be displayed. Click “OK” to confirm else “CANCEL” to modify. Once you have voted on the resolution (s), you will not be allowed to modify your vote. During the voting period, Members can login any number of times till they have voted on the Resolution(s).

xii. Corporate/Institutional Members (i.e. other than Individuals, HUF, NRI etc.) are also required to send scanned certified true copy (PDF Format) of the Board Resolution/Authority Letter etc., as mentioned in the Notes of this Notice.

(B) Members whose email IDs are not registered with the Company/Depository Participants(s), and consequently the Annual Report, Notice of AGM and e-voting instructions cannot be serviced, will have to follow the following process:

i. Members who have not registered their email address and in consequence the Annual Report, Notice of AGM and e-voting instructions cannot be serviced, may temporarily get their email address and mobile number provided with KFintech, by accessing the link: htps://ris.kfntech.com/ clientservices/mobilereg/mobileemailreg.aspx. Members are requested to follow the process as guided to capture the email address and mobile number for sending the soft copy of the notice and e-voting instructions along with the User ID and Password. In case of any queries, member may write to [email protected].

ii. Alternatively, member may send an e-mail request at the email id [email protected] along with scanned copy of the signed copy of the request letter providing the email address, mobile number, self-attested PAN copy and Client Master copy in case of electronic folio and copy of share certificate in case of physical folio for sending the Annual report, Notice of AGM, and the e-voting instructions.

iii. After receiving the e-voting instructions, please follow all steps above to cast your vote by electronic means.

OTHER INSTRUCTIONS:

In case a person has become a Member of the Company after dispatch of AGM Notice but on or before the cut-off date for E-voting, he/she may obtain the User ID and Password in the manner as mentioned below:

i. If the mobile number of the member is registered against Folio No./ DP ID Client ID, the member may send SMS: MYEPWD E-Voting Event Number+Folio No. or DP ID Client ID to 9212993399
Example for NSDL:
MYEPWD IN12345612345678
Example for CDSL:
MYEPWD 1402345612345678
Example for Physical:
MYEPWD XXXX1234567890
ii. If e-mail address or mobile number of the member is registered against Folio No. / DP ID Client ID, then on the home page of htps://evotng.kfntech.com/, the member may click “Forgot Password” and enter Folio No. or DP ID Client ID and PAN to generate a password.
iii. Members who may require any technical assistance or support before or during the AGM are requested to contact KFintech at toll free number 1-800-309-4001 or write to them at evotng@ kfntech.com.
In case of any query and/or grievance, in respect of voting by electronic means, Members may refer to the Help & Frequently Asked Questions (FAQs) and E-voting user manual available at the download section of htps://evotng.kfntech.com (KFintech Website) or contact Mr. Anandan K. at [email protected] or call KFintech’s toll free No. 1-800-309-4001 for any further clarifications.
You can also update your mobile number and E-mail address in the user profile details of the folio which may be used for sending future communication(s).
Any person who acquires shares of the Company and becomes member of the Company post-dispatch of Notice of AGM along with the Annual Report before the Cut-Off Date may obtain the login ID and password by sending a request at [email protected] or visit the FAQ’s section available at KFintech’s website https://evoting.karvy.com.
A person, whose name is recorded in the Register of Members or in the Register of Beneficial Owners maintained by the depositories, as on the cut-off date, only shall be entitled to avail the facility of remote e-voting or e-voting during the AGM.
In terms of SEBI Listing Regulations, application for : (i) Deletion of name of the deceased member(s) where the shares are held in the name of two or more member(s) (ii) Transmission of shares to the legal heir(s)/representative(s), where deceased member wasthe sole holder of shares (iii) Transposition of shares – when there is a change in the order of names in which physical shares are held jointly in the

( 7 )

names of two or more member has to be accompanied with a self-attested copy of their PAN along with the other required documents to the Company’s Registrar irrespective of the value of the transaction. Members are requested to bear in mind the aforesaid requirements while communicating with the Company or Registrar for any of the purposes stated above.Section 72 of the Act provides for Nomination by the members of the Company and the members are requested to avail this facility.

Mr. Devesh Kumar Vasisht (holding CP No.13700), Partner failing him, Ms. Priyanka (holding CP No.: 16187), Partner of M/s Sanjay Grover & Associates, Practicing Company Secretaries, has been appointed as the Scrutinizer to scrutinize the entire e-voting process in a fair and transparent manner.
The results declared along with the report of the Scrutinizer shall be placed on the Company’s website https:// newgensoft.com and on the website of KFintechhttps:// evoting.karvy.com immediately after the declaration of results by the Chairman or a person authorized by him in writing. The results shall also be submitted with the concerned Stock Exchanges i.e. BSE and NSE.

By order of the Board For Newgen Software Technologies Limited

Sd/Date: 25[th] June 2021 Aman Mourya Registered Office: A-6, Satsang Vihar Marg, Company Secretary Qutab Institutional Area, New Delhi – 110067 FCS: 9975

EXPLANATORY STATEMENT ANNEXED TO THE NOTICE CONVENING THE 29TH ANNUAL GENERAL MEETING TO BE HELD ON TUESDAY, 27TH JULY 2021.

Item No. 4

M/s B S R & Associates LLP, Chartered Accountants (Firm Registration No.101248W/W-100022), were re-appointed as the Statutory Auditors of the Company at the 24[th] AGM held in the year 2016 for a second term of 5(five) years to hold the office up to the conclusion of the 29[th] AGM and hence, would retire at the conclusion of the forthcoming 29th AGM, in accordance with the provisions of Section 139(2) of the Act and Rule 6 of the Companies (Audit & Auditors) Rules, 2014.

The Audit Committee proposed the appointment of M/s Walker Chandiok & Co LLP, Chartered Accountants, (Firm Registration Number is 001076N/N500013) as the Statutory Auditors after assessing M/s Walker Chandiok & Co LLP, Chartered Accountants and other audit firms based on certain parameters which includes Independency, audit experience, audit exposures, credentials in the market, ranking of the audit firms by NSE Infobase, strength and experience of its key members proposed in the audit team.

The Board of Directors of the Company, on the recommendation of the Audit Committee (‘the Committee’), has recommended to the members of the Company for the appointment of M/s Walker Chandiok & Co LLP, Chartered Accountants, (Firm Registration Number is 001076N/N500013) as the Auditors of the Company for a period of five years from the conclusion of this AGM till the conclusion of the 34[th] AGM.

M/s Walker Chandiok & Co LLP, Chartered Accountants, (Firm Registration Number is 001076N/N500013), have consented to the said appointment and confirmed that their appointment, if made, would be within the limits specified under Section 141(3)(g) of the Act. They have further confirmed that they are not disqualified to be appointed as statutory auditors in terms of the provisions of the proviso to Section 139(1), Section 141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit and Auditors) Rules, 2014.

The fee proposed to be paid to new Auditor would be c 37 Lakh for annual audit and c 21 Lakh for quarterly limited reviews. Auditors shall also be eligible for reimbursement of expenses if any, occurred during such audit and limited reviews.The aforesaid fees as proposed to be paid to new auditors is not exceeding the fee as paid to the outgoing auditors. It is also proposed to authorize, the Board of Directors to finalize incremental fee, from time to time, based on the performance evaluation, nature & volume of work and on such other terms in consultation with the new Auditors.

Profile: - M/s Walker Chandiok & Co LLP (WCC LLP) was established in the year 1935 having nationwide 13 offices and is registered with the Institute of Chartered Accountants of India as well as the PCAOB (US Public Company Accountancy Oversight Board). WCC LLP ranks among the top 5 Auditors in India on the basis of Market Capitalization of the companies audited by them. It licenses audit software as well as audit methodology from Grant Thornton International. For multinational companies and other organizations with international operations or interests, WCC LLP has access to Grant Thornton member firms in other countries that adopt the same rigorous standards and utilize the same tools and methodologies.

Pursuant to the provisions of Section 139, 142 and all other applicable provisions, if any, of the Act and the rules made thereunder, approval of the members of the Company be and is hereby sought to appoint M/s Walker Chandiok & Co LLP, Chartered Accountants, (Firm Registration Number is 001076N/N500013) as the Statutory Auditors of the Company, in place of the retiring auditors, to hold office for a period of 5 (five) years from the conclusion of this 29[th] AGM till the conclusion of the 34[th] AGM of the Company.

None of the Director(s) and Key Managerial Personnel of the Company and their relative(s) has any nature of concern or interest, financial or otherwise, directly or indirectly, in respect of the proposed resolution stated as item no.4 of this notice.

The Board of Directors recommends the resolution as set out at Item no. 4 for approval of the members to be passed as an Ordinary Resolution.

By order of the Board For Newgen Software Technologies Limited

Sd/Date: 25[th] June 2021 Aman Mourya Registered Office: A-6, Satsang Vihar Marg, Company Secretary Qutab Institutional Area, New Delhi – 110067 FCS: 9975

( 8 )

Annexure - 1

DETAILS OF THE DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT THE 29th ANNUAL GENERAL MEETING

[In pursuance of Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard on General Meetings (SS-2)]

Name of Director	Mr. T.S. Varadarajan (DIN: 00263115)
Item No.	3
Date of Birth	5thMay 1952
Age	69 years
Natonality	Indian
Qualifcaton	Bachelor’s in Science from the Bangalore University and Engineering (Electrical Technology) from the Indian Insttute of Science, Bengaluru. Master’s degree in Technology (Computer Science) from IIT, Madras.
Experience (in years)	46 years
Terms & Conditons for Appointment/ Re-appointment	No change in his previous terms of re-appointment as whole-tme Director, approved by the members.
Details of Remuneraton sought to be paid	No change in the remuneraton as previously approved by the members during re-appointment as whole-tme Director.
Last Remuneraton (2020-21)	b1,48,69,554
Date of frst appointment on the Board	5thJune 1992
No. of shares held in the Company as on date of this notce.	1,50,09,306 equity shares
Relatonship with other Directors, Manager and other Key Managerial Personnel of the Company	N.A.
No. of Board Meetngs atended/ held during Financial Year (2020-2021)	Number of Board meetng held: 5 Number of Board meetng atended: 5
Directorship held in other Companies (Only Listed Companies are considered)	NIL
Chairman/ Member of the Commitee of the Board of Directors of our Company	Stakeholders’ Relatonship Commitee (Member)
Commitee positon held in other listed companies. (Only Audit Commitee and Stakeholders’ Relatonship Commitee memberships in equity listed companies have been considered)	NIL

( 9 )

==> picture [596 x 410] intentionally omitted <==

Expediting Digital Transformation

- 2 0 2 0 2 1 | A n n u a l R e p o r t

Company Overview

==> picture [231 x 287] intentionally omitted <==

----- Start of picture text -----

Expediting Digital Transformation 01
Rapidly Accelerating Digital Transformation 02
with Industry-Recognized Products
Transforming Businesses 03
Expediting Success 06
Financial Performance 07
Chairman’s Message 08
Transforming Customer Experience through 10
Fast-Paced Innovation
Empowering Customers and Partners 11
Newgen as a Family – Standing Together 12
through Tough Times
Making an Impact – Building Opportunities. 14
Transforming Lives.
Board of Directors 18
Management Team 20
Corporate Information 24
----- End of picture text -----

Forward-looking statement

Statutory Reports

==> picture [231 x 86] intentionally omitted <==

----- Start of picture text -----

Directors’ Report 25
Business Responsibility Report 55
Report on Corporate Governance 63
Management Discussion and Analysis 86
----- End of picture text -----

Financial Statements

==> picture [231 x 38] intentionally omitted <==

----- Start of picture text -----

Standalone Financial Statements 93
Consolidated Financial Statements 156
----- End of picture text -----

To view this report online, please visit: www.newgensoft.com

This report contains forward-looking statements, which may be identified by their use of words like ‘plans’, ‘expects’, ‘will’, ‘anticipates’, ‘believes’, ‘intends’, ‘projects’, ‘estimates’ or other words with similar meaning. All statements that address expectations of projections about the future, including but not limited to statements about the Company’s strategy for growth, product development, market position, expenditures and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company’s actual results, performance or achievements could thus differ materially from those projected in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events. The Company has sourced the industry information from the publicly available resources and has not verified that information independently.

==> picture [63 x 50] intentionally omitted <==

Expediting Digital Transformation

With enterprises across the world placing an increased focus on business continuity, remote working, and paperless operations, expediting digital transformation initiatives is no longer a matter of choice. While digital has been on the priority list of enterprises in recent years, the pandemic has significantly accelerated its pace of adoption, making it critical for businesses to remain current and competitive despite the changing business environment.

Newgen Software Technologies Limited, with its digital transformation platform and low code capability, enables content-driven automation to ensure streamlined operations, informed employee decisions, and agile development and deployment of mission-critical and complex business applications. Our technologies help businesses to embrace business changes, respond faster, differentiate with automation and AI-driven intelligence and register strong and sustainable growth.

Newgen Today: A Snapshot (FY ‘21)

==> picture [439 x 140] intentionally omitted <==

----- Start of picture text -----

~ 550 72 17 5
Active Customers [(1)] Countries Verticals Core
(67 New Logos added) Verticals
Strong Industry ~ 3,000 44
Recognition Personnel Patent Filings
(Gartner & Forrester) (with ~470 personnel in R&D, (with 18 patent grants)
~300 personnel in S&M)
----- End of picture text -----

Newgen Today: Financial Snapshot (FY ‘21)

==> picture [439 x 143] intentionally omitted <==

----- Start of picture text -----

6,726 Mn 2,002 Mn 1,265 Mn Revenues Subscription Revenues [(3)] PAT (with annuity [(2)] of 57%) (19% YoY Growth) (74% YoY Growth)  2,157 Mn 496 Mn 2,118 Mn
Net Operating Cash Flows SaaS Revenues US Region Revenues
(140% YoY Growth) (30% YoY Growth) (16% YoY Growth)
----- End of picture text -----

(1) Customers billed in the last 12 months.

(2) Annuity comprises ATS/AMC, Cloud and Support revenues.

(3) Subscription revenues comprise ATS/AMC and Cloud revenue streams.

Newgen Software Technologies Limited

Annual Report 2020-21

Rapidly Accelerating Digital Transformation with Industry-Recognized Products

Newgen’s digital transformation platform integrates various capabilities needed to build business applications across the spectrum, empowering enterprises to automate complex business requirements and expedite digital transformation.

Contextual Content Services (ECM)

Low-code Process Automation (BPM)

Omnichannel Customer Communication (CCM)

==> picture [43 x 36] intentionally omitted <==

==> picture [67 x 34] intentionally omitted <==

==> picture [51 x 48] intentionally omitted <==

==> picture [67 x 33] intentionally omitted <==

==> picture [67 x 34] intentionally omitted <==

Deliver contextual content for smarter decision-making and improved collaboration across multiple channels

Create smarter processes, empower knowledge workers and build responsive business applications

Create, personalize and deliver interactive communications to enhance customer experience

Each platform a frontrunner in its own category
Most digital use cases leverage more than one product
Built on unified architecture and thus extremely compatible and seamlessly integrate, providing competitive differentiation from other market products
Cloud-ready architecture on AWS and Azure – flexible, scalable and secure; well-suited for Fortune 2000 enterprises with multiple platform needs for their current and future solutions
High referenceability – all platforms proven and enabling large enterprises for ‘Mission Mode Applications’
Ideal for contextual and personalized solutions

Company Overview

Financial Statements

Statutory Reports

Transforming Businesses

Newgen Contextual Content Services (ECM)

Digitize Workplace with Contextual Automation, Compliance and Intelligence – On Cloud

Newgen ECM empowers customers in managing the end-to-end lifecycle of enterprise content, from origination to disposition, and providing the flexibility to access and deliver digital content across all channels and devices. It leads to creating a connected and digital workplace to empower customers with contextual information for informed interactions with internal and external customers.

==> picture [497 x 317] intentionally omitted <==

----- Start of picture text -----

Scan Social Web Portal Channels of Engagement Office E-mail Mobile
Capture Process Store Extend
Professional Content Content Industry
Scanning Workflows Management Applications
Document Automated Cloud Storage Productivity
Quality Analyzer Classification & Repositories Applications
Web ActiveScript Security &
Enterprise
Scanning Automation Compliance Connectors
Intelligent Content Records Content
Extraction Analytics Management Microservices
Multiple Content Customer
RPA
Formats Discovery Communication
Smart Content Remote
Indexing Collaboration Imaging
----- End of picture text -----

==> picture [335 x 21] intentionally omitted <==

----- Start of picture text -----

Integration Contextual Content Services
----- End of picture text -----

==> picture [120 x 21] intentionally omitted <==

----- Start of picture text -----

Cloud/On-premises
----- End of picture text -----

Case Study

Digital transformation of India’s leading insurance company with over 250 million customers. Implementation included archival of ~500 million policy dockets and automation of processes across 2,000 branches, 113 divisional offices, 8 zonal offices, and corporate office.

Newgen Software Technologies Limited

Annual Report 2020-21

Newgen Low-code Process Automation (BPM)

Enable Rapid Application Development for Deep & Complex Business Applications across Devices

Newgen BPM enables enterprises in developing and deploying content-centric, mission-critical business processes with agility and speed.

Customers can streamline enterprise-wide workflows and leverage the low code development environment to rapidly design and rollout complex, context-aware, and customer-centric business applications.

==> picture [497 x 316] intentionally omitted <==

----- Start of picture text -----

Social Web Portal Mobile In-Person Web/Message/Scan
Industry Applications
Financial Government/ Insurance Shared Services Other
Institutions PSU Entities Companies and BPOs Industries
Low Code Process Case Data
Development Modelling Management Modelling
Analytics and Business Process
RPA
Process Insights Rules Simulaton
Content Responsive
AI/ML DevOps
Management Forms
Integration Low Code Process Automation Cloud/On-premises
----- End of picture text -----

Case Study

One of the largest banks in the US with around 240 branch offices implemented Newgen’s commercial loan origination solution to streamline overall lending process. The bank digitized its lending cycle and automated its operations, enabling quick and hassle-free shift to remote working.

Company Overview

Financial Statements

Statutory Reports

Newgen Omnichannel Customer Communication (CCM)

Use Business Data and Manage the Communication Output – Personalized and at Scale

Newgen CCM enhances customer experience with personalized, content-rich and consistent communication across channels, while tapping into various cross and up-sell opportunities across touchpoints, such as e-mail, SMS, web, and print.

==> picture [501 x 341] intentionally omitted <==

----- Start of picture text -----

Enterprise Use Cases
Batch On-Demand One-to-One WorkFlow-driven
Communication Response Correspondence Communication
Branding and Multi-Lingual Whitespace Industry
Personalization Communication Marketing Compliance
Integration Design Generate Track Engage Output
Ecosystem Channels
Template Communication Production Social
Customer Printer
and Library Scheduling Monitoring Listening
Email
Employee-facing
Applications PDF/MS Word Approval Response Natural Language Web
Import Workflows Tracking Processing (AI/ML)
SMS
Data User-defined Multiple Format Comprehensive Conditional FTP
Formats Rules Output Reporting Routing
and Sources Social
Version Active Audit Contextual Archive
Control XML Logs Response
Personalized Customer Communication
----- End of picture text -----

Case Study

Newgen CCM Solution Implementation for a leading private bank in India. The bank chose the Newgen’s CCM platform to make their customer communication more customized and platform-agnostic.

Newgen Software Technologies Limited

Annual Report 2020-21

Expediting Success

(Key Recognitions)

Gartner

A Niche Player in Gartner 2020 Magic Quadrant for Enterprise Low-Code Application Platforms.[(1)]

A Visionary in Gartner 2020 Magic Quadrant for Content Services Platforms.[(2)]

==> picture [85 x 24] intentionally omitted <==

A “Strong Performer” in The Forrester Wave™: Content Platforms, Q2 2021, authored by Cheryl McKinnon et al. A “Strong Performer” in The Forrester Wave™: Digital Process Automation for Wide Deployments, Q1 2019

==> picture [94 x 42] intentionally omitted <==

“Comprehensive” Customer Communication Management (CCM) vendor in the 2021 CCM Vendor Aspire Leaderboard

“Leader” in the business automation grid of the 2021 CCM Vendor Aspire Leaderboard

==> picture [313 x 201] intentionally omitted <==

Key Awards

Fidelity Bank and Newgen awarded the “Best Self-Service Banking Technology Implementation” at the Asian Banker Middle East and Africa Regional Awards 2020

Bank Muscat and Newgen recognized for the “Best Lending Implementation in the Middle East” at The Asian Banker Middle East and Africa Awards 2020

==> picture [113 x 26] intentionally omitted <==

Indicative risk rating of 5A2 by Dun & Bradstreet and overall status on Composite Appraisal/Condition as “Good”

Abu Dhabi Commercial Bank (ADCB Bank) and Newgen awarded the “Best Digital Transformation Implementation” at the Asian Banker Middle East and Africa Regional Awards 2020

==> picture [45 x 43] intentionally omitted <==

A2+ [CRISIL] Short Term Rating for Line of Credit

(1) Authored by Paul Vincent, Yefim Natis, Kimihiko Iijima, Jason Wong, Saikat Ray, Akash Jain, and Adrian Leow. 30 Sep 2020

(2) Authored by Michael Woodbridge et al. Updated 27 April 2021, Published 16 November 2020

Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

The Forrester Wave™ is copyrighted by Forrester Research, Inc. Forrester and Forrester Wave™ are trademarks of Forrester Research, Inc. The Forrester Wave™ is a graphical representation of Forrester’s call on a market and is plotted using a detailed spreadsheet with exposed scores, weightings, and comments. Forrester does not endorse any vendor, product, or service depicted in the Forrester Wave™. Information is based on best available resources. Opinions reflect judgement at the time and are subject to change.

Company Overview

Financial Statements

Statutory Reports

Financial Performance

Resilient business model in place with large and growing subscription revenues and diversification across geographies and verticals.

Financial Snapshot

==> picture [209 x 170] intentionally omitted <==

----- Start of picture text -----

Revenue ( ` in Million)
6,608 6,726
6,206
5,124
4,271
FY 17 FY 18 FY 19 FY 20 FY 21
----- End of picture text -----

Revenue Split

FY’21 Revenue Streams by Segment (%)

==> picture [103 x 104] intentionally omitted <==

Sale of Products 20% SaaS 7% ATS/AMC 22% Support 28% Implementation & Scanning 23%

==> picture [208 x 11] intentionally omitted <==

----- Start of picture text -----

Subscription Revenues ( ` in Million)
----- End of picture text -----

==> picture [186 x 151] intentionally omitted <==

----- Start of picture text -----

2,002
1,686
1,275
961
765
602
FY 16 FY 17 FY 18 FY 19 FY 20 FY 21
----- End of picture text -----

FY’21 Revenue Concentration by Geography (%)

==> picture [108 x 108] intentionally omitted <==

==> picture [93 x 58] intentionally omitted <==

----- Start of picture text -----

India 29%
EMEA 26%
USA 31%
APAC (Ex-India) 14%
----- End of picture text -----

==> picture [20 x 8] intentionally omitted <==

----- Start of picture text -----

PAT
----- End of picture text -----

( ` in Million)

==> picture [186 x 151] intentionally omitted <==

----- Start of picture text -----

1,265
1,022
729 727
513
FY 17 FY 18 FY 19 FY 20 FY 21
----- End of picture text -----

FY’21 Revenue Split by Vertical (%)

==> picture [102 x 103] intentionally omitted <==

==> picture [71 x 86] intentionally omitted <==

----- Start of picture text -----

Banking 60%
Govt/PSUs 9%
BPO/IT 6%
Insurance 8%
Healthcare 7%
Others 10%
----- End of picture text -----

FY ’17, FY ’18, FY ’19, FY ’20 and FY ’21 financials are Consolidated Financials as per Ind AS Accounting Standards

Newgen Software Technologies Limited

Annual Report 2020-21

Chairman’s Message

==> picture [283 x 285] intentionally omitted <==

Ensuring Employee Well-Being

Throughout the year, ensuring safety and well-being of our employees and their families has been the topmost priority for us. Newgen is providing all the necessary assistance and guidance to our employees. Our COVID-19 volunteer teams have done exemplary work in supporting each and every member of the Newgen family in these tough times. I appreciate and salute their spirit. Further, we are collaborating with hospitals and other agencies to quickly vaccinate our employees and their family members across multiple locations.

We continue to have our employees work from the safety of their homes. We are also designing our organisation to become more resilient and agile. We are also working on building an efficient hybrid workplace that will foster increased productivity and yet provide a better work-life balance for the employees. We are transforming our complete work culture to a more result-oriented one and our services and human resource function to become touchless but more responsive to Newgenites needs.

Empowering Customers

Our major focus has been on ensuring uninterrupted and quality services for our customers and we have a comprehensive and reliable programme in place for this. It includes synchronized cloud-based continuity strategy, product-based implementation framework and development of support zones with direct presence in multiple countries. During the pandemic, our cloud-based products ensured

Dear Shareholders,

The past financial year has been a year of caution, introspection, transformation, and hope for all of us. The year was an unprecedented one that provided long-lasting learnings and taught new ways of existence. During COVID-19, organizations globally geared up to adapt to the new normal. Digital workplaces and working-from-anywhere became a necessity for enterprises across industries, which are now expediting their digital transformation journeys.

Newgen, with its scalable and reliable digital transformation platforms, resilient business model, and agile development and implementation approach, is ideally positioned to enable enterprises and make a positive impact in today’s environment.

uninterrupted services for close to 550 active customers across 72 countries, helping them transform many of their complex and mission-critical business processes. We not only supported our customers remotely but also developed new solutions to fulfil their fresh and time-sensitive requirements. We have received encouraging appreciation from our customers for our continued support and engagement.

Demonstrating Steady Performance

We witnessed a resilient performance during the fiscal year 2020-21, clocking in revenues of ` 673 crores. We continued to witness business momentum with expanded customer engagements and an addition of 67 new logos under our umbrella. We are happy to share that the US is now our largest revenue contributor and one of the fastest expanding markets for us, growing at 16% YoY.

During the year, the Company has also adopted a strategic approach to cost management and cash flow optimization. We reported an EBITDA of 192 crores and a Profit after Tax of 127 crores. We are optimizing our execution capabilities, while continuing with long-term investments in R&D and sales.

Transition to Subscription Model

Our subscription revenues witnessed a growth of 19% during the year. Our overall annuity revenues remained consistent, contributing 57% to the revenues.

We continue on our path to transition from our existing model of new license revenues and Annual Technical Services to

Company Overview

Financial Statements

Statutory Reports

subscription-based revenues with most of our new customers. Even for our existing customers, wherever possible, we are building additional annuity-based revenue. This model is expected to start revenue optimisation over the next few years. We believe, that in time, we would be able to transform most of our existing customers into cloud or on-premise subscription model. This conscious shift is expected to enhance visibility and growth in subsequent years. Many of our new logos are based on cloud subscriptions, and hence their real impact is expected to reflect in the coming years.

Focussing on Innovation and Enhancement of Product Platforms

Continuous improvement is in Newgen’s DNA and we constantly keep enhancing our product portfolio. All three of our platforms - ECM, BPM and CCM continue to be frontrunners in their categories and are consistently receiving better recognition from customers, leading analysts, and most importantly our Global System Integrator (GSI) partners.

Our natively developed product platforms are ideal for digital transformation, they complement each other for building end-to-end digital solutions for Enterprises. Prominent industry analysts have taken notice of our products and innovations. Our Customers as well as GSI partners are appreciating our offerings because of multiple reasons, including:

Homogenized Cloud offering of combined solutions and availability on AWS as well as Azure platform
Built on unified architecture ensuring compatibility and seamless integration
Flexible and Comprehensive Support

We have a strong team of over 470 employees, focussed on research and product development initiatives. In FY’21, Newgen was granted 3 patents, taking the total number to 18 patent grants as of March 31, 2021.

During the year, we further enhanced our contextual content services platform for cloud deployment to support remote implementations. We have built new user interfaces, worked on enhanced user experience and added new functionalities to enhance our low code process automation platform. Low Code Application Development Platform (LCAP) is a fast growing area in the Industry with majority of enterprises expected to adopt more than one LCAP in the near future. We are taking lead in the area, especially where LCAP has to be used for complex, mission-critical processes.

As an organisation, we have been following a vertical-based sales approach using pre-built solution accelerators across our core verticals. Majority of the sales traditionally has been through our direct sales team supported by a large network of channel partners. We have more than 15 accelerators in these areas that are mature and are being used in many organisations. We continue to enhance our presence in BFSI segments with new solution accelerators in Trade Finance, Fund Transfers, General Insurance Claims Processing, etc. Over the last five years, Newgen has successfully implemented over 500 accelerator-based solutions for our large customers. They have found wide acceptance, achieved the desired results for our customers, and are working in Mission-Critical mode 24*7 at our Clients’ organizations.

with GSIs, targeting ‘Fortune 2000 enterprises’. Our initiatives in the Enterprise Market are bearing fruits and we have built acceptance from some of the largest GSIs and their large customers. GSIs have implemented their solutions successfully at these customers’ end in record time.

We are supporting them in modernizing solutions and building their IP (using low code application development). We are working extensively with Sales and Delivery leaders and consulting arms of GSI’s. Further, we are making investments in building partner support ecosystem to provide complete support to GSIs through entire sales, implementation and support cycles.

We have developed the internal GSI & Enterprise team and ecosystem. A senior sales leader has been added to orchestrate the Enterprise and GSI sales efforts. We are also adding experienced and relevant sales team in all major geographies.

Our recent successes, large deal wins and executions have further built the GSIs trust in Newgen.

Building a powerful Newgen Brand and strengthening

Sales and Marketing

We are making aggressive investments in enhancing visibility and brand awareness in the International markets through various initiatives including Digital events, analyst and consultant engagements and enhancing our digital presence and digital outreach.

Outlook

While the short-term economic challenges continue to lengthen the sales cycles, the enterprises across industries are witnessing an acceleration in their digital transformation initiatives.

Newgen has the right combination of technology, experience, customer success, industry validation, and specialized teams to capitalize on the opportunity. We have a resilient business model in place with large recurring business and diversification across verticals, clients, and geographies.

Going forward, we will continue to augment our product capabilities and build deeper relationships with the GSIs.

We have on-boarded three senior leaders in sales, product, and human resources. They bring a wealth of industry experience from many global prestigious organizations. Their leadership will infuse new ideas and energy. Furthermore, we continue to build local teams across mature markets.

We are carefully monitoring the situation and are working on a hybrid model to ensure the safety of our employees, customers, partners, and vendors.

In our constant endeavour to help organizations expedite their digital transformation efficiently and effectively, I would like to thank our teams, customers, vendors, and all the other stakeholders for their continued support. I would also like to thank our existing and new investors for their confidence and faith in Newgen’s business and team. We will keep working towards furthering the best interests of all our stakeholders.

Together, let us create a lasting and positive impact on businesses across the globe. Wishing health and safety for all.

Strengthening the GSI ecosystem

We are witnessing increased traction in the mature markets of US, Europe, and APAC, as we strengthen our partnerships

Diwakar Nigam

Newgen Software Technologies Limited

Annual Report 2020-21

Transforming Customer Experience through Fast-Paced Innovation

==> picture [53 x 33] intentionally omitted <==

470+ 44 R&D Employees Patents Filings (with 18 Patents Granted)

Innovation, fast-paced and continuous, is the key to agility and staying ahead of the curve in one’s journey to embrace and facilitate digital transformation and elevate customer experience. Fully aware of this, and with the aim of staying future-ready and solidify its position in new and specialized product lines, Newgen makes continuous investments in Research and Development. As of March 31, 2021, the Company has 44 patents filings to its credit, of which 18 have been granted in India and US, and 11 applications are under processing.

Newgen continues to rapidly develop and deploy new solutions that help customers run operations smoothly, even amid disruptions. Our development network and supporting infrastructure thus operates on a central system and follows a synchronized cloud-based continuity strategy. In addition to this, we maintain an aggressive strategy in pursuing cloud-based deployments to enable business continuity with secure, remote operations. The cloud attributed to 7% of our revenues in FY ‘21.

New Features

==> picture [399 x 48] intentionally omitted <==

----- Start of picture text -----

Low-Code
Intelligent Collaborative Robotic
Application Digital
Content Work Process
Dev Sensing
Services Management Automation
Platform
----- End of picture text -----

Key Patents Issued

Granted a patent for an invention entitled “Image Processing System and Method” for a period of 20 years, commencing from March 2018, by the United States Patent and Trademark Office. This invention is about a highly efficient and advanced level binarization process.

Granted a patent for an invention entitled “Remote Email Access through Short Message Service (SMS) by the Indian Patent Office, Chennai, for a term of 20 years, commencing from February 2010.

Granted a patent for an invention entitled “Automatic Detection of Alterations in Documents” by the Indian Patent Office.

Company Overview

Financial Statements

Statutory Reports

Empowering Customers and Partners

Leveraging its position as a key player in cloud-based content services and low code process automation technologies, Newgen is now focussed at expanding its frontiers, building and strengthening its presence in the global market.

The organization has been following a vertical-based sales approach using pre-built solution accelerators across our core verticals. It has also been using a ‘Named account’ approach for Enterprise Platform Sales. Majority of the sales traditionally has been through the direct sales team comprising about 300 people, supported by a large network of channel partners.

The Company is now working towards enhancing the global partner ecosystem and GSI team with the objective to target the ‘Fortune 2000’ companies in the US, Canada, EU, and ANZ.

Newgen is strengthening the Enterprise sales team by adding experienced and relevant sales team across all major geographies. It is also making aggressive investments in enhancing visibility and brand awareness through various initiatives including Digital events, analyst and consultant engagements, enhancing digital presence and digital outreach. Newgen is also making investments in building partner support ecosystem to provide complete support to GSIs through entire sales, implementation and support cycles.

==> picture [497 x 378] intentionally omitted <==

Newgen Software Technologies Limited

Annual Report 2020-21

Newgen as a Family – Standing Together through Tough Times

Our people are our biggest asset and the driving force behind our success, making us proud of their unflinching commitment towards Newgen and its customers. Collective growth and collaboration continues to be the backbone of our culture - whether within teams, departments, the overall company, or even with customers and broader society.

As a responsible and employee-friendly organization, the safety and health of our employees has always been a top priority, especially over the past year, during which we remained continuously focussed on providing all the necessary assistance, guidance, and support to Newgenites and their families.

Continuing to Provide a Safe Remote Working Environment

In these unprecedented times, our policies and initiatives were designed and modified to remain centred around the wellbeing of our employees and their families. In that spirit, Newgen continues to provide a safe and secure remote working environment to our employees through its robust IT infrastructure, VPNs, internet connectivity, and collaboration tools. This coupled with the dedication and resilience demonstrated by Newgenites in overcoming the challenges presented by the current crisis, has enabled us to ensure business and operational continuity for our employees and customers.

Newgen has also been organizing regular COVID-19 testing and mandating bi-weekly reports on employees’ health status, specifically related to COVID-19 symptoms, to ensure the wellbeing of all. The Company’s Corona Action Committee meets regularly to monitor the situation and support our work teams.

Imbibing Newgen’s Values and Culture

At Newgen, collaboration is celebrated and deeply aligned with our Leadership Code and our core values are being upheld by our people in all their endeavours. Focussed at collective progress, the Company provides challenging and creative growth opportunities to support innovation and further strengthen our product DNA. By entrusting Newgenites with greater responsibility in the early stages of their careers, we encourage them to work with the top customers, consultants, and analysts and build their confidence.

Our open and supportive work environment also helps us to grow together and continuously improve our offerings. Newgen’s culture promotes an “open door” policy and encourages free-flowing, two-way communication through various formal and informal channels. Our key mantra is care, humility and respect for all, thereby supporting and

motivating our people to perform with pride and passion. Along with providing care for our people, we also aim to constantly give back to and strengthen our communities.

Enhancing Talent Management

Newgen takes pride in its multi-talented employee base across its developmental centres in Noida, New Delhi, Mumbai, and Chennai. We recognize the critical importance of human capital management in ensuring smooth and effective enterprise connectivity. And so, we remain focussed on building our capacity management through various initiatives, including attracting and retaining the industry’s brightest talent through talent acquisition, internal job postings, and employee referrals.

With over 470 people in our R&D team, supported by Newgenites in our Delivery Excellence department, we continue to expand our frontiers and strengthen the Company’s position as a market leader.

Steering Capability Management

In today’s dynamic marketplace, Newgen remains focussed on enhancing the satisfaction level of its employees and clients by working proactively to drive an integrated approach toward competency development. Newgenites are given the freedom to script their own success with the Company’s accelerated learning curve and numerous growth opportunities offered quite early in their careers.

Our key efforts related to Capability Management include:

Making the onboarding process smoother for all new hires through structured programs, such as Newgen’s Broad Spectrum Orientation, product training, elaborate on-the-job training (OJT), and special mentorship programs

Company Overview

Financial Statements

Statutory Reports

Emphasizing on career planning for various roles with clearly defined growth paths
Providing regular in-house training and certifications for skill upgradation under our iLearn, iEvolve, and weLearn initiatives. These include behavioural and technical trainings, such as:
Newgen Certified Implementation Professional (NCIP) for Engineers
Newgen B1 certification for Business Analysts
Migrating various Learning and Development initiatives from the classroom to online modules, thereby supporting growth for Newgenites working from home
Strengthening leadership excellence through:
360-degree feedback assessments for our leadership team
Newgen Emerge Leadership Development program for mid-level leaders
Soul of Leading Teams training program for first-time managers
Using a role-based goal assessment system to help align individuals’ goals with the Company’s mission and vision
Providing access to Omnigyan, eLibrary, and various other online forums for continued education and knowledge enhancement

Empowering People with Effective Engagement

Newgen’s ability to lead the pack and enable our clients on their digital transformation journey is driven by the collective excellence of our people.

With a special focus on leadership development and improving our employee experience, we have undertaken the following initiatives:

Town Hall meetings with senior management to align all Newgenites with our shared vision
Regular Open House meetings, organized to communicate a uniform strategy and showcase the role of each Newgenite in achieving our collective vision
Strategic HR programs to ensure that Newgen continues to be a thriving workplace - these programs are developed based on inputs gathered from our Annual Employee Engagement Survey and Service Satisfaction Surveys
Reward and Recognition (R&R) program to highlight outstanding contributions and drive engagement,

coupled with incentives for performance excellence. The awards include:

Kudos to You
Hi Fi
Pinnacle Performance Award
Standing Ovation Award
Managerial Excellence Award
Your Contribution Counts
Rising Star award - designed to reward key, up-and-coming contributors
Online and offline campaigns to keep the organization connected and engaged, such as #XtraMiles, #NewgenHero, #GreatJob, #recallingmemorieswithbuddies, #Wecollab, #CheckmateCovid, #FriendsandFamilies, #NewGuru, #BestRemoteWorkplace, #LeadingfromFront, and #BusinessBytes
Platforms, such as the Newgen Women’s Forum and Newgen Employee Welfare Society (NEWS), to give Newgenites a forum to engage in collaborative discussions, activities, and celebrations
A well-integrated system of internal communication used to celebrate project success, build team spirit, and share proud moments with the Newgen family
Cross-functional collaboration, quality circles for brainstorming, and platforms such as Accomplish Collective Excellence (ACE) that allow Newgenites to contribute to the continuous improvement of matters that directly affect them
Hackathons and cross-functional task forces to drive organizational value by developing our product DNA
Employee stock options (ESOPs) granted on the occasion to encourage employees’ growth in tandem with the Company

Maintaining Our Commitment to Ethics and Compliance

Newgen’s responsible business mantra is rooted in its unwavering commitment to integrity and ethical practices. We have various measures and initiatives in place to ensure compliance with our values, including:

Newgen’s Code of Ethics and Business Conduct, which is shared and enforced to maintain our ethical focus
Focussed awareness campaigns and robust complaint redressal mechanisms
Gender neutral internal policies to establish our “Zero Tolerance to Sexual Harassment” philosophy at every level
Newgen’s Vigil Mechanism and Whistle Blower Policy, carried out by engaging a third-party ombudsman

Newgen Software Technologies Limited

Annual Report 2020-21

Making an Impact - Building Opportunities. Transforming Lives.

Newgen’s mission extends beyond facilitating enterprises in their journey towards digital transformation to empowering people in their journey of life. Our CSR initiatives actively contribute towards the social and economic development of the communities we operate in, acting on the core philosophy to empower the lesser privileged sections of society through an integrated approach to help them realize their full potential and enable a good quality of life.

Newgen’s CSR initiatives are focussed at contributing to two Sustainable Development Goals:

Goal 2 (Zero Hunger)
Goal 4 (Quality Education)

Along with the successful implementation of CSR initiatives, the Company has made a conscious effort to revamp the programs, systems, and processes. The year in review especially witnessed a different pattern of executing the CSR activities on account of the COVID-19 pandemic.

==> picture [497 x 302] intentionally omitted <==

CSR Thematic Area - Promotion of Education

Newgen Digital Discovery Paathshala (NDDP)

Newgen Digital Discovery Paathshala (NDDP), the flagship CSR initiative of the organization, continues to focus on promoting quality and equitable digital learning among government school students. The initiative is designed to impart knowledge using web-based technology and transform traditional classroom teachings into fun-learning sessions.

NDDP footprints are spread across three schools in the Delhi region - Government Girls Senior Secondary Schools in Harkesh Nagar and Tekhand, and Soami Nagar Model School, a trust-managed school. In the year under review, NDDP expanded its reach and benefited over 3,000 students from classes 6th to 11th.

During COVID-19, the NDDP program transformed its operations to scale up digital empowerment among the

Company Overview

Financial Statements

Statutory Reports

target students at a faster pace. The sessions were conducted through online and digital learning platforms. Under the aegis of NDDP, students were provided digital devices, including iPads, tablets, and smartphones, to make education more accessible, hone their skills, provide resources for online research, and develop creative content. It was also ensured that the online connectivity is made user-friendly and free of cost.

The virtual sessions were made interactive and engaging through an execution strategy that included audio-visual mode of teaching, participative group discussions, quizzes, activities, and assignments. The goal was to help the students become digitally sound and well informed. Supported by the program, the digital proficiency of the students was evident by their

==> picture [284 x 213] intentionally omitted <==

ability to navigate through devices, leverage the internet for studies, and prepare informative PowerPoint presentations for assignments. Furthermore, many students utilized the devices to help their peers and siblings in their education and support elders in online transactions and related tasks. The active participation of students in activities was incentivized by regular distribution of gifts, happiness boxes, and appreciation prizes.

NDDP Alumni Association Initiative

The NDDP alumni association aims to strengthen and amplify the impact of the NDDP program. It reconnects the NDDP beneficiaries who are promoted from class 8th. The project locations include Harkesh Nagar, Tekhand, Kalkaji, and Begumpur. The initiative actively engages the alumni with a handholding platform that is flexible, informative, and educationally powerful. This year, the online execution of the program helped expand the group, with nearly 250 alumni attending regular online classes on the school syllabus, personality development, life skills, and career counselling aiming towards their holistic growth.

Highlights

v Programme expansion to include students till class 11th, thereby reaching 3,000+ students
v Smart device distribution to nearly 500 students, ensuring free-of-cost connectivity and uninterrupted access to education
v Distribution of gifts and appreciation prizes to celebrate the achievements of students who excelled in quizzes and assignments, and to inspire a healthy sense of competition
v Virtual celebration of special events, including Rangragini Painting Competition, Independence Day, New Year, Special Debate, etc.

Making an Impact: Stories from Our Students

Mona is a bright student who has been a part of NDDP since class 7 and aspires to become a doctor. She expressed her gratitude to NDDP for taking some burden off her parents by providing a smartphone and free internet connectivity. This helped her and her sister to have continuous access to education during the lockdown. The device’s child lock feature has been helpful in preventing exposure to any irrelevant online content and was appreciated by her parents for ensuring that Mona was utilizing the device only to enhance her learning.

Juicy is a meritorious child who has been a part of NDDP since class 6. She appreciates the innovative approach of the NDDP sessions that have helped improve her speaking skills. She also expressed her gratitude for the digital device provided during the pandemic, which proved to be a blessing and enabled her to continue her studies, attend online classes, access e-books, and complete assignments. In addition to academic learning, her digital knowledge also helped her to book railway tickets online and teach her mother to use the Paytm app. Juicy has emerged as a more confident student and has been able to leverage digital platforms to further her education and impart information to her peers and elders.

Newgen Software Technologies Limited

Annual Report 2020-21

==> picture [497 x 202] intentionally omitted <==

Remedial Education Programme

The Remedial Education Programme is implemented in partnership with the NGO KHUSHII (Kinship for Humanitarian, Social and Holistic Intervention in India). Under this initiative, Newgen is working with MCD feeder schools to help the students from classes 1st to 5th prepare for senior secondary schools. In FY‘21, the Remedial Education Programme was implemented at four project locations, benefiting over 4,000 students:

Harkesh Nagar, Delhi (1,982 students)
Tekhand, Delhi (1,016 students)
Sangam Vihar, Delhi (760 students)
Nandambakkam, Chennai (730 students)

Highlights

v Delivering education for all students through online, partially online, or offline mediums
v Subject-wise and class-wise worksheets to ensure effective learning in the core subjects, including Hindi, English, Mathematics, and Social Sciences

Partnership with KK Academy, Lucknow

Newgen collaborated with KK Academy to ensure that children from the underprivileged families receive a holistic education. The Academy is based in Lucknow and is recognized by the state board to cater to students from Nursery to 8th standard. Newgen aims to utilize this collaboration to empower students from different marginalized backgrounds and help them become literate and confident, thereby bringing social transformation through education.

CSR Thematic Area - Eradication of Hunger, Poverty, and Malnutrition

Mid-Day Meal Programme

Newgen supports The Akshaya Patra Foundation for providing mid-day meals to school students and working

towards their all-round development. Under this initiative, Newgen ensures that healthy and nutritious meals are being served to children to support their growth during their formative years. The programme caters to approximately 9,000 children in Vrindavan, Jhalawar, and Guwahati.

==> picture [240 x 176] intentionally omitted <==

COVID-19 Relief Response

During the COVID-19 pandemic, Newgen came forward to support the distribution of nutritious food items in the form of ‘Happiness Kits’, containing monthly rations of non-perishable food items. It was done through the following approaches:

Partnering with The Akshaya Patra Foundation and delivering ‘Happiness Kits’ to 17,378+ students and their families in Vrindavan, Jhalawar, and Lucknow
Distributing nutritious food items in the form of ‘Happiness Kits’ to 400+ NDDP students at project locations in Delhi

Highlights

v Providing nutritious and healthy food to over 17,000 students, augmenting their growth and development

Company Overview

Financial Statements

Statutory Reports

CSR Thematic Area - Holistic Development

Personality Development Sessions

Newgen’s Personality Development Programme focusses on overall development and skill enhancement of the students. The sessions aim to build self-confidence, develop soft skills, and provide career and personal guidance to students. The sessions, held in collaboration with the I-AM organization, were conducted twice a month on the second Saturday and fourth Thursday of the month. In FY ‘21, the program extended its reach by engaging the NDDP alumni and supported over 200 students.

Case Study

Aarti is currently pursuing class 12 and plans to build a career in banking. She has been a part of the Newgen Sadbhavna Programme since the age of eight and credits these sessions for playing a vital role in developing her personality, honing her skills, and building her confidence.

Connecting the Dots: Supporting Our Students throughout Their Educational Trajectory

In FY ’21, Newgen re-aligned the implementation of its activities to foster overall development of children. The NDDP program expanded its scope by including the NDDP alumni. Both Remedial Education Programme and the NDDP sessions were conducted through online platforms and continued to provide a strong foundation for education and digital proficiency. The personality development sessions further prepared them for higher education and a bright future ahead. Together, these initiatives and programs have helped the beneficiaries to stay connected with Newgen throughout their educational trajectory and get ample opportunities to learn and grow during this span.

==> picture [77 x 67] intentionally omitted <==

==> picture [78 x 67] intentionally omitted <==

==> picture [377 x 58] intentionally omitted <==

----- Start of picture text -----

Remedial Education Newgen Digital
Programme Discovery Paathshala
Provides remedial Promotes digital
education to students education amongst
from classes 1st to 5th students from
classes 6th to 11th
----- End of picture text -----

==> picture [77 x 68] intentionally omitted <==

==> picture [78 x 68] intentionally omitted <==

==> picture [369 x 60] intentionally omitted <==

----- Start of picture text -----

Personality Newgen Alumni
Development Association
Programme Programme
Enhances skills of Enrols and guides
students and alumni for NDDP students from
overall development classes 9th to 12th
----- End of picture text -----

Newgen Software Technologies Limited

Annual Report 2020-21

Board of Directors

DIWAKAR NIGAM

==> picture [119 x 132] intentionally omitted <==

Chairman and Managing Director

Diwakar co-founded Newgen in 1992. He is also a founding member of NASSCOM, India’s apex Information Technology industry association. He was one of the members of NASSCOM’s Anti-piracy Task Group. Prior to joining Newgen, he founded Softek and was associated with it for 12 years.

Diwakar has been on our Board since April 1, 1993 and has over 40 years of experience in the information technology industry.

He holds a bachelor’s degree in Science from the University of Allahabad; master’s degree in Science (Mathematics) from IIT, Delhi and master’s degree in Technology (Computer Science) from IIT, Madras.

==> picture [121 x 131] intentionally omitted <==

T S VARADARAjAN

Whole-time Director

Varadarajan co-founded Newgen in 1992. He has been on our Board since its incorporation. Prior to promoting Newgen, he promoted Softek Private Limited and was associated with it for about 12 years. He has around 46 years of experience in the field of software designing and development. He did his bachelor’s in science from the Bangalore University and engineering (electrical technology) from the Indian Institute of Science, Bengaluru. He holds a master’s degree in technology (computer science) from IIT, Madras.

==> picture [119 x 131] intentionally omitted <==

PRIYADARSHINI NIGAM

Whole-time Director

Priyadarshini has been on our Board since 1997. Previously, she was a journalist with over 10 years of experience in the field. She has freelanced and published with South-North News Service and Depthnews Press Foundation Asia. She holds a bachelor’s and a master’s degree in Economics.

==> picture [121 x 131] intentionally omitted <==

SUBRAMANIAM RAMNATH IYER

Independent Director

Subramaniam Ramnath Iyer is an independent Director of our Company. A qualified chartered accountant, company secretary and cost accountant, he holds a bachelor’s degree in Commerce from Shri Ram College of Commerce University of Delhi. He is the sole proprietor of S.R. Iyer & Associates, Chartered Accountants. He has more than 38 years of experience in the field of finance, accounting and corporate law.

Company Overview

Financial Statements

Statutory Reports

Board of Directors

KAUSHIK DUTTA

==> picture [121 x 132] intentionally omitted <==

Independent Director

Kaushik is a non-executive, independent Director of our Company. He previously served as Partner of Lovelock and Lewes and Price Waterhouse, Bangalore. He has served as an expert with the Indian Institute of Corporate Affairs and Serious Fraud Investigation Office of the MCA. He is the Founder and Co-director of Thought Arbitrage Research Institute. He has more than 26 years of experience in the field of finance and accounting and is the author of Handbook of Independent Directors upholding the moral compass, co-author of Corporate Governance – myth to reality, India means business – how the elephant earned its stripes and contributing author of CR Datta and Company Law (VII edition). He graduated in commerce from St. Xavier’s College, University of Calcutta. He is a qualified chartered accountant and a fellow member of ICAI.

==> picture [121 x 132] intentionally omitted <==

SAURABH SRIVASTAVA

Independent Director

Saurabh is an Independent Director of our Company. He is an alumnus of the Indian Institute of Technology, Kanpur, and Harvard University, USA. He has also been awarded Padma Shri by the Government of India. Mr. Saurabh Srivastava has several years of experience in the field of Information Technology. He is one of India’s leading IT entrepreneurs, angel investors and venture capitalists. He is a Founder of Indian Angel Network and a former Chairman of NASSCOM. He has more than 40 years of experience in the field of Information Technology.

==> picture [121 x 131] intentionally omitted <==

PADMAjA KRISHNAN

Independent Director

Padmaja Krishnan is an independent Director of our Company. She has industry expertize spanning over forty years as a global business leader and innovator in the Technology space. She has managed multiple business portfolios for organizations like TCS, CSC, Sopra-Steria, Dell-Perot Systems, and Genisys Group. She is a certified coach at Marshall Goldsmith Stakeholder Centered Coaching, certified Tick IT Lead Assessor from UK, Certified Corporate Director by Institute of Directors and acts as a Guest Faculty for MBA programs at FMS, BIMTECH and NIFM. She did her Bachelors and Masters in Physics from University Of Delhi and Master’s in Philosophy (Computer & Systems Sciences) from JNU, New Delhi.

Newgen Software Technologies Limited

Annual Report 2020-21

Management Team

==> picture [119 x 131] intentionally omitted <==

S j RAj

Senior Vice President, HR Operations

Dr. Raj has been with Newgen for over 25 years and manages the company’s human resources (HR) strategy, global operations, and programs aligned with HR strategy. Before joining Newgen, he worked with Eicher Goodearth, SRF Nippondenso, PCS Data Products, and Semiconductor Complex Limited. He holds a M.A., with a specialization in social work, from Jamia Millia Islamia University and a Ph.D. from Chandigarh University.

==> picture [121 x 131] intentionally omitted <==

VIRENDER jEET

Senior Vice President, Sales & Marketing / Products

Virender Jeet has been with Newgen for over 26 years and manages the overall strategic and operational functions for the company’s entire portfolio of offerings. He oversees product development, global sales and marketing, and business enablement, and has spearheaded the filing of various patents in India and the U.S. He holds a Bachelor’s degree in Engineering from Savitribai Phule, Pune University.

==> picture [121 x 131] intentionally omitted <==

TARUN NANDWANI

Senior Vice President, Business Management – Existing Customers & Commercials

Tarun Nandwani has been with Newgen for over 26 years and manages the company’s existing customer and commercial business areas. He is responsible for customer relationship management, commercial activities, contract management, new solution and application development, and driving business from existing customers. He holds a Bachelor’s degree in Engineering from Delhi University.

==> picture [121 x 131] intentionally omitted <==

ARUN KUMAR GUPTA

Chief Financial Officer

Arun Kumar Gupta has been with Newgen since 2010. He oversees financial planning, treasury, global taxation, investor relations, business finance, compliances, and financial reporting. He has over 25 years of experience in finance, having previously worked with companies like Maersk, Thermax, and Satyam. He holds a Bachelor’s degree in Science from the University of Calcutta and is a qualified company secretary, cost and works accountant, and chartered accountant. He has received the FE CFO of the Year Award 2019.

Company Overview

Financial Statements

Statutory Reports

Management Team

==> picture [121 x 132] intentionally omitted <==

ANAND RAMAN

Executive Vice President and Chief Operating Officer, Newgen Software Inc.

Anand Raman has been with Newgen for over 25 years. He oversees Newgen’s operations in the Americas and is responsible for driving the company’s scale, growth, and profitability in the region. He is also a Director on the Board of Newgen Software Inc. Previously, Anand headed Newgen’s sales and marketing, global marketing, and product development teams. He holds a Bachelor’s in Computer Engineering from Pune University and a certificate in Advanced Management from the Wharton School at University of Pennsylvania.

==> picture [120 x 130] intentionally omitted <==

ARVIND jHA

Senior Vice President, Software Development

Arvind is responsible for product development. He has over three decades of experience in software development and engineering and driving business model transformation strategy for global and Indian start-up companies. He is recognized by the Indian tech community as an innovator and community builder. Prior to Newgen, he was the CEO of Pariksha Labs and had also led product development teams at Polaroid, Adobe, Monsoon Multimedia, and Movico Technologies. Arvind holds a Bachelor’s degree in Computer Science from IIT Kharagpur.

==> picture [113 x 123] intentionally omitted <==

RAjVINDER SINGH KOHLI

Senior Vice President, Sales

Rajvinder is driving Global Sales with a focus on GSI relationships in his current role. He has about three decades of solution sales experience and has a keen interest and strong knowledge of existing and emerging technologies in digital process automation and transformation space. He was associated with Newgen during 2002-09 in the sales leadership position for India and APAC. He has also been associated with Automation Anywhere, Microsoft, and IBM. He did his Master’s in Management from IRMA, Anand and Global Advance Management Programme from ISB-Kellogg.

==> picture [119 x 131] intentionally omitted <==

HEMANT MAKHIjA

Vice President, Marketing

Hemant Makhija is Newgen’s global head of marketing and has over 27 years of experience in leading product strategy, management, and marketing teams for various enterprise software companies in India, the UAE, and the US. Before joining Newgen, Hemant worked with organizations including Sage, Yahoo, and Plex Systems. He holds a Master’s in Marketing Management from Saint Mary’s College in Moraga, CA and a Bachelor’s in Engineering from Devi Ahilya University.

Newgen Software Technologies Limited

Annual Report 2020-21

Management Team

==> picture [121 x 132] intentionally omitted <==

MANOjIT MAjUMDAR

Vice President, Channels

Manojit Majumdar has been with Newgen for the past 9 years, after previously working for Newgen in 1999. He has over 33 years of industry experience, having spent time at a number of companies, including IBM. Currently, Manojit is responsible for setting up Newgen’s global business partner ecosystem, expanding the partner program into new geographies, and engaging existing partners. He holds a Master’s from Symbiosis International University and a certificate in Global Business from Harvard Business School.

==> picture [119 x 131] intentionally omitted <==

R. KRISHNA KUMAR

Vice President, ANZ

R. Krishna Kumar has been with Newgen for over 7 years and manages business operations in the Australia and New Zealand (ANZ) geography. He has over 25 years of experience as an engineer and worked with various companies prior to Newgen, including Ramco, Microland, and Wipro. He held a number of positions related to software products and services during his 13 years at Wipro.

==> picture [120 x 131] intentionally omitted <==

VIVEK BHATNAGAR

Vice President, Sales – EMEA

Vivek Bhatnagar manages Newgen’s sales and business operations in the Europe, Middle East and Africa (EMEA) geography. He has over 25 years of experience in sales and geography management across various industries, including banking, insurance, telecom, healthcare, and manufacturing and with companies like Tata Consultancy Services. Vivek also writes industry-specific blogs and participates in active discussions with senior IT leadership across the EMEA region.

Company Overview

Financial Statements

Statutory Reports

Management Team

==> picture [119 x 132] intentionally omitted <==

SUNIL PANDITA

Vice President, Sales – South Asia

Sunil Pandita manages Newgen’s sales and business operations in the South Asia geography. He has 20 years of progressive experience in the technology industry and has worked with a number of companies, including Samsung, Adobe, and IBM. Sunil is a regular presenter and keynote speaker at various industry forums. He is an alumnus of Birla Institute of Technology and Science.

==> picture [119 x 131] intentionally omitted <==

ASHOK KAPOOR

Vice President, Global Delivery

Ashok Kapoor has been with Newgen for over 5 years and manages software delivery organization. He has expertize in managing operations, building strong teams, and working with customers across various geographies, including the U.S., Europe, India, EMEA, and APAC. Within the IT industry, Ashok has worked with both products and services at various organizations, including NIIT Technologies, Interglobe Technologies and Headstrong Ltd. He holds a Master’s in Business Administration from IIM Calcutta and a Bachelor’s in Engineering from BITS Pilani.

==> picture [119 x 119] intentionally omitted <==

VIVEK MANI TRIPATHI

Vice President – Human Resources

Vivek brings a wealth of experience to his role of providing strategic leadership in planning and implementation of quality-based integrated human resource programs in Newgen. He has held positions of increasing responsibility and complexity over the last 27 years across organizations like BIBA Apparels, Lava International, Bharti Airtel and Adobe Systems etc. He has also been a visiting faculty for the strategic human resource management course at the Indian Institute of Management, Rohtak and was the President Consulting & Executive Education at the School of Inspired Leadership, Gurgaon. Vivek holds a PGDPM and IR from XLRI Jamshedpur and has also been recognized as a Certified Executive Coach from the Royal Roads University, British Columbia, Canada.

Newgen Software Technologies Limited

Annual Report 2020-21

Corporate Information

Directors

Bankers

Mr. Diwakar Nigam Chairman & Managing Director

Standard Chartered Bank Citi Bank

Mr. T.S. Varadarajan Whole-time Director

Ms. Priyadarshini Nigam Whole-time Director

Mr. Kaushik Dutta Independent Director

Mr. Saurabh Srivastava Independent Director

Mr. Subramaniam Ramnath Iyer Independent Director

Statutory Auditors

B S R & Associates, LLP Chartered Accountants Gurgaon (Firm Registration No.: 116231W/W-100024)

Secretarial Auditors

Aijaz & Associates

Practicing Company Secretaries, Delhi (C.P. No. 7040)

Internal Auditors

Ms. Padmaja Krishnan Independent Director

Grant Thornton India LLP Noida

Key Managerial Personnel

Mr. Virender jeet Senior Vice President (Sales & Marketing/Products)

Dr. S.j. Raj Senior Vice President (HR Operations)

Registered Office & Corporate Office

A-6, Satsang Vihar Marg, Qutab Institutional Area, New Delhi – 110067

Mr. Tarun Nandwani Senior Vice President Business Management – Existing Customers & Commercials

Mr. Arun Kumar Gupta Chief Financial Officer

Mr. Aman Mourya Company Secretary & Compliance Officer

Financial Statements

Company Overview Statutory Reports

Directors’ Report

Dear Members,

The Board of Directors are pleased to present the 29[th] Annual Report on Business and Operations of your Company (“the Company” or “Newgen”) along with the audited standalone and consolidated financial statements for the financial year ended 31[st] March 2021.

1. COMPANY’S AFFAIRS AND FINANCIAL PERFORMANCE:

Newgen Software Technologies Limited is an enterprise software Company offering innovative cloud-based content services and low code process automation technologies- changing the way enterprises service their customers, enable their employees, and collaborate with their partners. The three core products of Newgen Digital Automation Platform are Contextual Content Services (ECM), Intelligent Process Automation (BPM) and Omnichannel Customer Engagement (CCM). For more details, kindly refer the Management Discussion and Analysis Report highlighting the important aspects of the business of the Company as annexed with this Report.

Key highlights of the financial results of the Company prepared as per the Indian Accounting Standards (Ind-AS) for the financial year ended 31[st] March 2021 are as under. Wherever applicable, the consolidated financial statement is also being presented in addition to the standalone financial statement of the Company.

==> picture [500 x 348] intentionally omitted <==

----- Start of picture text -----

( ` in Lakhs)
Particulars Standalone Consolidated
Financial Year Financial Year Financial Year Financial Year
2020-21 2019-20 2020-21 2019-20
Revenue from Operations 61,039.47 57,740.12 67,262.44 66,075.62
Other Income 1,430.95 2,084.60 1,503.74 2,096.29
Total Income 62,470.42 59,824.72 68,766.18 68,171.91
Operating Expenditure 43,114.97 48,388.86 48,071.93 55,615.42
Profit/ loss before Depreciation, Finance 19,355.45 11,435.86 20,694.26 12,556.49
Costs, Exceptional items and Tax Expense
Less: Depreciation/ Amortisation/ Impairment 1,851.48 1,807.80 2,014.97 1,991.11
Less: Finance Costs 534.84 1,069.70 562.58 1,091.21
Profit /loss before Exceptional items 16,969.13 8,558.36 18,116.70 9,474.17
and Tax Expense
Add/(less): Exceptional items - - - -
Profit /loss before Tax Expense 16,969.13 8,558.36 18,116.70 9,474.17
Less: Provision for Current Tax 4,921.11 2,419.17 5,266.28 2,651.04
Less: Provision for deferred tax (credit)/charge 288.58 -452.04 202.19 -450.33
Profit after Tax (A) 11,759.43 6,591.23 12,648.23 7,273.46
Total Comprehensive Income/Loss (B) 115.78 -65.47 233.47 241.70
Total (A+B) 11,875.21 6,525.76 12,881.70 7,515.16
Balance of profit /loss for earlier years 3,3286.82 29,212.27 35,113.48 30,356.70
Less: Dividend paid on Equity Shares during 1,399.11 2,087.57 1,399.11 2,087.57
the year for the previous financial year
Less: Dividend Distribution tax paid during - 429.11 - 429.11
the year for the previous financial year
Profit available for Appropriation 43,647.14 33,488.82 46,362.60 35,113.48
Balance carried to Balance Sheet 43,647.14 33,488.82 46,362.60 35,113.48
----- End of picture text -----

On consolidated basis, the Company’s revenue from operations stood at 67,262.44 lakh reflecting an increase of 1.8% in financial year 2020-21 as against 66075.62 lakh in financial year 2019-20.
Consolidated Profit before Tax for the year stood at 18,116.70 lakh compared to 9474.17 Lakh reflecting an increase of 91.22% in financial year 2020-21.
Consolidated Profit after Tax for the year stood at 12,648.23 lakh compared to 7,273.46 Lakh reflecting an increase of 73.90% in financial year 2020-21.

Newgen Software Technologies Limited

Annual Report 2020-21

2. MATERIAL CHANGES, IF ANY, AFFECTING THE COMPANY:

There have been no material changes and commitments, which affect the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and the date of this Report. There is no change of nature of business of the Company during the financial year 2020-21.

3. IMPACT OF COVID-19 PANDEMIC:

The outbreak of Coronavirus (COVID -19) pandemic globally is causing significant disturbance and slowdown of economic activity. Newgen has a resilient business model in place with large annuity revenue streams i.e. recurring business from existing customers as well as diversification across verticals, clients and geographies Newgen’s pre-emptive measures, business continuity processes and robust IT infrastructure ensured quick control and seamless transition to remote working environment. Newgen’s solutions are of mission critical nature for long term customers. They serve as the backbone of their operations. During this COVID-19 time, the Company ensured customers’ operations and business continuity. The Company focused on health and safety of employees while fully supporting clients worldwide. Our workforce across locations is efficiently working remotely for the past one year with data security and compliance. For more details, kindly refer the Management Discussion and Analysis Report as annexed with this Report.

INDUSTRY OVERVIEW:

4.

For details on Industry overview, important changes in the industry, business outlook and economic outlook, kindly refer the Management Discussion and Analysis Report as annexed with this Report.

5. TRANSFER TO GENERAL RESERVE:

Your Directors have decided not to transfer any amount to the general reserve during the financial year 2020-21.

6. DIVIDEND:

Considering the Company’s financial performance, your Board of Directors has recommended a payment of dividend at a rate of 3.5/- per equity share (i.e 35% on the paid-up capital of the Company) for the financial year ended 31[st] March 2021 (dividend declared in previous year was 2 per equity share i.e 20%), payable to members, whose names appear in the Register of Members as on Record Date, subject to the approval of the Members at the ensuing 29[th] Annual General Meeting of the Company. The total outgo for such dividend will amount to ` 2448.45 Lakh.

7.

The Company has formulated a Dividend Distribution Policy, which includes the circumstances under which the member may/may not expect dividend, the financial parameters, internal and external factors, utilization of retained earnings, parameters with regard to different classes of shares. The provisions of this Policy are in line with Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 (“SEBI Listing Regulations”) and the Policy is available on the website of the Company at https://newgensoft.com/.

The Details of unpaid and unclaimed amounts, related with earlier years, lying with the Company is uploaded on Company’s website https://newgensoft.com/ and IEPF Authority website http://www.iepf.gov.in/.

Pursuant to the provisions of Section 124 of the Act, those dividend amounts which have remained unpaid or unclaimed for a period of seven consecutive years are required to be transferred to the Investor Education and Protection Fund (‘IEPF’) established pursuant to Section 125 of the Act. As on 31[st] March 2021, no such unpaid or unclaimed dividend amount is required to be transferred to IEPF. The contact details of the Nodal Officer, Mr. Aman Mourya, Company Secretary of the Company, as required under the provisions of IEPF rules, are available on the website of the Company https://newgensoft.com/.

SUBSIDIARY COMPANIES:

As on the date of this report, the Company has following six wholly - owned subsidiaries (WOS). There has been no material change in the nature of the business of these subsidiaries.

Newgen Software Inc. USA. (a material subsidiary as per SEBI Listing Regulations)
Newgen Software Technologies Pte. Ltd. (Singapore)
Newgen Software Technologies Canada Ltd.
Newgen Software Technologies (UK) Limited.
Newgen Software Technologies Pty Ltd. (Australia)
Newgen Computers Technologies Limited. (Incorporated in India)

There are no associate companies or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 (“Act”). There are no such companies which has become or ceased to be the subsidiary, associate or joint venture of the Company during the financial year 2020-21.

The consolidated financial statements of the Company for the financial year ended 31[st] March 2021 are

Financial Statements

Company Overview

Statutory Reports

prepared in compliance with the applicable provisions of the Act, including Indian Accounting Standards specified under Section 133 of the Act. The audited consolidated financial statements together with the Auditors’ Report thereon forms part of this Report. The statement containing salient features of the financial statement of subsidiaries is enclosed herewith in form AOC-1 as “Annexure -1” to this Report.

Financial statements of the aforesaid subsidiary companies are kept open for inspection by the Members at the Registered Office of the Company during business hours on all days except Saturday & Sunday up to the date of the AGM as required under Section 136 of the Act. Any Member desirous of obtaining a copy of the said financial statements may write to the Company at its Registered Office or to the Compliance Officer of the Company. The financial statements of the subsidiaries including the consolidated financial statements and all other documents required by law to be attached thereto have also been uploaded on the website of the Company at https://newgensoft.com.

To comply with the provisions of Regulation 16(c) of SEBI Listing Regulations the Board of Directors of the Company have adopted a Policy for determining Material Subsidiary. The policy on Material Subsidiary has been uploaded on the website of the Company https://newgensoft.com.

8. CAPITAL STRUCTURE:

During the financial year 2020-21, the Authorised Share Capital of the Company remains unchanged. During the financial year, the Company has not issued any shares or convertible securities. The issued, subscribed and paid-up equity share capital of the Company continue to stand at 69,95,57,010 divided into 6,99,55,701 Equity shares of 10/- each, as on 31[st] March 2021.

The equity shares of the Company are listed on Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE).

9. EMPLOYEE STOCK OPTION PLAN:

As on 31[st] March 2021, the Company has in place following Schemes: -

a) Newgen Employees Stock Option Scheme-2014 (“Newgen ESOP 2014”). Newgen ESOP 2014 is administered by the Nomination & Remuneration Committee of the Board, through Newgen ESOP Trust. The details on Options granted, exercised, vested and lapsed during the financial year 2020-21 and other particulars as required under the Act, read with its rules and SEBI (Share Based Employee Benefits) Regulations, 2014 in

respect to this Scheme are enclosed herewith as “Annexure – 2” to this Report.

b) Newgen Software Technologies Restricted Stock Units Scheme – 2021 (“Newgen RSU – 2021”). Newgen RSU – 2021 is also operated and administered by the Nomination & Remuneration Committee of the Board, through Newgen RSU Trust. Particulars required under the Act, read with its rules and SEBI (Share Based Employee Benefits) Regulations, 2014 in respect to this scheme is enclosed herewith as “Annexure - 2A” to this Report.

10. CREDIT RATING AND LIQUIDITY:

As the Company has not issued any debt instruments or accepted any fixed deposits, the Company was not required to obtain credit ratings in respect of the same. The credit rating from CRISIL Limited during the financial year 2020-21 for bank facilities is CRISIL A2+ for the short term.

Our principal sources of liquidity are cash and cash equivalents and the cash flow that we generate from our operations. The Company follows a conservative investment policy and invests in high quality debt instruments and bonds. As on 31[st] March 2021, on standalone basis, cash and cash equivalents were 2,873.44 Lakh and in addition to that 8,317.46 Lakh was invested in mutual funds & bonds and ` 17,000 Lakh in non-current fixed deposits.

As on 31[st] March 2021, on consolidated basis, cash and cash equivalents were 7,174.94 Lakh and in addition to that 8,317.46 Lakh was invested in mutual funds & bonds and ` 17,000 Lakh in non-current fixed deposits.

11. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The Company has a professional Board with an optimum combination of executive and non-executive directors who bring to the table the right mix of knowledge, skills and expertise. The Board provides strategic guidance and direction to the Company in achieving its business objectives and protecting the interest of stakeholders.

In accordance with Section 152 of the Act, Mr. T S Varadarajan (DIN: 00263115), who has been longest in the office since inception, is liable to retire by rotation at the ensuing 29[th] Annual General Meeting and being eligible, seeks re-appointment. The Board recommends his appointment for the approval of the members of the Company in the ensuing 29[th] Annual General Meeting.

Pursuant to the approval of the members in their 28[th] Annual General Meeting held on 27[th] July 2020,

Newgen Software Technologies Limited

Annual Report 2020-21

Mrs. Padmaja Krishnan (DIN: 03155610) has been appointed as an Independent Director of the Company for a first term of 5 (five) years commencing from 24[th] March 2020. Considering her strong industry expertise spanning over forty years as a global business leader and innovator in the Technology industry with exposure to Global and Indian clients, her appointment was based on the recommendation of Nomination & Remuneration Committee.

During the year, in the 28[th] Annual General Meeting, based on the recommendation of the Nomination & Remuneration Committee and the Board of Directors, the approval of the Members of the Company was also obtained for the continuation of Directorship of Mr. Saurabh Srivastava (DIN: 00380453) as an Independent Director of the Company, post attaining the age of 75 (Seventy-five) years, during his present term of 5 (five) years.

During the financial year 2020-21, there is no changes in the key managerial personnel of the Company.

The details required pursuant to sub-section 12 of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and SEBI Listing Regulations in respect of employees of the Company, is enclosed herewith as “Annexure - 3” to this Report.

Declaration of Independence by Independent Directors

During the year under review, all Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations. The Independent Directors have also given declaration of compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, with respect to their name appearing in the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs.

In the opinion of the Board of Directors, all the Independent Directors including those who have been appointed/ re-appointed, if any, during the financial year 2020-21, have relevant integrity, skills, expertise, experience and proficiency.

Board and Committee Meetings

The number and dates of meetings of the Board and its Committees are set out in the Corporate Governance Report which forms the part of this Report. The intervening gap between Board Meetings was within the period prescribed under the provisions of Section 173 of the Act and SEBI Listing Regulations.

The Composition of Audit Committee and other statutory committees constituted by the Board under the provisions of the Act, & SEBI Listing Regulations along with number and dates of meetings of such committees are set out in the Corporate Governance Report which forms the part of this Report.

All the recommendations by the Audit Committee were accepted by the Board of Directors.

Salient feature of the Remuneration policy and criteria for selection of candidates for appointment as Directors and Senior Management Personnel

The Company has in place a policy on Nomination & Remuneration of Directors, Key Managerial and Senior Management Personnel which is framed with the object of attracting, retaining and motivating talent which is required to run the Company successfully. It primarily lays down a framework in relation to remuneration of the Directors, Key Managerial Personnel (KMP), Senior Management Personnel as well as provide guidance to the Board of Directors (Board) and Nomination & Remuneration Committee (NRC) in relation to appointment/ removal to the said positions, which has been approved by the Board of Directors. The key objectives and purposes of the Policy inter alia are:

a) Formulating the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy/ framework relating to the remuneration of Directors, Key Managerial Personnel, Senior Management Personnel and other employees.
b) To provide guidance to the Board and the Committee in relation to appointment/ removal of Directors, Key Managerial Personnel and Senior Management Personnel.
c) Formulating the criteria for evaluation of performance of Chairperson, independent directors, non-Independent Directors and the Board of Directors as a whole.
d) To devise a policy on diversity of board of directors and to build a Succession Plan for appointment to the Board of Directors, KMPs and Senior Management Personnel.
e) To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.

Company’s Policy on directors’ appointment and remuneration including criteria for determining qualification, positive attributes, independence of a

Financial Statements

Company Overview

Statutory Reports

director and other matters provided under section 178(3) of the Act, is available on the website of the Company at https://newgensoft.com.

Board effectiveness

a) Familiarization program for Independent Directors: Over the years, the Company has developed a familiarization process for the newly appointed Directors with respect to their roles and responsibilities, way ahead of the prescription of the regulatory provisions. The process has been aligned with the requirements under the Act and other related regulations. This process inter alia includes providing an overview of the Company’s business model, Industry, the risks and opportunities, the new products, Innovations, Sustainability measures etc.
b) Annual evaluation of the performance of the Board, its Committees and of individual directors:
The Board carries out annual performance evaluation of its own performance, the Directors individually, as well as the evaluation of the working of its various Committees as mandated under the Act and the SEBI Listing Regulations.

The details of training and familiarisation programmes and annual evaluation process for directors, Board and its Committees are set out in the Corporate Governance Report which forms the part of this Report.

12. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2020-21. For more description, kindly refer the Management Discussion and Analysis Report as annexed with this Report.

13. QUALITY SYSTEMS & INFORMATION SECURITY INITIATIVE:

Newgen has sustained its commitment to the highest levels of quality, robust information security management practices that have collectively helped in achieving a significant milestone during the financial year 2020-21. Newgen’s Quality and Information Security system has been a steady journey with full

conviction starting from 1997. The same is evident from the implementation of industry standards namely ISO 9001, ISO 27001, ISO 27017, ISO 27018, and compliance with process improvement models namely CMMi Dev and CMMi Svc. Emphasis has been on System driven transparent process, which delivers exceptional Quality first time right with the required level of Security.

14. AUDIT REPORTS AND AUDITORS:

Secretarial Auditor and its Report

The Board of Directors of your Company re-appointed M/s Aijaz & Associates, Company Secretaries in Practice, as Secretarial Auditors of the Company to conduct Secretarial Audit for the financial year 2020-21. The Secretarial Audit Report for the financial year ended 31[st] March 2021, is enclosed herewith as “Annexure-4” to this Report. The Secretarial Audit Report for the financial year 2020-21 does not contain any qualification, reservation or adverse remarks.

Statutory Auditors and its Report

The Statutory Auditor’s Report does not contain any qualification, reservation, adverse remark or disclaimer.

B S R & Associates, LLP, Gurugram, (Firm Registration No. 116231W / W-100024), has completed its two terms as Statutory Auditors of your Company. Considering the requirements of Section 139(2) of the Act read with the Companies (Audit and Auditors) Rules, 2014, they shall cease to hold office from the conclusion of ensuing 29[th] Annual General Meeting. The Board places on record its sincere appreciation for the services rendered by B S R & Associates, LLP during their tenure as Statutory Auditors of the Company.

Therefore, on the recommendation of the Audit Committee, the Board of Directors has recommended to the members for their approval in the ensuing 29[th] Annual General Meeting for the appointment of M/s Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No 001076N/N500013), as Statutory Auditors of the Company who will hold office for a period of 5 (five) years from the conclusion of the ensuing 29[th] Annual General Meeting till the conclusion of 34[th] Annual General Meeting of the Company.

Cost Auditors

In terms of Section 148 of the Act and the Companies (Cost Records and Audit) Rules, 2014, Cost Audit is not applicable to the Company for the financial year ended 31[st] March 2021.

Newgen Software Technologies Limited

Annual Report 2020-21

15. REPORTING OF FRAUDS BY AUDITORS:

During the financial year 2020-21, neither the statutory auditors nor the secretarial auditors have reported to the Audit Committee under sub-section (12) of section 143 of the Act, any instances of fraud committed against the Company by its officers or employees.

16. DEPOSITS:

During the financial year 2020-21, the Company has not accepted any fixed deposit within the meaning of Section 73 of the Act and the rules made thereunder.

17. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT:

The particulars of loans, guarantees and investments, if any, as per Section 186 of the Act by the Company, have been disclosed in the financial statements (refer note no. 21 and 43b).

18. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

There were no contracts or arrangements, or transactions entered with related parties during the financial year 2020-21, which were not at arm’s length basis. There are no material related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel’s or others which may have a potential conflict with the interest of the Company at large. None of the Directors and KMPs has any material pecuniary relationships or transactions vis-a-vis the Company except remuneration as per terms of their respective appointments. A statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors on a quarterly basis. The disclosure of related party transactions, as required under Section 134(3)(h) of the Act in Form AOC-2 is enclosed herewith as “Annexure-5” to this Report.

Disclosures in compliance with the applicable Accounting Standard on “Related Party Disclosures” and other transactions, if any, of the Company, with any person or entity belonging to the promoter/promoter group which hold(s) 10% or more shareholding in the Company, have been given in the financial statements.

The policy on Related Party Transactions as approved by the Board of Directors is uploaded on the website of the Company https://newgensoft.com

19. DETAILS OF CSR POLICY AND INITIATIVE TAKEN DURING THE FINANCIAL YEAR 2020-21:

Company’s CSR Policy is established by the Board of Directors with the recommendation of the CSR Committee. Corporate social responsibility (CSR), for

Newgen, goes beyond charity and volunteering. CSR is an integral part of our Company culture, rooted in our values as an organization. Newgen is committed to make efforts for the nation’s social, economic, and environmental good. Objective of the CSR Policy is to make CSR a key business process for the sustainable development of whole communities, while conducting insightful engagement with our stakeholders. We aim to actively contribute to the holistic development of underprivileged children, specifically. Our efforts are concentrated on raising the human development index in India by enhancing children’s quality of education and life. The CSR policy lays down the principles/ process on identification, selection, implementation of CSR activities & programmes keeping in mind the Company’s CSR vision. It also provides the framework to monitor & evaluate the CSR activities & programmes in accordance with the provisions of the Act. Further brief outline on the initiatives undertaken by the Company on CSR activities during the financial year 2020-21, is enclosed herewith as “Annexure-6”. Other details regarding Company’s CSR activities and CSR Policy are available on the website of the Company at: https://newgensoft.com.

20. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars as prescribed under section 134 of the Act, read with the Companies (Accounts) Rules, 2014 are as follows:

a. Details of Conservation of energy

The Company is committed to conserve the environment by adopting the “Go Green Initiatives” and being responsible for energy and water management in its area of operations and perform energy efficiency by consuming energy and water in an efficient, economical and environment friendly manner throughout all its premises. The operations of your Company do not consume high levels of energy. As the cost of energy consumed by your Company forms a very small portion of the total costs, the impact of changes in energy cost on total costs is not significant. Your Company is on a constant look out for newer and efficient energy conservation technologies and introduces them appropriately. Following initiatives have been taken by the Company time to time.

Adequate measures have been taken to conserve energy by using energy-efficient computers, LED lightings and related equipment’s with the latest technologies.
Installation of PNG Genset capacity of 125 KVA for emergency efficiency.

Financial Statements

Company Overview

Statutory Reports

Installation of Solar panel for renewable Energy.
Installed a PNG Gas pipeline in the office kitchen/cafeteria.
Wastewater from the RO plant is being recycled to conserve water.
Continuous monitoring of floor areas after normal working hours and switching off lights and air-conditioning.
Installation of chillers graded with VFD in HVAC plant to reduce energy consumption immensely has been and is being done.
Installation of auto controls over running hours of some AC equipment’s in areas like Hub Rooms, UPS Rooms, Cafeteria, Audi, etc has been done.

Capital Investment on Energy conservation equipment during the year: Due to the COVID-19 Pandemic and work from home, the Company’s energy consumption during 2020-21 was minimal. Hence, the Company did not make any further capital investment on energy conservation during this financial year.

b. Technology Absorption, Adaptation and Innovation

Your Company realises the importance of innovation and constant improvement in key areas of business. We are focused on driving innovation and adopting solutions in line with rapidly evolving technological trends. Our inherent culture of innovation has enabled us to develop a track record of product innovation, expand the range of our offerings and improve the delivery of our products and services. We have a dedicated team of skilled individuals with technical background and domain expertise in each of our industry verticals with a focus on evolving technologies. These teams follow a structured innovation and solutions development process and work with delivery functions to identify the key concerns of our customers and generate solutions, ideas and concepts to address such concerns.

Newgen continually invests in research and development related to the technologies that power digital transformation for organisations. This year we have grown our patent portfolio across key content services technologies, having obtained 3 patents taking the total to 18. Newgen, with its integrated, robust, and scalable digital automation platform, continues to enable its customers by helping them deliver process and content applications—ranging from simple and wide to deep and complex. The platform, with low code development

capability, leverages our industry-recognized products—intelligent process automation (BPM), contextual content services (ECM), and omnichannel customer engagement (CCM)—to manage enterprise-wide processes, content, and communications. Newgen focuses on advanced application design and development capabilities to strengthen its offering, while also continuously enhancing its deployment technology stack, enabling compliance, security, and scalability for enterprise needs. In line with changing market requirements, we continually develop new business capabilities/modules/products to cater for the ever changing businesses. Below are the key release updates on our products, highlighting new products, features, and Functionalities over the last one year:

Information in case of imported technology (imports during the last five years) - Not applicable

c. Research and Development

The Company has made and will continue to make, significant investments in software product research and development and related product opportunities. For fiscals 2020, 2019, 2018 and 2017, the Company spent 10.74%, 9.23%, 8.67% and 8.55% (as a proportion of our total expenditure) respectively on research and development. For fiscal 2021 under review the Company had spent 12.97 % (as a proportion of the total expenditure) on research and development. We believe that the industry, in which we compete, witnesses rapid technological advances in software development due to constantly evolving customer preferences and requirements. The Company believe that emphasis on R&D has enabled us to remain up-to-date with the technological developments, as well as to cater to the evolving needs of our customers.

d. Foreign Exchange Earnings and Outgo

			(`in Lakh)
	Particulars	31st March 2021	31st March 2020
	Foreign Exchange Earnings Foreign Exchange Outgo	41348.22 7865.10	38253.97 9477.30

21. RISK MANAGEMENT:

The Board of Directors of the Company have constituted a Risk Management Committee to, inter-alia, assist the Board in overseeing the responsibilities with regard to identification, evaluation and mitigation of operational, strategic and external environmental risks. The details

Newgen Software Technologies Limited

Annual Report 2020-21

of Risk Management Committee are included in the Corporate Governance Report which forms the part of this report.

The Company has also laid down a Risk Management Policy, defining Risk profiles involving Strategic, Technological, Operational, Financial, Organizational, Legal and Regulatory risks within a well-defined framework. The Risk Management Policy acts as an enabler of growth for the Company by helping its businesses to identify the inherent risks, assess, evaluate and monitor these risks continuously and undertake effective steps to manage these risks. More details on Risk Management including identification of risk and their mitigation are covered in Management Discussion & Analysis Report, which forms the part of this report.

to the larger society which is also its stakeholder. Business responsibility report describing the initiatives taken by the Company from an environmental, social and governance perspective, in the format as specified by SEBI is enclosed herewith as “Annexure - 7” to this Report.

26. CORPORATE GOVERNANCE:

The report on Corporate Governance as stipulated under the SEBI Listing Regulations forms an integral part of this Report and the same is enclosed herewith as “Annexure – 8” to this Report. The requisite compliance certificate from Secretarial Auditor confirming compliance of conditions of Corporate Governance is also attached with the Corporate Governance Report.

27. MANAGEMENT DISCUSSION AND ANALYSIS:

22. WHISTLE BLOWER POLICY/ VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES:

The Company has adopted a Whistle Blower Policy and Vigil Mechanism that provides a mechanism to report violations, any unethical behaviour, suspected or actual fraud, violation of the Code of Conduct, including providing adequate safeguards against victimisation. During the financial year 2020-21, no case was reported under Whistle Blower Policy of the Company.

The Company hereby affirms that it has not denied access to any person to the Audit Committee and that it has mechanism to provide protection to the Whistle Blower as per the Whistle Blower Policy of the Company.

Whistle Blower Policy/ Vigil Mechanism is available on the website of the Company at: https:// newgensoft.com.

23. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE:

The Management Discussion and Analysis Report, highlighting the important aspects of the business of the Company is enclosed herewith as “Annexure 9” to this Report.

28. OTHER DISCLOSURES:

a) Your Company has complied with the provisions, including relating to the Constitution of Internal Complaints Committee, of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The details related with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 is set out in the Corporate Governance Report which forms the part of this report.
b) No case/ complaint was reported under Child labour/ forced labour/ involuntary labour and Discriminatory employment related matters in the financial year 2020-21.
c) The Company complies with all applicable mandatory secretarial standards issued by the Institute of Company Secretaries of India.

29. DIRECTORS’ RESPONSIBILITY STATEMENT:

In terms of Section 134(5) of the Act, the Directors would like to state that:

24. WEB ADDRESS FOR ANNUAL RETURN:

In terms of Section 92(3) of the Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at: https:// newgensoft.com.

25. BUSINESS RESPONSIBILITY REPORT:

At a time and age when enterprises are increasingly seen as critical components of the social system, they are accountable not merely to their shareholders from a revenue and profitability perspective but also

I. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any.
II. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.

Financial Statements

Company Overview

Statutory Reports

III. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
IV. The Directors had prepared the annual accounts on a going concern basis.
V. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
VI. The Directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

31. APPRECIATION:

Your Directors take this opportunity to thank all the members of the Company for their continued support. Your Directors thank all the customers, vendors, investors, bankers and other stakeholders for their confidence and continued support during the financial year 2020-21. Directors place on record their appreciation of the contribution made by employees at all levels, which has continued to be the major strength of the Company.

Your Directors also express their gratitude to the Governments of India and various countries where the Company has its operation and all other concerned departments/ agencies for their co-operation and look forward to their continued support in future.

30. CAUTIONARY STATEMENTS:

Statements in the Board’s Report and the Management Discussion & Analysis Report describing the Company’s objectives, expectations or forecasts may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the statements.

For and on behalf of Board of Directors

Diwakar Nigam Chairman & Managing Director DIN: 00263222

Date: 25[th] May 2021 Place: New Delhi

Newgen Software Technologies Limited

Annual Report 2020-21

Annexure 1

Form AOC-I

Statement containing salient features of the financial statement of subsidiaries/ associate companies/ joint ventures (Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

Part “A”: Subsidiaries

(Information in respect of each subsidiary to be presented with amounts in ` )

==> picture [496 x 321] intentionally omitted <==

----- Start of picture text -----

1 S. No. 1 2 3 4 5 6
Name of Newgen Newgen Newgen Newgen Newgen Newgen
the subsidiary Computers Software Software Software Software Software
Technologies Technologies Inc. USA Technologies Technologies Technologies
Ltd. (UK) Ltd. Canada Ltd. Pte Ltd. Pty Ltd.
– – – – – –
Reporting period for the
subsidiary concerned,
if different from the
holding company’s
reporting period
Reporting currency and INR GBP @ 100.96 USD @ 73.17 CAD @ 58.2 SGD @ 54.43 AUD @55.7
Exchange rate as on the
last date of the relevant
Financial year in the case
of foreign subsidiaries.
Share capital 21,00,000.00 2,01,92,000.00 8,78,04,000.00 58,20,000.00 1,36,07,500.00 5,57,00,000.00
Reserves & surplus 53,64,505.00 79,97,849.28 17,22,73,862.61 1,93,72,161.00 7,12,31,234.68 31,66,656.40
Total assets 78,35,150.00 7,51,54,624.00 84,36,80,486.04 6,19,10,424.60 21,13,24,747.15 6,28,56,948.70
Total Liabilities 3,70,645.00 4,69,64,774.72 58,36,02,623.43 3,67,18,263.60 12,64,86,012.47 39,90,292.30
Investments - - - - - -
Turnover - 14,67,97,657.28 2,16,01,34,747.59 10,25,73,658.80 50,41,95,976.00 5,25,96,897.30
Profit before taxation 7,71,234.00 26,05,575.68 8,20,80,836.50 54,05,732.40 2,90,39,656.89 22,11,902.70
Provision for taxation 1,89,820.00 5,44,376.32 1,94,85,104.42 14,52,613.80 34,23,157.13 6,76,365.10
Profit after taxation 5,81,414.00 20,61,199.36 6,25,95,732.09 39,53,118.60 2,56,16,499.76 15,35,537.60
Proposed Dividend - - - - - -
% of shareholding - - - - - -
----- End of picture text -----

2 Names of subsidiaries which are yet to commence operations

None

3 Names of subsidiaries which have been liquidated or sold during the year.

None

Financial Statements

Company Overview

Statutory Reports

Part “B”: Associates and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures

Part “A”: Subsidiaries

(Information in respect of each subsidiary to be presented with amounts in ` )

Name of Associates/Joint Ventures

Latest audited Balance Sheet Date
Shares of Associate/Joint Ventures held by the company on the year end
Description of how there is significant influence
Reason why the associate/joint venture is not consolidated
Networth attributable to Shareholding as per latest audited Balance Sheet 6. Profit / Loss for the year
i. Considered in Consolidation ii. Not Considered in Consolidation

NOT APPLICABLE

NOT APPLICABLE NOT APPLICABLE NOT APPLICABLE NOT APPLICABLE NOT APPLICABLE

NOT APPLICABLE NOT APPLICABLE

Names of associates or joint ventures which are yet to commence operations
Names of associates or joint ventures which have been liquidated or sold during the year.

NOT APPLICABLE NOT APPLICABLE

For Newgen Software Technologies Limited

Diwakar Nigam Chairman & Managing Director DIN: 00263222

Arun Kumar Gupta Chief Financial Officer Membership No: 056859

T.S. Vardarajan Date: 25[th] May 2021 Whole-Time Director Place: New Delhi DIN: 00263115

Aman Mourya

Company Secretary FCS: 9975

Newgen Software Technologies Limited

Annual Report 2020-21

Annexure 2

Information Regarding Employees Stock Option Scheme (ESOS) Pursuant to Rule 12(9) of Companies (Share Capital and Debentures) Rules, 2014 and Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014.

1) Details related to the Scheme:

As on 31[st] March 2021, the Company has in place the Newgen Employees Stock Option Scheme – 2014 (“NEWGEN ESOP 2014”). All the relevant details as prescribed under above Rule and Regulation are provided below and the same is also available on the website of the Company at https://newgensoft.com.
A. Relevant disclosures in terms of the ‘Guidance note on accounting for employee share-based payments’ issued by ICAI or any other relevant accounting standards as prescribed from time to time.

Please refer Note 35– Share Based Payment, of Notes to the Standalone Financial Statements forming part of the Annual Report.

B. Diluted EPS on issue of shares pursuant to all the schemes covered under the regulations in accordance with ‘Indian Accounting Standard (Ind AS) - 33 - Earnings Per Share’ or any other relevant accounting standards as prescribed from time to time.

Fully diluted EPS pursuant to issue of Equity Shares on exercise of stock options calculated in Basic: 18.28 accordance with Ind AS - 34 ‘Earning Per Share’ (Consolidated) Diluted: 18.10

C. Other Details relating to Newgen ESOP 2014.

Other Details relating to Newgen	ESOP 2014.
Sl. No. Particulars	Fiscal 2021 Fiscal 2020 Fiscal 2019 Fiscal 2018 Fiscal 2017 Fiscal 2016 Fiscal 2015
i. a) Date of shareholders’ approval	As on 31stMarch 2021, the Company has in place the Newgen Employee Stock Option Scheme – 2014(“NEWGEN ESOP 2014”),as approved by the shareholders on 13thNovember 2014, which was further amended and modifed on 28thJuly 2017 by the shareholders of the Company, to be compliant with the SEBI (Share Based Employee Benefts) Regulations, 2014 during IPO procedure. Post initial public ofer of the Company, the shareholders ratifed the Newgen ESOP 2014 on 9thAugust 2018, as required under SEBI (Share Based Employee Benefts) Regulations, 2014.
b) Total number of options approved	The maximum number of 37,83,800 shares can be issued under NEWGEN ESOP 2014.
c) Total number of options granted	2,33,000 NIL NIL 5,62,550 NIL NIL 36,53,525
d) Vesting requirements	Set forth below is the vesting schedule, subject to there being a gap of at least one year between the date of grant of options and the vesting of such options.

	Number of options vested Vesting schedule
	10% of the options granted One year from the date of grant
	20% of the options granted Two years from the date of grant
	30% of the options granted Three years from the date of grant
	40% of the optionsgranted Fouryears from the date ofgrant

e) Exercise price or pricing formula	`63/-
f) Maximum term of options granted	Once the options have vested, such options have to be exercised within a period of fve years from the date on which the last of the options vest. Vesting period shall be as stated in above point (d).
g) Source of shares (primary, secondary or combination)	Company uses Trust Route for implementing this Scheme. Source of Share to the Trust as on 31stMarch 2021 is Primary. For more information, please refer details related to Newgen ESOP Trust as provided in this disclosure.
h) Variation in terms of options	NIL

Financial Statements

Company Overview

Statutory Reports

==> picture [479 x 175] intentionally omitted <==

----- Start of picture text -----

Sl. Particulars Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
No. 2021 2020 2019 2018 2017 2016 2015
ii. Method used to account for For Grant pre-listing: - Fair Value Method using Black-Scholes Model
NEWGEN ESOP 2014 For Grant post listing: - Average Market Price on the date of grant
iii. Difference between the employee During the financial year 2020-21 Company followed fair value accounting
compensation cost using the of stock options.
intrinsic value of stock options and
the employee compensation cost
that shall have been recognized
if it had used the fair value of
the options. The impact of this
difference on profits and on EPS
of the Company.
----- End of picture text -----

iv. Option movement during the year:

	Fiscal Year	2021	2020	2019	2018	2017	2016	2015
a)	Number of options outstanding at	8,84,598	15,57,524	22,43,483	30,61,209	33,84,305	36,53,525	-
	the beginning of the year
b)	Number of options granted	2,33,000	NIL	NIL	5,62,550	NIL	NIL	36,53,525
	during the year
c)	Number of options forfeited /	NIL	40,723	1,12,466	1,26,096	1,66,525	2,13,175	NIL
	lapsed during the year
d)	Number of options vested	1,34,171	90,605	12,68,724	9,43,211	7,77,170	2,88,188	NIL
	during the year
e)	Number of options exercised	1,98,689	6,49,706*	5,73,493	12,54,180	1,56,571	56,045	NIL
	during the year
f)	Number of shares arising as a	2,16,192*	6,32,203	5,73,493	12,54,180	1,56,571	56,045	NIL
	result of exercise of options
g)	Money realized by exercise	1,25,17,407	40,93,1478	3,61,30,059	7,90,13,340	98,63,973	35,30,835	NIL
	of options (INR), if scheme
	is implemented directly
	by the company
h)	Loan repaid by the Trust	Nil	2,04,75,000	1,48,05,000	8,53,02,000	1,82,10,000	19,50,000	NIL
	during the year from exercise
	price received
i)	Number of options outstanding	9,01,406	8,84,598	15,57,524	22,43,483	30,61,209	33,84,305	36,53,525
	at the end of the year
j)	Number of options exercisable at the end of the year	4,89,498	5,71,519	11,22,797	4,45,616	7,77,170	2,88,188	36,53,525

*2,16,192 shares arising in the financial year 2020-21, includes 17,503 shares, related to the options exercised in the month of March 2020 (financial year 2019-20), which were pending with Newgen ESOP Trust for transfer to the employees due to COVID-19 and related lock down.

v. Weighted-average exercise prices and weighted-average fair values of options disclosed separately for options whose exercise price either equals or exceeds or is less than the market price of the stock.

 Weighted-average exercise prices: ` 63/-

 Weighted-average fair values of options granted during the year: NA

Newgen Software Technologies Limited

Annual Report 2020-21

==> picture [479 x 320] intentionally omitted <==

----- Start of picture text -----

vi. Employee wise details of the options granted:
a. Option granted to Senior Managerial Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
Personnel & KMPs during the year 2021 2020 2019 2018 2017 2016 2015
Name Designation
Virender Jeet Sr. Vice President NIL NIL NIL 42,000 NIL NIL 55,000
(Sales and Marketing/
Product)
Surender Jeet Raj Sr. Vice President NIL NIL NIL 39,000 NIL NIL 55,000
(HR Operations)
Tarun Nandwani Vice President NIL NIL NIL 22,000 NIL NIL 55,000
(Customer Relations/
Delivery)
Arun Kumar Gupta Chief Financial Officer NIL NIL NIL 13,000 NIL NIL 35,000
Manojit Majumdar VP- Channels NIL NIL NIL NIL NIL NIL 35,000
Ashok Kapoor VP – Global Delivery NIL NIL NIL 30,000 NIL NIL NIL
Dushyant Kumar VP – GSI Development NIL NIL NIL NIL NIL NIL 45,000
Aman Mourya Company Secretary 2500 NIL NIL 5,000 NIL NIL NIL
b. Any other employee who receives a grant NIL NIL NIL NIL NIL NIL NIL
in any one year of option amounting
to 5% or more of option granted
during that year
c. Identified employees who were granted option NIL NIL NIL NIL NIL NIL NIL
during any one year equal to or exceeding 1%
of the issued capital of the Company (excluding
outstanding warrants and conversions) at
the time of grant.
----- End of picture text -----

* The exercise price at which options were granted is ` 63/-

vii. A description of method and significant assumptions used during the year to estimate the fair value of options including the following information:

==> picture [481 x 329] intentionally omitted <==

----- Start of picture text -----

a) the weighted-average values of share price NA
b) the weighted average values of exercise price NA
c) Expected volatility NA
d) Expected option life Grant Grant Number Exercise Remaining
Name Date of options Period Life (In
outstanding Years)
ESOP 01-01-2015 4,97,800 31-12- 2.75
2014/ 2023
Grant I
ESOP 01-07-2017 1,99,375 30-06- 5.25
2014/ 2026
Grant II
ESOP 01-09-2017 1,26,500 31-08- 5.42
2014/ 2026
Grant III
ESOP 01-10-2017 47,600 30-09- 5.50
2014/ 2026
Grant IV
ESOP 25-03-2021 2,33,000 24-03- 8.99
2014/ 3030
Grant V
e) Expected dividends NA
f) Risk-free interest rate and any other NA
inputs to the model
g) The method used and the assumptions made to NA
incorporate the effects of expected early exercise
----- End of picture text -----

Financial Statements

Company Overview

Statutory Reports

NA NA

h) How expected volatility was determined, including an explanation of the extent to which expected volatility was based on historical volatility i) whether and how any other features of the option grant were incorporated into the measurement of fair value, such as a market condition

2) Details Related to Trust:

Newgen ESOP 2014 will continue to be implemented through the Trust Route and accordingly Newgen ESOP Trust was constituted for Newgen ESOP 2014. In Trust Route, the Trust will utilise the shares already held by it and will acquire the shares of the company either through fresh allotment from the company or by way of secondary acquisition, if any.

(i) Details:

==> picture [479 x 305] intentionally omitted <==

----- Start of picture text -----

Sl. Particulars Newgen ESOP Trust
No. (For Newgen ESOP 2014)
1. Name of the Trust Newgen ESOP Trust
2. Details of the Trustee (s) Mr. Amarendra Kishore Sharan and
Mr. Arvind Kaul
3. Amount of loan disbursed by the company/ any company in NIL
the group during the year
4. Amount of loan outstanding (repayable to company/ any 1,46,94,649
company in the group) as at the end of the year
5. Amount of loan, if any, taken from any other source for which NIL
the company or any company in the group has provided any
security or guarantee
6. Any other contribution made to the Trust during the year NIL
Including Interest of ` 1,08,51,650/- on Loan payable by Newgen ESOP Trust.
(ii) Brief details of transactions in shares by the Trust:y the Trust: the Trust:
Sl. Particulars Newgen ESOP Trust
No. (For Newgen ESOP 2014)
1. Number of shares held at the beginning of the year 8,65,888
2. Number of shares acquired during the year through (i) primary Nil
issuance (ii) secondary acquisition, also as a percentage of paid-up
equity capital as at the end of the previous financial year, along with
information on weighted average cost of acquisition per share
3. Number of shares transferred to the employees / sold along 2,16,192
with the purpose thereof
4. Number of shares held at the end of the year. 6,49,696
----- End of picture text -----*

(ii) Brief details of transactions in shares by the Trust:y the Trust: the Trust:

* Total number of shares transferred to the employees / sold includes 17,503 shares which were exercised by the employees during the year 2019-20, however, shares had not been transferred in that year due to COVID-19 pandemic and related lockdown.

(iii) In case of secondary acquisition of shares by the Trust:

Number of shares	As a percentage of paid-up equity capital as at the end of the year immediately preceding the year in which shareholders’ approval was obtained
	Newgen ESOP Trust
Held at the beginning of the year	NIL
Acquired during the year	NIL
Sold during the year	NIL
Transferred to the employees during the year	NIL
Held at the end of theyear	NIL

For and on behalf of Board of Directors

Diwakar Nigam Chairman & Managing Director DIN: 00263222

Date: 25[th] May 2021 Place: New Delhi

Newgen Software Technologies Limited

Annual Report 2020-21

Annexure -2A

Information Regarding Restricted Stocks Units (RSU) Pursuant to Rule 12(9) of Companies (Share Capital and Debentures) Rules, 2014 and Regulation 14 of SEBI (Share Based Employee Benefits) Regulations, 2014.

1) Details related to the Scheme:

As on 31[st] March 2021, the Company has also in place the Newgen Software Technologies Restricted Stock Units Scheme – 2021 (“Newgen RSU - 2021”). All the relevant details as prescribed under above Rule and Regulation are provided below and the same is also available on the website of the Company at https://newgensoft.com.
A. Relevant disclosures in terms of the ‘Guidance note on accounting for employee share-based payments’ issued by ICAI or any other relevant accounting standards as prescribed from time to time.

Please refer Note number 35 - Share Based Payment, of Notes to the Standalone Financial Statements forming part of the Annual Report.

B. Diluted EPS on issue of shares pursuant to all the schemes covered under the regulations in accordance with ‘Indian Accounting Standard (Ind AS) - 33 - Earnings Per Share’ or any other relevant accounting standards as prescribed from time to time:

Fully diluted EPS pursuant to issue of Equity Shares on RSUs calculated in accordance with Ind AS - 34 ‘Earning Per Share’ (Consolidated)

Not Applicable (no such RSUs are granted and exercised during the year)

C. Other Details relating to Newgen RSU - 2021

==> picture [459 x 308] intentionally omitted <==

----- Start of picture text -----

Sl. Particulars Fiscal 2021
No.
i. a) Date of shareholders’ approval 26 [th] December 2020
b) Total number of RSUs approved The maximum number of 14,00,000 shares can
be issued under this Scheme.
c) Total number of RSUs granted NIL
d) Vesting requirements Not Applicable.
e) Exercise price or pricing formula Not Applicable.
f) Maximum term of RSUs granted Not Applicable.
g) Source of shares (primary, secondary or Company uses Trust Route for implementing
combination) this Scheme. No shares were allotted to the
Trust as on 31 [st] March 2021.
h) Variation in terms of RSUs NIL
ii. Method used to account for NEWGEN RSU Not Applicable
2021
iii. Difference between the employee Not Applicable
compensation cost using the intrinsic value
of RSUs and the employee compensation
cost that shall have been recognized if it had
used the fair value of the RSUs. The impact of
this difference on profits and on EPS of the
Company.
iv. RSUs movement Not Applicable
----- End of picture text -----

Financial Statements

Company Overview

Statutory Reports

==> picture [459 x 155] intentionally omitted <==

----- Start of picture text -----

Sl. Particulars Fiscal 2021
No.
v. Weighted-average exercise prices and Not Applicable
weighted-average fair values of RSUs disclosed
separately for RSUs whose exercise price
either equals or exceeds or is less than the
market price of the stock.
vi. Employee wise details of the RSUs granted Not Applicable
vii. A description of method and significant Not Applicable
assumptions used during the year to estimate
the fair value of RSUs including the following
information
----- End of picture text -----

2)

Details Related to Trust:

Newgen RSU - 2021 will continue to be implemented through the Trust Route and accordingly Newgen RSU Trust was constituted to implement the Scheme. In Trust Route, the Trust will utilise the shares already held by it and will acquire the shares of the company either through fresh allotment from the company or by way of secondary acquisition, if any.

(i) Details:

==> picture [459 x 174] intentionally omitted <==

----- Start of picture text -----

1. Name of the Trust Newgen RSU Trust
2. Details of the Trustee (s) Mr. Amarendra Kishore Sharan and
Mr. Rajesh Pathak
3. Amount of loan disbursed by the company/ any NIL
company in the group during the year
4. Amount of loan outstanding (repayable to NIL
company/ any company in the group) as at the
end of the year
5. Amount of loan, if any, taken from any other NIL
source for which the company or any company in
the group has provided any security or guarantee
6. Any other contribution made to the Trust during NIL
the year
----- End of picture text -----

(ii) Brief details of transactions in shares by the Newgen RSU Trust:

==> picture [458 x 105] intentionally omitted <==

----- Start of picture text -----

1. Number of shares held at the beginning of the year NIL
2. Number of shares acquired during the year through (i) primary issuance (ii) NIL
secondary acquisition, also as a percentage of paid-up equity capital as at the end
of the previous financial year, along with information on weighted average cost of
acquisition per share
3. Number of shares transferred to the employees / sold along with the purpose NIL
thereof
4. Number of shares held at the end of the year. NIL
----- End of picture text -----

Newgen Software Technologies Limited

Annual Report 2020-21

(iii) In case of secondary acquisition of shares by the Trust:

==> picture [458 x 141] intentionally omitted <==

----- Start of picture text -----

Number of shares As a percentage of paid-up equity capital as
at the end of the year immediately preceding
the year in which shareholders’ approval was
obtained
Newgen RSU Trust
Held at the beginning of the year NIL
Acquired during the year NIL
Sold during the year NIL
Transferred to the employees during the year NIL
Held at the end of the year NIL
----- End of picture text -----

For and on behalf of Board of Directors

Date:25[th] May 2021 Place: New Delhi

Diwakar Nigam Chairman & Managing Director DIN: 00263222

Financial Statements

Company Overview

Statutory Reports

Annexure 3

Details Pertaining to Remuneration as required to be disclosed under Section 197 (12) of the Companies Act, 2013 Read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

i. Ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2020-21.

==> picture [479 x 127] intentionally omitted <==

----- Start of picture text -----

Sr. Name of the Director Ratio to median remuneration of the employees
No.
1. Mr. Diwakar Nigam, Chairman & Managing Director 33.54
2. Mr. T. S. Varadarajan, Whole – time Director 18.13
3. Mrs. Priyadarshini Nigam, Whole – time Director 10.76
4. Mr. Kaushik Dutta, Independent Director 4.75
5. Mrs. Padmaja Krishnan, Independent Director 3.65
6. Mr. Saurabh Srivastava, Independent Director 4.63
7. Mr. Subramaniam Ramnath Iyer, Independent 4.75
Director
----- End of picture text -----

ii. Percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2020-21:-

==> picture [480 x 152] intentionally omitted <==

----- Start of picture text -----

Sr. Name of the Person % increase in Remuneration
No.
1. Mr. Diwakar Nigam, Chairman & Managing Director (1.42)
2. Mr. T. S. Varadarajan, Whole – time Director 4.29
3. Mrs. Priyadarshini Nigam, Whole – time Director 13.69
4. Mr. Kaushik Dutta, Independent Director 27.00
5. Mrs. Padmaja Krishnan, Independent Director -
6. Mr. Saurabh Srivastava, Independent Director 27.91
7. Mr. Subramaniam Ramnath Iyer, Independent Director 27.00
8. Mr. Arun Kumar Gupta, Chief Financial Officer 5.87
9. Mr. Aman Mourya, Company Secretary 3.34
----- End of picture text -----*

*Mrs. Padmaja Krishnan was appointed as Independent Director with effect from 24[th] March 2020, hence the said information is incomparable and not provided.

Remuneration of Independent Directors includes only sitting fee and commission on profit.

The remuneration of Key Managerial Personnel includes incentive, ESOP perquisite, if any, to the extent options exercised during the year and includes amount outstanding at the year end.

iii. The number of permanent employees on the rolls of the Company as on 31[st] March 2021 were 2,224. The median remuneration of employees in financial year 2020-21 has increased by 7%.
iv. The average percentile increases already made in the salaries of employees other than managerial personnel in the last financial year was 9.36% and the average percentile increase in the remuneration of managerial personnel (executive directors) was 2.56%. The increase in salaries during the year are based on the remuneration policy/reward philosophy of the Company and due to annual appraisals of employees.
v. The key parameters for any variable component of remuneration availed by the directors:
Executive Directors - Nomination & Remuneration Committee recommends to the Board the commission amount being the variable component of their compensation annually based on their individual responsibilities and contributions to the performance of the organisation.

Non-Executive Directors – Board determines the variable compensation being commission, based on a few parameters such as involvement and time spent in carrying out duties and responsibilities, contributions in their areas of expertise, besides their activities in committees and allied areas for the benefit of the organisation.

vi. The remuneration is in accordance with the Remuneration Policy of the Company which is available on the website of the Company at: https://newgensoft.com.

Newgen Software Technologies Limited

Annual Report 2020-21

Statement of particulars under Section 197(12) of the Act and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, for the year ended 31[st] March 2021 (also includes the details of top ten employees of the Company)

i. The names of top employees in terms of remuneration drawn (remuneration paid in the financial year 2020-21) and the name of every employee of the Company, who - if employed throughout the financial year 2020-21, was in receipt of remuneration which, in the aggregate, was not less than One Crore and Two Lakh rupees:

==> picture [499 x 493] intentionally omitted <==

----- Start of picture text -----

Sr. Name Designation Nature of Remuneration Age Qualification Experience Last Date of
No. employment, Received in years Employment Commencement
whether of Employment
contractual
or otherwise
1. Diwakar Nigam Chairman & Permanent 2,75,02,991 64 MSC, 37 NA He has been on
Managing M. Tech the Board of the
Director Company since
01-04-1993
2. Virender Jeet Sr. Vice Permanent 2,68,40,316 51 B.E 27 NIE - Jaipur 01-12-1992
President,
(Sales and
Marketing/
Product)
3. Surender Jeet Raj Sr. Vice Permanent 1,77,67,455 63 Ph.D. 40 PCS DG 16-08-1993
President- HR
Operations
4. Tarun Nandwani Sr. Vice Permanent 1,73,03,645 48 B.E 27 NA 15-07-1993
President-
Business
Management
5. T.S. Varadarajan Whole-time Permanent 1,48,69,554 68 M.Tech. 37 NA He has been on
Director the Board, since
inception of the
Company.
6. Dushyant Kumar Vice President- Permanent 1,33,48,300 60 B.E 38 Softek Ltd. 16-11-1999
Software
Development
7. Hemant Makhija Vice President Permanent 1,21,17,191 55 MBA 31 Plex Systems 01.08.2019
Inc.
8. Shanmugam Vice President- Permanent 1,13,06,520 48 M.S 29 Replicon 18-03-2019
Nagappan Software Software
Development (India) Pvt Ltd
9. Prashant Sahai Vice President Permanent 1,11,10,183 45 MBA 22 Vicisoft 15-06-1998
Technologies
Pvt.Ltd
10. Ashok Kapoor Vice President- Permanent 1,10,96,037 55 PGDM 29 NIIT 06-04-2015
Software
Development
----- End of picture text -----*

*Prashant Sahai posted & working in Dubai. He is getting remuneration in AED and his remuneration as given above is converted and reported in `.

Remuneration also includes provisions for bonus, variable incentives and ESOP perquisites to the extent options exercised during the year and includes amount outstanding at the year end.

Financial Statements

Company Overview

Statutory Reports

==> picture [501 x 415] intentionally omitted <==

----- Start of picture text -----

ii. Details of employee if employed for a part of the financial year, was in receipt of remuneration for any part of that year,
at a rate which, in the aggregate, was not less than Eight Lakh and Fifty Thousand rupees per month.
Sr. Name Designation Nature of Remuneration Age Qualification Experience Last Date of
No. employment, Received in years Employment Commencement
whether of Employment
contractual
or otherwise
1. Arvind Jha Sr.Vice Permanent 57,92,462 58 B.Tech 33 Pariksha Labs 23.11.2020
President Pvt Ltd
2. Rajvinder Singh Sr.Vice Permanent 49,30,840 54 PGDRM 34 Tecnova 23.11.2020
Kohli President
iii. Particulars of Employees posted and working in a country outside India, not being Director or their relatives, drawing
more than sixty lakh rupees per financial year 2020-21 or five lakh rupees per month:
Sr. Name Designation Nature of Remuneration Age Qualification Experience Last Date of
No. employment, Received in years Employment Commencement
whether of Employment
contractual
or otherwise
1. Anup Verma Business Permanent 71,45,276 44 MBA 13 Oracle Inc 07-07-2019
Development
Manager
2. R.Balaji Regional Sales Permanent 91,26,940 35 MBA 14 Newgen & 15-05-2017
Manager Paripoorna
Software
Solutions
3. Glitty Paul Sr.Business Permanent 77,54,289 37 MBA 12 Intertec 23-02-2016
Development System
Manager
4. Mayank Manager- Permanent 60,19,297 30 MBA 8 N.A 03.06.2013
Sharma Products &
Solutions
5. Zainual Bashar Manager- Permanent 60,75,000 35 MBA 10 NA 01-12-2011
Bhutto Products &
Solutions
----- End of picture text -----

*All above five employees are posted in Dubai and getting remuneration in AED. The given remunerations are converted and reported herewith in `.

Notes:

a) Above remunerations also include provisions for bonus, variable incentives and ESOP perquisites to the extent options exercised during the year and includes amount outstanding, if any, at the year end.
b) Except Mr. Diwakar Nigam, Chairman & Managing Director (holding 26.41% of equity shares himself and 11.39% of equity shares through his spouse) and Mr. T.S. Varadarajan (holding 21.46% of equity shares himself and 6.47% of equity shares through his spouse), no other employees, as listed above, holding, by himself or herself along with his/her spouse and dependent children, 2% or more of equity shares of the Company.
c) None of the employees as listed above is a relative of Director of the Company except below. Except below: -
Mrs. Priyadarshini Nigam, Whole-time Director is the spouse of Mr. Diwakar Nigam, Chairman & Managing Director of the Company.
iv. Details of employee if employed throughout the financial year 2020-21 or part thereof, was in receipt of remuneration in that year which is in excess of that drawn by the Managing Director and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company, except the details of employees forming part of this annexure. Nil

For and on behalf of Board of Directors

Date:25[th] May 2021 Place: New Delhi

Diwakar Nigam Chairman & Managing Director DIN: 00263222

Newgen Software Technologies Limited

Annual Report 2020-21

Annexure 4

SECRETARIAL AUDIT REPORT

(For the financial year ended 31[st] March 2021)

[Pursuant to section 204(1) of the Companies Act, 2013 and rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,

The Members

Newgen Software Technologies Limited

A- 6, Satsang Vihar Marg, Qutab Institutional Area New Delhi-110067

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Newgen Software Technologies Limited (hereinafter called “the Company”). Secretarial audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing us opinion, subject to Annexure “A” to this report, thereon.

Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorised representatives during the conduct of secretarial audit and on the basis of the written representations/explanations received from the management, we hereby report that in our opinion the Company has, during the audit period covering the financial year ended on 31[st] March 2021 (“audit period”) complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliancemechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the company for the financial year ended on 31[st] March 2021, according to the provisions of:

(i) The Companies Act, 2013 (“the Act”) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act, 1956 (SCRA) and the rules made thereunder;
(iii) The Depositories Act, 1996 and the Regulations and bye-laws framed thereunder;
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):
- a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; Not applicable during the period under review.
- b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
- c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; Not applicable during the period under review.
- d. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;
- e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; Not applicable during the period under review.
- f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;
- g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; Not applicable during the period under review.
- h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; Not applicable during the period under review.
- i. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
(vi) The company carries business of software development and related activities for which it has registration with the SEZ Noida and the Management has identified and confirmed the following laws as specifically applicable to the Company:
- a) The Information Technology Act, 2000;
- b) The Special Economic Zone Act, 2005;
- c) The Indian Copyright Act, 1957;
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of foreign direct investment, overseas direct investment;
d) The Patents Act, 1970; and
e) The Trade Marks Act, 1999.

Financial Statements

Company Overview

Statutory Reports

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India;
(ii) The Listing Agreements entered into by the Company with Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

During the period under review the company has complied with the provisions of the Acts, Rules, Regulations, Guidelines, Standards, etc., mentioned above.

We further report that:-

the Board of directors of the company is duly constituted with proper balance of executive directors, non-executive directors and independent directors. The changes in the composition of the Board of Directors that took place during the audit period were carried out in compliance with the provisions of the Act, however, the following changes occurred in the composition of the Board of Directors:
i) Appointment of Ms. Padmaja Krishnan as an Additional Director in the category of Non-Executive, Independent Director with effect from 24[th] March 2020 and which was ratified/ approved by the members of the Company at the 28th Annual General Meeting held on 27.07.2020.
ii) Special resolution was passed for continuation of directorship of Mr. Saurabh Srivastava (DIN: 00380453) as an Independent Director of the Company post attaining the age of 75 (Seventy-five) years, who was appointed originally w.e.f. 30.08.2017.
advance notice is given to all directors to schedule the board meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
all decisions at Board Meetings and Committee Meetings are carried out unanimously as recorded in the minutes of the meetings of the Board or Committees of the Board, as the case may be.

We further report that based on review of compliance mechanism established by the Company and on the basis of the Compliance Certificate(s) issued by the Company Secretary and taken on record by the Board of Directors at their meeting(s), we are of the opinion that there are adequate systems and processes in place in the Company which is commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period there were no specific events/actions having a major bearing on Company’s affairs in pursuance of the above-referred laws, rules, regulations, guidelines, standards, etc.

Signature Name of Auditor : M. Aijaz FCS No. : 6563 Place: Delhi C.P. No. :7040 Date : May 17, 2021 UDIN : F006563C000337850

Newgen Software Technologies Limited

Annual Report 2020-21

Annexure ‘A’

To,

The Members

Newgen Software Technologies Limited

A- 6, Satsang Vihar Marg, Qutab Institutional Area New Delhi-110067

Our report of even date is to be read along with this Annexure.

Maintenance of secretarial record is the responsibility of the management of the company. Our responsibility is to express an opinion on these secretarial records based on our audit.
We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.
We have not verified the correctness and appropriateness of financial records and books of accounts of the company.
Where ever required, we have obtained the Management Representation about the compliance of laws, rules and regulations and happening of events, etc.
The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.
The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.

Place: Delhi Date : 17[th ] May, 2021

Financial Statements

Company Overview Statutory Reports

Annexure 5

Form AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto.

1. Details of contracts or arrangements or transactions not at arm’s length basis

Not Applicable. Newgen Software Technologies Limited (the Company) has not entered into any contract/arrangement/ transaction with its related parties which is not in ordinary course of business or not at arm’s length during FY 2020-21.

2. Details of material contracts or arrangement or transactions at arm’s length basis

The details of transactions with wholly owned subsidiaries are set out in the standalone financial statements forming part of the Board’s Report. The same may be referred for this purpose. The pricing of the transactions with wholly owned subsidiaries are based on the Independent Transfer Pricing Report given by Price Waterhouse & Co., Chartered Accountants which determined the arms-length pricing and are under ordinary course of business. All transactions, based on respective master service agreements, with wholly owned subsidiaries, were placed before the Audit Committee and the Board of Directors on quarterly basis for its review, approval and noting.

==> picture [499 x 169] intentionally omitted <==

----- Start of picture text -----

Name(s) of the Nature of Duration of Salient terms of Date(s) of Aggregate Amount
related party contracts/ the contracts / the contracts or approval Transaction paid as
and nature arrangements/ arrangements/ arrangements by the Value during advances,
of relationship transactions transactions or transactions Board, Financial Year if any:
including if any: (if Material)
the value, if any (Amount in
Lakh)
Newgen Sale of products Ongoing Based on Transfer NA 14,792.03 NIL
Software Inc. USA and services (duration of pricing guidelines
(Material Wholly Back office transaction 147.41
Owned Subsidiary) support services 1 [st] April 2020 -
31 [st] March 2021)
Sub-contracting 2,422.58
expenses
----- End of picture text -----*

Aggregated transaction with a related party shall be considered material if the transaction(s) entered during the financial year, exceeds ten percent of the annual consolidated turnover of the listed entity as per the last audited financial statements of the listed entity. Aggregate transactions, during the finanical year 2020-21 with other respective subisidaries are not material. *Since these RPTs are in the ordinary course of business and are at the arm’s length basis, approval of the Board is not applicable. However, these are reported to the Audit Committee / Board at their quarterly meetings.

Date.: 25[th] May 2021 Place: New Delhi

Diwakar Nigam Chairman & Managing Director DIN: 00263222

Newgen Software Technologies Limited

Annual Report 2020-21

Annexure 6

Annual Report on Corporate Social Responsibility (“CSR”) Activities or Programmes pursuant to Section 135 of the Companies Act, 2013 and Rule 8 of the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021.

1. Brief outline on CSR Policy of the Company:

Newgen’s CSR mission actively contributes to the social and economic development of the communities it operates in. The core philosophy is to empower the less privileged sections of society through an integrated approach to help them realize their full potential and enjoy a good quality of life.

In line with the Sustainable Development Goals (SDGs) and national priorities of promotion of education, Newgen is contributing to the Schedule VII thematic areas of Promotion of Education and Eradication of Hunger, Poverty, and Malnutrition.

Newgen CSR Flagship Program:

a. Newgen Digital Discovery Paathshala (NDDP).

Newgen’s Corporate Social Responsibility intervention ‘Newgen Digital Discovery Paathshala’ (“NDDP”) is designed to impart knowledge to school children using web-based technology and transforming traditional classroom teachings into fun learning sessions. Under the aegis of NDDP, nearly 500 students were provided digital devices that included I-pads, tablets and smartphones to bridge the technology accessibility gap among the beneficiaries and the skills of our NDDP beneficiaries were enhanced by creating a platform for them to research the internet using these devices and develop creative content. It was ensured that the online connectivity is made user friendly and free of cost.

NDDP continues to have its footprints spread across three schools in the Delhi region - Government Girls Senior Secondary Schools in Harkesh Nagar and Tekhand, and Soami Nagar Model School, a trust-managed school. Over 3,000 students of classes 6[th] to 11[th] benefit from the program. In the past one year, the digitally sound targeted students regularly attended the online sessions with the devices and participated completely. Regular online classes have been conducted for the students. The active participation of the students in interactive activities was appreciated by regular distribution of gifts, happiness boxes and prizes.

The alumni association initiative has been instituted under the umbrella of NDDP to strengthen its impact. The program reconnects ex-NDDP beneficiaries at the project locations of Harkesh Nagar, Tekhand, Begumpur and Kalkaji. The initiative actively engages the alumni with a handholding platform that is flexible, informative, and educationally powerful. The first session was successfully held in December 2019 with 120 alumni. The current batch consists of 250 alumni students with whom regular online classes are being conducted on personality development, life skills and career counselling.

With the COVID-19 pandemic, a large section of the population was affected with shortage of food. Without proper nutrition, the target group of students possibly could not concentrate in their education and their growth would be impacted as well. To prevent this, Newgen distributed ‘Happiness Kits’ that comprised of monthly rations of non-perishable food items for students and their families. 400 happiness kits were distributed to the students to support them through the difficult time and giving them hope for a better tomorrow.

b. Remedial Education Program.

Newgen collaborated with the NGO KHUSHII (Kinship for Humanitarian, Social and Holistic Intervention in India) to offer remedial classes at MCD feeder schools for students from classes 1[st] to 5[th] and prepare them for senior secondary education. The four project locations are Pratibha Primary School, Harkesh Nagar (1,982 students), Tekhand (1,016 students), Sangam Vihar (760 students), and Nandambakkam, Chennai (730 students). Over 4,000 students benefit from this program.

This initiative has augmented the impact of NDDP as the targeted students will be associated with Newgen CSR for an extended period of eleven years, creating an opportunity to unlock their full potential. The sessions in 2020-2021 have been conducted over online platform with the students being regular attendees.

Financial Statements

Company Overview

Statutory Reports

c. Partnership with KK Academy, Lucknow

Newgen collaborated with KK Academy to ensure that children from underprivileged families receive a holistic education. The academy is based in Lucknow and is recognized by the state board to cater to students from classes nursery to 8[th] . Newgen will be working with the academy to empower students from different marginalized backgrounds and help them become literate and confident, thereby bringing social transformation through education.

d. Mid-Day Meal Programme.

To complement the growth and well-being of children in their formative years, Newgen supports the mid-day meals of nearly 9000 students in partnership with the Akshaya Patra Foundation at the government schools in the remote areas of Vrindavan, Jhalawar, and Guwahati.

As relief response to COVID-19 pandemic, in addition to the mid-day meals, Newgen collaborated with Akshaya Patra Foundation to distribute ‘Happiness Kits’. These kits primarily included monthly ration of non-perishable food items and was distributed to over 17,000 families in Vrindavan, Jhalawar, and Lucknow.

e. Personality Development Sessions.

The personality development program caters to the children from economically weaker backgrounds and helps them build self-confidence, develop soft skills, and provide career counselling and personal guidance. The session is held twice every month by an organization called I-AM. In 2020-21, Newgen supported nearly 200 students through these sessions.

2. Composition of the CSR Committee:

==> picture [479 x 87] intentionally omitted <==

----- Start of picture text -----

Sl. Name of Director Designation Number of meetings Number of meetings of
No. / Nature of CSR Committee held CSR Committee attended
of Directorship during the year during the year
1 Mrs. Priyadarshini Nigam Whole-Time Director 1 1
2 Mr. Kaushik Dutta Independent Director 1 1
3 Mr. T.S. Varadarajan Whole-Time Director 1 1
----- End of picture text -----

3. Provide the web-link where Composition of CSR committee, CSR Policy and CSR projects approved by the board are disclosed on the website of the Company: https://newgensoft.com/

4. Provide the details of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, if applicable (attach the report): Not Applicable

5. Details of the amount available for set off in pursuance of sub-rule (3) of rule 7 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and amount required for set off for the financial year, if any:

==> picture [479 x 57] intentionally omitted <==

----- Start of picture text -----

Sl. Financial Year Amount available for Amount required to be
No. set-off from preceding set-off for the financial
financial years (in ) year, if any (in )
Nil
----- End of picture text -----

6. Average net profit of the company as per section 135(5): ` 10,054.48 Lakh

7. (a) Two percent of average net profit of the company as approved by the Board: ` 201.09 Lakh

(b) Surplus arising out of the CSR projects or programmes or activities of the previous financial years: NIL
(c) Amount required to be set off for the financial year, if any: NIL
(d) Total CSR obligation for the financial year (7a+7b-7c): ` 201.09 Lakh

Newgen Software Technologies Limited

Annual Report 2020-21

8. (a) CSR amount spent or unspent for the financial year:

==> picture [479 x 88] intentionally omitted <==

----- Start of picture text -----

Amount Unspent
Total Amount Spent Total Amount transferred Amount transferred to any fund specified under
for the Financial to Unspent CSR Account Schedule VII as per second proviso to section 135(5).
Year. (in ` Lakh) as per section 135(6).
Amount Date of transfer Name of the Fund Amount Date of Transfer
201.27 NIL Not Applicable Not Applicable NIL Not Applicable
----- End of picture text -----

(b) Details of CSR amount spent against ongoing projects for the financial year:

(1) (2) (3) (4)	(5) (6) (7) (8) (9) (10) (11)	(5) (6) (7) (8) (9) (10) (11)
Sl. No. Name of the Project. Item from the list of activities in Schedule VII of the Act. Local area (Yes/No).	Location of the project. Project duration. Amount allocated for the project Amount spent in the current fnancial Year Amount transferred to Unspent CSR Account for the project as per Section 135(6) Mode of Implementation - Direct (Yes/No). Mode of Implementation - Through Implementing Agency State District Name CSR Registration Number
		Name CSR Registration Number
	Not Applicable

(c) Details of CSR amount spent against other than ongoing projects for the financial year:

Details of CSR amount spent against other than	Details of CSR amount spent against other than	ongoing projects for the fnancial year:	ongoing projects for the fnancial year:
(1) (2) (3) (4)		(5) (6) (7) (8)
Sl. No Name of the Project Item from the list of activities in Schedule VII of the Act. Local area (Yes/ No).		Location of the project. Amount spent for the project (in`Lakh). Mode of implemen- tation - Direct (Yes/No). Mode of implementation - Through implementing agency. State District Name CSR Registration Number
			Name CSR Registration Number
1 Newgen Digital Discovery Paathshala Clause (ii) of Schedule VII: Promoting Education Yes No		New Delhi South Delhi 74.55 Yes	NA NA
	No	Uttar Pradesh Lucknow 8.23 No	Kiddy Kingdom Academy Samiti SRN- T15137011
2 Personality Development Sessions Clause (ii) of Schedule VII: Promoting Education Yes		New Delhi South Delhi 1.17 Yes	NA NA
3 Remedial Education Programme Clause (ii) of Schedule VII: Promoting Education Yes		New Delhi South Delhi 57.62 No	KHUSHII CSR 00001135
4 Remedial Education Programme Clause (ii) of Schedule VII: Promoting Education Yes		Tamil Nadu Chennai 17.64 No	KHUSHII CSR 00001135
5 Mid-Day Meal Programme Clause (i) of Schedule VII: Eradicating hunger, poverty and malnutrition No		Rajasthan Jhalawar 29.00 No	Akshaya Patra Fundation CSR 00000286
6 Mid-Day Meal Programme Clause (i) of Schedule VII: Eradicating hunger, poverty and malnutrition No		Uttar Pradesh Vrindavan 11.58 No	Akshaya Patra Fundation CSR 00000286
Total		199.79

(d) Amount spent in Administrative Overheads: ` 1.48 Lakh
(e) Amount spent on Impact Assessment, if applicable: Not Applicable
(f) Total amount spent for the Financial Year: ` 201.27 Lakh

(8b+8c+8d+8e)

Financial Statements

Company Overview

Statutory Reports

(g) Excess amount for set off, if any: Nil

Sl.	Particular	Amount (in`)
No.
(i)	Twopercent of average netproft of the companyasper section 135(5)	201.09 Lakh
(ii)	Total amount spent for the Financial Year	201.27 Lakh
(iii)	Excess amount spent for the fnancialyear [(ii)-(i)]	17,544.84/-
(iv)	Surplus arising out of the CSR projects or programmes or activities of the previous	Nil
	fnancialyears, if any
(v)	Amount available for set of in succeedingfnancialyears [(iii)-(iv)]	17,544.84/-

9. (a) Details of Unspent CSR amount for the preceding three financial years:

Preceding	Amount	Amount spent	Amount transferred to any fund specifed	Amount transferred to any fund specifed	Amount transferred to any fund specifed	Amount transferred to any fund specifed	Amount
Financial	transferred to	in the	under Schedule VII as per		section 135(6), if		remaining to
Year.	Unspent CSR	reporting		any.			be spent in
	Account under	Financial Year					succeeding
	section 135 (6)						fnancial
							years.
			Name	Amount		Date of transfer.	Amount
			of the				remaining to
			Fund				be spent in
							succeeding fnancial
							years.
			Not Applicable

(b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial years:

==> picture [479 x 129] intentionally omitted <==

----- Start of picture text -----

(1) (2) (3) (4) (5) (6) (7) (8) (9)
Sl. Project ID. Name of the Financial Project Total amount Amount Cumulative Status of the project -
No. Project. Year in which duration. allocated for spent amount spent Completed /Ongoing.
the project was the project on the at the end of
commenced. project in reporting
the Financial Year.
reporting
Financial
Year.
Not Applicable
----- End of picture text -----

10. In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or acquired through CSR spent in the financial year (asset-wise details).

(a) Date of creation or acquisition of the capital asset(s).

Not Applicable

(b) Amount of CSR spent for creation or acquisition of capital asset.

Not Applicable

(c) Details of the entity or public authority or beneficiary under whose name such capital asset is registered, their address etc.
Not Applicable
(d) Provide details of the capital asset(s) created or acquired (including complete address and location of the capital asset).

Not Applicable

Newgen Software Technologies Limited

Annual Report 2020-21

11. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per section 135(5):

Not Applicable

For Newgen Software Technologies Limited

Diwakar Nigam

Chairman & Managing Director DIN: 00263222

Priyadarshini Nigam Chairperson (CSR Committee) DIN:00267100

Date: 25[th] May 2021 Place: New Delhi

Financial Statements

Company Overview

Statutory Reports

Annexure - 7

BUSINESS RESPONSIBILITY REPORT

(As per Regulation 34(2) of the SEBI

(Listing Obligations and Disclosure Requirements) Regulations, 2015)

SECTION A: General Information about the Company

==> picture [499 x 487] intentionally omitted <==

----- Start of picture text -----

1. Corporate Identity Number (CIN) of the Company : L72200DL1992PLC049074
2. Name of the Company : Newgen Software Technologies Limited
3. Registered address : A-6, Satsang Vihar Marg, Qutab Institutional Area,
New Delhi - 110067
4. Website : https://newgensoft.com
5. E-mail id : [email protected]
6. Financial Year reported : 1 [st] April 2020 to 31 [st] March 2021
7. Sector(s) that the Company is engaged in : Computer Programming, Consultancy and Related services.
(industrial activity code-wise)
NIC Code of the activities - 620
8. List three key products/services that the : Product Solutions and Services in:
Company manufactures/provides (as (i) Enterprise Content Management
in balance sheet) (ii) Business Process Management
(iii) Customer Communication Management.
For detailed description on the Company’s products/
services kindly refer Management Discussion and
Analysis Report, as annexed to the Board’s Report.
9. Total number of locations where business : (i) Details of International Locations:
activity is undertaken by the Company USA: United State of America, Canada
APAC: Singapore, Australia
EMEA: UK, Dubai
(ii) Details of National Locations:
New Delhi, Noida- Uttar Pradesh,
Mumbai, Chennai.
10. Markets served by the Company - Local/State/ : Company serves the Indian as well as International markets.
National/International
For detailed description kindly refer Management and
Discussion Analysis Report annexed to the Board’s Report.
SECTION B: Financial Details of the Company
1. Paid up Capital (INR) : 6995.5701 Lakh
2. Total Turnover (INR) : 67,262.44 Lakh
3. Total profit after taxes (INR) : 12,648.23 Lakh
4. Total Spending on Corporate Social : 2% of average of net profit of the Company made during the
Responsibility (CSR) as percentage of 3 (three) immediately preceding financial year.
profit after tax (%)
5. List of activities in which expenditure in 4 : Kindly refer Corporate Social responsibility Report, annexure
above has been incurred 6 to the Board’s Report.
----- End of picture text -----

SECTION C: Other Details

1. Does the Company have any Subsidiary Company/ Companies?

Yes.

2. Do the Subsidiary Company/ Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of such subsidiary company(ies)

Yes. All 6 (six) subsidiary Companies participate in the BR initiatives.

Newgen Software Technologies Limited

Annual Report 2020-21

3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities? [Less than 30%, 30-60%, More than 60%]

Yes, 30-60% of the entities that the Company does business with, participate in the BR initiatives of the Company. We have a Purchase process management policy and a Supplier Code of Conduct policy, which extends to all suppliers who conduct business with us.

At the time of sharing aforesaid Code, in most of the cases, the officials of the Company conduct vendor meets and participates in various knowledge sharing platforms with an objective to share the BR initiatives with its suppliers.

SECTION D: BR Information

1. Details of Director(s) responsible for BR

(a) Details of the Director/Directors responsible for implementation of the BR policy/policies:

==> picture [407 x 40] intentionally omitted <==

----- Start of picture text -----

i. DIN : 00263222
ii. Name : Mr. Diwakar Nigam
iii. Designation : Chairman & Managing Director
----- End of picture text -----

(b) Details of the BR head:

==> picture [407 x 102] intentionally omitted <==

----- Start of picture text -----

Sl. Particulars Details
No.
i. DIN 00263222
ii. Name Mr. Diwakar Nigam
iii. Designation Chairman & Managing Director
iv. Telephone number +91-11-4077 0100
v. E-mail id [email protected]
----- End of picture text -----

2. Principle-wise (as per NVGs) BR Policy/ Policies

The National Voluntary Guidelines (NVGs) on Social, Environmental and Economic Responsibilities of Business released by the Ministry of Corporate Affairs (MCA) has adopted nine areas of Business Responsibility which are briefed as below.

P1: Businesses should conduct and govern themselves with Ethics, Transparency and Accountability.

This is embedded in the Company’s Code of Ethics and Business Conduct, Anti-Bribery & Anti-Corruption Policy, Disciplinary Action Policy, Code of Conduct for Directors and Senior Management Personnel, Whistle Blower Mechanism and Policy on Prevention of Sexual Harassment of Women at Workplace.

P2: Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle.
This is embedded in the Company’s Code of Ethics and Business Conduct, Policy on Environment Sustainability, Information Security Policy, Newgen’s Quality Policy and other Policies/process as required by Newgen’s ISMS and QMS.
P3: Businesses should respect and promote the well-being of all employees, including those in their value chains.

This is embedded in the Company’s Code of Ethics and Business Conduct, Recruitment Policy, Compensation philosophy and promotion guidelines, Policy on Prevention of Sexual Harassment of Women at Workplace and Whistle Blower Mechanism.

P4: Businesses should respect the interests of and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized.
This is embedded in the Company’s Code of Ethics and Business Conduct, Whistle blower Mechanism, CSR Policy, Policy on Environment Sustainability and Supplier Code of Conduct policy.

P5: Businesses should respect and promote human rights.

This is embedded in the Company’s Code of Ethics and Business Conduct, Policy on Prevention of Sexual Harassment of Women at Workplace, Anti-Bribery & Anti-Corruption Policy, Disciplinary Action Policy and Whistle Blower Mechanism.

Financial Statements

Company Overview Statutory Reports

P6: Businesses should respect and make efforts to protect and restore the environment.
This is embedded in the Company’s Policy on Environment Sustainability.
P7: Businesses, when engaged in influencing public and regulatory policy, should do so in a manner that is responsible and transparent.

This is embedded in the Company’s Code of Ethics and Business Conduct, Anti-Bribery & Anti-Corruption Policy, Disciplinary Action Policy, Policy on Prevention of Sexual Harassment of Women at Workplace and Whistle blower Mechanism.

P8: Businesses should promote inclusive growth and equitable development.
This is embedded in the CSR policy.
P9: Businesses should engage with and provide value to their consumers in a responsible manner.

The Company has focused on continuous improvements in Customer engagements as well as internal operations leveraging best-in-class methodologies and information security practices. Cross-functional Teams monitor and optimize the processes & policies to meet the ever-growing demands of Newgen’s engagements.

The Company’s commitment towards customer satisfaction and resilient systems/services has resulted in the adaptation of related industry standards/acts namely PCI-DSS, HIPAA, SOC-1 Type-2 and SOC-2+HITRUST Type-2 attestation. The Company also drives the process and product improvements based on Voice of Customer, i.e. Customer Satisfaction Surveys (CSS).

(a) Details of compliance (Reply in Y/N):

==> picture [460 x 321] intentionally omitted <==

----- Start of picture text -----

Sl. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
No.
i. Do you have a policy/policies for the Y Y Y Y Y Y Y Y Y
respective Principles
ii. Has the policy being formulated in consultation with Y Y Y Y Y Y Y Y Y
the relevant stakeholders?
iii. Does the policy conform to any national / Y Y Y Y Y Y Y Y Y
international standards? If yes, specify? (50 words) [#1]
iv. Has the policy being approved by the Board? Is yes, Y Y Y Y Y Y Y Y Y
has it been signed by MD/ owner/ CEO/ appropriate
Board Director? [#2]
v. Does the company have a specified committee Y Y Y Y Y Y Y Y Y
of the Board/ Director/ Official to oversee the
implementation of the policy?
vi. Indicate the link for the policy to be viewed online? [#3] Y Y Y Y Y Y Y Y Y
vii. Has the policy been formally communicated to all Y Y Y Y Y Y Y Y Y
relevant internal and external stakeholders?
viii. Does the company have in-house structure to Y Y Y Y Y Y Y Y Y
implement the policy/ policies
ix. Does the Company have a grievance redressal Y Y Y Y Y Y Y Y Y
mechanism related to the policy/ policies to
address stakeholders’ grievances related to the
policy/ policies?
x. Has the Company carried out independent audit/ Y Y Y Y Y Y Y Y Y
evaluation of the working of this policy by an internal
or external agency?
----- End of picture text -----

1 These policies have been devised in confirmation to respective regulations/ standards that come into effect, time to time.

2 Mandatory Policies are approved by the Board / or its Committee and signed by the Chairman & Managing Director of the Company. Some routine Policies are approved and signed by the Chairman & Managing Director of the Company.

3 All Newgen policies are uploaded on the NMS site on the Newgen intranet for the information & implementation by the internal stakeholder and also available on the Newgen’s website, as per the statutory requirements.

Newgen Software Technologies Limited

Annual Report 2020-21

(b) If answer to the question at Serial number 1 against any principle, is ‘No’, please explain why? Not Applicable

3. Governance related to BR

(a) Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year. Annually.
(b) Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it is published?

The Business Responsibility Report (BRR) will form part of the Annual Report and such report will be published on Annual basis. The same is available on the Company’s website at: https://newgensoft.com/ company/investor-relations/

SECTION E: Principle-Wise Performance Principle 1:

1.1 Does the policy relating to ethics, bribery and corruption cover only the Company? Yes/ No. Does it extend to the Group/Joint Ventures/ Suppliers/Contractors/NGOs /Others? The policy relating to ethics, bribery and corruption covers not only Newgen Software Technologies Limited (“Newgen” or “the Company”), but extends to its all the subsidiaries, suppliers, contractors and other persons associated with the Company.
1.2 How many stakeholder complaints have been received in the past financial year and what percentage was satisfactorily resolved by the management? If so, provide details thereof, in about 50 words or so.
No such complaints related to ethics, bribery and corruption was received in the past financial year.
For details on shareholders/investor complaints, refer the Corporate Governance report, annexure 8 of this Annual Report.

Principle 2:

2.1 List up to 3 of your products or services whose design has incorporated social or environmental concerns, risks and/or opportunities.
We work on digital-transformation projects that significantly impact the socio-economic progress of enterprises especially in the banking and financial services and government sector.
a) The client is a leading insurance company with more than 250 million customers across India. It was looking to increase its operational efficiency
- by automating enterprise-wide processes and enhance customer experience with personalized communications. The client on-boarded Newgen and implemented our flagship products - intelligent process automation (BPM), contextual content services (ECM), and omnichannel customer engagement (CCM), along with the enterprise mobility framework. The insurer leveraged Newgen’s solutions to achieve - reduced operational costs, improved policy record management, enhanced customer service, and many more benefits.
b) A New York-Based Bank ensured smooth and continued operations during COVID-19 using Newgen’s Commercial Lending Solution. One of the largest banks in the United States with around 240 branch offices had implemented Newgen’s commercial loan origination solution (CLOS) to streamline the overall lending process. Due to the outbreak of the COVID-19 epidemic, the bank needed to immediately enable employees to operate remotely without impacting the speed and quality of services. Using Newgen’s CLOS application, the bank digitized its lending cycle and automated its operations, enabling a quick and hassle-free shift to the remote working environment.
c) The client is a leading financial institution in the Middle East, with nearly four decades of experience. It on boarded Newgen to automate its manual processes, offer premium digital services to its customers, and enhance their experience. With Newgen’s retail lending software, the bank automated its end-to-end retail lending process, from pre-screening, application processing, and underwriting to disbursal in a paperless and electronically - driven workflow environment. By implementing the solution, it achieved substantial increase in the number of customer transactions in branches, increased the number of loans disbursed on the same day of application, reduced the turnaround time, improved process efficiency, enhanced visibility and control and delivered better customer experience.
2.2 For each such product, provide the following details in respect of resource use (energy, water, raw material etc.) per unit of product (optional).

==> picture [225 x 92] intentionally omitted <==

----- Start of picture text -----

(a) Reduction during sourcing/ Not
production/ distribution achieved Applicable
since the previous year throughout
the value chain?
(b) Reduction during usage by Not
consumers (energy, water) has been Applicable
achieved since the previous year?
----- End of picture text -----

Financial Statements

Company Overview

Statutory Reports

As the Company is into software development services, our products are not resource intensive and hence reduction is negligible. However, being a responsible entity, we track the consumption of resources critically.

2.3 Does the company have procedures in place for sustainable sourcing (including transportation)? If yes, what percentage of your inputs was sourced sustainably? Also, provide details thereof, in about 50 words or so.
b) Towards minimizing usage of paper products, the Company has implemented use of ceramic cups & glasses for employees to consume tea & coffee. Through this step we have eliminating the usage of paper products for tea/coffee machines leading to less wastage.
c) We have worked towards stopping single use plastic products and in our cafeteria, we are no more using plastic products for daily consumption.

Yes.

Newgen has a Purchase process management policy and the Supplier Code of Conduct Policy, which extends to all suppliers who conduct business with us. Newgen prefers suppliers with sustainable practices and ability to deliver on key strategic growth initiatives.

More than 90% our inputs are sources sustainability. Specifications of CAPEX items are finalized by considering the vendor’s sustainability aspects and they have to supply items with desired Specifications. Our supplier analysis also takes into account the sourcing strategy of the supplier and proximity of the supplier to the location where the order request has been raised. This helps improve logistics and saves time, cost and emissions from unwanted transportation through longer routes. We review supplier’s behaviors, which help us understand the potential risks within the Supply Chain from Environmental, Social Governance perspective.

2.4 Has the company taken any steps to procure goods and services from local & small producers, including communities surrounding their place of work? The Company gives preference to local and small producers which are based near its offices.
2.5 If yes, what steps have been taken to improve their capacity and capability of local and small vendors?
Development of Local Vendors is a continuous process, and their empanelment is done, time to time, based on references, direct contacts and interactions with them.
2.6 Does the company have a mechanism to recycle products and waste? If yes what is the percentage of recycling of products and waste (separately as <5%, 5-10%, >10%). Also, provide details thereof, in about 50 words or so.
Yes, it is >10%. The company has a mechanism to recycle waste, but we don’t deal with product recycling as we do not manufacture such products. Newgen has Policy on Environment Sustainability. The Company has taken the following initiative to recycle products and waste.
a) Initiated a project to reuse wastewater from RO plants in our facilities. This water is used in mopping, cleaning etc.
d) We have also entered into an agreement with one NGO for recycling of paper. We are collecting all waste papers/newspaper and giving to that NGO, who in lieu of these wastepaper would provide us recycled stationary products free of cost. At the same time, they plant a tree on company’s behalf, if we give them 1 ton of paper to recycle, we would be saving 17 trees.
e) Newgen also took initiative on preventing food wastage in cafeteria. The Company gets the waste food weighted and the wastage quantity gets displayed on board in cafeterias, then it gets collected by NGO to feed animals / good quality waste food gets distributed to feed people.

Principle 3:

3.1 Please indicate the Total number of employees of the Company (standalone).
2921 employees (including employees under probation/ temporary/contractual)
3.2 Please indicate the Total number of employees hired on temporary/ contractual/ casual basis (standalone).
420 employees.
3.3 Please indicate the Number of permanent women employees (standalone).
637 permanent women employees
3.4 Please indicate the Number of permanent employees with disabilities
11 employees
3.5 Do you have an employee association that is recognized by management? No
3.6 What percentage of your permanent employees is members of this recognized employee association? Not Applicable
3.7 Please indicate the Number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last financial year and pending, as on the end of the financial year.

Newgen Software Technologies Limited

Annual Report 2020-21

==> picture [245 x 169] intentionally omitted <==

----- Start of picture text -----

Sl. Category No of No of
No. complaints complaints
filed pending
during the as on end
financial of the
year financial
year
i. Child labour/ Nil Nil
forced labour/
involuntary labour
ii. Sexual harassment Nil Nil
iii. Discriminatory Nil Nil
employment
----- End of picture text -----

3.8 What percentage of your under mentioned employees were given safety & skill up-gradation training in the last year? (Skill upgradation training info can be taken from L&D team – total number of training days during the year)

Principle 5:

5.1 Does the policy of the Company on human rights cover only the Company or extend to the Group/Joint Ventures/Suppliers/ Contractors/NGOs/Others?
- The principles stated in our code and policies which include respect for human rights and dignity of all stakeholders, extend to the group, suppliers and all those who work with us.
5.2 How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the management?
- No complaint related to violation of fundamental human rights of individuals was received during the past financial year. However, for details of complaints related to shareholders/investor please refer question number 2 of Principle 1 of this report.
Total Number of training during the year: 205
(a) Permanent Employees participant: 82%
(b) Permanent Women Employees participant: 74%
(c) Casual/Temporary/Contractual Employees: 11%
(d) Employees with Disabilities: 100%

Principle 4:

4.1 Has the company mapped its internal and external stakeholders? Yes/No
Yes, the Company has mapped its internal and external stakeholders.

Internal Stakeholders of the Company include employees, senior leaders, managers, Board of Directors, and the support staff.

The external stakeholders include customers, investors, regulatory bodies, Banks, Suppliers, media and the communities the Company engages through its CSR programme.

4.2 Out of the above, has the company identified the disadvantaged, vulnerable & marginalized stakeholders? Yes
4.3 Are there any special initiatives taken by the company to engage with the disadvantaged, vulnerable and marginalized stakeholders. If so, provide details thereof, in about 50 words or so. Yes.

The Company aims to address the needs of the disadvantaged, vulnerable and marginalized sections of the society through its CSR programs. For detail description, kindly refer the annexure 6 of the Board’s Report relating to the CSR activities.

Principle 6:

6.1 Does the policy related to Principle 6 cover only the Company or extends to the Group/Joint Ventures/Suppliers/Contractors/NGOs/others.
Yes. The policy and practices related to said principle extends to the Company, its wholly owned subsidiaries and also extend to suppliers, contractors, NGOs and others.
6.2 Does the company have strategies/ initiatives to address global environmental issues such as climate change, global warming, etc.? Y/N. If yes, please give hyperlink for webpage etc.

Newgen has a Policy on Environmental Sustainability and we strive to achieve Excellence in Environmental Sustainability in its area of operations by:

a) Integrating Environmental considerations into our all areas of operations, taking into account our environmental risks, responsibilities and organizational capability.
b) Reducing our Ecological footprint through optimized utilization of natural resources including land, water and by ensuring the responsible use of energy throughout our operations including conserving energy, improving energy efficiency, and giving preference to renewable over non-renewable energy wherever feasible.

Financial Statements

Company Overview

Statutory Reports

c) Reducing and working towards the elimination of the use of plastic products by becoming Plastic Free.
d) Introducing more sustainable and green products.
e) Preventing pollution and minimizing all type of waste by adopting Reduce-ReuseRecycle philosophy.
6.3 Does the company identify and assess potential environmental risks? Y/N
Yes, Company has identified the potential environmental risks and for an initiative the Company has implemented the Environment Sustainability Policy.
6.4 Does the company have any project related to Clean Development Mechanism? If so, provide details thereof, in about 50 words or so. Also, if yes, whether any environmental compliance report is filed?
Not Applicable
6.5 Has the company undertaken any other initiatives on – clean technology, energy efficiency, renewable energy, etc. Y/N, If yes, please give hyperlink for web page etc.

Yes.

Following initiatives are taken by the Company:

a) PNG Genset capacity of 125 KVA for emergency efficiency.
b) Solar panel capacity of 19 KVA installed for renewable Energy.
c) Installed a PNG Gas pipeline, at Noida office, to the kitchen where meals for close to 1200 staff is prepared.
6.6 Are the Emissions/Waste generated by the company within the permissible limits given by CPCB/SPCB for the financial year being reported? Yes
6.7 Number of show cause/ legal notices received from CPCB/SPCB which are pending (i.e. not resolved to satisfaction) as on end of Financial Year. Nil

Principle 7:

7.1 Is your company a member of any trade and chamber or association? If Yes, Name only those major ones that your business deals with.

Yes, we are a member of Nasscom and CII. We are also a member in few banking associations in US regions such as ABA etc.

7.2 Have you advocated/lobbied through above associations for the advancement or improvement of public good? Yes/No; if yes specify the broad areas (drop box: Governance and Administration, Economic Reforms, Inclusive Development Policies, Energy security, Water, Food Security, Sustainable Business Principles, Others) No

Principle 8:

8.1 Does the company have specified programmes/ initiatives/projects in pursuit of the policy related to Principle 8? If yes details thereof.
Yes, please refer question number 3 of Principle 4 of this report.
8.2 Are the program/projects undertaken through in-house team/own foundation/external NGO/ government structures/any other organization?
The Company’s CSR program/projects are being implemented through directly by the in-house CSR team and external NGOs.
8.3 Have you done any impact assessment of your initiative?
Yes. For the core CSR initiative, Newgen Digital Discovery Paathshala, a comprehensive CSR yearly report was prepared in 2020-21. As for the partner programs, NGOs are liable to track the impact and yearly progress of the initiatives that are being implemented by them on ground.
8.4 What is your company’s direct contribution to community development projects- Amount in INR and the details of the projects undertaken?
For details, kindly refer annexure 6 of the Board’s Report relating to the CSR activities.
8.5 Have you taken steps to ensure that this community development initiative is successfully adopted by the community? Please explain in 50 words, or so.

To ensure that initiatives are benefiting the targeted stakeholders and the learning of the same are adopted by the community, a comprehensive plan has been created. In 2020-21, online educational initiatives were taken to support beneficiaries and stakeholders. Spreading awareness of the pandemic, generating information about online platforms, providing support to enhance quality of life. Example, our NDDP program received enormous support from the parents of the students, we are also involving mothers of our beneficiaries and providing them with the digital learning experience by generating awareness on various thematic areas.

Newgen Software Technologies Limited

Annual Report 2020-21

Principle 9:

9.1 What percentage of customer complaints/ consumer cases are pending as on the end of financial year?

For financial year 2020-21, we have addressed all customer complaints/ cases and there are no major customer grievances pending as on 31[st] March 2021.

Customer success is our highest priority. We are focused on helping our customers achieve their digital transformation objectives while delivering value to their own customers. Enterprises globally trust us for our commitment toward our customers. Our customer centric culture spans across the organization ensuring better services, experience and a better value for money for our customers. Customer escalations and complaints are treated with utmost importance in the organization. A well-established system is in place for tracking all critical customer escalations and to expedite necessary actions required to close these complaints quickly.

9.2 Does the company display product information on the product label, over and above what is mandated as per local laws? Yes/No/N.A. / Remarks (additional information)

Not Applicable, as the Company is in the business of IT and software related services.

9.3 Is there any case filed by any stakeholder against the company regarding unfair trade practices, irresponsible advertising and/or anti-competitive behavior during the last five years and pending as on end of financial year. If so, provide details thereof, in about 50 words, or so.

There has been no case filed by any stakeholder against Newgen regarding unfair trade practices, irresponsible advertising and/or anticompetitive behaviour during the last five years.

9.4 Did your company carry out any consumer survey/ consumer satisfaction trends?
The Company’s commitment towards improving customer satisfaction has led to the adoption of industry-standard measurements of Net Promoter Score (NPS) and Customer Satisfaction Score (CSAT). The Company captures NPS and CSAT at every milestone and major interaction with our customers, starting from the win/loss interview and user acceptance testing to the completion of successful implementations and support incidents. A neutral customer satisfaction survey is conducted by Kantar IMRB to measure overall customer NPS score and get qualitative and quantitative information for appropriate corrective action, if needed. This voice of customer also drives process and product improvements in the Company.

For and on behalf of Board of Directors

Diwakar Nigam Date: 25[th] May 2021 Chairman & Managing Director Place: New Delhi DIN: 00263222

Financial Statements

Company Overview Statutory Reports

Annexure – 8

REPORT ON CORPORATE GOVERNANCE

I. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE:

Your Company’s philosophy on Corporate Governance envisages accomplishment of high level of transparency, integrity and accountability in the conduct of its businesses and accords importance to regulatory compliances. These principles have evolved, over the years, from the Company’s culture of continuous innovation and rich experiences gathered from the past. The Company recognizes that good governance is a continuing exercise and reiterates its commitment to pursue highest standards of corporate governance in the overall interest of its stakeholders.

Our core principles represent the edifice of our two-tier governance model, with the Board of Directors and the Committees of the Board at the apex, and the management structure at the operational level. The Board and its Committees guide, support and complement the management team’s ideas and initiatives, which in turn assumes accountability, strives to achieve the set objectives and enhances value creation for all.

II. BOARD OF DIRECTORS:

The composition of the Board is in conformity with the requirements of the Companies Act, 2013 (the “Act”) including the rules framed thereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”). The composition of the Board represents an optimal mix of professionalism, knowledge, experience and enables the Board to discharge its responsibilities and provide effective leadership to the business.

(i) As on 31[st] March 2021, the Board comprises of 7 (seven) Directors, out of which 3 (three) Directors are Executive Directors and 4 (four) Directors are Non-Executive Directors. 2 (two) Executive Directors are Promoter Directors, and one Executive Director is the member of promoter group. All the 4 (four) Non-Executive Directors are Independent Directors including 1 (one) woman Independent Director.
(ii) Based on the declarations received from the Independent Directors, the Board of Directors has confirmed that they meet the criteria of Independence as mandated by Regulation 16(1)(b) of the SEBI Listing Regulations and that they are independent of the management. The Company has issued formal letters of appointment to Independent Directors, whenever required, in the manner as provided in the Act and SEBI Listing Regulations.
(iii) None of the Directors on the Board holds directorships in more than 10 (ten) public companies (Listed or Unlisted). None of the Independent Directors serves as an independent director on more than 7 (seven) listed entities. Necessary disclosures about their Directorship(s) and status of Committee’s Membership(s)/ Chairpersonship(s) in other Companies (Listed or Unlisted) have been made.
(iv) The names and categories of the Directors on the Board, their attendance at the last Annual General Meeting (“AGM”), number of Directorship(s) and the status of Committee Membership(s)/ Chairperson(s) held by them in other Companies (Listed or Unlisted), as at 31[st] March, 2021 are given herein below:

==> picture [459 x 211] intentionally omitted <==

----- Start of picture text -----

Name of the Category of Director Whether Number of Number Chairmanship(s)
Director attended last Directorship(s) of Membership(s) of Committee(s)
AGM held in other of Committee(s) in other
on 27 [th] July 2020 Companies [#1] in other Companies [#2]
Companies [#2]
Mr. Diwakar Nigam Promoter/ Executive/ Yes 1 0 0
Chairman and
Managing Director
Mr. T. S. Varadarajan Promoter/ Executive/ Whole Yes 3 0 0
- Time Director
Mrs. Priyadarshini Promoter Group/ Executive/ Yes 1 0 0
Nigam Whole - Time Director
Mr. Kaushik Dutta Non – Executive/ Yes 7 6 2
Independent Director
Mr. Saurabh Srivastava Non – Executive/ No 7 3 1
Independent Director
Mr. Subramaniam Non – Executive/ Yes 1 0 0
Ramnath Iyer Independent Director
Mrs. Padmaja Krishnan [#3] Non – Executive/ Yes 1 0 0
Independent Director
----- End of picture text -----

Newgen Software Technologies Limited

Annual Report 2020-21

1 Above list of other Directorship(s) is based on declaration given by respective Director(s) and does not include Directorship(s) in Foreign company and Section 8 company under the Act.
2 Committees considered are Audit committee & Stakeholders’ Relationship Committee of Listed Company and Public Companies only, excluding that of Newgen Software Technologies Limited.
3 Mrs. Padmaja Krishnan was regularised as an Independent Director of the Company at the 28th Annual General Meeting.
(v) Details of Directorship(s) held by the Directors on the Board in other Listed Companies during the financial year 2020-21:

==> picture [479 x 165] intentionally omitted <==

----- Start of picture text -----

Name of Director Name of Other Listed Companies Category of Directorship(s) in
such other listed Companies
Mr. Diwakar Nigam NIL NIL
Mr. T.S. Varadarajan NIL NIL
Mrs. Priyadarshini Nigam NIL NIL
Mr. Kaushik Dutta 1. HCL Infosystems Limited 1. Independent Director
2.New Delhi Television Limited 2. Independent Director
Mr. Saurabh Srivastava 1. Dr. Lal Pathlabs Limited 1. Independent Director
2. Info Edge (India) Limited 2. Independent Director
Mr. Subramaniam Ramnath Iyer NIL NIL
Mrs. Padmaja Krishnan NIL NIL
----- End of picture text -----

(vi) During the financial year 2020-21, 5 (five) meetings of the Board of Directors were held, the details of attendance of each Director at the Board meetings are given below:

==> picture [479 x 245] intentionally omitted <==

----- Start of picture text -----

Name of the Director Category Date(s) of the Board meeting [#1]
of the Director 26-05-2020 22-07-2020 21-10-2020 20-01-2021 25-03-2021
Mr. Diwakar Nigam Promoter/ Executive/ Yes Yes Yes Yes Yes
Chairman and
Managing Director
Mr. T.S. Varadarajan Promoter/ Executive/ Yes Yes Yes Yes Yes
Whole - Time Director
Mrs. Priyadarshini Promoter Group/ Yes No Yes Yes Yes
Nigam Executive/ Whole
– Time Director
Mr. Kaushik Dutta Non – Executive/ Yes Yes Yes Yes Yes
Independent Director
Mr. Saurabh Srivastava Non – Executive/ Yes Yes Yes Yes Yes
Independent Director
Mr. Subramaniam Non – Executive/ Yes Yes Yes Yes Yes
Ramnath Iyer Independent Director
Mrs. Padmaja Krishnan Non – Executive/ Yes Yes Yes Yes Yes
Independent Director
----- End of picture text -----

1 Including attendance by Videoconference.

(vii) The Board is updated on the discussions held at the Committee meetings and the recommendations made by various Committees.
(viii) Except Mr. Diwakar Nigam and Mrs. Priyadarshini Nigam, none of the Directors is related to any other Director(s). Mrs. Priyadarshini Nigam a Whole-time Director is the spouse of Mr. Diwakar Nigam who is the Chairman & Managing Director of the Company.
(ix) As on 31[st] March 2021 none of the Non-Executive Directors holds Equity Shares of the Company, and the Company does not have any outstanding convertible instruments.

Financial Statements

Company Overview

Statutory Reports

(x) The Board has identified the following skills/expertise/competencies fundamental for the effective functioning of the Company which are currently available with the Board:

==> picture [479 x 238] intentionally omitted <==

----- Start of picture text -----

Technology Reasonable knowledge and experience in technology with an ability to foresee technological
trends and changes, apply new technology and bring about innovations in business strategies.
Strategic Ability to critically identify and assess strategic opportunities and threats and develop
Planning and Analysis effective strategies in the context of long-term objectives and the organizations’ relevant
policies and priorities.
Financial Management Wide ranging knowledge and financial skills, oversight for risk management and internal
controls and proficiency in financial management and financial reporting processes.
Global Business Experience in driving business success in markets around the world, with an understanding of
diverse business environments, economic conditions, cultures, and regulatory frameworks,
and a broad perspective on global market opportunities.
Governance Understanding of the various governance and compliance requirements under various
applicable laws, supporting a strong Board base and management accountability,
transparency, and protection of shareholder interests.
Leadership Leadership experience for understanding the needs of the organization, risk management
systems and succession planning for the organization.
Diversity Representation of gender, ethnic, geographic, cultural, or other perspectives that expand the
Board’s understanding of the needs and viewpoints of our customers, partners, employees,
governments, and other stakeholders worldwide.
----- End of picture text -----

The table below expresses the specific areas of focus skills/ expertise/ competencies which are currently possessed by the Directors of the Company. However, absence of a tick mark does not necessarily mean the member does not possess the corresponding skills/ expertise.

==> picture [479 x 210] intentionally omitted <==

----- Start of picture text -----

Name of Directors Technology Strategic Financial Global Governance Leadership Diversity
Planning Management Business
and
Analysis
Mr. Diwakar Nigam       
Mr. T S Varadarajan       
Mrs. Priyadarshini -  -    
Nigam
Mr. Kaushik Dutta -      
Mrs. Padmaja       
Krishnan
Mr. Saurabh       
Srivastava
Mr. Subramaniam -      
Ramnath Iyer
----- End of picture text -----

The profiles of Directors are available on the Company’s website: https://newgensoft.com and shall also be included in the Annual Report of the Company.

III. INDEPENDENT DIRECTORS:

At Newgen, the appointment of Independent Directors is carried out in a structured manner in accordance with the provisions of the Act and the SEBI Listing Regulations. The Nomination & Remuneration Committee of the Board identifies candidates based on certain laid down criteria and takes into consideration the need for diversity of the Board and accordingly makes its recommendations to the Board.

Independent Directors play a significant role in the governance processes of the Board. By virtue of their varied experience & expertise, they enrich the Board’s decision-making and prevent possible conflicts of interest that may emerge in such decision-making.

Newgen Software Technologies Limited

Annual Report 2020-21

(i) Meeting of Independent Directors:

The Independent Directors met once in a financial year, without the presence of Non-Independent Directors or Management representatives. Independent Directors, inter alia, evaluated:

a) the performance of the Chairperson of the Company taking into account the views of the Executive and Non-executive Directors; and
b) the performance of non-independent Directors and the Board of Directors as a whole.

In addition, they also discussed the issues arising out of Committee Meetings and Board discussion including the quality, quantity and timely flow of information between the Company Management and the Board, which are essential for the Board members to effectively and reasonably perform their duties.

(ii) The details of the familiarisation programme for Independent Directors are given below:
With a view to familiarise the Independent Directors, the Company arranges programmes, time to time, to familiarize the Independent Directors with the Company, their roles, rights and responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc.

The Company has divided the familiarization initiatives in two parts viz, orientation programme upon induction of new independent director and other initiatives to update the directors on a continuing basis.

Meetings with Company’s officials have been arranged as and when necessary, to understand the business and operations of the Company. The presentations at the Board meetings include updates on the industry, business operations and financial performance, working capital management, senior management changes, compliances, cash flow, budgets, operation of the Company and of its subsidiaries. The details of familiarization program of the Independent Directors can be found on the Company’s website: https://newgensoft.com.

IV. COMPOSITION OF COMMITTEES OF THE BOARD:

The Committees of the Board play an indispensable role in the governance structure of the Company. These Committees are set up under the formal approval of the Board to carry out clearly defined roles which are considered to be performed by Members of the Board, as a part of good governance practice. The minutes of

the meetings of all Committees are placed before the Board for noting. Special invitees are invited to join the meetings of the Committee as considered appropriate by the Chairman of the Committee.

There are 5 (Five) Board Committees as on 31[st] March 2021 and 1 (one) non-statutory committee that have been constituted considering the best practices in Corporate Governance and in the best interest of the Company. These Committees review, discuss and monitor the activities falling within their terms of reference, the details of which are provided below:

1) Audit Committee:

The Committee is constituted in accordance with the provisions of the Act and the provisions of the SEBI Listing Regulations. All members of the Audit Committee are financially literate and bring in expertise in the fields of Finance, Taxation and business of the Company.

A. Terms of reference:

The terms of reference of the Audit Committee are as set forth below:

 Powers of Audit Committee

The Audit Committee shall have powers, including the following:
(1) To investigate any activity within its terms of reference;
(2) To seek information from any employee;
(3) To obtain outside legal or other professional advice; and
(4) To secure attendance of outsiders with relevant expertise, if it considers necessary.

 Role of Audit Committee

The role of the Audit Committee shall include the following:
(1) Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible;
(2) Recommendation for appointment, re-appointment, replacement, remuneration and terms of appointment of auditors of the Company and the fixation of the audit fee;
(3) Approval of payment to statutory auditors for any other services rendered by the statutory auditors;
(4) Reviewing, the financial statements with respect to its unlisted Subsidiary(ies), in particular investments made by such subsidiary(ies) of the Company;

Financial Statements

Company Overview

Statutory Reports

(5) Reviewing, with the management, the annual financial statements and auditor’s report thereon before submission to the Board for approval, with particular reference to:
a) Matters required to be included in the Directors’ Responsibility Statement to be included in the Board’s report in terms of clause (c) of sub-section 3 of Section 134 of the Act;
b) Changes, if any, in accounting policies and practices and reasons for the same;
c) Major accounting entries involving estimates based on the exercise of judgment by management;
d) Significant adjustments made in the financial statements arising out of audit findings;
e) Compliance with listing and other legal requirements relating to financial statements;
f) Disclosure of any related party transactions; and
g) Modified opinion(s) in the draft audit report.
(6) Reviewing, with the management, the quarterly, half-yearly and annual financial statements before submission to the Board for approval;
(7) Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
(8) Reviewing and monitoring the auditor’s independence and performance, and effectiveness of audit process;
(9) Approval of any subsequent modification of transactions of the Company with related parties and omnibus approval for related party transactions proposed to be entered into by the Company, subject to the conditions as may be prescribed;

Explanation: The term “related party transactions” shall have the same meaning as provided in Clause 2(zc) of the SEBI Listing Regulations and/or the applicable Accounting Standards and/or the Act.

(10) Scrutiny of inter-corporate loans and investments;

(11) Valuation of undertakings or assets of the Company, wherever it is necessary;
(12) Evaluation of internal financial controls and risk management systems;
(13) Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
(14) Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;
(15) Discussion with internal auditors of any significant findings and follow up there on;
(16) Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;
(17) Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
(18) Looking into the reasons for substantial defaults in the payment to depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
(19) Recommending to the board the appointment and removal of the external auditor, fixation of audit fees and approval for payment for any other services;
(20) Reviewing the functioning of the whistle blower mechanism;
(21) Overseeing the vigil mechanism established by the Company, with the Chairman of the Audit Committee directly hearing grievances of victimization of employees and directors, who used vigil mechanism to report genuine concerns in appropriate and exceptional cases;
(22) Carrying out any other functions required to be carried out by the audit committee in terms of applicable law.
The Audit Committee shall mandatorily review the following information:
a) Management discussion and analysis of financial condition and results of operations;
b) Statement of significant related party transactions (as defined by the audit committee), submitted by management;

Newgen Software Technologies Limited

Annual Report 2020-21

c) Management letters / letters of internal control weaknesses issued by the statutory auditors;
d) Internal audit reports relating to internal control weaknesses;
e) The appointment, removal and terms of remuneration of the Chief Internal auditor, if, any, shall be subject to review by the audit committee; and
f) Statement of deviations in terms of the SEBI listing regulations.
g) Quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to stock exchange(s) in terms of the SEBI listing regulations.
h) Annual statement of funds utilised for purposes other than those stated in the offer document/prospectus/ notice in terms of the SEBI Listing Regulations.

B. Composition of the Audit Committee during the financial year 2020-21:

==> picture [479 x 62] intentionally omitted <==

----- Start of picture text -----

Name of the Committee Member Category & Designation Chairman/ Member
Mr. Kaushik Dutta Non-Executive, Independent Director Chairman
Mr. Saurabh Srivastava Non-Executive, Independent Director Member
Mr. Subramaniam Ramnath Iyer Non-Executive, Independent Director Member
----- End of picture text -----

C. Meetings and Attendance of the members at the Audit Committee meeting held during the financial year 2020-21:

During the financial year 2020-21, 5 (five) meetings of the Audit Committee were held. The attendance of the members of the Committee at the meetings are as below:

==> picture [479 x 113] intentionally omitted <==

----- Start of picture text -----

Name of the Category & Date(s) of the meeting/ attendance
Committee Member Designation 25-05-2020 22-07-2020 21-10-2020 20-01-2021 25-03-2021
Mr. Kaushik Dutta Non-Executive, Yes Yes Yes Yes Yes
Independent Director
Mr. Saurabh Srivastava Non-Executive, Yes Yes Yes Yes Yes
Independent Director
Mr. Subramaniam Non-Executive, Yes Yes Yes Yes Yes
Ramnath Iyer Independent Director
----- End of picture text -----

The necessary Quorum was present at all the meetings and all the meetings were held within prescribed time gap.

2) Nomination & Remuneration Committee:

The Committee is constituted in accordance with the provisions of Section 178(3) of the Act and Regulation 19(4) read with Part D of Schedule-II of the SEBI Listing Regulations.

A. The terms of reference of the Nomination & Remuneration Committee:

The Nomination and Remuneration Committee shall be responsible for, among other things, as may be required by the stock exchanges from time to time, the following:

Formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board, a policy relating to the remuneration of the directors, key managerial personnel and other employees;

The Nomination and Remuneration Committee, while formulating the above policy, should ensure that:

the level and composition of remuneration be reasonable and sufficient to attract, retain and motivate directors of the quality required to run the Company successfully;
relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals.
Formulation of criteria for evaluation of independent directors and the Board;
Devising a policy on Board diversity;

Financial Statements

Company Overview

Statutory Reports

Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal and shall carry out evaluation of every director’s performance (including independent director);
Recommend to the Board, all remuneration, in whatever form, payable to senior management;
Whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of directors; and
Carrying out any other functions/ role as required to be undertaken by the Nomination and Remuneration Committee under applicable law and/ or by the Board of Directors of the Company.
Administer and implement any Employee based benefit plan including but not limited to Stock Options Scheme (ESOP)/ Plan, RSU, SAR etc, including:
a) Delegation of duties and powers in whole or in part as it determines, to one or more officers of the Company and/ or to any one or more sub-committees in respect of aforesaid Plan;
b) To choose eligible employees for grant of options and formulate the detailed terms and conditions of the scheme or plan;
c) To meet at such intervals as may be required for consideration of grant of options/units under aforesaid Plan;
d) To take decision about the criteria of employees to whom shares, under any aforesaid Plan, to be directly issued or through transfer of shares from trust as may be set up under respective scheme or plan;
e) To do all such other act and matters as may be provided in any aforesaid Plan and empowered by the Board of Directors time to time.

B. Composition of the Nomination & Remuneration Committee during the financial year 2020-21:

==> picture [479 x 68] intentionally omitted <==

----- Start of picture text -----

Name of the Committee Member Category & Designation Chairman/ Member
Mr. Subramaniam Ramnath Iyer Non-Executive, Independent Director Chairman
Mr. Saurabh Srivastava Non-Executive, Independent Director Member
Mr. Kaushik Dutta Non-Executive, Independent Director Member
----- End of picture text -----

C. Meetings and attendance of the Nomination & Remuneration Committee meeting held during the financial year 2020-21:

During the financial year 2020-21, 3 (three) meetings of Nomination & Remuneration Committee were held. The attendance of the members of the Committee at the meetings is as below:

==> picture [479 x 121] intentionally omitted <==

----- Start of picture text -----

Name of the Category & Designation Date(s) of the meeting/ Attendance
Committee Member
25-05-2020 21-10-2020 25-03-2021
Mr. Subramaniam Ramnath Iyer Non-Executive, Yes Yes Yes
Independent Director
Mr. Saurabh Srivastava Non-Executive, Yes Yes Yes
Independent Director
Mr. Kaushik Dutta Non-Executive, Yes Yes Yes
Independent Director
----- End of picture text -----

The necessary Quorum was present at the meeting and all the meetings were held within maximum prescribed time gap.

D. Board Annual Evaluation:

Pursuant to the provisions of the Act and SEBI Listing Regulations, the Board of Directors in consultation with the Nomination & Remuneration Committee has carried out the annual performance evaluation of its own performance, Committees of the Board and Individual Director. The performance of the Board was evaluated by the Board itself after seeking the inputs from all the directors on the basis of the criteria such as structure & composition of Board

Newgen Software Technologies Limited

Annual Report 2020-21

Culture, effectiveness of Board processes, functioning, execution and performance of specific duties, obligations and governance etc. The performance of Committees was evaluated by the Board after seeking inputs from respective committee members on the basis of the criteria such as composition of committees, effectiveness of committee meetings, and quality of recommendation to the Board, etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role. In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The performance evaluation of the Independent Directors was carried out by the entire Board. All the Directors expressed their satisfaction with the evaluation process.

E. Details of the Remuneration of Directors:

(i) Pecuniary transactions with Non-Executive Directors:

The Non-Executive Directors are paid remuneration by way of sitting fee(s) for attending meetings of the Board & the Committees and commission on profit as approved by the Board of Directors, considering the performance of the Company, the current trends in the industry, the director’s participation in Board and Committee meetings during the year and such other responsibilities associated with their respective position. The remuneration paid to the Non-Executive Directors are within the threshold limit prescribed under the provisions of Companies Act and SEBI Listing Regulations.

( ` in Lakh)

==> picture [459 x 97] intentionally omitted <==

----- Start of picture text -----

Name Sitting Fees Commission on Profit Other Expenses
reimbursed, if any
Mr. Kaushik Dutta 15.00 23.95 Nil
Mr. Saurabh Srivastava 14.00 23.95 Nil
Mr. Subramaniam Ramnath Iyer 15.00 23.95 Nil
Mrs. Padmaja Krishnan 6.00 23.95 Nil
----- End of picture text -----

The policy for setting out the criteria of making payments to Non-Executive Directors are available on the Company’s website: https://newgensoft.com.

(ii) Executive Directors:

The remuneration drawn by the Executive Directors during the financial year 2020-21 is set out below. The remuneration to Executive Director includes fixed salary, perquisites and commission on profit as determined by the Nomination & Remuneration Committee based on their individual responsibilities and contributions to the performance of the organisation. The remuneration paid to the Executive Directors is in accordance with the provisions of the Act and SEBI Listing Regulations.

( ` in Lakh)

==> picture [459 x 92] intentionally omitted <==

----- Start of picture text -----

PARTICULARS NAME OF THE EXECUTIVE DIRECTORS
Diwakar Nigam T.S. Varadarajan Priyadarshini Nigam
Salary 130.67 61.72 30.33
Benefits, Perquisites & Allowances 0.68 0.77 0.40
Commission on Profit 143.68 86.21 57.47
Total 275.03 148.70 88.20
----- End of picture text -----

The Company enters into service contracts with all Executive Directors for a period of 5 (five) years. The notice period is of 3 (three) months and the severance fee is the sum equivalent to remuneration for the notice period or part thereof in case of shorter notice. The details of notice period and severance fees etc. are governed by the appointment letter issued to respective Non-Executive Director at the time of his / her appointment. The aforesaid appointment letters are available on the website of the Company.

Financial Statements

Company Overview

Statutory Reports

3) Stakeholders’ Relationship Committee:

The constitution of Committee and its composition is in compliance with the Act and SEBI Listing Regulations.

A. The terms of reference of the Stakeholders’ Relationship Committee:

a) Considering and resolving grievances of security holders of the Company including complaints related to transfer/ transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general meetings etc.
b) Building mechanism to redress various aspect of interest of security holders including complaints in respect of allotment of Shares, transfer of Shares, non-receipt of declared dividends, annual reports, balance sheets of the Company, etc.
c) To Issue duplicate certificates and new certificates on split/consolidation/renewal, etc. and delegate other officers of the Company to issue duplicate share certificates as it deems fit.
d) Review of adherence to the service standards adopted by the Company in respect of various services being rendered by the Registrar & Share Transfer Agent.
e) Review of the various measures and initiatives taken by the Company for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annual reports/statutory notices by the shareholders of the Company.
f) Review of measures taken for effective exercise of voting rights by shareholders.

g) Allotment of shares.

h) Carrying out any other functions as may be required from time to time to be undertaken by the Stakeholder’s Relationship Committee under applicable law and Board of Directors.

B. Composition of the Stakeholders’ Relationship Committee during the financial year 2020-21:

==> picture [479 x 74] intentionally omitted <==

----- Start of picture text -----

Name of the Committee Member Category & Designation Chairman/ Member
Mr. Subramaniam Ramnath Iyer Non-Executive, Chairman
Independent Director
Mr. Diwakar Nigam Chairman and Managing Director Member
Mr. T.S. Varadarajan Whole-time Director Member
----- End of picture text -----

C. Meetings and attendance of the Stakeholders’ Relationship Committee meeting held during the Financial Year 2020-21:

During the Financial Year 2020-21, 1 (one) Stakeholders’ Relationship Committee meeting was held. The attendance of the members of the Committee at the meeting is as below:

==> picture [479 x 89] intentionally omitted <==

----- Start of picture text -----

Name of the Committee Member Category & Designation Date(s) of the
meeting/ Attendance
25-05-2020
Mr. Subramaniam Ramnath Iyer Non-Executive, Independent Director Yes
Mr. Diwakar Nigam Chairman and Managing Director Yes
Mr. T.S. Varadarajan Whole-time Director Yes
----- End of picture text -----

The necessary Quorum was present at the meeting.

Mr. Aman Mourya, Company Secretary functions as the Compliance Officer of the Company. He has also been appointed as the nodal officer in line with statutory requirements. During the financial year 2020-21, 1 (one) complaint was received from the Investors/Shareholders. Shareholders/Investors complaints and other correspondence are normally attended to within 30 (Thirty) working days. All the complaints have been redressed to the satisfaction of the Investors/ Shareholders and none of them were pending as on 31[st] March 2021. The number of pending share transfers and pending requests for dematerialization as on 31[st] March 2021 was Nil.

Newgen Software Technologies Limited

Annual Report 2020-21

==> picture [479 x 47] intentionally omitted <==

----- Start of picture text -----

Particulars Complaints Received Complaints Redressed
Non-receipt of Dividend 1 1
Non-receipt of Annual Report Nil Nil
----- End of picture text -----

The above table includes Complaints, if any, received from SEBI SCORES portal (an online redressal portal) by the Company.

4) Corporate Social Responsibility Committee (CSR):

The constitution of Corporate Social Responsibility Committee and its composition and terms of reference are in compliance with the provisions of Act.

A. The terms of reference of the Corporate Social Responsibility Committee:

a) To formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the Company as specified in Schedule VII of the Act.
b) To recommend the amount of expenditure to be incurred on activities referred in the law.
c) formulate and recommend to the Board, an annual action plan in pursuance of its CSR policy.
d) To monitor the Corporate Social Responsibility Policy of the Company from time to time.
e) To take decisions and to spend the amount in CSR related activities and projects as defined in the CSR Policy of the Company.

B. Composition of the Corporate Social Responsibility Committee during the financial year 2020-21:

==> picture [459 x 65] intentionally omitted <==

----- Start of picture text -----

Name of the Committee Member Category & Designation Chairperson/ Member
Mrs. Priyadarshini Nigam Whole-time Director Chairperson
Mr. Kaushik Dutta Non-Executive, Member
Independent Director
Mr. T.S. Varadarajan Whole-time Director Member
----- End of picture text -----

C. Meetings and attendance of the Corporate Social Responsibility Committee meeting held during the financial year 2020-21:

During the Financial Year 2020-21, 1 (one) Corporate Social Responsibility Committee meeting was held. The attendance of the members of the Committee at the meeting is as below:

==> picture [459 x 89] intentionally omitted <==

----- Start of picture text -----

Name of the Committee Member Category & Designation Date(s) of the
meeting/ Attendance
25-05-2020
Mrs. Priyadarshini Nigam Whole-time Director Yes
Mr. Kaushik Dutta Non-Executive, Yes
Independent Director
Mr. T.S. Varadarajan Whole-time Director Yes
----- End of picture text -----

The necessary Quorum was present at the meeting.

5) Risk Management Committee:

The Company has constituted the Risk Management Committee in compliance with SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021 read with SEBI Listing Regulations.

A. The terms of reference of the Risk Management Committee:

a) To formulate a detailed risk management policy which shall include:
A framework for identification of internal and external risks specifically faced by the listed entity, in particular including financial, operational, sectoral, sustainability (particularly, ESG related risks), information, cyber security risks or any other risk as may be determined by the Committee.
Measures for risk mitigation including systems and processes for internal control of identified risks.
Business continuity plan.

Financial Statements

Company Overview

Statutory Reports

b) To ensure that appropriate methodology, processes and systems are in place to monitor and evaluate risks associated with the business of the Company.
c) To monitor and oversee implementation of the risk management policy, including evaluating the adequacy of risk management systems.
d) To periodically review the risk management policy, at least once in two years, including by considering the changing industry dynamics and evolving complexity.
e) To keep the board of directors informed about the nature and content of its discussions, recommendations and actions to be taken.
f) The appointment, removal and terms of remuneration of the Chief Risk Officer (if any, as of now it is not mandatory) shall be subject to review by the Risk Management Committee.
g) The Committee shall have access to any internal information necessary to fulfil its oversight role. As and when required the Committee may assign tasks to the Internal Auditor, the Company’s internal risk management team and any external expert advisors considered necessary for any task and they will provide their findings to the Committee.
h) Such other terms as may be specified by the Board of Directors from time to time.
i) Such other terms/ activities as may be prescribed under applicable laws, time to time.

B. Composition of the Risk Management Committee:

==> picture [479 x 122] intentionally omitted <==

----- Start of picture text -----

Name of proposed Member Designation Chairman/ Member
Mr. Diwakar Nigam Chairman and Managing Director Chairman
Mr. Kaushik Dutta Independent Director Member
Mr. Subramaniam Ramnath Iyer Independent Director Member
Mrs. Padmaja Krishnan Independent Director Member
Mr. Virender Jeet Sr. VP – Sales & Marketing / Products Member
Mr. Surender Jeet Raj Sr. VP – HR Operations Member
----- End of picture text -----

First meeting of the Risk Management Committee is yet to be held.

6) Other Committees

Apart from the above statutory committees, the Board of Directors has constituted the following Committee to raise the level of governance and also to meet the specific business needs.

6.1. Finance and Operations Committee:

The Finance and Operations Committee has been constituted to oversee the Banking operations, delegation of operational powers, dealing with the statutory bodies and other finance and routine operations that arise in the normal course of the business. The Committee reports to the Board and the minutes of these meetings are placed before the Board for information.

A. The terms of reference of the Finance and Operations Committee:

a) To provide the authorization for applying, negotiating and finalizing, with the existing/proposed Bankers, the sanctioning/renewal of the Temporary / Ad hoc / Regular Working Capital or Short-Term Finance / Loan requirements, whether fund based or non-fund based (LC/BG), interchangeable or otherwise in the ordinary course of business.
b) To provide authorization to open, operate and close the Bank Account/(s) of the Company, to change the Authorized Signatories therein from time to time; and to provide authorization in respect of executing/ submitting bank related documents.

Newgen Software Technologies Limited

Annual Report 2020-21

c) To provide authorization to take on lease/rent/or on Leave and license basis any premises in the ordinary course of business or for the purpose of guest house of the Company and execution of agreements, papers and other document thereto and to deal with any Government or semi-government departments/ authorities, local bodies and corporation for registration of such agreements/documents with Registrar or Sub- Registrar.
d) To act as per the Investment Policy approved by the Board of Directors.
e) To provide authorization to deal with State, Central Government or Government authorities, Statutory Corporations, government undertaking, local bodies.
B. Composition of the Finance and Operation Committee during financial year 2020-21:

==> picture [479 x 62] intentionally omitted <==

----- Start of picture text -----

Name of the Committee Member Category & Designation Chairman/ Member
Mr. T.S. Varadarajan Whole-time Director Chairman
Mr. Diwakar Nigam Chairman & Managing Director Member
Mrs. Priyadarshini Nigam Whole-time Director Member
----- End of picture text -----

Whereas Mr. Arun Kumar Gupta is the permanent invitee to this committee.

No meeting of the Finance & Operation Committee was held during the financial year 2020-21.

V. GENERAL BODY MEETINGS:

A. ANNUAL GENERAL MEETING (“AGM”)

The AGM of the Company during the preceding 3 (three) years were held at the following venues, dates and times, wherein the following special resolutions were passed:

==> picture [479 x 271] intentionally omitted <==

----- Start of picture text -----

AGM Date & Time of AGM Venue Details of Special resolutions
26 [th] AGM 09-08-2018 NCUI Auditorium & Convention 1. To Ratify the Newgen Employee Stock
at 11:00 AM Centre, 3, Siri Institutional Area, Option Scheme-2014.
August Kranti Marg, Hauz Khas, 2. To Ratify issuance of Options
New Delhi – 110016 and extending benefits of
Newgen Employee Stock Option
Scheme-2014 to the Employees of the
Subsidiary Company(s).
3. To Ratify Newgen ESOP Trust for
secondary acquisition of Equity Shares.
27 [th] AGM 07-08-2019 NCUI Auditorium & Convention 1. Re-appointment of Mr. T. S.
at 11:00 AM Centre, 3, Siri Institutional Area, Varadarajan as Whole-time Director
August Kranti Marg, Hauz Khas, of the Company for a period
New Delhi – 110016 of five (5) years
28 [th] AGM 27-07-2020 Through Video 1. To consider the continuation of
at 11:00 AM Conferencing (VC)/ Other Directorship of Mr. Saurabh Srivastava
Audio-Visual Means (OAVM) (DIN: 00380453), Independent Director
of the Company, post attaining the
age of Seventy-five (75) during his
present tenure.
----- End of picture text -----

No Extraordinary General Meeting was held during the period under review.

B. POSTAL BALLOT

During the financial year 2020-21, the Company sought the approval of Shareholders by way of Special Resolutions through notice of postal ballot dated 23[rd] November 2020 for:

I. Approval of Newgen Software Technologies Restricted Stock Units Scheme – 2021.
II. To Approve Extending the Benefits to the employees of Subsidiary Company(ies) under Newgen Software Technologies Restricted Stock Units Scheme –2021.

Financial Statements

Company Overview

Statutory Reports

III. To approve acquisition of equity shares by way of secondary acquisition under Newgen Software Technologies Restricted Stock Units Scheme – 2021.
IV. Provision of money by the Company for purchase of its own shares by the Trust / Trustees for the benefit of employees under Newgen Software Technologies Restricted Stock Units Scheme – 2021.

All the aforesaid Special Resolutions were duly passed in accordance with the provisions of Companies Act and SEBI Listing Regulations, on 26[th] December 2020 and the results of which were submitted with the stock exchanges within prescribed time limit. M/s Kundan Agrawal & Associates, Practising Company Secretaries, was appointed as the Scrutinizer to scrutinize the postal ballot and remote e-voting process in a fair and transparent manner. The consolidated summary of the result of postal ballot / e-voting is as under:

==> picture [479 x 329] intentionally omitted <==

----- Start of picture text -----

Special Resolutions No. No. of No. of Votes % of Votes % of Votes
of Votes Polled Votes Cast Cast Against Cast in Favour Cast Against
in Favour on Votes Polled on Votes Polled
Approval of Newgen Software 60301224 60245809 55415 99.9081 0.0919
Technologies Restricted
Stock Units Scheme – 2021
To approve extending the 60301474 60245977 55497 99.9080 0.0920
benefits to the employees
of Subsidiary Company(ies)
under Newgen Software
Technologies Restricted
Stock Units Scheme – 2021
To approve acquisition 60301224 60245802 55422 99.9081 0.0919
of equity shares by way
of secondary acquisition
under Newgen Software
Technologies Restricted
Stock Units Scheme – 2021
Provision of money by the 60301474 60245741 55733 99.9076 0.0924
company for purchase
of its own shares by the
trust / trustees for the
benefit of employees
under Newgen Software
Technologies Restricted
Stock Units Scheme – 2021.
----- End of picture text -----

Procedure for Postal ballot:

The postal ballot is conducted in accordance with the provisions contained in Section 108, 110 and other applicable provisions of the Act 2013, read with the related Rules and SEBI Listing Regulations, the Company provided electronic voting facility to all its members, to enable them to cast their votes electronically.

Company engaged the services of Registrar and Share Transfer Agent (“RTA”) of the Company, i.e. KFin Technologies Private Limited for the purpose of providing e-voting facility. The Members had the option to vote by e-voting. Company circulated the postal ballot notice containing draft resolutions together with the explanatory statements, the postal ballot form to its members whose name appears on the register of members /list of beneficiaries as on cut-off date, in electronic form to the email addresses registered with the depository (in case of electronic shareholding)/the Company’s Registrar and Share Transfer Agent (in case of physical shareholding). The Company also publishes notice in the newspapers declaring the details of completion of dispatch as mandated under the Act and applicable rules. The Company fixes a cut-off date to reckon paid-up value of equity shares registered in the name of members for the purpose of voting. Members may cast their votes through e-voting during the voting period fixed for this purpose. Alternatively, members may exercise their votes through physical ballot by sending duly completed and signed forms so as to reach the scrutinizer before a specified date and time. The scrutinizer submits his report to the Chairman, or any other person authorised by the Chairman, after the completion of scrutiny of the postal ballots (including remote e-voting). The results of the postal ballot (including remote e-voting) are announced by the Chairman or any other person, if any, authorised by the Chairman within 48 hours of

Newgen Software Technologies Limited

Annual Report 2020-21

conclusion of the voting period. The results are also displayed at the registered office and corporate office of the Company, intimated to RTA and the Stock Exchanges where the Company’s shares are listed and also displayed along with the Scrutinizer’s report on the Company’s website viz. https://newgensoft.com. The resolution, (if passed by requisite majority), shall be deemed to have been passed on the last date specified by the Company for receipt of duly completed postal ballot forms or e-voting.

VI. MEANS OF COMMUNICATION:

The quarterly results of the Company were published in English daily newspaper (Financial Express) having nation-wide circulation and in local Hindi daily newspaper (Jansatta) and also displayed at the Company’s website at https:// newgensoft.com .

All official press/ news releases, presentations made to analysts and institutional investors and other general information about the Company are also available on the Company’s website. The presentations made to the institutional investors or analysts, if any, are not communicated individually to the shareholders of the Company. However, in addition to uploading the same on the website of the Company, the presentations are sent to the Stock Exchange for dissemination.

VII. GENERAL SHAREHOLDER INFORMATION:

A. 29[th] Annual General Meeting:

The date, time and venue of the 29[th] (Twenty-ninth) Annual General Meeting of the Company is provided hereunder:

==> picture [479 x 74] intentionally omitted <==

----- Start of picture text -----

Day & Date : Tuesday, 27 [th] July 2021
Time : 11:00 AM
Venue : Video Conferencing or Other Audio-Visual Means
Deemed Venue: Registered office of the Company situated at A-6, Satsang Vihar Marg, Qutab
Institutional Area, New Delhi – 110067.
----- End of picture text -----*

*Due to the Covid-19 pandemic, the company is conducting its annual general meeting through video conferencing or other audio-visual means.

B. Financial Year:

The Company follows the financial year from 1[st] April to 31[st] March. The financial year was from 1[st] April 2020 to 31[st] March 2021.

C. Details related with Dividend:

Dividend on equity shares, if declared at the ensuing Annual General Meeting, will be credited on or before 10[th] August 2021. Members who hold shares in demat mode should inform their depository participant, whereas Members holding shares in physical form should inform Company’s RTA of their banking account details. In cases where the banking account details are not available, the Company will issue the demand drafts stating the existing bank details available with the Company.

The period of book closure date and record date for the purpose of ensuing AGM and payment of Dividend is 16[th] July 2021.

D. Listing on Stock Exchanges:

The Company’s equity shares are listed on the following Stock Exchanges and the annual listing fees have been duly paid to the stock exchanges.

==> picture [479 x 86] intentionally omitted <==

----- Start of picture text -----

Sr. Name of the Stock Exchange Address Stock Code
No.
1. BSE Limited (BSE) 1 [st] Floor, Phiroze Jeejeebhoy Towers, Dalal 540900
Street, Mumbai 400 001
2. National Stock Exchange of Exchange Plaza, Bandra - Kurla Complex, Bandra NEWGEN
India Limited (NSE) (E), Mumbai 400 051
----- End of picture text -----

International Securities Identification Number (ISIN):

INE619B01017.

Financial Statements

Company Overview

Statutory Reports

E. Market Price Data:

The monthly high and low prices of shares of the Company at BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE) for the financial year ended 31[st] March 2021 along with performance in comparison to such indices are tabled below:

==> picture [479 x 432] intentionally omitted <==

----- Start of picture text -----

Month Newgen at BSE BSE Sensex
High Low High Low
Apr-20 141.9 101.75 33887.25 27500.79
May-20 164 123 32845.48 29968.45
Jun-20 158.5 139.1 35706.55 32348.1
Jul-20 215.95 145.05 38617.03 34927.2
Aug-20 221.8 173 40010.17 36911.23
Sep-20 247.35 186.1 39359.51 36495.98
Oct-20 269 204 41048.05 38410.2
Nov-20 288.55 245 44825.37 39334.92
Dec-20 284.8 241.5 47896.97 44118.1
Jan-21 332.85 266.1 50184.01 46160.46
Feb-21 327.7 273.55 52516.76 46433.65
Mar-21 307.15 271.7 51821.84 48236.35
Apr-20 141.9 132.7 9889.05 8055.80
May-20 142.8 133.1 9598.85 8806.75
Jun-20 150.95 146 10553.15 9544.35
Jul-20 180.9 173.2 11341.40 10299.60
Aug-20 212.55 198.5 11794.25 10882.25
Sep-20 220.8 216 11618.10 10790.20
Oct-20 262 243.05 12025.45 11347.05
Nov-20 274.5 267.1 13145.85 11557.40
Dec-20 276 268 14024.85 12962.80
Jan-21 294.85 290 14753.55 13596.75
Feb-21 302.85 291.1 15431.75 13661.75
Mar-21 287.6 282.5 15336.30 14264.40
----- End of picture text -----

F. Registrar and Share Transfer Agent (“RTA”):

KFin Technologies Private Limited is our Registrar and Share Transfer Agent (RTA) to render services related to Share transfer/ Dematerialisation/ Rematerialisation/ Transmission, dividend payment and other activities thereto for both electronic and physical shareholdings. Members/ Investors are requested to forward share transfer documents, dematerialization/ rematerialisation requests, dividend payment related queries and other related correspondence directly to the RTA of the Company.

Details for Correspondence:

KFin Technologies Private Limited

Selenium Building, Tower B, Plot No. 31 and 32,

Gachibowli Financial District, Nanakramguda, Hyderabad 500032

Toll free number - 1- 800-309-4001

Email: [email protected] Website: https://www.kfintech.com and / or https://ris.kfintech.com/

SEBI Registration No. INR000000221

Newgen Software Technologies Limited

Annual Report 2020-21

G. Share Transfer System:

Requests for transfer of Equity Shares in dematerialized form are done through depositories with no involvement of the Company. Transfer of shares held in physical form is not permitted after 31[st] March 2019 through statutory notifications. Accordingly, members holding equity shares in physical form are urged to have their shares dematerialized.

H. Distribution of Shareholding:

Tabled below is the shareholding distribution of Equity shares of the Company as on 31[st] March 2021:

==> picture [479 x 164] intentionally omitted <==

----- Start of picture text -----

Categories Number of Shares Percentage
Promoter(s) & promoter group 4,59,78,988 65.73
Resident Individuals 73,57,352 10.52
Non-resident Indians/ Non-resident Indian Non repatriable/ Foreign 5,49,859 0.78
Corporate Bodies
Foreign Portfolio Investors 1,02,37,623 14.63
Alternate Investment Funds & Mutual Funds 47,89,851 6.85
Bodies Corporate 1,63,254 0.23
Newgen ESOP Trust 6,49,696 0.93
Others 2,29,078 0.33
Total 6,99,55,701 100
----- End of picture text -----

Distribution of Shareholding

==> picture [299 x 315] intentionally omitted <==

----- Start of picture text -----

0.93% 0.33%
0.23%
6.85%
14.63%
0.78%
10.52%
65.73%
----- End of picture text -----

Promoter(s) & Promoter group Resident individuals Non-resident Indians/ Non-resident Indian Non repatriable/ Foreign Corporate Bodies

Foreign Portfolio Investors Alternate Investment Funds/ Mutual Funds Bodies Corporate Newgen ESOP Trust Others

Financial Statements

Company Overview

Statutory Reports

==> picture [479 x 178] intentionally omitted <==

----- Start of picture text -----

Distribution Schedule - Consolidated as on 31-03-2021
Category No. % Total Amount (in ) % of (Amount in ) of Shareholders of Shareholders Number of Shares Amount
1-5000 27,108 95.34 1799528 1,79,95,280 2.57
5001- 10000 532 1.87 425440 42,54,400 0.61
10001- 20000 307 1.08 461274 46,12,740 0.66
20001- 30000 136 0.48 341565 34,15,650 0.49
30001- 40000 64 0.23 222012 22,20,120 0.32
40001- 50000 44 0.15 204362 20,43,620 0.29
50001- 100000 92 0.32 654097 65,40,970 0.94
100001& Above 151 0.53 65847423 65,84,74,230 94.13
Total 28,434 100 6,99,55,701 69,95,57,010 100
----- End of picture text -----

I. Dematerialization/ Rematerialisation of Shares and liquidity:

As on 31[st] March 2021, 99.96% of the total Equity Shares were held in dematerialized form with National Securities Depository Limited and Central Depository Services (India) Limited as on 31[st] March 2021. The market lot is one share and the trading in equity shares of the Company is permitted only in dematerialized form. The face value of share is ` 10/- (Rupees Ten only) per share.

During the financial year 2020-21, no case was received for dematerialisation as well as for rematerialisation of equity shares of the Company.

J. Details of Shares held in Demat Suspense Account:

Not Applicable.

K. Outstanding Convertible Instruments/ ADRs/ GDRs/ Warrants:

As on 31[st] March 2021, the Company did not have outstanding GDRs/ADRs/Warrants or any Convertible instruments (excluding ESOPs).

L. Commodity price risk or foreign exchange risk and hedging activities:

The Company had no exposure to commodity and commodity risks for the financial year 2020-21. For details related to foreign exchange risk and hedging activities, please refer the “Management and Discussion Analysis Report” which forms part of this Annual Report.

M. Plant Locations:

The Company being in software development business, does not require manufacturing plant. The addresses of the development centres/ offices of the Company are given in the annual report.

N. Address for Correspondence:

Shareholders may write either to the Company or the RTA for redressal of queries and grievances. The address and contact details of the concerned officials are given below:

==> picture [479 x 104] intentionally omitted <==

----- Start of picture text -----

Registrar and Transfer Agent Details of Compliance Officer/ Investors’ complaints
KFin Technologies Private Limited Newgen Software Technologies Limited
Selenium Building, Tower B, Plot No. 31 and 32, Gachibowli E-44/13, Okhla Phase - II, New Delhi - 110020
Financial District, Nanakramguda, Hyderabad 500 032 Contact person: Mr. Aman Mourya,
Toll Free No.: 1- 800-309-4001 Company Secretary & Compliance Officer
Email: [email protected] Tel: +91-11-46533200
Fax: +91-11-26383963
E-mail: [email protected]
----- End of picture text -----

Newgen Software Technologies Limited

Annual Report 2020-21

Members are requested to take note that all queries in connection with change in their residential address, bank account details, etc. are to be sent to their respective Depository Participants (DPs).

Analysts can reach our Investor Relations team for any queries and clarification on financial/investor relations related matters:

Newgen Software Technologies Limited

E-44/13, Okhla Phase - II, New Delhi - 110020

Contact person: Mrs. Deepti Mehra Chugh,

Head – Investor Relations

Tel: +91-11-46533200 Fax: +91-11-26383963 E-mail: [email protected]

O. Details of Credit ratings obtained by the Company:

The Company has not issued any debt instruments which necessitates any credit rating. The Credit Rating, from CRISIL Ratings Limited during the year 2020-21 for short-term Working Capital Facilities is CRISIL A2+. There has been no revision in the above rating.

VIII. OTHER DISCLOSURES:

(a) Related Party Transactions:

There have been no materially significant related party transactions that may have a potential conflict with the interest of the Company at large. The Policy on Related Party Transactions is available on the Company’s website at https://newgensoft.com

Based on the disclosures received from Senior Management Personnel of the Company, none of the officials have any personal interest in any of the financial or commercial transactions with the Company, except their remuneration. The policy on related party transactions has been placed on the Company’s website at: https://newgensoft.com.

(b) Details of non-compliance, if any, by the Company, on any matter related to capital markets:

During the last 3 (three) years, there were no instances of non-compliance by the Company and no penalty or strictures were imposed on the Company by the Stock Exchanges or SEBI or any statutory authority, on any matter related to the capital markets.

regulate, monitor and report trading by Designated Persons and their Immediate Relatives under the SEBI (Prohibition of Insider Trading) Regulations, 2015. This Code of Conduct also includes code of practices and procedures for fair disclosure of unpublished price sensitive information which has been made available on the Company’s website at: https://newgensoft.com.

In addition to the above, the Company has put in place adequate and effective system of internal controls to ensure compliance with the requirements of the Prohibition of Insider Trading Regulations. A structured in-house digital database is being maintained by the Company. The Board have also formulated a Policy for determination of ‘legitimate purposes’ as a part of the Code of Fair Disclosure and Conduct as per the requirements of the SEBI (Prohibition of Insider Trading) Regulations, 2015.

Company Secretary has been appointed as the Compliance Officer for ensuring implementation of the Code. Further, the Board, designated persons and other connected persons have affirmed compliance with the aforesaid Code.

(d) Whistle Blower Policy/ Vigil Mechanism:

Pursuant to the provisions of the Companies Act and SEBI Listing Regulations, the Company has adopted a policy on Whistle Blower mechanism. The Whistle Blower Policy includes vigil mechanism as mandated under the SEBI Listing Regulations and provides a mechanism for directors, employees and other stakeholder to raise concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Ethics & Business Conduct, etc.

At Newgen, we ensure that Directors, employees and other stakeholder are allowed to voice concern in a responsible and effective manner. Your Company has an Ombudsman as a channel for receiving and redressing complaints from directors, employees and other stakeholder under the Whistle Blower mechanism. All complaints, if any, are addressed to Ombudsman and investigative findings thereon are reviewed and reported to the Ethics Committee/ Chairman of Board of Directors or Chairman of Audit Committee, depending on case to case. The Company hereby affirms that no personnel had been denied access to the audit committee under the policy on Whistle Blower mechanism.

(c) Code for Prevention of Insider Trading:

Pursuant to the provision of SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has formulated a Code of Practices & Procedures for Fair Disclosure of Unpublished Price Sensitive Information and Code of Conduct to Regulate and monitor trading in the securities of the Company (“the Code”). The aforesaid Newgen’s Code are devised to

Directors, employees and other stakeholder may raise concern by writing to: whistleblower.newgen@ arthaarbitrage.com or by postal mail/letter to: M/s Artha Arbitrage Consulting LLP C-16, 2[nd] Floor, Qutab Institutional Area, New Delhi110067. Mechanism followed under the Whistle Blower policy is appropriately communicated within the Company

Financial Statements

Company Overview

Statutory Reports

across all levels and is also available under the investor relations section on our website at: https:// newgensoft.com.

(e) Code of Conduct for the Board members and Senior Management:
The Board of Directors has adopted a Code of Conduct for the Board members and Senior Management Personnel of the Company, in line with the amended SEBI Listing Regulations. The Code lays down the standard of conduct which is expected to be followed by the Board members and Senior Management personnel. On the basis of declarations received from the Board Members and the Senior Management Personnel, the Chairman & Managing Director has given a declaration that the Board Members and Senior Management Personnel of the Company have affirmed compliance with the Code, with respect to the financial year 2020-21. The Code is available on the website of the Company at https://newgensoft.com.

(h) Funds raised through preferential allotment or qualified institutions placement:

During the year under review, the Company has not raised funds through preferential allotment or qualified institutions placement as specified under Regulation 32(7A) of SEBI Listing Regulations.

(i) Compliance with Mandatory requirements:

During the financial year 2020-21, your Company has complied with all the mandatory Corporate Governance requirements under the SEBI Listing Regulations. your Company confirms compliance in respect of Corporate Governance Report as stated under sub-paras (2) to (10) of section (C) of Schedule V to the SEBI Listing Regulations.

(j) Recommendations of the Committees of the Board:

During the financial year ended 31[st] March 2021 the Board of Directors has accepted all the recommendations of its Committees.

(f) Sexual Harassment policy:

Your Company has constituted Internal Complaints Committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and also has a policy and framework for employees to report sexual harassment cases at workplace and its process ensures complete anonymity and confidentiality of information. Adequate workshops and awareness programmes against sexual harassment are conducted across the organization.

Details of complaints received, redressed and pending during the financial year 2020-2021 on Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 are tabled below:

==> picture [225 x 83] intentionally omitted <==

----- Start of picture text -----

Number of Complaints filed during NIL
the financial year
Number of Complaints disposed of NIL
during the financial year
Number of Complaints pending as at NIL
the end of Financial year
----- End of picture text -----

(g) Policy for Determination of Material Subsidiary:

The Company has formulated a Policy for Determining Material Subsidiaries in terms of the SEBI Listing Regulations which has been uploaded on the Company’s website at https://newgensoft.com.

As per the materiality policy, Newgen Software Inc. is our material subsidiary company incorporated in USA. Provisions to the extent applicable under the SEBI Listing Regulations with reference to other subsidiary companies were duly complied. Minutes of the Board meetings of subsidiary companies (including its material subsidiary) were regularly placed before the Board of Directors.

(k) Compliance on Discretionary requirements under Regulation 27(1) of the SEBI Listing Regulations:

The status of compliance with the non-mandatory requirements, as stated under Regulation 27(1) read with Part E of Schedule-II to the SEBI Listing Regulations:

(i) The Board: The Chairman of the Company is an Executive Director and hence this provision is not applicable to us.
(ii) Shareholders’ rights: To ensure dissemination of Company’s financial results to its shareholders, the Company publishes the quarterly and half-yearly results in newspapers having wide circulation in India and particularly in New Delhi, where the registered office of the Company is located. These results are also filed with stock exchanges and uploaded on Company’s website immediately after the Board meeting. Company also conducts conference call/ investors / analyst meets, if any, to respond to any investor queries with regard to the financial results or operations of the Company.
(iii) Modified opinion(s) in audit report: The Company confirms that its financial statements are with un-modified opinion.
(iv) Reporting of Internal Auditor: The Internal Auditors report directly to the Audit Committee of the Board.
(v) Compliance with Secretarial Standards: The Company has complied with the applicable Secretarial Standards (SS) issued by the Institute of Companies Secretaries of India, which have mandatory application during the year under review.

Newgen Software Technologies Limited

Annual Report 2020-21

(vi) Accounting Standards: The Company has adopted the relevant Accounting Standards notified by the Companies (Indian Accounting Standards) Rules, 2015 while preparing its Standalone and Consolidated Financial Statements for the financial year ended 31[st] March 2021.
(l) Fees paid by the Company or its subsidiaries to the Statutory Auditors and all entities in the network firm/network entity of which the statutory auditor is a part:
Total fee for Statutory Audit and Limited Review paid by the Company to B S R & Associates, LLP, Statutory Auditor is 62 Lakh and 3.36 Lakh as reimbursement of expenses.
Certification fee, for the services as required, paid by the Company to B S R & Associates, LLP, Statutory Auditor is ` 6.95 Lakh
The aggregate amount of ` 29.55 Lakh was paid to KPMG Assurance and Consulting Services LLP, by the Company for the SOC1 Type-2, SOC-2 Type-2, Vulnerability Assessment Penetration Testing (“VAPT”) and Information Security related assessment services.
Fee of CAD 10,508 was paid by Newgen Software Canada Pte Ltd to KPMG Law LLP.
IX. CONFIRMATION OF COMPLIANCE WITH THE CORPORATE GOVERNANCE REQUIREMENTS SPECIFIED UNDER REGULATION 17 TO 27 AND CLAUSES (b) to (i) OF SUB-REGULATION 2 OF REGULATION 46 OF SEBI LISTING REGULATIONS:

It is hereby confirmed that the Company has complied with the mandatory requirements of Corporate Governance as specified in Regulations 17 to 27 and 46(2) of SEBI Listing Regulations. The Certificate from Chairman & Managing Director and Chief Financial Officer of the Company, as stipulated in Regulation 17(8) of the SEBI Listing Regulations read with Part B of Schedule II was placed before the Board along with the financial statements for the financial year ended 31[st] March 2021 and the Board reviewed the same. The said Certificate is annexed with this Corporate Governance Report.

X. CERTIFICATE FROM PRACTICING COMPANY SECRETARY ON COMPLIANCE OF CORPORATE GOVERNANCE UNDER REPLACE WITH SEBI LISTING REGULATIONS: The Company has obtained a certificate from a M/s Aijaz & Associates, Practicing Company Secretary regarding compliance with the provisions relating to corporate governance laid down in Part C(10)(i) and E of Schedule V to the SEBI Listing Regulations and the same is annexed with this report.

Diwakar Nigam Date: 25[th] May 2021 Chairman & Managing Director Place: New Delhi DIN: 00263222

Financial Statements

Company Overview Statutory Reports

DECLARATION TO COMPLIANCE OF CODE OF CONDUCT

This is to certify that the Company has laid down its Code of Conduct for all the Board Members and Senior Management Personnel of the Company and the copy of the same has been uploaded on the website of the Company https:// newgensoft.com.

I hereby declare that all the Directors and Senior Managerial Personnel of the Company, have affirmed the compliance with the aforesaid Code of Conduct and have given a confirmation thereto in this regard, in respect of financial year ended 31[st] March 2021.

Diwakar Nigam Date: 30[th] April 2021 Chairman & Managing Director Place: New Delhi DIN: 00263222

CERTIFICATE UNDER REGULATION 17 (8) OF THE SEBI LISTING REGULATIONS

To The Board of Director Newgen Software Technologies Limited New Delhi

Sub.: Certification by Managing Director & Chief Financial Officer, pursuant to regulation 17(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

We, Diwakar Nigam, Chairman & Managing Director and Arun Kumar Gupta, Chief Financial Officer of Newgen Software Technologies Limited, hereby certify that: -

a) We have reviewed financial statements and cash flow statement for the year ended 31[st] March 2021 and that to the best of our knowledge and belief:
i. these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
ii. these statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.
b) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Company’s code of conduct.
c) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.
d) We have indicated to the auditors and the Audit Committee: -
i. that there are no significant changes in internal control over financial reporting during the year;
ii. that there are no significant changes in accounting policies during the year; and
iii. that there are no instances of significant fraud of which we have become aware and that there is no involvement of the management or employee having a significant role in the Company’s internal control system over financial reporting.

Date: 25[th] May 2021 Place: New Delhi

Diwakar Nigam

Chairman & Managing Director DIN: 00263222

Arun Kumar Gupta Chief Financial Officer PAN: ADTPG6017D

Newgen Software Technologies Limited

Annual Report 2020-21

CERTIFICATE ON COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE

To

The Members, Newgen Software Technologies Limited New Delhi-110067

We have examined the compliance of conditions of Corporate Governance by Newgen Software Technologies Limited (“the Company”), for the financial year ended 31[st] March 2021 as stipulated under regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and Para C, D and E of Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”).

We have examined the relevant records and documents maintained by the Company for the purposes of providing reasonable assurance on the compliance with Corporate Governance requirements by the Company. The compliance of conditions of Corporate Governance is the responsibility of the management of the Company. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated under Regulations 17 to 27 and clauses (b) to (i) of Regulation 46(2) and Para C, D and E of Schedule V to the SEBI Listing Regulations.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For Aijaz & Associates Practicing Company Secretaries

Date: 18[th] May 2021 Place: New Delhi

Name: M. Aijaz CP No.: 7040 M. No.: 6563 UDIN: F006563C000341238

Financial Statements

Company Overview Statutory Reports

CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

(Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)

To

The Members, Newgen Software Technologies Limited New Delhi-110067

We have examined the relevant registers, records, forms, returns and disclosures received from the Directors of Newgen Software Technologies Limited having CIN L72200DL1992PLC049074 and having registered office at A-6, Satsang Vihar Marg, Qutab Institutional Area, New Delhi-110067 (hereinafter referred to as ‘the Company’), produced before us by the Company for the purpose of issuing this Certificate, in accordance with Regulation 34(3) read with Schedule V Para-C sub clause (i) of clause 10 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In our opinion and to the best of our information and according to the verifications including [Directors Identification Number (DIN) status at the portal www.mca.gov.in] as considered necessary and explanations furnished to us by the Company & its officers, we hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year ending on 31[st] March 2021 have been debarred or disqualified from being appointed or continuing as Directors of Companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other Statutory Authority.

==> picture [499 x 145] intentionally omitted <==

----- Start of picture text -----

S. Name of the Directors Designation DIN Date of Initial
No. Appointment in the Company
1. Mr. Diwakar Nigam Chairman & 00263222 1 [st] April 1993
Managing Director
2. Mr. T.S. Varadarajan Whole-time Director 00263115 5 [th] June 1992
3. Mrs. Priyadarshini Nigam Whole-time Director 00267100 20 [th] September 1997
4. Mr. Kaushik Dutta Independent Director 03328890 9 [th] July 2014
5. Mr. Saurabh Srivastava Independent Director 00380453 30 [th] August 2017
6. Mr. Subramaniam Ramnath Iyer Independent Director 00524187 22 [nd] November 2017
7. Mrs. Padmaja Krishnan Independent Director 03155610 24 [th] March 2020
----- End of picture text -----*

*In the 28[th] AGM, Special resolution was passed for continuation of directorship of Mr. Saurabh Srivastava (DIN: 00380453) as an Independent Director of the Company post attaining the age of 75 (Seventy-five) years.

**Mrs. Padmaja Krishnan was regularised as an Independent Director of the Company at the 28[th] Annual General Meeting.

Ensuring the eligibility for the appointment/continuity of every Director on the Board is the responsibility of the management of the Company. Our responsibility is to express an opinion on these based for our verification. This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For Aijaz & Associates Practicing Company Secretaries

Date: 17[th] May 2021 Place: New Delhi

Name: M. Aijaz CP No.: 7040 M. No.: 6563 UDIN: F006563C000337740

Newgen Software Technologies Limited

Annual Report 2020-21

Management Discussion and Analysis

Management’s discussion and analysis of the financial condition and results of operations include forward-looking statements based on certain assumptions and expectations of future events. The Company cannot assure that these assumptions and expectations are accurate. Although the Management has considered future risks as part of the discussions, future uncertainties are not limited to Management perceptions.

Company Overview

Newgen Software Technologies Limited is an enterprise-wide Digital Automation platform player offering mission critical solutions to organizations for digital transformation and competitive differentiation. The three core products of Newgen Digital Automation Platform are Contextual Content Services (ECM), Low-code Process Automation (BPM) and Omnichannel Customer Communication (CCM). Each platform is a frontrunner in its own category. The products are built on unified architecture and thus are extremely compatible and seamlessly integrate, providing competitive differentiation from other market products. They have a cloud-ready architecture on AWS and Azure and are well-suited for Fortune 2000 enterprises with multiple platform needs for their current and future solutions.

The Company, with its best-in-class products and solutions, deep domain expertise and global experience, is well positioned in the market and is transforming businesses for around 550 customers across 72 countries through its enterprise solutions (including 67 new customer wins during the year, mostly on cloud). It has clients across India, USA, Canada, UAE, Saudi Arabia, UK, Philippines, Indonesia, Singapore and many more countries. It offers products and solutions across 17 industries and has been a preferred partner of some of the world’s leading Banks, Insurance companies, Healthcare organizations, Governments, Telecom companies, Shared service centres, and BPOs among others.

The Company has a resilient business model in place with large annuity revenue streams and diversification across customers and geographies. Moreover, the Company’s solutions are of mission-critical nature for the long-term customers. They serve as the backbone of their operations. Newgen is actively helping customers to continue operations despite the disruptions.

Newgen makes continuous investments in R&D and has a strong team of 470+ employees which constantly focusses on various research & product development initiatives. During the year, it was granted 3 patents taking the total to 18 patent grants as of March 2021. The endeavour is to work on enhancing the product portfolio to meet the evolving industry and technological developments, changes

in customer requirements and competitive products and features, so as to seamlessly deliver according to customer needs while reducing their total cost of ownership.

Newgen focusses on advanced application design and development capabilities to strengthen its offering, while also continuously enhancing its deployment technology stack, enabling compliance, security, and scalability for enterprise needs. In line with changing market requirements, the Company continually develops new business capabilities/ modules/products to cater for the ever changing businesses. The Company expects to extend the solutions stack further across all verticals and get deeper and wider market presence. With low code capabilities of the platform the customers expect to gain from significant reduction in deployment cycle, effort and cost.

Newgen’s strong focus on product innovation makes it one of the few software products organizations which have attracted multiple recognitions from leading advisory and research firms from time to time.

It continues to extend its reach globally by expanding the direct and indirect sales network. The Company’s global sales organization is highly focussed and comprises about 300 employees in Sales & Marketing targeting specific geographies, supported by a large network of channel partners and system integrators. The Company would continue to leverage the partner network for further market expansion. The Company has been re-modelling new methods of sales and marketing including remote engagements and increasing localization efforts. The Company also continues to develop the GSI ecosystem for the mature markets.

With the long-term vision of growth, Newgen has strengthened its management team across geographies. It has on-boarded three senior leaders in sales, product, and human resources. They bring a wealth of industry experience from many prestigious organizations across the world. The Company’s strong team of professionals uphold the organization’s core values in all endeavours and work together for growth.

Industry Overview

The Company’s core addressable market can be broadly classified across low code, global ECM, BPM and CCM market. Newgen has further expanded its addressable market by developing solution frameworks in key verticals including banking, government/PSU, BPO/IT, healthcare and insurance (addressed as the Application PaaS market). The current disturbance on account of COVID-19 pandemic has increased the relevance of digital transformation projects across the globe. They are triggering investments

Financial Statements

Company Overview

Statutory Reports

across front-end transformations and personalization of the customer experience, as well as at the back end, to operate seamlessly, simplify and digitize processes, reduce turnaround times for customer service requests and enhance the end-to-end customer journey.

According to Gartner Market Estimates, the global content services market is estimated at $7142.8 million in 2019.[(*1)]

The overall low code market is estimated at $9152.6 million, of which the global intelligent business process management suits market is estimated at $2509.7 million in 2019.[(*2)]

It forecasts that Content services markets will grow at a CAGR of 4.3% over 2019 to 2025 to reach $9197.9 million in 2025.[(*1)]

The overall low code market is estimated to grow at a CAGR of 21.2% over 2019 to 2025 to reach $29063.4 million in 2025. Of this, the global intelligent business process management suits market is estimated to grow at a CAGR of 7.0% to reach $ 3758.4 million in 2025.[(*2)]

Business Continuity during COvId-19 pandemic

The second wave of Coronavirus (COVID-19) pandemic is causing significant disturbance and slowdown of economic activity globally. Governments and central banks have subsequently made monetary and fiscal interventions to stabilize economic conditions.

Newgen has a resilient business model in place with large annuity revenue streams i.e. recurring business from existing customers as well as diversification across verticals, clients and geographies. Newgen’s pre-emptive measures, business continuity processes and robust IT infrastructure ensured quick control and seamless transition to remote working environment.

Newgen’s solutions are of mission-critical nature for long-term customers. They serve as the backbone of their operations. During this COVID-19 time, the Company ensured customers’ operations and business continuity. The Company focussed on health and safety of employees while fully supporting clients worldwide. Our workforce across locations is efficiently working remotely for the past one year with data security and compliance and is fully functional.

The Company undertook the following processes and setups to ensure uninterrupted services for our customers during COVID-19:

Developed Support zones, with direct presence in multiple countries
Product-based implementation framework for consistent and distributed support services, globally, available in local time zones
Team collaboration tools, for secure remote operations
Extended development network via VPN for uncompromised communication
Centralized servers and standardized environments with synchronized cloud-based continuity strategy
Low code agile implementation and delivery

For our customers who have subscribed to our cloud services, we are adhering to the agreed-upon recovery point and recovery time objectives. Our operation centres are accessible from different cloud access zones, across geographies, to meet regulatory requirements. Our virtual cloud access zone is available for continued operations in case physical cloud access zones become unavailable.

During the year, the Company has also adopted a strategic approach to cost management and cashflow optimization.

Financial Performance

Consolidated Financials in ` lakhs

(All amounts in ` lakhs, except per share data and unless otherwise stated)

==> picture [499 x 187] intentionally omitted <==

----- Start of picture text -----

FY 2021 FY 2020
Revenue
Revenue from operations 67,262.44 66,075.62
Other income 1,503.74 2,096.29
Total revenue 68,766.18 68,171.91
Expenses
Employee benefits 32,761.76 34,239.46
Finance costs 562.58 1,091.21
Depreciation and amortization 2,014.97 1,991.11
Other expenses 15,310.17 21,375.96
Total expenses 50,649.48 58,697.74
Profit before tax 18,116.70 9,474.17
Profit after tax for the year 12,648.23 7,273.46
Other comprehensive income/(loss) for the year, net of income tax 233.47 241.70
Total comprehensive income for the year 12,881.70 7,515.16
----- End of picture text -----

Newgen Software Technologies Limited

Annual Report 2020-21

Revenue from Operations

The Company’s business has multiple revenue streams including from:

Annuity-based revenue: recurring fees/charges from the following:
SaaS: subscription fees for licenses in relation to platform deployed on cloud
ATS/AMC: charges for annual technical support and maintenance (including updates) of licenses, and installation
Support: charges for support and development services
Sale of software products: one-time upfront license fees in relation to the platform deployed on-premise
Sale of services: milestone-based charges for implementation and development, and charges for scanning services

On a consolidated basis, the Company’s revenue from operations stood at 67,262.44 lakhs reflecting an increase of 2% in FY ’21 as against 66,075.62 lakhs in FY ’20. Despite the pandemic year, the Company had significant incremental business from large existing customers as well as new customers.

The Company has been focussing on expanding the recurring revenues in order to increase the predictable revenue streams. The Annuity revenues comprised 57% of the total revenues during the year.

It has made substantial customer wins during the year and added 67 new customers and currently has an active customer base of about 550 clients.

Segment-wise Performance

Revenue by geographical segment is the primary reporting segment for the Company. USA and APAC have been the strongest growth centres for Newgen witnessing growth of 16% and 22% respectively during the year. Geographically, USA comprised 31% of the revenues, India comprised 29%, EMEA comprised 26%, and APAC (excluding India) comprised 14% of revenues.

Given the current environment, the Company is focussing on SaaS-based business model to provide digital transformation solutions to clients helping them sustain operations despite the restrictions. The Company witnessed strong growth momentum in the subscription revenues (including ATS/ AMC and SaaS) which grew by 19% during the year to reach ` 20,021.68 lakhs. The SaaS revenues specifically (though on a smaller base) witnessed the fastest growth amongst segments and grew 30%.

Newgen provides mission-critical solutions across key verticals. Banking and Financial Services vertical continued to be our largest vertical comprising 60% of revenues during

the year followed by Government/PSU (9%), Insurance (8%), Healthcare (7%) and BPO/IT (6%). The Company has low presence in currently impacted verticals due to the pandemic.

Profits and Margins

Profits and Margins witnessed a substantial increase due to various cost rationalization initiatives undertaken by the Company during the year as well as due to the organic impact of COVID-19. The Company continues to make investments in R&D and S&M efforts. The Company reported the EBITDA (adjusted for other income) of 19,190.51 lakhs in 2021, witnessing a growth of 83% as against 10,460.20 lakhs in 2020. Profit after Tax was at 12,648.23 lakhs in 2021 witnessing a growth of 74% as against 7,273.46 lakhs in 2020.

Share Capital

During the financial year, the Authorized Share Capital of the Company remains unchanged. The issued, subscribed and paid-up equity share capital of the Company, as on March 31, 2021 is 69,95,57,010 divided into 6,99,55,701 Equity shares of 10 each. 6,49,696 shares are held by the Trust.

Other Equity

The total retained earnings as on March 31, 2021 was 46,362.59 lakhs. During the year, the Company earned net profit of 12,648.23 lakhs. Newgen has proposed a dividend of ` 3.5 per share.

Securities Premium account stands at ` 10,173.60 lakhs (excluding premium on shares held by Newgen ESOP Trust).

Others comprised of Capital redemption reserve, General reserve, Capital reserve, Foreign currency translation reserve, Newgen ESOP Trust reserve, Share options outstanding reserve as well as items of other comprehensive income and stands at ` 3,102.87 lakhs.

Property, Plant & Equipment, Capital Work-in-Progress

and Intangible Assets

As at March 31, 2021, property, plant and equipment stands at 15,783.39 lakhs against 6,641.33 lakhs as on March 31, 2020 largely on account of capitalization of the new office premise in Noida. The Company’s Capital Work-in-Progress is NIL as against 9,072.62 lakhs as on March 31, 2020. The Right-of-use assets stand at 4,647.42 lakhs as against ` 6,252.30 lakhs largely on account of release of certain office premises.

The intangible assets of the Company are at ` 64.12 lakhs.

Investments

Investments comprise of investments in unquoted bonds and mutual funds. The aggregate value of these investments is ` 8,317.46 lakhs.

Financial Statements

Company Overview

Statutory Reports

Trade Receivables

The trade receivables (net of allowances) as on March 31, 2021 are 23,854.30 lakhs (allowances at 4,366.11 lakhs), against 26,939.67 lakhs (allowances at 5,488.49 lakhs) on March 31, 2020.

During the year, Debtor Days (net) stood at 129 days as compared to 149 days in FY ’20.

Other Financial Assets (Current)

Other Financial Assets ( 7,604.02 lakhs) largely comprise of unbilled revenues pertaining to amounts recognized based on services performed in advance of billing in accordance with contract terms to the extent of 6,926.04 lakhs.

Cash and Cash Equivalents and Other Bank Balances

Cash and Cash Equivalents stood at 7,174.94 lakhs and Other bank balances stood at 17,000.00 lakhs as of March 31, 2021.

Current Liabilities

Current liabilities represent borrowings, trade payables, other financial liabilities, deferred income, short-term provisions and other current liabilities. As on March 31, 2021, the Current liabilities are 21,238.76 lakhs ( 27,555.11 lakhs as on March 31, 2020). Out of these, the deferred revenue comprises of ` 10,391.66 lakhs.

Cash Flow

The net cash generated from operating activities were at 21,569.90 lakhs during the year ended March 31, 2021 compared to 9,005.33 lakhs during the year ended March 31, 2020.

Key Ratios

During the financial year, the Return on Average Net Worth was at 20.8% compared to 13.9% in the previous financial year. The Return on Average Capital Employed was at 27.9% compared to 16.6% in the previous year (adjusted for IPO proceeds utilization).

Opportunities and Threats

The Company is likely to benefit from the emerging trends in digitalization. Content management is at the core of digital transformation. The Company is well positioned to take advantage of the market opportunity with its strong product portfolio which endeavours to enable organizations to leverage the innovations in mobile, analytics, social and cloud technologies. Relevance of Digital transformation initiatives have increased further in these uncertain times and the Company has strategized new offerings pertaining to this.

The various threats that the Company addresses include uncertain global economic conditions; changes in fiscal, economic or political conditions in India and the currency risks; increasing competition; changing technologies and regulatory changes in the industry in which the company operates.

Risk Review

COVID-19 Pandemic-related Risk: While the Company believes strongly that it has a good portfolio of services to partner with customers, the future business could be impacted due to the COVID-19 pandemic and the lockdowns and restrictions imposed globally. Prolonged lockdown situation could decrease the chances of winning of new business as well as result in the Company’s inability to deploy onsite resources at different locations given the restrictions on movement. Moreover, there is a possibility that our customers might not be able to continue their businesses due to financial resource constraints or their services no-longer being availed by their customers. Customers could also postpone their discretionary spend due to change in priorities. There could also be time and cost overruns on projects. Newgen has been quick in adapting to the changing environment with its pre-emptive measures, business continuity processes and robust IT infrastructure. The Company has had seamless transition to remote working environment. The Company has changed its practices and systems while ensuring data security and has also reinvented new ways of working across the organization. The Company has been successfully managing remote and cloud deployments over the past year The Company is constantly keeping track of the developments in order to respond quickly to manage the dynamic situation.

Technology/Obsolescence Risk: Rapid technological advances, changing delivery models and evolving standards in computer software development and communications infrastructure, changing and increasingly sophisticated customer needs and frequent new product introductions and enhancements characterise the industry in which Newgen competes. Disruptive technologies such as Cloud, Big data, social and smart devices are changing the way business is done. The Company’s success depends upon its ability to anticipate, design, develop, test, market, license and support new software products, services, and enhancements of current products and services on a timely basis in response to both competitive threats and evolving industry requirements. However, its continuous investments in R&D and intellectual properties help the Company mitigate this risk.

Currency Risk: The Company derives about 70% of its revenues from international markets and thus is always exposed to unforeseen exchange rate fluctuations that can potentially impact the revenues and profits of the Company. To tackle with this potential risk, the Company follows hedging through Export Packing Credit limits. Further, export collections and payments are made through EEFC account to avoid currency fluctuations.

Market-specific Risk: The IT spends in any market are affected by the domestic as well as global economic conditions. Considerable or a prolonged slowdown in a particular country or a region or industry within a region severely affects the IT spends. Similarly, policy changes in global markets may

Newgen Software Technologies Limited

Annual Report 2020-21

also influence IT spending pattern. The Company can also be impacted by intense competition in the market. To deal with such market-specific risks, the Company endeavours to expand its clientele across industries and geographies continuously. From about 48 countries in FY ‘13, the Company increased its presence across 72 countries in FY ’21. Similarly, the Company now has close to 550 active clients in FY ’21, adding 67 new clients during the year. To deal with policy challenges, the Company has been giving an emphasis on growing its regional presence and hiring local talent, without compromising on economies of scales and cost. To deal with environmental changes, the Company has adopted its business continuity plan.

Attrition Risk: The Company’s business depends largely upon its highly skilled technology professionals and its ability to hire, attract, motivate, retain and train these personnel. Any inability to maintain a skilled and motivated team of professionals can affect the business. As a Company, there is strong focus on nurturing the existing workforce and attracting new talent through Newgen’s various HR policies and initiatives.

Credit Risk: Customer credit risk is the risk of default by the customers. The Company’s credit risk is managed according to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored. An impairment analysis is performed at each reporting date.

Our Strategies

Newgen’s strategies are based on addressing the market opportunities in enterprise platforms for ECM, BPM and CCM products, creating domain-rich solution frameworks on the platform and using low code platform capabilities to create solution frameworks. These include:

Focus on increasing the Annuity Revenue Streams including moving towards increasing cloud deployments

The Company has been focussing on increasing the share of its stable revenue streams which would help in reducing the seasonality in business. Currently, annuity revenues comprise 57% of revenues. These revenue streams ensure higher predictability of business. Given the current uncertain environment, the Company is witnessing increasing acceptance for cloud deployments across geographies – US, APAC, India, as well as EMEA region. During the year, cloud revenues witnessed a growth of 30% reaching ` 4,961.39 lakhs.

Expansion of business and geographical footprint

The Company plans to expand its market share across key geographies and solutions. Its platform is designed to be natively multi-lingual to address challenges in multi-national organizations. Newgen currently operates in 72 countries

and believes that it has a significant opportunity to grow the international footprint. It is investing in direct and indirect sales channels, professional services, customer support and channel partners to expand the geographical footprint. The Company has a regional go-to-market strategy with specific strategies for mature markets such as USA and developing markets such as India and South-East Asia. It has recently expanded in the Australian market as well. Through its direct and indirect sales channels, it plans to further grow the brand presence and partner networks in these new markets. Newgen is reorganizing its sales and marketing efforts and delivery operations so as to operate remotely and increase localization esp. in mature markets.

The Company plans to grow through its differentiated ‘land and expand’ model. The customers receive the complete set of modules and functionality of the platform with their initial purchase/subscription and can eventually build a number of applications on the platform due to an effective reduction in the per-user cost of each application and also save substantial costs of switching over to a new platform.

Newgen plans to develop new customer relationships by identifying potential customers that operate within the same verticals and engage in cross-selling of the solutions. It aims to also begin developing new verticals.

The Company is also developing the global system integrator (GSI) ecosystem forlong-term engagements and relationship building with leading GSIs.

Focus on attractive verticals in select mature markets

Newgen has a strong presence across regions in the banking and healthcare verticals and intends to continue to expand the customer base in these verticals in select mature markets, including USA and UK. The focus areas in these regions include banking and government/PSUs in partnership with consulting firms. As part of the strategy to increase the customer base in USA, the Company has made infrastructure and operational investments in USA including hiring of senior-level professionals in sales and marketing for the USA market since fiscal 2016. Further, the Company is now making in-roads in the Australian market.

Newgen plans to expand the product portfolio through investments in advanced features and technologies. It is constantly engaged in enhancement of R&D capabilities, particularly with a view to create solutions in emerging technologies that enhance the ability to develop tools for enabling entry into new areas and developing products that address customers in specific industries. Key focus areas include business intelligence and analytics, RPA, digitalization, blockchain, dev-ops and user experience. Newgen continues to work with customers in mature markets to build capabilities, both in domain and technology, for enhancing the product offering, strengthening the platform and expanding the number of features available to customers.

Financial Statements

Company Overview

Statutory Reports

The Company has built high-level domain expertise and created robust frameworks for Retail and Corporate lending in the Banking domain which are successfully operating across banks and geographies. It aims to increase customer penetration in these segments based on its strong credentials.

Expansion of strategic business applications to new verticals

The Company has used the platform to create vertical domain-rich products in several verticals, including banking, government/PSU, BPO/IT, insurance and healthcare. While the platforms are industry-agnostic, investments have been made to enhance the expertise of sales and marketing for key industry verticals. Newgen believes that focussing on the digital transformation needs of organizations within these industry verticals can help drive adoption of the platform. It also plans to target new verticals.

Attract, develop and retain highly-skilled employees

The Company’s employees are one of its most important assets. It focusses on the quality and level of service that the employees deliver by investing in recruitment, development, retention, maintenance of a culture of innovation and by creating both a challenging and rewarding work environment. Newgen’s talent development strategy focusses on engaging, motivating and developing a high performing workforce and aims to create and sustain a positive workplace culture for employees. Safety of the employees is of utmost importance to the organization and the Company has rapidly moved to a remote working environment with high engagement levels with the employees.

Internal Controls Systems & their Adequacy

The Company has aligned its current systems of internal financial control with the requirement of Companies Act 2013. The explanation of the term ‘Internal Financial Control’ has been provided only in the context of section 134(5)(e). It includes policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, thereby covering not only the controls pertaining to financial statements but also include strategic and operational controls pervasive across the entire business.

Newgen internal controls are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance of corporate policies. In view of the above, and for safeguarding the assets of the Company, preventing and detecting fraud or other irregularities and maintaining proper books of account and to ensure adequate internal financial control, the Company is already pursuing various Standard Operating Procedures (SOPs), Vigil Mechanism, audit

mechanism (through Internal Audit for FY ‘21, Secretarial Audit and Statutory Audit). Newgen also undergoes periodic audit by specialized third-party consultants and professionals for business-specific compliances such as Quality Management, Information Security Management, etc. It has continued its efforts to align all its processes and controls with global best practices. Our management assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2021. B S R & Associates, LLP, Chartered Accountants, the statutory auditors of Newgen have audited the financial statements included in this annual report and also reported on our internal control over financial reporting (as defined in section 143 of Companies Act 2013).

The Audit Committee reviews reports submitted by the management and audit reports submitted by M/s Grant Thornton, internal auditors, and B S R & Associates, LLP, statutory auditors. The audit committee also meets Newgen’s Statutory Auditors as well as Internal Auditors to ascertain, inter alia, their views on the adequacy of internal control systems and keeps the Board of Directors informed of its major observations periodically. Based on its evaluation (as defined in section 177 of Companies Act 2013), the audit committee has concluded that, as of March 31, 2021, the internal financial controls were adequate and operating effectively.

Human Resources

The Company follows the philosophy of achieving mutually beneficial and all-inclusive growth and thus values its human resources as its biggest asset. The employees are provided a fair environment supported by transparent policies to foster their personal growth along with attainment of corporate objectives. It encourages all employees to strike a perfect worklife balance. The Company’s policies are employee-centric and aim at keeping its personnel motivated and satisfied. Nonetheless, the Company has formed disciplinary policies and a code of due diligence to ensure smooth functioning of the business.

During the pandemic, the Company has ensured that it provided a safe remote working environment to its employees and continued to support them.

During the year, critical functions of the organization were strengthened with assessment of Leadership bandwidth to build a strong team aligned to the Company’s fundamentals and culture. Particular emphasis was placed on attracting, developing and retaining talent and fostering a unique performance culture. The HR function launched numerous initiatives to ensure a high-performing and engaged workforce.

As on March 31, 2021, the Company had 2,969 personnel (consolidated) of the Company and its subsidiaries. As a result of its visionary human resource policies, the Company has managed to attract and retain talent.

Newgen Software Technologies Limited

Annual Report 2020-21

Outlook

Newgen’s endeavour is to provide transformative experience to its customers through the Company’s cutting edge enterprise solutions in order to change the way organizations work. Digital Transformation has become a central component for businesses across all industries.

Organizations have increased their focus on investments across front-end transformations and personalization of the customer experience, as well as at the back end, to operate seamlessly, simplify and digitize processes, reduce turnaround times for customer service requests and enhance the end-to-end customer journey.

Newgen is pursuing its long-term growth strategies to expand its market share across key geographies and

solutions. The Company believes that focussing on the digital transformation needs of organizations within key industry verticals can help drive adoption of its platform. It continues to invest in direct and indirect sales channels, professional services, customer support and channel partners and global system integrator relationships to expand its geographical footprint. To address the market opportunities arising from digitization, Newgen seeks to continue to enhance its product portfolio and is currently working on several new projects. It also constantly works on strengthening its management team to meet the growing business needs.

With these measures, the Company would continue to work towards creating significant value for all its stakeholders moving forward.

*1 : Gartner, Forecast: Enterprise Application Software, Worldwide, 2019-2025, 1Q21 Update, Amarendra et al., March 25, 2021, Content Services, Content Service Platforms, Calculations performed by Newgen Software

*2 : Gartner, Forecast Analysis: Low-Code Development Technologies, Fabrizio Biscotti et al., January 22, 2021, Calculations performed by Newgen Software

Financial Statements

Company Overview

Statutory Reports

Independent Auditors’ Report

To the Members of Newgen Software Technologies Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Newgen Software Technologies Limited (“the Company”), which comprise the Standalone Balance Sheet as at 31 March 2021, and the Standalone Statement of Profit and Loss (including other comprehensive income), Standalone Statement of Changes in Equity and Standalone Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (“Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2021, and profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Description of Key Audit Matter

Revenue from operations (refer note 27 to the standalone financial statements)

The key audit matter

Revenue relating to implementation services from fixed price contracts is recognised based on percentage of completion method which is estimated by the Company basis the completion of milestones and activities agreed with the customers. Due to complexity and volume of transactions, significant judgements are required to estimate percentage of completion and determine timing and accuracy of recognition of revenue.

How the matter was addressed in our audit

In view of the significance of the matter we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence:

Evaluated the design and implementation of internal controls and tested the operating effectiveness of internal controls relating to determination of percentage of completion and estimation of efforts required to complete the performance obligation;
Involved specialists to assess the design, implementation and operating effectiveness of key IT controls over the IT environment in which the business systems operate and to test information technology system controls used in recording revenue.
Selected specific/statistical samples of existing and new contracts and performed the following procedures:
Inspected key terms, including price, deliverables, timetable and milestones set out in the contract for selected sample of contracts and identified the distinct performance obligations.
Tested project management tool for budgeted efforts and related percentage completion milestones and establishing accuracy of milestones based on actualisation of efforts for delivered projects.
Tested the details of activities completed with those stated in the customer contract, details of activities completed as provided by the project head and confirmation/acceptance of completion of such activities by the customer.

Newgen Software Technologies Limited

Annual Report 2020-21

Trade receivables (refer note 12 to the standalone financial statements) The key audit matter

How the matter was addressed in our audit

In view of the significance of the matter we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence:
Significant management judgement in determining the recoverable amount of trade receivables as estimating the recoverable amount involves inherent uncertainty.
Obtained an understanding of and assessed the design and implementation of Company’s key internal controls relating to debt collection and making provision for doubtful debts;
Assessed, on a sample basis that items in the receivables’ ageing report were classified within the correct ageing bracket by comparing individual items in the report with underlying documentation, which included sales invoices, proof of delivery and customers sign offs;
Assessed the assumptions and estimates made by the Company for the provision for doubtful debts with reference to our understanding of the debtors’ financial condition, the industry in which the debtors are operating, the ageing of overdue balances and historical and post year-end cash receipts from the debtors and by performed a retrospective analysis of the historical accuracy of these estimates; and
Tested the accuracy and completeness of underlying data for “expected credit loss model”.

Other Information

The Company’s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company’s annual report, but does not include the standalone financial statements and our auditors’ report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management’s and Board of Directors’ Responsibility for the Standalone Financial Statements

The Company’s Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income (loss), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India,

including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the

Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud

Financial Statements

Company Overview

Statutory Reports

or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures in the standalone financial statements made by the Management and Board of Directors.
Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial

statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors’ Report) Order, 2016 (“the Order”) issued by the Central Government in terms of section 143 (11) of the Act, we give in the “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
(A) As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

Newgen Software Technologies Limited

Annual Report 2020-21

d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31 March 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2021 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.
(B) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at 31 March 2021 on its financial position in its standalone financial statements - Refer Note 36 to the standalone financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv. The disclosures in the standalone financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in these standalone financial statements since they do not pertain to the financial year ended 31 March 2021.
(C) With respect to the matter to be included in the Auditors’ Report under section 197(16):

In our opinion and according to the information and explanations given to us, the remuneration paid by the company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

For B S R & Associates LLP Chartered Accountants Firm’s Registration No.: 116231W / W-100024

Sandeep Batra Partner Place: Gurugram Membership No. 093320 Date: 25 May 2021 UDIN: 21093320AAAAAS9805

Financial Statements

Company Overview

Statutory Reports

ANNexuRe A

referred to in our Independent Auditors’ Report to the members of Newgen Software Technologies Limited on the standalone financial statements for the year ended 31 March 2021, we report that:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of two years. In accordance with this programme, fixed assets at certain locations were verified by the management during the year. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds and lease deeds of the immovable properties are held in the name of the Company.
(ii) The Company is a service company, primarily engaged in the business of software product development including designing and delivering end-to-end software solutions covering the entire spectrum of software services from workflow automation to document management to imaging. Accordingly, it does not hold any physical inventories at the end of the year. Thus, paragraph 3(ii) of the Order is not applicable.
(iii) The Company has not granted any loans, secured or unsecured, to Companies, limited liability partnerships, firms or other parties covered in the register required under section 189 of the Companies Act, 2013. Accordingly, para 3(iii) of the Order is not applicable.
(iv) According to the information and explanations given to us, the Company has not given any loan, guarantee and security as specified under section 185 and 186 of the Companies Act, 2013. Further, the investment made by the Company is in compliance with section 186 of the Companies Act, 2013.
(v) As per the information and explanations given to us, the Company has not accepted any deposits as mentioned in the directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Act and the rules framed there under.
(vi) The Central Government has not prescribed the maintenance of cost records under sub section (1) of section 148 of the Companies Act, 2013 for any of the activities carried out by the Company.
(vii) (a) According to the information and explanation given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income- tax, Goods and Service tax, Duty of customs, Cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Duty of excise, Sales tax, Service tax and Value added tax.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax, Goods and Service tax, Duty of customs, Cess and other material statutory dues were in arrears as at 31 March 2021 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues in respect of Income tax, Goods and Service tax and Duty of customs which have not been deposited with the appropriate authorities on account of any dispute. As explained above, the Company did not have any dues on account of Duty of excise, Sales tax, Service tax and Value added tax.
(viii) In our opinion, and according to the information and explanations given to us, the Company has not defaulted in repayment of loans/borrowings to banks. Further, there were no dues payable to financial institutions, government or debenture holders during the year or outstanding as at 31 March 2021.
(ix) According to the information and explanations given to us, the Company did not raise any money by way of initial public offer or further public offer (including debt instrument) and did not have any term loans during the year. Accordingly, paragraph 3(ix) of the Order is not applicable to the Company.
(x) According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.
(xi) According to the information and explanations given to us and on the basis of our examination of the records of the Company, managerial remuneration has been

Newgen Software Technologies Limited

Annual Report 2020-21

paid/provided by the Company in accordance with provisions of section 197 read with Schedule V of the Companies Act, 2013.

(xii) According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no transactions with related parties which are not in compliance with Section 177 and 188 of the Companies Act, 2013 and the details have been disclosed in the standalone financial statements, as required, by the applicable accounting standards.
(xiv) According to the information and explanation given to us and on the basis of our examination of the records of the Company, the Company has not made any preferential allotment, private placement of shares and fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable.
(xv) According to information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) According to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For B S R & Associates LLP Chartered Accountants Firm’s Registration No.: 116231W / W-100024

Sandeep Batra Partner Place: Gurugram Membership No. 093320 Date: 25 May 2021 UDIN: 21093320AAAAAS9805

Financial Statements

Company Overview

Statutory Reports

ANNexuRe B

to the Independent Auditors’ report on the standalone financial statements of Newgen Software Technologies Limited for the year ended 31 March 2021

Report on the internal financial controls with reference to the aforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013

(Referred to in paragraph 2(A)(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

Opinion

We have audited the internal financial controls with reference to standalone financial statements of Newgen Software Technologies Limited (“the Company”) as of 31 March 2021 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to standalone financial statements and such internal financial controls with reference to standalone financial statements were operating effectively as at 31 March 2021, based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the “Guidance Note”).

Management’s Responsibility for Internal Financial Controls

The Company’s management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (hereinafter referred to as “the Act”).

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to standalone financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements were established and maintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial

controls with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls with reference to standalone financial statements.

Meaning of Internal Financial controls with Reference to Standalone Financial Statements

A company’s internal financial controls with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial controls with reference to standalone financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial controls with Reference to Standalone Financial Statements

Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone financial statements to future periods are subject to the risk that the internal financial controls with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

For B S R & Associates LLP Chartered Accountants Firm’s Registration No.: 116231W / W-100024

Sandeep Batra Partner Place: Gurugram Membership No. 093320 Date: 25 May 2021 UDIN: 21093320AAAAAS9805

Newgen Software Technologies Limited

Annual Report 2020-21

Standalone Balance Sheet as at 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [500 x 509] intentionally omitted <==

----- Start of picture text -----

Note As at As at
31 March 2021 31 March 2020
ASSeTS
Non-current assets
Property, plant and equipment 4 15,682.11 6,520.72
Capital work-in-progress 4 - 9,072.62
Right-of-use assets 19 4,239.66 6,007.01
Intangible assets 5 64.12 139.56
Investment in subsidiaries 6 1,420.34 1,417.65
Financial assets
Loans 7 338.30 427.69
Other fnancial assets 8 3,345.83 351.48
Deferred tax assets (net) 33 1,913.69 2,269.32
Income tax assets (net) 9 985.84 1,581.18
Other non-current assets 10 6.83 91.20
Total non-current assets 27,996.72 27,878.43
Current assets
Financial assets
Investments 11 8,317.46 7,610.67
Trade receivables 12 17,541.07 23,813.20
Cash and cash equivalents 13 2,873.38 5,758.70
Other bank balances 13A 17,000.00 6,516.11
Loans 14 159.44 95.56
Other fnancial assets 15 9,817.16 8,260.42
Other current assets 16 591.65 651.75
Total current assets 56,300.16 52,706.41
TOTAL ASSeTS 84,296.88 80,584.84
eQuITY AND LIABILITIeS
equity
Share capital 17 6,930.60 6,908.98
Other equity 18
Securities premium 10,173.59 10,069.59
Retained earnings 43,647.14 33,286.82
Others (including items of other comprehensive income) 2,597.76 2,427.16
Total equity attributable to the owners of the Company 63,349.09 52,692.55
Non-current liabilities
Financial liabilities
Lease liabilities 19 1,091.74 2,129.79
Provisions 20 2,844.25 2,320.24
Total non-current liabilities 3,935.99 4,450.03
Current liabilities
Financial liabilities
Lease liabilities 19 475.32 1,217.24
Borrowings 21 - 7,453.21
Trade payables 22 2,387.20 3,149.06
Other fnancial liabilities 23 4,315.69 4,036.57
Deferred income 24 6,574.73 5,972.22
Other current liabilities 25 1,189.12 1,206.00
Provisions 26 446.52 407.96
Income tax liabilities (net) 9A 1,623.22 -
Total current liabilities 17,011.80 23,442.26
Total liabilities 20,947.79 27,892.29
TOTAL eQuITY AND LIABILITIeS 84,296.88 80,584.84
Summary of significant accounting policies 3
----- End of picture text -----

The accompanying notes are an integral part of the Standalone Financial Statements As per our report of even date attached

For B S R & Associates LLP

For and on behalf of the Board of Directors of Newgen Software Technologies Limited

Chartered Accountants

Firm Registration No.: 116231W / W-100024

Sandeep Batra

Diwakar Nigam

T.S.Varadarajan Arun Kumar Gupta Whole Time Director Chief Financial Officer DIN: 00263115 Membership No: 056859

Chairman & Managing Director Whole Time Director DIN: 00263222 DIN: 00263115

Partner Membership No.: 093320 UDIN:21093320AAAAAS9805

Place: Gurugram Place: New Delhi Date: 25 May 2021 Date: 25 May 2021

Place: Chennai Place: Noida Date: 25 May 2021 Date: 25 May 2021

Aman Mourya Company Secretary Membership No: F9975

Place: Noida Date: 25 May 2021

100

Financial Statements

Company Overview

Statutory Reports

Standalone Statement of Profit and Loss for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [499 x 515] intentionally omitted <==

----- Start of picture text -----

Note For the year ended For the year ended
31 March 2021 31 March 2020
Income
Revenue from operations 27 61,039.47 57,740.12
Other income 28 1,430.95 2,084.60
Total income 62,470.42 59,824.72
expenses
Employee benefits expense 29 27,926.06 29,272.42
Finance costs 30 534.84 1,069.70
Depreciation and amortisation expense 31 1,851.48 1,807.80
Other expenses 32 15,188.91 19,116.44
Total expenses 45,501.29 51,266.36
Profit before tax 16,969.13 8,558.36
Tax expense 33
Current tax 3,632.26 2,419.17
Tax expense for earlier years 1,288.86 -
Deferred tax charge / (credit) 288.58 (452.04)
Income tax expense 5,209.70 1,967.13
Profit for the year 11,759.43 6,591.23
Other comprehensive income / (loss)
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit liability (asset) 102.73 (106.35)
Income tax relating to items that will not be reclassified to profit or loss (35.90) 37.16
Net other comprehensive income / (loss) not to be reclassified 66.83 (69.19)
subsequently to proft or loss
Items that will be reclassified subsequently to profit or loss
Debt instruments through other comprehensive income - net change in fair value 75.25 5.72
Income tax relating to items that will be reclassified to profit or loss (26.30) (2.00)
Net other comprehensive income to be reclassified subsequently to 48.95 3.72
proft or loss
Other comprehensive income / (loss) for the year, net of income tax 115.78 (65.47)
Total comprehensive income for the year 11,875.21 6,525.76
Profit attributable to:
Owners of the Company 11,759.43 6,591.23
Profit for the year 11,759.43 6,591.23
Other comprehensive income / (loss) attributable to:
Owners of the Company 115.78 (65.47)
Other comprehensive income / (loss) for the year 115.78 (65.47)
Total comprehensive income attributable to:
Owners of the Company 11,875.21 6,525.76
Total comprehensive income for the year 11,875.21 6,525.76
earnings per equity share 34
Nominal value of share INR 10 (31 March 2020: INR 10)
Basic earning per share (INR) 17.00 9.57
Diluted earning per share (INR) 16.82 9.52
Summary of significant accounting policies 3
----- End of picture text -----

The accompanying notes are an integral part of the Standalone Financial Statements As per our report of even date attached

For B S R & Associates LLP

For and on behalf of the Board of Directors of Newgen Software Technologies Limited

Chartered Accountants

Firm Registration No.: 116231W / W-100024

Sandeep Batra Diwakar Nigam T.S.Varadarajan Partner Chairman & Managing Director Whole Time Director Membership No.: 093320 DIN: 00263222 DIN: 00263115 UDIN:21093320AAAAAS9805

T.S.Varadarajan Arun Kumar Gupta Whole Time Director Chief Financial Officer DIN: 00263115 Membership No: 056859

Place: Gurugram Place: New Delhi Date: 25 May 2021 Date: 25 May 2021

Place: Chennai Place: Noida Date: 25 May 2021 Date: 25 May 2021

Aman Mourya Company Secretary Membership No: F9975

Place: Noida Date: 25 May 2021

101

Newgen Software Technologies Limited

Annual Report 2020-21

Standalone Statement of Changes in Equity for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [480 x 644] intentionally omitted <==

----- Start of picture text -----

Amount 6,958.57 37.00 6,995.57 86.59 6,908.98 6,995.57 6,995.57 64.97 6,930.60 Total attributable to owners of the Company 41,918.21 (202.00) 41,716.21 6,591.23 (65.47) 196.10 39.69 (2,087.57) (429.11) 87.03 (19.63) - 46,028.48 244.91 45,783.57
Debt 16.80 - 16.80 - 3.72 - - - - - (19.63) - 0.89 - 0.89
Total share captial instruments through OCI
- - - - - - - - - -
Amount 6,958.57 37.00 6,995.57 86.59 6,908.98 6,995.57 6,995.57 64.97 6,930.60 Items of Other comprehensive income Remeasurement of defined benefit liability (27.10) (27.10) (69.19) (96.29) (96.29)
Share options outstanding reserve 459.20 - 459.20 - - - - - - 87.03 - (140.48) 405.75 - 405.75
- - - - - - - - - -
Number 3,70,000 8,65,888 6,49,696
equity share capital 6,95,85,701 6,99,55,701 6,90,89,813 6,99,55,701 6,99,55,701 6,93,06,005 Newgen eSOP Trust reserve 257.78 257.78 39.69 297.47 297.47
- - - - - - - - - - -
Others
General reserve 1,731.39 1,731.39 1,731.39 1,731.39
Capital redemption reserve 87.95 - 87.95 - - - - - - - - - 87.95 - 87.95
Retained earnings 29,414.27 (202.00) 29,212.27 6,591.23 - - - (2,087.57) (429.11) - - - 33,286.82 - 33,286.82
Securities premium 9,977.92 - 9,977.92 - - 196.10 - - - - - 140.48 10,314.50 244.91 10,069.59
Other equity
Particulars Balance as at 1 April 2019 Add: Issued during the year to Newgen ESOP Trust Balance as at 31 March 2020 Less: Shares held by Newgen ESOP Trust Total Share capital as at 31 March 2020 Balance as at 1 April 2020 Balance as at 31 March 2021 Less: Shares held by Newgen ESOP Trust Total Share capital as at 31 March 2021 b. Particulars Balance as at 1 April 2019 Transition impact of Ind AS 116- Leases, net of taxes (refer note 19) Restated balance as at 1 April 2019 Total comprehensive income for the year ended 31 March 2020 Profit for the year Other comprehensive income/(loss) (net of tax) Securities premium on issue of shares to Newgen ESOP Trust Transactions with owners, recorded directly in equity Addition to Newgen ESOP Trust reserve Contributions by and distributions to owners Dividend on equity shares Dividend distribution tax on dividend on equity shares Employee stock compensation expense (Gain) of debt instrument transferred to Statement of Profit and Loss Transferred to securities premium account on exercise of stock options Balance as at 31 March 2020 Less: Securities premium on shares held by Newgen ESOP Trust Balance as at 31 March 2020
----- End of picture text -----*

102

Financial Statements

Company Overview

Statutory Reports

Standalone Statement of Changes in Equity for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Total attributable to owners of the Company	Total attributable to owners of the Company	46,028.48	11,759.43	115.78		106.85		(1,399.11)	64.59	9.00	(21.62)	56,663.40	244.91	56,418.49
mprehensive e	Debt instruments through OCI	0.89	-	48.95		-		-	-	9.00	-	58.84	-	58.84
Items of Other co incom	Remeasurement of defned beneft liability	(96.29)	-	66.83		-		-	-	-	-	(29.46)	-	(29.46)
	Share options outstanding reserve	405.75	-	-		-		-	64.59	-	(125.62)	344.72	-	344.72
hers	Newgen eSOP Trust reserve	297.47	-	-		106.85		-	-	-	-	404.32	-	404.32
Ot	General reserve	1,731.39	-	-		-		-	-	-	-	1,731.39	-	1,731.39	Note 3
	Capital redemption reserve	87.95	-	-		-		-	-	-	-	87.95	-	87.95	Summary of signifcant accounting policies
Retained earnings		33,286.82	11,759.43	-		-		(1,399.11)	-	-	-	43,647.14	-	43,647.14
Securities premium		10,314.50	-	-		-		-	-	-	104.00	10,418.50	244.91	10,173.59
Particulars		Balance as at 1 April 2020 Proft for the year		Other comprehensive income/(loss) (net of tax)	Transactions with owners, recorded directly in equity	Addition to Newgen ESOP Trust reserve	Contributions by and distributions to owners	Dividend on equity shares	Employee stock compensation expense	(Gain) of debt instrument transferred to Statement of Proft and Loss	Transferred to securities premium account on exercise of stock options Balance as at 31 March 2021 Less: Securities premium on shares held by Newgen ESOP Trust Balance as at 31 March 2021 * Refer note 18

103

Newgen Software Technologies Limited

Annual Report 2020-21

Standalone Statement of Cash Flows

for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [500 x 612] intentionally omitted <==

----- Start of picture text -----

Particulars For the year ended For the year ended
31 March 2021 31 March 2020
A. Cash flows from operating activities
Net profit before tax 16,969.13 8,558.36
Adjustments for:
Depreciation and amortisation 1,851.48 1,807.80
Gain on sale of property, plant and equipment (10.16) (1.10)
Loss allowance on trade receivables 2,149.62 1,736.67
Liabilities/ provision no longer required written back (7.27) (169.22)
Loss allowance on other financial assets - 23.72
Unrealised foreign exchange gain (10.61) (349.95)
Share based payment - equity settled 61.90 82.82
Finance cost on lease liabilities 272.67 335.74
Finance cost 192.70 649.65
Fair value changes of financial assets at FVTPL (70.60) (173.01)
(Profit)/loss on sale of mutual funds (net) at FVTPL (125.98) 6.85
Loss on redemption of bonds at FVTOCI 27.78 7.07
Interest income on security deposits at amortised cost (38.69) (40.09)
Interest income from government and other bonds at FVTOCI (240.64) (148.11)
Interest income from bank deposits (754.90) (804.15)
-
Profit on lease termination (87.49)
Operating cash flow before working capital changes 20,178.94 11,523.05
Decrease/ (Increase) in trade receivables 4,133.12 (1,288.73)
Decrease/ (Increase) in loans 74.50 (108.73)
Increase in other financial assets (1,350.05) (1,753.07)
Decrease in other assets 84.94 29.37
Increase in provisions 665.30 346.37
Increase in other financial liabilities 727.25 171.84
Increase in other liabilities 585.63 992.08
(Decrease)/ Increase in trade payables (754.59) 856.80
Cash generated from operations 24,345.04 10,768.98
Income taxes paid (net) (2,855.62) (2,990.58)
Net cash generated from operating activities (A) 21,489.42 7,778.40
B. Cash flows from investing activities
Acquisition or construction of property plant and equipment including intangible (1,166.15) (4,330.75)
assets, capital work-in-progress and capital advances
Proceeds from sale of property plant and equipment 12.33 2.79
Purchase of mutual funds and bonds (14,893.36) (4,742.85)
Proceeds from redemption of mutual funds and bonds 14,444.43 2,467.46
Interest received from bonds 168.20 168.30
Interest received from bank deposits 626.40 501.70
-
Investment in subsidiary company (491.05)
Investment in bank deposits (net of maturities) (13,483.99) (4,415.08)
Net cash used in investing activities (B) (14,292.14) (10,839.48)
----- End of picture text -----

104

Financial Statements

Company Overview

Statutory Reports

Standalone Statement of Cash Flows

for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [500 x 304] intentionally omitted <==

----- Start of picture text -----

Particulars For the year ended For the year ended
31 March 2021 31 March 2020
C. Cash flows from financing activities
(Repayment of) / proceeds from short-term borrowings (net) (7,453.21) 454.03
Repayment of lease liabilities (1,297.51) (2,258.91)
Proceeds from issue of equity shares under ESOP scheme - 380.97
Dividend paid (1,399.11) (2,087.57)
Dividend distribution tax - (429.11)
Interest expense on borrowings (86.71) (635.26)
Gain on transfer of equity shares by Newgen ESOP trust 153.94 39.69
Net cash used in financing activities (C) (10,082.60) (4,536.16)
Net decrease in cash and cash equivalents (A + B + C) (2,885.32) (7,597.24)
Cash and cash equivalents at the beginning of the year 5,758.70 13,355.94
Cash and cash equivalents at the end of the year 2,873.38 5,758.70
Components of cash and cash equivalents: (refer note 13)
Cash in hand 3.08 4.51
Balances with banks:
- in current accounts 2,710.30 1,754.19
- balances with scheduled banks in deposit accounts with original maturity of less than 160.00 4,000.00
3 months
2,873.38 5,758.70
----- End of picture text -----

Notes:

The cash flow statement has been prepared under the indirect method as set out in the Ind AS 7 “Statement of Cash Flows

The accompanying notes are an integral part of the Standalone Financial Statements As per our report of even date attached

For B S R & Associates LLP

For and on behalf of the Board of Directors of Newgen Software Technologies Limited

Chartered Accountants

Firm Registration No.: 116231W / W-100024

Sandeep Batra

Sandeep Batra Diwakar Nigam T.S.Varadarajan Partner Chairman & Managing Director Whole Time Director Membership No.: 093320 DIN: 00263222 DIN: 00263115 UDIN:21093320AAAAAS9805

Sandeep Batra Diwakar Nigam T.S.Varadarajan Arun Kumar Gupta Partner Chairman & Managing Director Whole Time Director Chief Financial Officer Membership No.: 093320 DIN: 00263222 DIN: 00263115 Membership No: 056859 UDIN:21093320AAAAAS9805 Place: Gurugram Place: New Delhi Place: Chennai Place: Noida Date: 25 May 2021 Date: 25 May 2021 Date: 25 May 2021 Date: 25 May 2021

Aman Mourya Company Secretary Membership No: F9975

Place: Noida Date: 25 May 2021

105

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

1. Background

Newgen Software Technologies Limited (‘Newgen’ or ‘the Company’) is a public company domiciled and incorporated under the provisions of the Companies Act applicable in India. The registered office of the Company is situated at A-6, Satsang Vihar Marg, Qutab Institutional Area, New Delhi - 110067. The Company raised money by way of initial public offer during the year ended 31 March 2018 and its shares were listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) of India.

The Company is a global software Company and is engaged in the business of software product development including designing and delivering endto-end software solutions covering the entire spectrum of software services from workflow automation to Document management to imaging. Newgen provides a complete range of software that helps automate business processes. Newgen’s solutions enable document intensive organizations/ industries such as Finance and Banking, Insurance and government departments to improve productivity through better document management and workflow implementation.

2. Basis of Preparation

A. Statement of compliance

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. The financial statements for the year ended 31 March 2018 were the first financial statements that the Company had prepared in accordance with Ind AS.

The financial statements were authorised for issue by the Company’s Board of Directors on 25 May 2021.

Details of the Company’s accounting policies are included in Note 3.

B. Functional and presentation currency

These financial statements are presented in Indian Rupees (INR), which is also the Company’s functional currency. All amounts have been rounded-off to the nearest lakhs, unless otherwise indicated.

C. Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following items:

==> picture [223 x 68] intentionally omitted <==

----- Start of picture text -----

Items Measurement basis
Certain financial assets Fair value
and liabilities
Net defined benefit Fair value of plan assets
(asset)/ liability less present value of
defned beneft obligations
----- End of picture text -----

D. Use of estimates and judgements

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and the accompanying disclosures. Uncertainty about the assumptions and estimates could result in outcomes that may require material adjustment to the carrying value of assets or liabilities affected in future periods.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

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 3(i) and Note 27 – revenue recognition from fixed price contracts of software implementation services: percentage of completion method to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended.
Note 3(l) and Note 19 – determination of lease term;

Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending 31 March 2021 is included in the following notes:

Note 3(c)(iii) –Estimation of Useful lives of intangible assets and Property, plant and equipment
Note 29 – Measurement of defined benefit obligations: key actuarial assumptions;
Note 33 – Recognition of deferred tax assets: availability of future taxable profit against which tax losses carried forward can be used;
Note 35 –Fair value of share based payments
Note 44(a) – Impairment of trade receivables and financial assets.
Note 19 – Recognition of right of use asset and lease liability

Impact of COVID-19 (pandemic)

The Company has taken into account all the possible impacts of COVID-19 in preparation of these standalone financial statements, including but not limited to its assessment of,

106

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

liquidity and going concern assumption, recoverable values of its financial and non-financial assets, impact on revenue recognition owing to changes in cost budgets of fixed price contracts and impact on leases. The Company has carried out this assessment based on available internal and external sources of information upto the date of approval of these standalone financial statements and believes that the impact of COVID-19 is not material to these financial statements and expects to recover the carrying amount of its assets. The impact of COVID-19 on the standalone financial statements may differ from that estimated as at the date of approval of these standalone financial statements owing to the nature and duration of COVID-19

E. Current and non-current classification

The Company presents assets and liabilities in the balance sheet based on current / non-current classification.

An asset is classified as current when it satisfies any of the following criteria:

it is expected to be realized in, or is intended for sale or consumption in, the Company’s normal operating cycle.
it is held primarily for the purpose of being traded;
it is expected to be realized within 12 months after the reporting date; or
it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.
A liability is classified as current when it satisfies any of the following criteria:
it is expected to be settled in the Company’s normal operating cycle;

Operating cycle

Based on the nature of the operations and the time between the acquisition of assets for processing and their realization in cash or cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current/ non-current classification of assets and liabilities.

F. Measurement of fair values

A number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Company has an established control framework with respect to the measurement of fair values. The finance team has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the chief financial officer. The Company regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the Company assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.

Significant valuation issues are reported to the Company’s audit committee.

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).
it is held primarily for the purpose of being traded;
it is due to be settled within 12 months after the reporting date; or
the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Current assets/liabilities include current portion of noncurrent financial assets/liabilities respectively. All other assets/ liabilities are classified as non-current. Deferred tax assets and liabilities (if any) are classified as noncurrent assets and liabilities.

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 recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

107

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Further information about the assumptions made in measuring fair values is included in the following notes:

Note 35 – Share-based payment arrangements; and

Note 44 – Financial instruments.

3. Significant Accounting Policies

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as FVTPL:

a. Foreign currency

i. Functional currency

The Company’s financial statements are presented in INR, which is also the Company’s functional currency.

ii. Foreign currency transactions

Transactions in foreign currencies are translated into INR, the functional currency of the Company, at the exchange rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction.

b. Financial instruments

i. Recognition and initial measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.

A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.

ii. Classification and subsequent measurement

Financial assets:

On initial recognition, a financial asset is classified as measured at

Amortised cost;
Fair value through Other Comprehensive Income (FVOCI) – debt investment;
Fair Value through Other Comprehensive Income (FVOCI) – equity investment; or
FVTPL
the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as FVTPL:

the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets: Business model assessment

The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management, for instance the stated policies and objectives for the portfolio, frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Company’s continuing recognition of the assets.

108

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

Financial assets: Assessment whether contractual cash flows are solely payments of principal and Interest.

For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin. In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:

contingent events that would change the amount or timing of cash flows;
terms that may adjust the contractual coupon rate, including variable interest rate features;
prepayment and extension features; and

Basis the above classification criteria, Company’s investments are classified as below:-

Investments in government and other bonds have been classified as FVOCI.
Investments in Mutual funds have been classified as FVTPL.

Financial assets: Subsequent measurement and gains and losses

Financial assets at FVTPL

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.

Debt investments at FVOCI

These assets are subsequently measured at fair value. Interest income under the effective interest method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.

Equity investments at FVOCI

These assets are subsequently measured at fair value. Dividends are recognized as income in Statement of profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to Statement of profit or loss.

Financial liabilities: Classification, subsequent

measurement and gains and losses

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.

iii. Derecognition

Financial assets

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.

If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.

Financial liabilities

Financial assets at amortised cost

These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.

The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case,

109

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.

iv. Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

v. Derivatives and Embedded derivatives

Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognised in profit or loss.

Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in Statement of profit or loss.

Advances paid towards the acquisition of property, plant and equipment outstanding at each Balance Sheet date is classified as capital advances under other non-current assets and the cost of assets not ready to use before such date are disclosed under ‘Capital workin-progress.

ii.

Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

iii. Depreciation

Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values over their estimated useful lives using the straight-line method, and is generally recognised in the statement of profit and loss. Assets acquired under finance leases are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Freehold land is not depreciated.

c. Property, plant and equipment

i. Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any.

Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located.

The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labor, any other costs directly attributable to bringing the item to working condition for its intended use, and estimated costs of dismantling and removing the item and restoring the site on which it is located.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

The estimated useful lives of items of property, plant and equipment for the current and comparative periods are as follows:

==> picture [222 x 161] intentionally omitted <==

----- Start of picture text -----

Category of property, plant estimated useful
and equipment life (Years)
Building 60
Plant and equipment 15
Leasehold Improvements 3
Office equipment 10
Furniture and Fixtures 10
Vehicles 8
Computer hardware
- servers and networks 6
- Computers 3-5
----- End of picture text -----*

Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

Depreciation on addition (disposal) is provided on a pro-rata basis i.e. from (upto) the date on which asset is ready for use (disposed off).

*Leasehold improvements are depreciated over the period of the lease term of the respective property or 3 years whichever is lower.

110

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Leasehold land is amortised over the lease period of 90 years.

The Company measures loss allowances at an amount equal to lifetime expected credit losses.

**Based on an internal technical assessment, the management believes that the useful lives as given above best represents the period over which management expects to use its assets. Hence, the useful life of plant and equipment is different from the useful life as prescribed under Part C of Schedule II of Companies Act, 2013.

d. Intangible assets

Recognition and measurement

Intangible assets that are acquired by the Company are measured initially at cost. After initial recognition, an intangible asset is carried at its cost less accumulated amortisation and accumulated impairment loss, if any.

Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits from the specific asset to which it relates.

Amortization

Intangible assets of the Company represents computer software and are amortized using the straight-line method over the estimated useful life (at present 3-4 years) or the tenure of the respective software license, whichever is lower. The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of profit or loss when the asset is derecognized.

e. Impairment

i. Impairment of financial instruments

The Company recognises loss allowances for expected credit losses on:

financial assets measured at amortised cost; and
financial assets measured at FVOCIdebt investments.

At each reporting date, the Company assesses whether financial assets carried at amortised cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit- impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.

12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over which the Company is exposed to credit risk.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Company considers a financial asset to be in default when:

the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realising security (if any is held); or
the financial asset is 90 days or more past due.

The Company considers a debt security to have low credit risk when its credit risk rating is equivalent to ‘investment grade’ e.g. BBB or higher as per renowned rating agencies.

Measurement of expected credit losses

Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).

As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forwardlooking estimates are analysed.

111

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Presentation of allowance for expected credit losses in the balance sheet

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

For debt securities at FVOCI, the loss allowance is charged to profit or loss.

Write-off

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

ii. Impairment of Non-financial assets

The carrying amounts of assets are reviewed at each reporting date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset (or cash generating unit) exceeds its recoverable amount. The recoverable amount is the greater of the asset’s (or cash generating unit’s) net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset (or cash generating unit).

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 amortisation, if no impairment loss had been recognised

f. Employee benefits

i. Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and 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 amount of obligation can be estimated reliably.

ii. Share-based payment transactions

The grant date fair value of equity settled share-based payment awards granted to employees of the Company and subsidiaries of the Company is recognised as an employee expense and deemed investment, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as expense/deemed investment is based on the estimate of the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense/ dement investment is based on the number of awards that do meet the related service and non-market vesting conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

iii. Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards Government administered provident fund scheme. Obligations for contributions to defined contribution plans are recognized as an employee benefit expense in profit or loss in the periods during which the related services are rendered by employees.

Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

Defined benefit plans

iv.

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company’s gratuity scheme is a defined benefit plan. The present value of obligations under such defined benefit plans are determined based on actuarial valuation carried out by an independent actuary using the Projected Unit Credit Method, which recognizes each period of service as giving rise to an additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of estimated future cash flows. The discount rates used for determining the present value of obligation under defined benefit plans, are based on the market yields on government securities as at the balance sheet date, having maturity period approximating to the terms of related obligations

112

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income and are never reclassified to profit or loss. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in the profit or loss as past service cost.

v. Other long-term employee benefits

The Company’s net obligation in respect of long-term employee benefits other than post-employment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted.

The employees can carry-forward a portion of the unutilized accrued compensated absences and utilize it in future service periods or receive cash compensation on termination of employment. Since the compensated absences do not fall due wholly within twelve months after the end of the period in which the employees render the related service and are also not expected to be utilized wholly within twelve months after the end of such period, the benefit is classified as a long-term employee benefit. The Company records an obligation for such compensated absences in the period in which the employee renders the services that increase this entitlement. The obligation is measured on the basis of independent actuarial valuation using the projected unit credit method. Re measurements as a result of experience adjustments and changes in actuarial assumptions are recognized in the profit or loss

g. Provisions (other than for employee benefits)

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not provided for. Provisions are reviewed by the management at each reporting date and adjusted to reflect the current best estimates.

Onerous contracts

A contract is considered to be onerous when the expected economic benefits to be derived by the Company from the contract are lower than the

h.

i.

unavoidable cost of meeting its obligations under the contract. The provision for an onerous contract is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before such a provision is made, the Company recognises any impairment loss on the assets associated with that contract.

Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation, or a present obligation whose amount cannot be estimated reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements

Revenue

Effective 1 April 2018, the Company has applied Ind AS 115 which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised. Ind AS 115 replaces Ind AS 18 Revenue and Ind AS 11 Construction Contracts. The Company has adopted Ind AS 115 using the cumulative effect method. The adoption of the standard did not have any material impact to the Standalone financial statements of the Company.

Revenues from customer’s contracts are considered for recognition and measurement when the contract has been approved by the parties, in writing, to the contract, the parties to contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. Revenue is recognized upon transfer of control of promised products or services (“performance obligations”) to customers in an amount that reflects the consideration the Company has received or expects to receive in exchange for these products or services (“transaction price”). When there is uncertainty as to collectability, revenue recognition is postponed until such uncertainty is resolved.

Sale of License

Revenue from sale of licenses for software products is recognised when the significant risks and rewards of ownership have been transferred to the buyer which generally coincides with delivery of licenses to the customers, recovery of the consideration is probable, the associated costs and possible return of software sold can be estimated reliably, there is no continuing effective control over, or managerial involvement with the licenses transferred and the amount of revenue can be measured reliably.

113

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

ii. Rendering of services

Revenue from services rendered is recognized in proportion to the stage of completion of the transaction at the reporting date. Efforts or costs expended have been used to measure progress towards completion as there is a direct relationship between input and productivity.

Software Implementation Services

The revenue from fixed price contracts for software implementation is recognized based on proportionate completion method based on hours expended, and foreseeable losses on the completion of contract, if any are recognized immediately. Efforts or costs expended have been used to determine progress towards completion as there is a direct relationship between input and productivity. Progress towards completion is measured as the ratio of costs or efforts incurred to date (representing work performed) to the estimated total costs or efforts. Estimates of transaction price and total costs or efforts are continuously monitored over the lives of the contracts and are recognized in profit or loss in the period when these estimates change or when the estimates are revised. Revenues and the estimated total costs or efforts are subject to revision as the contract progresses. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the estimated efforts or costs to complete the contract.

The Company is also involved in time and material contracts and recognizes revenue as the services are performed.

Digitization services

Revenue from digitization services is recognized as services are rendered to the customer.

Annual Technical services

Revenue from annual technical service and maintenance contracts is recognised ratably over the term of the underlying maintenance arrangement.

iii. Sale of right to use software

Software-as-a-service, that is, a right to access software functionality in a cloud-based-infrastructure provided by the Company. Revenue from arrangements where the customer obtains a “right to access” is recognized over the access period.

Revenue from client training, support and other services arising due to the sale of license is recognized as the performance obligations are satisfied.

iv.

Revenue is recognised, net of returns, trade discounts and volume rebates. This inter alia involves discounting of the consideration due to the present value if payment extends beyond normal credit terms. Reimbursements of out-of-pocket expenses received from customers have been netted off with expense.

Amounts received or billed in advance of services to be performed are recorded as advance from customers/ unearned revenue. Unbilled revenue represents amounts recognized based on services performed in advance of billing in accordance with contract terms.

Multiple deliverable arrangements

When two or more revenue generating activities or deliverables are provided under a single arrangement, the Company has applied the guidance in Ind AS 115, Revenue from contract with customer, by applying the revenue recognition criteria for each distinct performance obligation. The arrangements with customers generally meet the criteria for considering license for software products and related services as distinct performance obligations. For allocating the transaction price, the Company has measured the revenue in respect of each performance obligation of a contract at its relative standalone selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In cases where the company is unable to determine the standalone selling price, the company uses the expected cost plus margin approach in estimating the standalone selling price.

Arrangements to deliver software products generally have three elements license, implementation and Annual Technical Services (ATS). The company has applied the principles under Ind AS 115 to account for revenues from these performance obligations. When implementation services are provided in conjunction with the licensing arrangement and the license and implementation have been identified as two separate performance obligations, the transaction price for such contracts are allocated to each performance obligation of the contract based on their relative standalone selling prices. In the absence of standalone selling price for implementation, the performance obligation is estimated using the expected cost plus margin approach.

Deferred contract costs are incremental costs of obtaining a contract which are recognized as assets and amortized over the term of the contract.

Revenue from subsidiaries is recognised based on transaction price which is at arm’s length.

Contract assets are recognised when there is excess of revenue earned over billings on contracts. Contract

114

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

assets are classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms.

Unearned and deferred revenue (“contract liability”) is recognised when there is billings in excess of revenues.

j. Recognition of dividend income, interest income or expense

Dividend income is recognised in Statement of profit or loss on the date on which the Company’s right to receive payment is established.

Interest income or expense is recognised using the effective interest method.

The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

the gross carrying amount of the financial asset; or
the amortised cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

At the date of commencement of the lease, the Company recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.

k. Sale of investments

Profit on sale of investments is recorded on transfer of title from the Company and is determined as the difference between the sales price and the carrying value of the investment

l. Leases

The Company as a lessee

The Company’s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (1) the contract involves the use of an identified asset (2) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (3) the Company has the right to direct the use of the asset.

Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or

115

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

a termination option. The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of leases with similar characteristics.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

m. Income tax

Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to an item recognised directly in equity or in other comprehensive income.

i. Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

Deferred tax

ii.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits. Deferred tax is not recognised for:

temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss at the time of the transaction;

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets – unrecognised or recognised, are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realized.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

Minimum Alternative Tax (‘MAT’) under the provisions of the Income-tax Act, 1961 is recognised as current tax in the Statement of Profit and Loss. The credit available under the Act in respect of MAT paid is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the period for which the MAT credit can be carried forward for set-off against the normal tax liability. MAT credit recognised as an asset is reviewed at each balance sheet date and written down to the extent the aforesaid convincing evidence no longer exists.

Cash and cash equivalents

n.

Cash and short-term deposits in the Balance Sheet comprise cash at banks and cash in hand and shortterm deposits with an original maturity of three months or less, which are subject to insignificant risk of changes in value.

o. Earnings per share (“EPS”)

Basic earnings per share is calculated by dividing the profit attributable to the owners of the Company by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed using the net profit or loss for the year attributable to equity shareholders and the weighted average number of common and dilutive common equivalent shares outstanding during the year but including share options, compulsory convertible preference shares except where the result would be anti-dilutive.

p. Share Capital

Equity Shares

Equity shares are classified as equity. Incremental costs directly attributable to the issuance of new equity shares are recognized as a deduction from equity.

116

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Dividends

The final dividend on shares is recorded as a liability on the date of approval by the shareholders, and interim dividend are recorded as a liability on the date of declaration by the Company’s Board of Directors.

q. Basis of segmentation

Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM).

Identification of segments:

All operating segments’ results are reviewed regularly by the Board of Directors, who have been identified as the CODM, to allocate resources to the segments and assess their performance. Refer note 46 for segment information.

ESOP Trust

r.

The ESOP trust has been treated as an extension of the Company and accordingly shares held by ESOP Trust are netted off from the total share capital. Consequently, all the assets, liabilities, income and expenses of the trust are accounted for as assets and liabilities of the Company, except for profit / loss on issue of shares to the employees and dividend received by trust which are directly adjusted in the Newgen ESOP Trust reserve.

Rounding of amounts

s.

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise stated.

t. Standards issued but not yet effective

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards. There is no such notification which would have been applicable from 1 April 2021.

117

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [404 x 646] intentionally omitted <==

----- Start of picture text -----

Capital work- in-progress# 8,321.36 3,959.24 (3,207.98) - 9,072.62 9,072.62 437.91 (9,510.53) - - - - - - - - - - - 9,072.62 -
Total 7,881.71 (3,523.68) 3,765.45 - 62.96 8,060.52 8,060.52 9,841.59 - 147.84 17,754.27 1,205.12 (118.50) 514.45 61.27 1,539.80 1,539.80 678.03 145.67 2,072.16 6,520.72 15,682.11
Computer and servers 1,352.78 - 431.06 - 37.61 1,746.23 1,746.23 284.12 - 82.41 1,947.94 591.93 - 290.02 37.08 844.87 844.87 308.30 82.19 1,070.98 901.36 876.96
Furniture and fixtures 290.33 - 61.20 - 3.90 347.63 347.63 283.97 - 16.71 614.89 88.11 - 36.39 3.25 121.25 121.25 45.51 15.54 151.22 226.38 463.67
Office equipment 422.01 - 745.32 - 7.05 1,160.28 1,160.28 171.46 - 16.44 1,315.30 145.49 - 70.75 6.99 209.25 209.25 128.61 16.25 321.61 951.03 993.69
Vehicles 244.85 - - - - 244.85 244.85 - - 16.20 228.65 76.43 - 34.58 - 111.01 111.01 34.49 16.20 129.30 133.84 99.35
- - - - - - - - - - - - - - INR 437.91 lakhs on construction of building and the total amount of INR 9,510.53
`
Leasehold improvements 5.99 5.99 5.99 5.99 5.99 5.99 5.99 5.99
Plant and machinery 331.37 - 141.87 - 14.40 458.84 458.84 299.31 - 16.08 742.07 106.80 - 42.05 13.95 134.90 134.90 54.56 15.49 173.97 323.94 568.10
Buildings 1,706.42 - 2,386.00 - - 4,092.42 4,092.42 8,802.73 - - 12,895.15 71.87 - 40.66 - 112.53 112.53 106.56 - 219.09 3,979.89 12,676.06
Leasehold land 3,523.68 (3,523.68) - - - - - - - - - 118.50 (118.50) - - - - - - - - -
Freehold land 4.28 - - - - 4.28 4.28 - - - 4.28 - - - - - - - - - 4.28 4.28
Cost Balance as at 1 April 2019 Transition impact of Ind AS 116 (refer note 19) Additions during the year Capitalized during the year Less: Disposals during the year Balance as at 31 March 2020 Balance as at 1 April 2020 Additions during the year Capitalized during the year Less: Disposals during the year Balance as at 31 March 2021 Accumulated Depreciation Balance as at 1 April 2019 Transition impact of Ind AS 116 (refer note 19) Additions during the year Less: Disposals during the year Balance as at 31 March 2020 Balance as at 1 April 2020 Additions during the year Less: Disposals during the year Balance as at 31 March 2021 Carrying amount (net) Balance as at 31 March 2020 Balance as at 31 March 2021 As at 31 March 2021 properties with a carrying amount of INR 374.60 lakhs (31 March 2020 : INR 382.70 lakhs) are subject to first charge to working capital loans from banks. Represents land at Chennai and Noida location taken on finance lease for a term of 99 and 90 years respectively. # Capital work in progress represents acquistion and further construction of office premises at Noida, Uttar Pradesh wherein cost incurred upto 31 March 2020 amounting to INR 9,072.62 lakhs. During the year ended 31 March 2021, additional cost was incurred amounting to lakhs was capitalised during the year.
----- End of picture text -----

118

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

5. Intangible assets

==> picture [501 x 240] intentionally omitted <==

----- Start of picture text -----

Computer software
Cost
Balance as at 1 April 2019 304.25
Additions during the year 97.69
Balance as at 31 March 2020 401.94
Balance as at 1 April 2020 401.94
Additions during the year 8.56
Balance as at 31 March 2021 410.50
Accumulated Amortisation
Balance as at 1 April 2019 173.70
Additions during the year 88.68
Balance as at 31 March 2020 262.38
Balance as at 1 April 2020 262.38
Additions during the year 84.01
Balance as at 31 March 2021 346.39
Carrying amount (net)
Balance as at 31 March 2020 139.56
Balance as at 31 March 2021 64.12
----- End of picture text -----

6. Investment in subsidiaries

==> picture [499 x 223] intentionally omitted <==

----- Start of picture text -----

As at As at
31 March 2021 31 March 2020
Investments in equity instruments - at cost (unquoted)
6,000 (31 March 2020: 6,000) common shares of USD 200 each, fully paid up 530.09 528.10
of Newgen Software Inc. USA.
1,000,000 (31 March 2020: 1,000,000) common shares of CAD 0.10 each, fully 56.52 56.52
paid up of Newgen Software Technologies Canada, Limited.
250,000 (31 March 2020: 250,000) ordinary shares of SGD 1 each, fully paid up 117.44 116.74
of Newgen Software Technologies Pte. Limited.
210,000 (31 March 2020: 210,000) equity shares of INR 10 each, fully paid up of 46.50 46.50
Newgen Computers Technologies Limited.
20,000,000 (31 March 2020: 20,000,000) common stock of GBP 0.01 each, fully 178.74 178.74
paid up of Newgen Software Technologies (UK) Ltd.
1,000,000 (31 March 2020: 1,000,000) common shares of AUD 1 each, fully 491.05 491.05
paid up of Newgen Software Technologies Pty Ltd.
1,420.34 1,417.65
Aggregate book value of unquoted investments 1,420.34 1,417.65
----- End of picture text -----

Increase in investment represents deemed investment on account of share based payment awards granted to the employees of subsidiaries of the Company.

7. Loans (unsecured, considered good, unless otherwise stated)

7. Loans (unsecured, considered good, unless otherwise stated)
		As at	As at
	31	March 2021	31 March 2020
Securitydeposits		338.30	427.69
		338.30	427.69

119

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

8. Other financial assets (non-current)

==> picture [499 x 130] intentionally omitted <==

----- Start of picture text -----

As at As at
31 March 2021 31 March 2020
Bank deposits
- pledged with tax authorities 4.42 4.14
- held as margin money 3,282.03 282.21
Interest accrued on deposits 47.10 30.74
Earnest money deposits
Unsecured, considered good 12.28 34.39
Unsecured, considered doubtful 164.75 164.75
Less: Loss allowance for doubtful deposits (164.75) (164.75)
3,345.83 351.48
----- End of picture text -----

“*Bank deposits held as margin money represents deposits made on account of guarantees issued to government customers amounting to INR 282.03 lakhs (31 March 2020: INR 282.21 lakhs) and deposits made to avail overdraft facilities amounting to INR 3,000.00 lakhs (31 March 2020: INR Nil)

Information about Company’s exposure to credit and market risks and fair value measurement is included in Note 43(c).

9. Income tax assets (net)

9. Income tax assets (net)
	As at	As at
	31 March 2021	31 March 2020
Advance income tax (net of provision of INR 5,453.20 lakhs (31 March 2020:	985.84	1,581.18
INR 12,005.47 lakhs))
	985.84	1,581.18

9A. Income tax liabilities (net)

9A. Income tax liabilities (net)
	As at	As at
	31 March 2021	31 March 2020
Provision for tax (net of advance tax of INR 7,084.45 lakhs (31 March 2020:	1,623.22	-
INR Nil))
	1,623.22	-
10. Other non-current assets
	As at	As at
	31 March 2021	31 March 2020
Prepaid expenses	6.83	31.66
Capitaladvances	-	59.54
	6.83	91.20
11. Investments (refer note 41)
	As at	As at
	31 March 2021	31 March 2020
Investments in bonds(unquoted)
Bonds atFVOCI
Investmentingovernment bonds	3,561.72	1,982.38
Investment in other bonds	-	608.54
	3,561.72	2,590.92
Investments in mutual funds (unquoted)
Mutual funds atFVTPL	4,755.74	5,019.75
	4,755.74	5,019.75
	8,317.46	7,610.67
Aggregate book value ofunquotedinvestments	8,317.46	7,610.67

Investments in bonds measured at FVOCI have stated interest rates of 7.04% to 8.63%. Information about Company’s exposure to credit and market risks and fair value measurement is included in Note 43(c)

120

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

12. Trade receivables

==> picture [499 x 130] intentionally omitted <==

----- Start of picture text -----

As at As at
31 March 2021 31 March 2020
(Unsecured, considered good, unless stated otherwise)
Unsecured
- Considered good 17,541.07 23,813.20
- Considered doubtful 3,989.38 4,830.79
21,530.45 28,643.99
Less: Loss allowance for trade receivables
- unsecured, considered doubtful (3,989.38) (4,830.79)
17,541.07 23,813.20
----- End of picture text -----*

*Includes balance receivables from related parties. For details refer note 42

No trade or other receivables are due from directors or other officers of the Company either severally or jointly with any other person. Nor any trade or other receivables are due from firms or private companies respectively in which any director is a partner, director or a member. Trade receivables are non-interest bearing and are generally on terms of 30-45 days.

The Company’s exposure to credit and currency risks and loss allowances related to trade receivables are discussed in note 43(c).

13. Cash and cash equivalents

13. Cash and cash equivalents
	As at	As at
	31 March 2021	31 March 2020
Cash on hand	3.08	4.51
Balanceswithbanks
- incurrent accounts*	2,710.30	1,754.19
Balances with scheduled banks in deposit accounts with original maturity of less than3months	160.00	4,000.00
	2,873.38	5,758.70

*Current account balances with banks include INR 142.43 lakhs (31 March 2020: INR 118.65 lakhs) held at a foreign branch.

13A. Other bank balances

13A. Other bank balances
	As at	As at
	31 March 2021	31 March 2020
Balances with scheduled banks in deposit accounts	17,000.00	6,516.11
-Original maturity of less than 12 months	17,000.00	6,516.11

14. Current financial assets - Loans

14. Current fnancial assets - Loans
	As at	As at
	31 March 2021	31 March 2020
Loans to employees*	9.04	7.54
Security deposits	150.40	88.02
	159.44	95.56

*These are interest bearing loans - repayable within one year given to employees, chargeable at the rate of 12% p.a.

121

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

15. Current financial assets - Others

15. Current fnancial assets - Others
	As at	As at
	31 March 2021	31 March 2020
(unsecured consideredgood,unless otherwise stated)
Interest accrued on deposits	519.11	406.97
Interest accrued but not due ongovernment bonds	158.87	86.43
Unbilled revenue*
- other than relatedparties	6,926.03	7,767.02
- relatedparties	2,213.15	-
	9,817.16	8,260.42

*Unbilled revenue represents amounts recognized based on services performed in advance of billing in accordance with contract terms.

During the year ended 31 March 2021 INR 3,224.27 lakhs of unbilled revenue as of 1 April 2020 has been reclassified to trade receivables upon billing to customers on completion of milestones.

16. Other current assets

	As at	As at
	31 March 2021	31 March 2020
Advances to vendors	12.65	11.29
Deferred contract cost	93.90	123.00
Advance to employees	24.52	138.02
Prepaid expenses	460.58	362.30
Other current assets	-	17.14
	591.65	651.75

17. Share Capital

==> picture [499 x 227] intentionally omitted <==

----- Start of picture text -----

As at 31 March 2021 As at 31 March 2020
Number Amount Number Amount
of shares of shares
Authorised share capital
Equity shares of INR 10 each 9,80,00,200 9,800.02 9,80,00,200 9,800.02
0.01% Compulsory convertible preference shares of INR 1,19,99,800 1,199.98 1,19,99,800 1,199.98
10 each
11,00,00,000 11,000.00 11,00,00,000 11,000.00
As at 31 March 2021 As at 31 March 2020
Number Amount Number Amount
of shares of shares
Issued, subscribed and paid up
Equity share capital of INR 10 each, fully paid up 6,99,55,701 6,995.57 6,95,85,701 6,958.57
Add: Issued during the year to Newgen ESOP Trust - - 3,70,000 37.00
Balance 6,99,55,701 6,995.57 6,99,55,701 6,995.57
Less : Shares held by Newgen ESOP Trust 6,49,696 64.97 8,65,888 86.59
Total Share capital 6,93,06,005 6,930.60 6,90,89,813 6,908.98
----- End of picture text -----

122

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Reconciliation of shares outstanding at the beginning and at the end at the reporting year

==> picture [499 x 114] intentionally omitted <==

----- Start of picture text -----

As at 31 March 2021 As at 31 March 2020
Number Amount Number Amount
of shares of shares
Equity share capital of INR 10 each, fully paid up
At the beginning of the year 6,99,55,701 6,995.57 6,95,85,701 6,958.57
Add: Issued during the year to Newgen ESOP Trust - - 3,70,000 37.00
At the end of the year 6,99,55,701 6,995.57 6,99,55,701 6,995.57
Less: Shares held by Newgen ESOP Trust 6,49,696 64.97 8,65,888 86.59
Total equity share capital 6,93,06,005 6,930.60 6,90,89,813 6,908.98
----- End of picture text -----

Terms/rights attached to equity shares

In case of equity shares, each equity shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing annual general meeting, except in case of interim dividend, if any. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their respective shareholding.

17 A. Details of shareholders holding more than 5% shares in the Company

==> picture [499 x 109] intentionally omitted <==

----- Start of picture text -----

Equity shares of INR10 each, fully paid up held by: As at 31 March 2021 As at 31 March 2020
Number Amount Number Amount
of shares % of shares %
- Mr. Diwakar Nigam 1,84,72,406 26.41% 1,84,72,406 26.41%
- Mr. T.S. Varadarajan 1,50,09,306 21.46% 1,50,09,306 21.46%
- Mrs. Priyadarshini Nigam 79,68,906 11.39% 79,68,906 11.39%
- Mrs. Usha Varadarajan 45,28,320 6.47% 45,28,320 6.47%
- Malabar India Fund Limited 49,78,931 7.12% 56,78,931 8.12%
----- End of picture text -----

17 B. Shares reserved for issue under Employee stock option plan

Terms attached to stock options granted to employees are described in note 35 regarding share based payments.

17 C. Aggregate number of shares issued for consideration other than cash during the period of five years immediately preceding the reporting date.

Equity shares have been issued under Employee stock options plans to trust for which only exercise price has been received in cash.

			For the year	For the year	For the year	For the year	For the year
			ended	ended	ended	ended	ended
			31 March 2021	31 March 2020	31 March 2019	31 March 2018	31 March 2017
Equityshares of INR	10	each	-	3,70,000	3,50,000	10,50,000	-

123

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

18. Other equity

==> picture [499 x 622] intentionally omitted <==

----- Start of picture text -----

As at As at
31 March 2021 31 March 2020
Securities premium 10,173.59 10,069.59
Retained earnings 43,647.14 33,286.82
Capital redemption reserve 87.95 87.95
General reserve 1,731.39 1,731.39
Newgen ESOP Trust reserve 404.32 297.47
Share options outstanding reserve 344.72 405.75
Other comprehensive gain/ (loss) 29.38 (95.40)
56,418.49 45,783.57
Securities premium (refer note (i) below) As at As at
31 March 2021 31 March 2020
Balance as at beginning of the year 10,314.50 9,977.92
Securities premium on issue of shares to Newgen ESOP Trust - 196.10
Transferred from share options outstanding reserve on exercise of stock 104.00 140.48
options
Balance as at end of the year 10,418.50 10,314.50
Less: Securities premium on shares held by Newgen ESOP Trust 244.91 244.91
Balance as at end of the year 10,173.59 10,069.59
Retained earnings (refer note (ii) below) As at As at
31 March 2021 31 March 2020
Balance as at beginning of the year 33,286.82 29,414.27
Transistion impact of Ind AS 116-Leases, net of tax (refer note 19) - (202.00)
Profit for the year 11,759.43 6,591.23
Dividend on equity shares (1,399.11) (2,087.57)
Dividend distribution tax on dividend on equity shares - (429.11)
Balance as at end of the year 43,647.14 33,286.82
Capital redemption reserve As at As at
31 March 2021 31 March 2020
Balance as at beginning of the year 87.95 87.95
Balance as at end of the year 87.95 87.95
General reserve As at As at
31 March 2021 31 March 2020
Balance as at beginning of the year 1,731.39 1,731.39
Balance as at end of the year 1,731.39 1,731.39
Newgen ESOP Trust reserve (refer note (iii) below) As at As at
31 March 2021 31 March 2020
Balance as at beginning of the year 297.47 257.78
Addition to Newgen ESOP Trust reserve 106.85 39.69
Balance as at end of the year 404.32 297.47
----- End of picture text -----

124

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [499 x 277] intentionally omitted <==

----- Start of picture text -----

Share options outstanding reserve (refer note (iv) below) As at As at
31 March 2021 31 March 2020
Balance as at beginning of the year 405.75 459.20
Employee stock compensation expense 64.59 87.03
Transferred to securities premium account on exercise of stock options (125.62) (140.48)
Balance as at end of the year 344.72 405.75
Other comprehensive income/(loss) (refer note (v) below) As at As at
31 March 2021 31 March 2020
Remeasurement of defined benefit liability
Balance as at beginning of the year (96.29) (27.10)
Other comprehensive income (loss) (net of tax) 66.83 (69.19)
Balance as at end of the year (29.46) (96.29)
Debt instruments through other comprehensive income As at As at
31 March 2021 31 March 2020
Balance as at beginning of the year 0.89 16.80
Other comprehensive income (net of tax) 48.95 3.72
(Profit)/loss on sale of debt instrument transferred to profit and loss 9.00 (19.63)
Balance as at end of the year 58.84 0.89
----- End of picture text -----

(i) Securities premium is used to record the premium received on issue of shares. It will be utilised in accordance with the provisions of the Companies Act, 2013.

(ii) Retained earnings represents accumulated balances of profits over the years after appropriations for general reserves and adjustments of dividend.

(iii) Newgen ESOP Trust has been treated as an extension of the Company and accordingly shares held by Newgen ESOP Trust are netted off from the total share capital. Consequently, all the assets, liabilities, income and expenses of the trust are accounted for as assets and liabilities of the Company, except for profit / loss on issue of shares to the employees and dividend received by trust which are directly adjusted in the Newgen ESOP Trust reserve.

(iv) The Company has established various equity-settled share-based payment plans for certain employees of the Company. Refer to note 35 for further details on these plans.

(v) Refer Statement of Changes in Equity for analysis of other comprehensive income, net of tax.

125

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

19. Right-of-use assets

Changes in the carrying value of right of use assets for the year ended 31 March 2020

==> picture [499 x 121] intentionally omitted <==

----- Start of picture text -----

Particulars Category of ROu asset Total
Leasehold land Buildings
Balance as at 1 April 2019 - 1,381.90 1,381.90
Reclassified on account of adoption of Ind AS 116 3,405.18 - 3,405.18
Addition - 2,483.05 2,483.05
Termination of Leases - (58.45) (58.45)
Depreciation (39.40) (1,165.27) (1,204.67)
Balance as at 31 March 2020 3,365.78 2,641.23 6,007.01
----- End of picture text -----*

Changes in the carrying value of right of use assets for the year ended 31 March 2021

==> picture [499 x 92] intentionally omitted <==

----- Start of picture text -----

Particulars Category of ROu asset Total
Leasehold land Buildings
Balance as at 1 April 2020 3,365.78 2,641.23 6,007.01
Termination of Leases - (677.91) (677.91)
Depreciation (39.30) (1,050.14) (1,089.44)
Balance as at 31 March 2021 3,326.48 913.18 4,239.66
----- End of picture text -----

*Right of use assets recognised in the balance sheet at the date of initial recognition.

The aggregate depreciation expense on ROU assets is included under depreciation and amortization expense in the Statement of Profit and Loss.(refer note 31)

Lease liabilities

Break up of current and non-current lease liabilities as at 31 March 2021

Lease liabilities Break up of current and non-current lease liabilities as at 31 March 2021
Particulars	As at	As at
	31 March 2021	31 March 2020
Non-current lease liabilities	1,091.74	2,129.79
Current lease liabilities	475.32	1,217.24
Total	1,567.06	3,347.03

Movement in lease liabilities during the year ended 31 March 2020

Movement in lease liabilities during the year ended 31 March 2020
Particulars	As at
	31 March 2020
Balance as at 1 April 2019#	1,578.15
Reclassifed on account of adoption of Ind AS 116	1,320.15
Addition	2,434.24
Finance cost	335.74
Deletion	(62.35)
Payment of lease liabilities	(2,258.90)
Balance as at 31 March 2020	3,347.03

126

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Movement in lease liabilities during the year ended 31 March 2021

Movement in lease liabilities during the year ended 31 March 2021
Particulars	As at
	31 March 2021
Balance as at 1 April 2020	3,347.03
Addition	-
Finance cost	272.67
Deletion	(755.09)
Payment of lease liabilities	(1,297.51)
Balance as at 31 March 2021	1,567.10

Lease liabilities recognised in the balance sheet at the date of initial recognition.

Details regarding the contractual maturities of lease liabilities as at 31 March 2021 on an undiscounted basis:

Particulars	As at	As at
	31 March 2021	31 March 2020
Less than oneyear	555.28	1,499.01
One to fveyears	946.79	2,020.39
More than fveyears	5,201.79	5,267.64
Total	6,703.86	8,787.04

The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

Finance lease

The Company has leases that were classified as finance leases applying Ind AS 17. For such leases, the carrying amount of the right-of-use asset and the lease liability at the date of initial application of Ind AS 116 is the carrying amount of the lease asset and lease liability on the transition date as measured applying Ind AS 17. Accordingly, during the year ended 31 March 2020, an amount of 3,405.18 lakhs has been reclassified from property, plant and equipment to right-of-use assets. An amount of 291.59 lakhs has been reclassified from other current financial liabilities to lease liability – current and an amount of ` 1,028.55 lakhs has been reclassified from Non-current financial liabilities to lease liability – non-current.

Rental expense recorded for short-term leases was INR 94.31 lakhs for the year ended 31 March 2021 (31 March 2020: INR 280.38 lakhs)

Effective interest rate of 10.43% has been applied to lease liabiliites recognised in the balance sheet at the date of initial application.

127

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

20. Non-current provisions

20. Non-current provisions
	As at	As at
	31 March 2021	31 March 2020
Provision for employee benefts(refer note 29)
-provision forgratuity	2,196.75	1,799.02
-provision for compensated absences	647.50	521.22
	2,844.25	2,320.24

21. Current financial liabilities - Borrowings

21. Current fnancial liabilities - Borrowings
	As at	As at
	31 March 2021	31 March 2020
Loans from banks
Pre-shipment loans(secured)*	-	7,453.21
	-	7,453.21

“*Pre-shipment loans carry interest rate @ LIBOR plus margin which varied from 1.47% to 3.70% per annum. These are secured by first pari passu charge over all future and present stock, book debts and equitable mortgage of land and building with carrying amount of INR 374.60 lakhs (31 March 2020: INR 382.70 lakhs) and are repayable within 180 days from the date of disbursement.

22. Trade payables

22. Trade payables
	As at	As at
	31 March 2021	31 March 2020
- Total outstandingdues to micro enterprises and small enterprises	-	-
- Total outstandingdues to creditors other than micro and small enterprises	2,387.20	3,149.06
	2,387.20	3,149.06

Trade payables are non-interest bearing and are generally on terms of 30-45 days

a) Refer note 37 for disclosures under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED)

b) Refer note 42 for dues to related parties

c) The Company’s exposure to currency and liquidity risks related to trade payables is disclosed in note 43(c).

23. Current financial liabilities - Others

23. Current fnancial liabilities - Others
	As at	As at
	31 March 2021	31 March 2020
Employee relatedpayables	4,169.87	3,428.23
Payable in respect of retention money	127.82	180.54
Interest accrued but not due on deferred liability	-	14.39
Earnest moneydeposits	1.00	1.00
Payable for capital assets	17.00	412.41
	4,315.69	4,036.57

24. Deferred income

24. Deferred income
	As at	As at
	31 March 2021	31 March 2020
Advance billing*	6,542.05	5,940.17
Advance from customers	32.68	32.05
	6,574.73	5,972.22

128

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

*Changes in deferred income (advance billing) is as follows:

*Changes in deferred income (advance billing) is as follows:
	As at	As at
	31 March 2021	31 March 2020
Balance at the begining of theyear	5,940.17	4,625.39
Revenue recognised that was included in deferred income at the beginningof theyear	(5,739.60)	(4,363.29)
Increase due to invoicing during the year, excluding amount recognised as revenue duringtheyear	6,341.48	5,678.07
Balance at the end of theyear	6,542.05	5,940.17

25. Other current liabilities

25. Other current liabilities
	As at	As at
	31 March 2021	31 March 2020
Statutoryduespayable	1,185.09	1,178.45
Advance from employees for share options	0.26	21.22
Other current liabilities	3.77	6.33
	1,189.12	1,206.00

26. Current provisions

26. Current provisions
	As at	As at
	31 March 2021	31 March 2020
Provision for employee benefts(refer note 29)
-provision forgratuity	313.84	278.87
-provision for compensated absences	132.68	129.09
	446.52	407.96

27. Revenue from operations

27. Revenue from operations
	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Sale ofproducts - softwares	11,857.65	11,114.81
Sale of services
- Implementation	13,253.68	14,729.93
- Scanning	702.82	954.90
- AMC/ATS	14,396.97	12,011.51
- Support	16,900.50	16,530.68
- SaaS revenue	3,927.85	2,398.29
	61,039.47	57,740.12

Performance obligations and remaining performance obligations

The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue. Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the remaining performance obligation related disclosures for contracts where :

(i) The performance obligation is part of a contract that has an original expected duration of one year or less.

(ii) The revenue recognized corresponds directly with the value to the customer of the entity’s performance completed to date, typically those contracts where invoicing is on time and material basis.

Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that has not materialized and adjustments for currency.

The aggregate value of performance obligations that are completely or partially unsatisfied as at 31 March 2021, other than those meeting the exclusion criteria mentioned above is INR Nil.

129

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

28. Other income

==> picture [500 x 203] intentionally omitted <==

----- Start of picture text -----

For the year For the year
ended ended
31 March 2021 31 March 2020
Interest income under the effective interest rate method:
- on security deposits at amortised cost 38.69 40.09
- government and other bonds at FVOCI 240.64 148.11
Interest income on deposit with banks 754.90 804.15
Gain on lease termination 87.49 6.05
Gain on sale of property, plant and equipment 10.16 1.10
Profit on sale of mutual funds (net) at FVTPL 132.79 -
Fair value changes of financial assets at FVTPL 70.60 173.01
Liabilities / provision no longer required written back 7.27 169.22
Net foreign exchange fluctuation gain - 704.25
Bad debts recovered 43.10 -
Miscellaneous income 45.31 38.62
1,430.95 2,084.60
----- End of picture text -----

29. Employee benefits expense

29. Employee benefts expense
	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Salaries,wages and bonus	25,747.74	26,971.54
Contribution toprovident funds(refer note i below)	995.96	994.27
Expenses related to compensated absences(refer note ii below)	419.26	352.27
Share basedpayment - equitysettled	61.90	82.82
Expense related to defned beneftplan(refer note iii below)	614.89	371.73
Staf welfare expenses	86.31	499.79
	27,926.06	29,272.42

(i) Defined contribution plans:

The Company makes contributions, determined as a specified percentage of the employee salaries in respect of qualifying employees towards provident fund, which is a defined contribution plan. The amount recognised as an expense towards contribution to provident fund for the year aggregated to INR 995.96 lakhs (31 March 2020: INR 994.27 lakhs). The amount recognised as an expense towards employee state insurance aggregated to INR 0.88 lakhs (31 March 2020: INR 1.26 lakhs).

(ii) Compensated absences:

The Principal assumptions used in determining the compensated absences benefit obligation are as given below:

	As at	As at
	31 March 2021	31 March 2020
Discountingrate(p.a.)	6.88%	6.90%
Future salaryincrease( p.a.)	6.00%	6.00%

(iii) Defined Benefit Plan:

Gratuity scheme - This is an unfunded defined benefit plan and it entitles an employee, who has rendered atleast 5 years of continuous service, to receive one-half month’s salary for each year of completed service at the time of retirement/ exit.

i) On normal retirement / early retirement / withdrawal / resignation: As per the provisions of the Payment of Gratuity Act, 1972 with vesting period of 5 years of service.

130

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

ii) On death in service: As per the provisions of the Payment of Gratuity Act, 1972 without any vesting period. Gratuity payable to employee in case (i) and (ii), as mentioned above, is computed as per the Payment of Gratuity Act, 1972 except the Company does not have any limit on gratuity amount.

A. Movement in net defined benefit (asset) liability

The following table shows a reconciliation from the opening balances to the closing balances for net defined benefit (asset) liability and its components

==> picture [499 x 140] intentionally omitted <==

----- Start of picture text -----

As at As at
31 March 2021 31 March 2020
Balance at the beginning of the year 2,077.89 1,740.26
Benefits paid (123.72) (129.12)
Current service cost 471.52 238.43
Interest cost 143.37 133.30
Acturial (gains) losses recognised in OCI
change in demographic assumptions 20.87 (21.33)
change in financial assumptions 3.28 (33.40)
experience adjustments (82.63) 149.75
Balance at the end of the year 2,510.58 2,077.89
----- End of picture text -----

B. i) Expense recognised in profit and loss

B. i) Expense recognised in proft and loss
Particulars	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Current service cost	471.52	238.43
Interest cost	143.37	133.30
Total expense recognised in Statement ofproft and loss	614.89	371.73
ii) Remeasurements recoginsed in other comprehensive income
Particulars	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Actuarial loss on defned beneft obligation	(58.48)	95.02
Total remeasurements recognised in other comprehensive income	(58.48)	95.02

C. Defined benefit obligations

i. Actuarial assumptions
The followingwere theprincipal actuarial assumptions at the reportingdate:
Particulars	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Discount rate	6.88	6.90
Salaryescalation rate	6.00	6.00
Mortality rate	100% of IALM	100% of IALM
	(2012- 14)	(2012 - 14)

131

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

ii. Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.

	As at 31 March 2021 As at 31 March 2020
	Increase Decrease Increase Decrease
Discount rate(0.50% movement)	(77.78) 83.10 (73.76) 79.01
Future salary growth(0.50% movement)	83.40 (78.76) 79.32 (74.70)

Attrition rate (0.50% movement)

Sensitivities due to mortality & withdrawals are not material & hence impact of change not calculated. Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement and life expectancy are not applicable being a lump sum benefit on retirement.

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amounts recognised in the Company’s financial statements as at balance sheet date:

==> picture [499 x 156] intentionally omitted <==

----- Start of picture text -----

As at As at
31 March 2021 31 March 2020
Net defined benefit liability
Liability for gratuity 2,510.58 2,077.89
Liability for compensated absences 780.17 650.31
Total employee benefit liabilities 3,290.75 2,728.20
Non-current:
Gratuity 2,196.75 1,799.02
Compensated absences 647.50 521.22
Current:
Gratuity 313.84 278.87
Compensated absences 132.68 129.09
----- End of picture text -----

The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

30. Finance costs

30. Finance costs
	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Finance cost on lease liabilities	272.67	335.74
Interest expense onborrowings Other fnance costs	86.71 175.46 534.84	649.65 84.31 1,069.70

31. Depreciation and amortization

31. Depreciation and amortization
	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Depreciation ofproperty,plant and equipment(refer note 4)	678.03	514.45
Depreciationof right-ofuse assets (refer note19)	1,089.44	1,204.67
Amortisationof intangible assets (refer note 5)	84.01	88.68
	1,851.48	1,807.80

132

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

32. Other expenses

==> picture [500 x 572] intentionally omitted <==

----- Start of picture text -----

For the year For the year
ended ended
31 March 2021 31 March 2020
Rent 94.31 280.38
Repairs and maintenance 261.85 264.76
Rates and taxes 426.49 728.47
Travelling and conveyance 773.16 5,698.45
Legal and professional fees 2,140.17 2,294.93
Outsourced technical services expense 3,219.84 1,299.40
Cloud hosting services 1,245.75 959.98
Payment to auditors 72.31 75.40
Electricity and water 355.98 419.36
Advertising and sales promotion 399.33 752.48
Membership and subscription fee 250.00 267.24
Brokerage and commission 861.77 980.67
Communication costs 233.69 386.44
Software and license maintenance 790.09 645.35
Expenditure on corporate social responsibility 201.27 186.27
Donation 29.00 36.18
Recruitment charges 115.53 280.35
Insurance 385.02 359.60
Operation and maintenance 418.65 617.59
Printing, stationery and scanning charges 293.12 460.18
Property, plant and equipment written off 0.12 -
Loss allowance on trade receivables 2,149.62 1,736.67
(net of adjustment for bad debts written off of INR 2,991.03 lakhs (previous year
INR 527.43 lakhs)
Loss allowance on other financial assets - 23.72
Security charges 229.12 263.05
Net foreign exchange fluctuation loss 141.98 -
Loss on redemption of bonds (net) at FVOCI 27.78 7.07
Loss on redemption of mutual funds (net) at FVTPL - 6.85
Miscellaneous expenses 72.96 85.60
15,188.91 19,116.44
Payment to auditors
As auditor:
- Statutory audit fee 39.50 39.50
- Limited review fee 22.50 22.50
- Certification fee 6.95 8.25
- Reimbursement of expenses 3.36 5.15
72.31 75.40
----- End of picture text -----

133

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

33. Income Tax

A. The major components of income tax income recognised in Statement of Profit or Loss

==> picture [500 x 376] intentionally omitted <==

----- Start of picture text -----

For the year For the year
ended ended
31 March 2021 31 March 2020
Tax expense 3,632.26 2,340.32
Tax expense for earlier years 1,288.86 78.85
Deferred tax charge/ (credit) 288.58 (452.04)
Total 5,209.70 1,967.13
Recognised in Other comprehensive income
Tax impact on
- Re-measurement on defined benefit plan (35.90) 37.16
- Fair value of debt instruments through other comprehensive income/(loss) (26.30) (2.00)
Total (62.20) 35.16
B. Reconciliation of effective tax rate
31 March 2021 31 March 2020
Profit before tax 16,969.13 8,558.36
Tax using the Company's tax rate 34.94% 5,929.69 34.94% 2,990.63
Effect of deduction under section 10AA of the Income tax -13.38% (2,270.61) -13.47% (1,152.56)
Act, 1961
Effect of expenses permanently disallowed under the 0.25% 41.98 0.35% 29.91
Income Tax Act, 1961
Effect of income exempt/ non taxable/ taxed on lower rate -0.68% (114.75) -0.31% (26.92)
Effect of profit on redemption of mutual funds taxable 0.66% 111.75 0.57% 48.46
under Income tax Act, 1961
Tax expense for earlier years 7.60% 1,288.86 0.92% 78.85
Others 1.31% 222.79 -0.01% (1.24)
Income tax recognised in statement of profit and loss for 30.70% 5,209.70 22.98% 1,967.13
the current year
----- End of picture text -----

C. Deferred tax assets (net)

==> picture [499 x 214] intentionally omitted <==

----- Start of picture text -----

Deferred tax relates to the following: As at As at
31 March 2021 31 March 2020
Deferred tax related to items recognised in OCI:
Deferred tax assets (gross)
Investments at fair value through OCI 1.42 1.42
Remeasurement of defined benefit liability (asset) 15.47 51.37
(a) 16.89 52.79
Deferred tax liabilities
Investments at fair value through OCI 31.15 -
(b) 31.15 -
Deferred tax related to items recognised in Statement of
Profit and Loss:
Deferred tax liabilities (gross)
Property, plant and equipment 606.72 373.98
----- End of picture text -----

134

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [499 x 202] intentionally omitted <==

----- Start of picture text -----

Deferred tax relates to the following: As at As at
31 March 2021 31 March 2020
Others 170.82 145.20
(c) 777.54 519.18
Deferred tax assets (gross)
Loss allowance on other financial assets 57.57 57.57
Loss allowance on trade receivables 1,394.05 1,688.07
Provision for employee benefits 1,214.87 931.23
Lease liabilities 39.00 58.84
(d) 2,705.49 2,735.71
(e) = (d) - (c) 1,927.95 2,216.53
Deferred tax assets (net) (e) + (a) - (b) 1,913.69 2,269.32
Total deferred tax assets (net) 1,913.69 2,269.32
----- End of picture text -----

D. Movement in temporary differences

31 March 2021

==> picture [498 x 189] intentionally omitted <==

----- Start of picture text -----

Particulars Balance as at Transition Recognised Recognised Balance as
1 April 2020 impact in in OCI during at
of Ind AS Statement the year 31 March
116-Leases of Profit or 2021
Loss during
the year
Investments at fair value through OCI 1.42 - - (31.15) (29.73)
Remeasurement of defined benefit 51.37 - - (35.90) 15.47
liability (asset)
Property, plant and equipment (373.98) - (232.74) - (606.72)
Loss allowance on other financial assets 57.57 - - - 57.57
Loss allowance on trade receivables 1,688.07 - (294.02) - 1,394.05
Provision for employee benefits 931.23 - 283.64 - 1,214.87
Others (145.20) - (25.62) - (170.82)
Lease liabilities 58.84 - (19.84) - 39.00
Total 2,269.32 - (288.58) (67.05) 1,913.69
----- End of picture text -----

31 March 2020

31 March 2020
Particulars	Balance as at	Transition	Recognised	Recognised	Balance
	1 April 2019	impact of Ind AS	in Statement of Proft or	in OCI during the year	as at 31 March
		116-Leases	Loss during		2020
			the year
Investments at fair value through OCI Remeasurement of defned beneft liability (asset)	(7.12) 14.21	- -	- -	8.54 37.16	1.42 51.37
Property, plant and equipment Loss allowance on other fnancial assets	(278.40) 51.03	- -	(95.58) 6.54	- -	(373.98) 57.57
Loss allowance on trade receivables Provision for employee benefts	1,265.52 772.84	- -	422.55 158.39	- -	1,688.07 931.23
Others	(84.54)	-	(60.66)	-	(145.20)
Lease liabilities	(29.89)	67.93	20.80	-	58.84
Total	1,703.65	67.93	452.04	45.70	2,269.32

135

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

34. Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.”

i. Profit attributable to Equity holders of the Company

i. Proft attributable to Equity holders of the Company
	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Proft attributable to equity holders of the Company	11,759.43	6,591.23
Proft attributable to equity holders of the Company for basic and diluted earnings	11,759.43	6,591.23

ii. Weighted average number of ordinary shares

ii. Weighted average number of ordinary shares
	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Opening balance of equity's shares	6,90,89,813	6,84,57,610
Efect of share options exercised	1,00,973	4,22,753
Weighted average number of shares for basic EPS	6,91,90,786	6,88,80,363
Efect of dilution:
Add: Equity shares held by Newgen ESOP Trust with respect to options not	7,02,162	3,48,839
exercised byemployees but outstanding
Weighted average number of shares for diluted EPS	6,98,92,948	6,92,29,202

Basic and diluted earnings per share

Basic and diluted earnings per share
	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
	INR	INR
Basic earnings per share	17.00	9.57
Diluted earnings per share	16.82	9.52

136

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

35. Share-based payment arrangements:

A. Description of share-based payment arrangements

i. Share option programmes (equity-settled)

The Company established Newgen Employees Stock Option Scheme 2014 (Newgen ESOP 2014) in the year 2014-15, administered through a new Trust ‘Newgen ESOP Trust’. The maximum numbers of shares to be issued under this Scheme shall be limited to 3,783,800 equity shares of the Company. Pursuant to the scheme, during the year 201415, the Company has granted 3,653,525 options at an exercise price of INR 63 per option, to the employees of the Company. Further, during the year 2017-18 grant of options 353,000, 130,000, and 79,250 through grant II, III and IV on 1 Jul 2017, 1 Sep 2017 and 1 Oct 2017 respectively under the same scheme and with same vesting conditions was made. During the year 2020-21, the Company has granted 2,33,000 options under Newgen ESOP 2014 on 25 March 2021.Under the terms of the plans, these options are vested on a graded vesting basis over a maximum period of four years from the date of grant and are to be exercised either in part(s) or full, within a maximum period of five from the date of last vesting.

During the year, the Company has established Newgen Software Technologies Restricted Stock Units Scheme – 2021 (Newgen RSU – 2021), administered through a new trust “Newgen RSU Trust” The maximum numbers of shares to be issued under this Scheme shall be limited to 14,00,000 equity shares of the Company. No RSUs are granted under Newgen RSU - 2021 as on 31 March 2021.

==> picture [479 x 163] intentionally omitted <==

----- Start of picture text -----

Particulars Newgen ESOP 2014 Newgen RSU – 2021
Maximum number of shares under 37,83,800 14,00,000
the plan
Method of settlement (cash/equity) Equity Cash/ Equity
Vesting period (maximum) “4 years “5 years
1 year - 10% at the end of 3rd year - 50%
2 year - 20% at the end of 5th year - 50%”
3year- 30%
4year-40%”
Exercise period from the date of 5 year from last vesting 5 year from last vesting
vesting (maximum)
Vesting conditions Service period Perfomance based
----- End of picture text -----

Newgen ESOP trust has been treated as an extension of the Company and accordingly shares held by Newgen ESOP Trust are netted off from the total share capital. Consequently, all the assets, liabilities, income and expenses of the trust are accounted for as assets and liabilities of the Company, except for profit / loss on issue of shares to the employees and dividend received by trust which are directly adjusted in the Newgen ESOP Trust reserve.

Following table represents general terms of the grants for the ESOP outstanding as on 31 March 2021.

==> picture [480 x 176] intentionally omitted <==

----- Start of picture text -----

eSOP schemes Grant Date No. of exercise Price Weighted Vesting
Options average Period
Outstanding remaining life
Newgen Employees Stock Option 1-Jan-2015 3,76,615 INR 63.00 2.75 4 years
Scheme 2014 (Newgen ESOP 2014)
Newgen Employees Stock Option 1-Jul-2017 1,60,436 INR 63.00 5.25 4 years
Scheme 2014 (Newgen ESOP 2014)
Newgen Employees Stock Option 1-Sep-2017 90,300 INR 63.00 5.42 4 years
Scheme 2014 (Newgen ESOP 2014)
Newgen Employees Stock Option 1-Oct-2017 41,055 INR 63.00 5.50 4 years
Scheme 2014 (Newgen ESOP 2014)
Newgen Employees Stock Option 25-Mar-2021 2,33,000 INR 63.00 8.99 4 years
Scheme 2014 (Newgen ESOP 2014)
----- End of picture text -----

137

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

B. Reconciliation of outstanding share options

The number and weighted-average exercise prices of share options under the share option programmes were as follows.

==> picture [499 x 157] intentionally omitted <==

----- Start of picture text -----

Newgen Employees Stock Option Scheme 2014 (New- Number of Weighted Number of Weighted
gen ESOP 2014) options average options average
31 March exercise 31 March exercise
2021 price 2020 price
31 March 31 March
2021 2020
Options outstanding as at the beginning of the year 8,84,598 INR 63.00 15,57,524 INR 63.00
Add: Options granted during the year 2,33,000 INR 63.00 - -
Less: Options lapsed during the year - - 40,723 INR 63.00
Less: Options exercised during the year 2,16,192 INR 63.00 6,32,203 INR 63.00
Options outstanding as at the year end 9,01,406 INR 63.00 8,84,598 INR 63.00
Exercisable as at year end 4,89,498 5,71,519
Weighted - average contractual life 5.20 years 4.85 years
----- End of picture text -----

C. Expense recognised in Statement of Profit and Loss

For details on the employee benefits expense, refer note 29

36. Contingent liabilities and commitments (to the extent not provided for)*

	As at	As at
	31 March 2021	31 March 2020
a. Estimated amount of contracts remaining to be executed on capital account and notprovided for net of advances,tangible assets**	-	84.18
b. Income Tax matters(Financialyear 2015-16 to 2019-20)***	-	1,058.36

The Company is committed to operationally, technically and financially support the operations of its certain subsidiary companies.

** For other commitments – Non-cancellable operating and finance leases, refer note 19

***During the year ended 31 March 2021, the Company has filed an application under ‘Direct Tax Vivad Se Vishwas Act, 2020’ in respect of assessment orders pertaining to financial years 2015-16 and 2016-17, against which appeals were pending with Commissioner of Income Tax (Appeal). The application for both the years was accepted by the department. Accordingly an amount of 463.50 lakhs has been recorded as tax expense during the current year. The dispute primarily involved partial disallowances made by the assessing officer with respect to foreign withholding tax credit claimed as a set off. . The Company has likewise claimed foreign withholding tax credit in the subsequent financial years. Based on management evaluation, the effect of similar disallowances has been recognised in respect of subsequent assessment years, without prejudice to any rights, and additional tax expense of 847.07 lakhs relating to financial years 201718 to 2019-20 and ` 231.80 lakhs in respect of year ended 31 March 2021 has been recorded in the current year.

In February 2019, there was a judicial pronouncement with respect to provident fund. It is not currently clear whether the interpretation set out in the pronouncement has retrospective application. If applied retrospectively, the interpretation would result in an increase in contributions payable by the Company for past and future periods for certain of its employees. There are numerous interpretative challenges concerning the retrospective application of the judgment. Due to such challenges and a lack of interpretive guidance, it is currently impracticable to reliably estimate the timing and amount of any payments the Company may be required to make. The Company will continue to monitor and evaluate its position based on future events and developments.

37. Details of dues to Micro, Small and Medium Enterprises as defined under the MSMED Act, 2006

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as on 31 March 2021 and 31 March 2020 has been made in the financial statements based on information received and available with the Company. Based on the information currently available with the Company, there are no dues payable to Micro and Small Suppliers as defined in the Micro, Small and Medium Enterprises Development Act, 2006.

38. After the reporting date the following dividend were proposed by the Board of Directors, subject to the approval of shareholders at Annual General Meeting; Accordingly, the dividends have not been recognised as liabilities. The Finance Act 2020 has repealed the Dividend Distribution Tax (DDT). The Company is now required to pay/distribute dividend after deducting applicable taxes.

138

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)
Particulars	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Final dividend of INR 3.50 per share (31 March 2020: INR 2/-)	2,448.45	1,399.11

39. Utilization of Corporat Social Responsibility expenses

As per Section 135 of the Companies Act 2013, the following is the detail of CSR expenses incurred by the Company: Gross amount to be spent by the Company during the year ended 31 March 2021 is INR 201.09 lakhs as approved by the board of directors (previous year INR. 186.27 lakhs). Amount spent during the year ended 31 March 2021:

==> picture [478 x 42] intentionally omitted <==

----- Start of picture text -----

Particulars Amount spent Amount to be Total
during the year spent
i) For purpose mentioned as under 201.27 - 201.27
----- End of picture text -----*

*The areas for CSR activities are promoting education, health care, sanitation, digital literacy and livelihood enhancement . The funds were primarily utilized through the year on the activities which are specified in Schedule VII of the Companies Act, 2013.

40. The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income-tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company has got the updated documentation for the international transactions entered into with the associated enterprises during the financial year. During the year ended 31 March 2020, the holding company has also started availing services from its overseas subsidiaries in accordance with the transfer pricing methodology under sections 92-92F of the Income Tax Act, 1961. The management is of the opinion that its international transactions are at arm’s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

41. Details of current Investments (refer note 11)

==> picture [498 x 330] intentionally omitted <==

----- Start of picture text -----

Particulars Number of units as at Amount in lakhs as at
31 March 2021 31 March 2020 31 March 2021 31 March 2020
Investment in mutual funds
-FVTPL
Nippon India Short Term Fund- - 6,34,842.04 - 251.01
Direct Plan- Growth option
ICICI Prudential Short Term Plan- - 20,98,216.14 - 930.90
Direct Plan-Growth option
ICICI Prudential Credit Risk Fund - 21,85,595.64 - 505.92
-Direct Plan- Growth option
Kotak Credit Risk Fund- Direct Plan- - 21,94,751.05 - 514.89
Growth option
IIFL Wealth Finance Limited SR-A1- - 20.00 - 257.35
June2022 LOA 13JU22 FVRS10LAC
HDFC Short Term Debt Fund-Direct - 24,03,804.13 - 550.19
Plan-growth option
DSP Liquidity Fund- Regular Plan- - 21,276.15 - 600.45
Growth option
IDFC Bond Fund-Short Term Plan- - 11,53,064.73 - 500.00
growth option
Aditya Birla Sun Life Liquid Fund 1,94,248.97 2,20,614.74 639.68 700.99
-Growth-Regular Plan
Bharat bonds ETF 20,000.00 20,000.00 226.87 208.07
- -
Aditya Birla Liquid Fund Direct plan 4,72,293.51 1,565.81
Growth option
ICICI Prudential Liquid Fund Growth 4,92,315.98 - 1,500.27 -
HDFC Liquid Fund -Direct Growth 7,622.95 - 308.39 -
IDFC Cash Fund - Growth- Direct 20,704.45 - 514.71 -
Plan
----- End of picture text -----

139

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [498 x 275] intentionally omitted <==

----- Start of picture text -----

Particulars Number of units as at Amount in lakhs as at
31 March 2021 31 March 2020 31 March 2021 31 March 2020
Investment in government
bonds-FVTOCI
8.40% IRFC 15YRS SR2A 18022029 40,000.00 40,000.00 494.26 467.71
(18-Feb-2029)
7.35% NHAI LTD Tax free Bond 45,000.00 45,000.00 539.85 500.96
15YRS SR2A Annual (11-Jan-2031)
8.54% PFC Tax free Bonds (Series 16,500.00 16,500.00 204.13 203.32
2A) 16/11/2028
7.04% IRFC Bond 03/03/2026 15.00 15.00 164.73 166.38
8.3% NHAI Tax free Bonds 30,000.00 30,000.00 352.97 355.96
25/01/2027
8.63% IRFC Bonds 26/03/2029 22,000.00 22,000.00 275.62 288.04
8.30% IRFC Bonds 23/02/2027 87,000.00 - 1,016.65 -
8.20% NHAI Bonds 25/01/2022 50,000.00 - 513.51 -
Investment in Other Bonds-
FCTOCI
State Bank of India Series 1 9.56% - 30.00 - 306.31
NCD perpetual FVRS10Lac
ICICI Bank Limited SR DDE18AT 9.90 - 30.00 - 302.22
BD Perpetual FVRS10LAC
8,317.44 7,610.66
----- End of picture text -----

42. Related party transactions

A. List of subsidiaries

==> picture [500 x 126] intentionally omitted <==

----- Start of picture text -----

Name of the company Country of Ownership interest
incorporation 31 March 2021 31 March 2020
Newgen Software Inc. United States of 100% 100%
America
Newgen Software Technologies Pte Ltd. Singapore 100% 100%
Newgen Software Technologies Canada Limited Canada 100% 100%
Newgen Software Technologies (UK) Ltd. United Kingdom 100% 100%
Newgen Software Technologies Pty Ltd. Australia 100% 100%
Newgen Computers Technologies Limited India 100% 100%
----- End of picture text -----

The principal place of business of all the entities listed above is the same as the respective country of incorporation.

B. Transactions with Key Management Personnel

A number of key management personnel, or their related parties hold positions in other entities that result in them having control or significant influence over those entities.

Compensation of the Company’s key managerial personnel includes salaries, non-cash benefits and contributions to post - employment defined benefit plan(see note 29)

Executive officers also participate in the Company’s share option plan as per the conditions laid down in that scheme (see note 29 and note 35).

140

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

List of key management personnel and their relatives

Mr. Diwakar Nigam - Managing Director

Mr. T.S. Varadarajan - Whole Time Director

Mrs. Priyadarshini Nigam - Whole Time Director

Mr. Arun Kumar Gupta - Chief Financial Officer

Mr. Virender Jeet - Senior Vice President (Sales and Marketing/Product)

Mr. Surender Jeet Raj - Senior Vice President (HR/Operations)

Mr. Tarun Nandwani - Senior Vice President (Business Management)

Mr. Usha Varadarajan - Relative of Whole Time Director - T.S. Varadarajan

Mr. Aman Mourya- Company Secretary

List of non-executive and independent directors

Mr. Kaushik Dutta - Independent Director
Mr. Saurabh Srivastava - Independent Director

Mr. Subramaniam R Iyer - Independent Director

Mrs. Padmaja Krishnan - Independent Director

Key management personnel compensation

==> picture [498 x 380] intentionally omitted <==

----- Start of picture text -----

Transaction value Balance payable
For the year For the year As at As at
ended ended 31 March 2021 31 March 2020
31 March 2021 31 March 2020
Salaries, wages and bonus 1,236.05 1,086.14 675.20 389.66
Mr. Diwakar Nigam 275.03 278.99 154.62 82.42
Mr. T.S. Varadarajan 148.70 142.57 91.61 50.23
Mrs. Priyadarshini Nigam 88.20 77.58 60.25 33.04
Mr. Arun Kumar Gupta 87.64 82.77 41.33 26.60
Mr. Virender Jeet 268.40 147.60 118.78 75.01
Mr. Surender Jeet Raj 177.67 191.46 112.65 62.70
Mr. Tarun Nandwani 173.04 148.35 94.68 58.65
Mr. Aman Mourya 17.38 16.81 1.27 1.01
Dividend paid (excluding 935.81 1,402.83 - -
dividend distribution tax)
Mr. Diwakar Nigam 369.45 552.67 - -
Mr. T.S. Varadarajan 300.19 450.28 - -
Mrs. Priyadarshini Nigam 159.38 239.07 - -
Mr. Arun Kumar Gupta 1.10 2.10 - -
Mr. Virender Jeet 4.98 7.47 - -
Mr. Surender Jeet Raj 4.99 7.48 - -
Mr. Tarun Nandwani 5.14 7.87 - -
Mr.s Usha Varadarajan 90.57 135.85 - -
Mr. Aman Mourya 0.03 0.04
Share-based payments 99.83 93.69 - -
Mr. Arun Kumar Gupta - 4.60 - -
Mr. Virender Jeet 77.72 - - -
Mr. Surender Jeet Raj - 56.92 - -
Mr. Tarun Nandwani 19.75 29.81 - -
Mr. Aman Mourya 2.37 2.36
----- End of picture text -----*

excludes provision for gratuity and compensated absences, as these are determined on the basis of actuarial valuation for the Company as a whole and includes share-based payments and commission.

141

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [498 x 197] intentionally omitted <==

----- Start of picture text -----

Transaction value Balance payable
For the year For the year As at As at
ended ended 31 March 2021 31 March 2020
31 March 2021 31 March 2020
Sitting fees to independent 50.00 41.00 - 8.10
director
Mr. Kaushik Dutta 15.00 14.00 - 2.70
Mr. Saurabh Srivastava 14.00 13.00 - 2.70
Mr. Subramaniam R Iyer 15.00 14.00 - 2.70
Mrs. Padmaja Krishnan 6.00 - - -
Commission to independent 95.79 50.00 88.60 47.50
director
Mr. Kaushik Dutta 23.95 16.67 22.15 15.83
Mr. Saurabh Srivastava 23.95 16.67 22.15 15.83
Mr. Subramaniam R Iyer 23.95 16.67 22.15 15.83
Mrs. Padmaja Krishnan 23.95 - 22.15 -
----- End of picture text -----

C. Related party transactions other than those with key management personnel

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and settlement occurs in cash.

For the year ended 31 March 2021 and 31 March 2020, the Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken at each reporting period.

==> picture [498 x 360] intentionally omitted <==

----- Start of picture text -----

Transaction value Balance payable
For the year For the year As at As at
ended ended 31 March 2021 31 March 2020
31 March 2021 31 March 2020
Sale of products and services
Subsidiaries
Newgen Software Inc., USA 14,740.62 9,883.41 731.70 2,850.88
Newgen Software Technologies 4,099.33 2,048.35 0.03 1,237.49
Pte Ltd.
Newgen Software Technologies 423.87 386.65 1.58 238.85
Canada Limited
Newgen Software Technologies 1,019.49 656.30 3.17 298.47
(UK) Ltd.
Sale of services-back office
support cost
Subsidiaries
Newgen Software Inc., USA 145.70 137.64 - 137.64
Newgen Software Technologies 37.30 29.52 - 29.52
Pte Ltd.
Newgen Software Technologies 20.23 18.42 4.60 18.42
Canada Limited
Newgen Software Technologies 11.33 10.13 - 10.13
(UK) Ltd.
Newgen Software Technologies 6.40 8.20 - 8.08
Pty Ltd.
expense-Outsourced technical
services
Subsidiaries
Newgen Software Inc., USA 2401.65 593.52 - 341.11
Newgen Software Technologies 115.11 101.87 27.28 50.73
Pte Ltd.
----- End of picture text -----

142

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [498 x 395] intentionally omitted <==

----- Start of picture text -----

Transaction value Balance payable
For the year For the year As at As at
ended ended 31 March 2021 31 March 2020
31 March 2021 31 March 2020
expense-Marketing support
services
Subsidiary
Newgen Software Technologies 511.66 395.32 - 386.38
Pty Ltd.
Rent expense
Subsidiary
Newgen Computers Technologies 7.92 7.92 - -
Limited
Paid on behalf of
Subsidiary
Newgen Computers Technologies 1.25 0.69 - -
Limited
Newgen Software Technologies 0.22 -
Pte Ltd.
Bank Guarantee issued on behalf
of
Subsidiary
Newgen Software Technologies 65.71 - - -
Pte Ltd.
Recovered from
Subsidiary
Newgen Computers Technologies 0.00 0.69 - -
Limited
Newgen Software Technologies 0.22 0.00
Pte Ltd.
Investment in subsidiaries -
share based payment
Newgen Software Inc., USA 1.99 3.39 - -
Newgen Singapore 0.70 0.82 - -
----- End of picture text -----

D. Investment in subsidiaries

Subsidiary Company	As at	As at
	31 March 2021	31 March 2020
Newgen Software Inc. USA	530.09	528.10
NewgenSoftwareTechnologies CanadaLimited	56.52	56.52
NewgenSoftwareTechnologiesPte.Ltd.	117.44	116.74
Newgen Computers Technologies Limited	46.50	46.50
Newgen Software Technologies PtyLtd.	491.05	491.05
Newgen Software Technologies (UK) Ltd.	178.74	178.74
	1,420.34	1,417.65

143

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

43. Financial instruments – Fair values and risk management

A Accounting classification and fair values

The following table shows the carrying amounts and fair value of financial assets and financial liabilities, including their levels in the fair value hirarchy.

==> picture [479 x 430] intentionally omitted <==

144

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [479 x 549] intentionally omitted <==

----- Start of picture text -----

31 March Carrying amount Fair value
2020
Note FVTPL FVTOCI Amortised Total Level 1 Level 2 Level 3 Total
Cost
Financial assets
Financial assets measured at fair value
Investments 11 5,019.75 - - 5,019.75 5,019.75 - - 5,019.75
in debt
mutual funds
Investments 11 - 2,590.91 - 2,590.91 2,590.91 - - 2,590.91
in bonds
Financial assets not measured at fair value
Other non- 8 - - 351.48 351.48 - - - -
current
financial asset
Trade 12 - - 23,813.20 23,813.20 - - - -
receivables
Cash and cash 13 - - 5,758.70 5,758.70 - - - -
equivalents
Other bank 13A - - 6,516.11 6,516.11
balances
Loans 7 and 14 - - 523.25 523.25 - - - -
Other 15 - - 8,260.42 8,260.42 - - - -
financial
assets
- -
5,019.75 2,590.91 45,223.16 52,833.83 7,610.67 7,610.67
Financial liabilities
Financial liabilities not measured at fair value -
Long-term 19 - - 3,347.03 3,347.03 - - - -
maturities of
finance lease
obligations
(secured)
Short term 21 - - 7,453.21 7,453.21 - - - -
borrowings
Trade 22 - - 3,149.06 3,149.06 - - - -
payables
Other 23 - - 4,036.57 4,036.57 - - - -
financial
liabilities
- - - - - -
17,985.87 17,985.87
----- End of picture text -----

145

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

The fair value of trade receivables, cash and cash equivalents, other bank balances, loans, other current financial assets, current borrowings, trade payables and other current financial liabilities approximate their carrying amounts, due to their short-term nature. Fair value of bank deposits included in non-current other financial assets are equivalent to their carrying amount, as the interest rate on them is equivalent to market rate.

B. Measurement of fair values

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable inputs

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

==> picture [479 x 393] intentionally omitted <==

----- Start of picture text -----

Particulars Fair value Valuation technique Significant Inter-relationship
hierarchy unobservable between unobservable
inputs inputs and fair vale
measurement
Financial assets
measured at FVTPL
Investments in mutual Level 1 Market valuation technique: Not applicable Not applicable
funds Investments traded in active
markets are determined by
reference to quotes from
the financial institutions; for
example: Net asset value
(NAV) for investments in
mutual funds declared by
mutual fund house, quoted
price of equity shares in the
stock exchange etc.
Financial assets
measured at FVTOCI
Investments in bonds Level 1 Market valuation technique: Not applicable Not applicable
The fair value of bonds is
based on direct and market
observable inputs.
Financial liabilities
measured at
Amortised cost
Long term borrowings Level 2 Discounted cash flow: The Not applicable Not applicable
Short term borrowings Level 2 valuation model considers
the present value of expected
payment, discounted using a
risk adjusted discount rate
----- End of picture text -----

There have been no transfers in either direction for the years ended 31 March 2021 and 31 March 2020.

146

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

C. Financial risk management

The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk and liquidity risk.

i. Risk management framework

The Company’s board of directors has framed a Risk Management Policy and plan for enabling the Company to identify elements of risk as contemplated by the provisions of the Section 134 of the Companies Act 2013. The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and `procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company’s audit committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit.

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises partially from the Company’s receivables from customers, loans and investment in debt securities. The carrying amount of financial assets represent the maximum credit risk exposure. The Company has credit policies in place and the exposures to these credit risks are monitored on an ongoing basis.

The carrying amount of financial assets represent the maximum credit risk exposure. The maximum exposure to credit risk at the reporting was:

risk at the reporting was:
Particulars	As at	As at
	31 March 2021	31 March 2020
Tradereceivables	17,541.07	23,813.20
Loans	497.74	523.25
Cashand cashequivalents	2,873.38	5,758.70
Otherbankbalances	17,000.00	6,516.11
	37,912.19	36,611.26

To cater to the credit risk for investments in mutual funds and bonds, only high rated mutual funds/bonds are accepted. The Company has given security deposits to vendors for rental deposits for office properties, securing services from them, government departments. The Company does not expect any default from these parties and accordingly the risk of default is negligible or nil.

Trade receivables and unbilled revenues are typically unsecured and derived from revenue earned from customers primarily located in India, USA, EMEA and APAC.

Credit risk has always been managed by the Company through credit approval, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit term in normal course of business. Credit limits are established for each customers and received quarterly. Any sales/services exceeding these limits require approval from the risk management committee.

The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or legal entity, industry and existence of previous financial difficulties, if any.

Trade and other receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management establishes an allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables. An impairment analysis is performed at each reporting date.

147

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

The Company’s exposure to credit risk for trade receivables by geographic region is as follows

==> picture [480 x 123] intentionally omitted <==

----- Start of picture text -----

Carrying amount
As at As at
31 March 2021 31 March 2020
India 6,086.63 7,103.27
USA 770.54 3,319.15
EMEA 8,586.97 9,586.80
APAC 2,096.93 3,795.90
Australia - 8.08
17,541.07 23,813.20
----- End of picture text -----

The following table provides information about the exposure to credit risk and expected credit loss for trade receivables from individual customers:

==> picture [479 x 455] intentionally omitted <==

----- Start of picture text -----

As at 31 March 2021 Gross carrying Weighted- Loss allowance Credit-impaired
amount average loss
rate
0-3 months past due 16,097.90 2.89% 465.75 No
3-6 months past due 614.74 10.05% 61.80 No
6-9 months past due 647.86 21.86% 141.60 No
9-12 months past due 411.58 36.89% 151.85 No
12-15 months past due 666.53 50.64% 337.52 No
15-18 months past due 459.03 56.55% 259.57 No
18-21 months past due 153.09 65.94% 100.94 No
21-24 months past due 34.49 72.84% 25.12 No
above 24 months past due 2,445.22 100.00% 2,445.22 No
21,530.45 3,989.38
As at 31 March 2020 Gross carrying Weighted- Loss allowance Credit-impaired
amount average loss
rate
0-3 months past due 18,438.64 1.91% 352.83 No
3-6 months past due 3,588.25 7.83% 280.82 No
6-9 months past due 746.07 15.93% 118.82 No
9-12 months past due 98.49 25.68% 25.30 No
12-15 months past due 567.29 34.53% 195.88 No
15-18 months past due 336.66 38.37% 129.16 No
18-21 months past due 308.48 48.64% 150.04 No
21-24 months past due 551.49 59.01% 325.44 No
above 24 months past due 4,008.62 81.14% 3,252.50 No
28,643.99 4,830.79
Balance as at 1 April 2019 3,621.55
Impairment loss recognised 1,736.67
Amounts written off 527.43
Balance as at 31 March 2020 4,830.79
Impairment loss recognised 2,149.62
Amounts written off 2,991.03
Balance as at 31 March 2021 3,989.38
----- End of picture text -----

148

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

Debt securities

The Company limits its exposure to credit risk by investing only in liquid debt securities and only with counterparties that have a credit rating A to AAA from renowned rating agencies.”

The Company monitors changes in credit risk by tracking published external credit ratings. For its investment in bonds, Company also reviews changes in government bond yields together with available press and regulatory information about issuers

The exposure to credit risk for debt securities at FVTOCI and at FVTPL is as follows:-

	Net carrying amount
	As at 31 March 2021 As at 31 March 2020
India	8,317.46 7,610.68
	8,317.46 7,610.68

Basis experienced credit judgement, no risk of loss is indicative on Company’s investment in mutual funds and government bonds.

Cash and cash equivalents and other bank balances

The Company held cash and cash equivalents of INR 2,873.38 lakhs at 31 March 2021 (31 March 2020: INR 5,758.70 lakhs) and other bank balances of INR 17,000.00 lakhs as at 31 March 2021 (31 March 2020: INR 6,516.11 lakhs). The cash and cash equivalents are held with bank and financial institution counterparties, which are rated AA- to AAA, based on renowned rating agencies.

iii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the company’s reputation.

The Company’s primary sources of liquidity include cash and bank balances, deposits, undrawn borrowings and cash flow from operating activities. As at 31 March 2021, the Company had a working capital of INR 39,408.60 lakhs (31 March 2020: INR 29,264.15 lakhs) including cash and cash equivalent of INR 2,873.38 lakhs (31 March 2020: INR 5,758.70 lakhs), other bank balances of INR 17,000.00 lakhs ( 31 March 2020: 6,516.11 lakhs) and current investments of INR 8,317.46 lakhs (31 March 2020: INR 7,610.67 lakhs).

Consequently, the Company believes its revenue, along with proceeds from financing activities will continue to provide the necessary funds to cover its short term liquidity needs. In addition, the Company projects cash flows and considering the level of liquid assets necessary to meet liquidity requirement.

In addition, the Company had access to the following undrawn borrowing facilities at the end of the reporting year

==> picture [458 x 59] intentionally omitted <==

----- Start of picture text -----

Particulars Total 2 months or 2-12 months 1-2 years 2-5 years More than
less 5 years
As at 31 March 2021 10,553.00 - 10,553.00
As at 31 March 2020 546.79 - 546.79 - - -
----- End of picture text -----

149

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.

==> picture [500 x 466] intentionally omitted <==

----- Start of picture text -----

Contractual cash flows
31 March 2021 Carrying Total 2 months 2-12 1-2 years 2-5 years More than
amount or less months 5 years
Non-derivative `
financial liabilities
Finance lease 3,347.03 6,703.86 99.15 456.13 283.55 663.24 5,201.79
obligations (including
current maturities)
Employee related 4,169.87 4,169.87 2,533.13 1,540.59 96.16 - -
payables
Trade and other 2,387.20 2,387.20 2,387.20 - - - -
payables
Payable in respect of 127.82 127.82 - 127.82 - - -
retention money
Earnest money deposits 1.00 1.00 - 1.00 - - -
Payable for capital 17.00 17.00 - 17.00 - - -
assets
Total 10,049.92 13,406.75 5,019.48 2,142.54 379.70 663.24 5,201.79
Contractual cash flows
31 March 2020 Carrying Total 2 months 2-12 1-2 years 2-5 years More than
amount or less months 5 years
Non-derivative
financial liabilities
Finance lease 3,347.03 8,787.04 268.63 1,230.78 1,209.24 810.75 5,267.64
obligations (including
current maturities)
Employee related 3,428.23 3,428.23 2,477.64 950.59 - - -
payables
Trade and other 3,149.06 3,149.06 3,149.06 - - - -
payables
Pre-shipment loans 7,453.21 7,453.21 - 7,453.21 - - -
(secured)
Payable in respect of 180.54 180.54 - 180.54 - - -
retention money
Earnest money deposits 1.00 1.00 - 1.00 - - -
Payable for capital 412.41 412.41 - 412.41 - - -
assets
Total 17,971.48 23,411.49 5,895.33 10,228.53 1,209.24 810.75 5,267.64
----- End of picture text -----

Interest payment on variable interest rate loan in the table above reflect market forward interest rates at the reporting dates and these amount may change as market interest changes

Financial instruments – Fair values and risk management (continued)

iv. Market risk

Market risk is the risk that changes in market prices – such as foreign exchange rates, interest rates and equity prices – will affect the company’s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of our investments. Thus, our exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs.

150

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

v. Currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company is exposed to currency risk on account of its borrowings, receivables and other payables in foreign currency. The functional currency of the Company is Indian Rupee. The foreign currency exchange management policy is to minimize economic and transactional exposures arising from currency movements against the US dollar, Euro, Great Britain Pound, Canadian dolar, Abar Emirates Dhiram, Saudi Riyal, Singapore dollar, Australian dollar, Malaysian Ringgit and Hong Kong dollar. The Company manages the risk by netting off naturally-occurring opposite exposures wherever possible, and then dealing with any material residual foreign currency exchange risks if any.

exposure to currency risk

The currency profile of financial assets and financial liabilities as at 31 March 2021 and 31 March 2020 are as below:

==> picture [479 x 416] intentionally omitted <==

----- Start of picture text -----

Particulars Currency 31 March 2021 31 March 2020
Amount Amount in Amount Amount in
in foreign local currency in foreign local currency
currency (lakhs) currency (lakhs)
(lakhs) (lakhs)
Financial assets
Trade and other receivables
USD 167.49 12,255.57 222.03 16,738.68
AED 4.05 80.62 5.22 107.07
CAD 0.47 27.12 4.98 265.73
EUR 1.21 104.02 0.78 64.60
GBP 0.11 11.00 3.57 328.58
SAR - - 2.06 41.36
SGD 0.01 0.41 23.91 1,267.39
MYR 9.80 172.99 1.62 28.30
AUD - - 0.17 8.08
Bank balance-Dubai AED 7.15 142.43 5.78 118.65
Bank balance-EEFC USD 16.43 1,202.38 6.87 518.17
Travelling Advance to employees USD 0.22 16.38 0.67 47.72
AED 0.06 1.13 0.70 13.85
CAD - - 0.02 0.92
GBP - - 0.02 1.87
SGD - - 0.02 0.87
SAR - - 0.51 10.04
HKD - - 0.06 0.56
Financial liabilities
Trade and other payables
USD (17.74) (1,277.36) (20.44) (1,498.18)
SGD (0.86) (47.04) (1.02) (53.34)
SAR - - (0.47) (8.86)
AUD (1.76) (97.89) (8.35) (395.32)
Short term borrowings USD - - (98.86) (7,453.21)
----- End of picture text -----*

gross of loss allowance

A reasonably possible strengthening (weakening) of the Indian Rupee against US dollar, Euro, Great Britain Pound, Canadian dolar, Abar Emirates Dhiram, Saudi Riyal, Singapore dollar, Australian dollor, Malaysian Ringgit and Hong Kong Dollar at reporting date would have affected the measurement of financial instruments denominated in foreign currencies and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

151

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [499 x 160] intentionally omitted <==

----- Start of picture text -----

Effect in Lakhs of INR For the year ended 31 March 2021 For the year ended 31 March 2020
Strengthening Weakening Strengthening Weakening
1% movement
USD 121.76 (121.76) 83.13 (83.13)
EUR1 1.04 (1.04) 0.64 (0.64)
GBP1 0.11 (0.11) 3.34 (3.34)
CAD1 0.27 (0.27) 2.67 (2.67)
SGD1 (0.46) 0.46 12.14 (12.14)
AED1 2.24 (2.24) 2.38 (2.38)
SAR1 - - 0.42 (0.42)
HKD1 - - 0.01 (0.01)
MYR1 1.73 (1.73) 0.28 (0.28)
AUD1 (0.98) 0.98 (3.78) 3.78
125.72 (125.72) 101.23 (101.23)
----- End of picture text -----

vi. Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.

a) Exposure to interest rate risk

The Company is exposed to both fair value interest rate risk as well as cash flow interest rate risk arising both on short-term and long-term floating rate instruments.

The interest rate profile of the Company’s interest-bearing financial instruments is as follows:

==> picture [460 x 126] intentionally omitted <==

----- Start of picture text -----

Nominal amount in INR
31 March 2021 31 March 2020
Fixed-rate instruments
Financial assets 24,167.61 13,488.94
Financial liabilities 3,347.03 3,347.03
27,514.64 16,835.97
Variable-rate instruments `
Financial assets - -
Financial liabilities - (7,453.21)
-
(7,453.21)
Total 27,514.64 9,382.76
----- End of picture text -----

b) Sensitivity analysis

Fair value sensitivity analysis for fixed-rate instruments

The Company accounts for investments in government and other bonds as fair value through other comprehensive income. Therefore, a change in interest rate at the reporting date would have impact on equity.

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity by INR 23.15 lakhs after tax (31 March 2020: INR 16.84 lakhs).

Cash flow sensitivity analysis for variable-rate instruments

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.

==> picture [460 x 94] intentionally omitted <==

----- Start of picture text -----

Profit or loss
100 bp increase 100 bp decrease
31 March 2021
Variable-rate instruments - -
Cash fow sensitivity (net) - -
31 March 2020
Variable-rate instruments 74.53 74.53
Cash fow sensitivity (net) 74.53 74.53
----- End of picture text -----

152

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Market price risk

a) Exposure

The Company’s exposure to mutual funds and bonds price risk arises from investments held by the Company and classified in the balance sheet as fair value through profit and loss and at fair value through other comprehensive income respectively.

To manage its price risk arising from investments, the Company diversifies its portfolio. Diversification of the portfolio is done in accordances with the limits set by the Company.

b) Sensitivity analysis

Company is having investment in mutual funds, government bonds, other bonds and investment in subsidiaries. For such investments classified at Fair value through other comprehensive income, a 2% increase in their fair value at the reporting date would have increased equity by INR 46.30 lakhs after tax (31 March, 2020: INR 33.68 lakhs ). An equal change in the opposite direction would have decreased equity by INR 46.30 lakhs after tax (31 March, 2020: INR 33.68 lakhs )

For such investments classified at Fair value through profit or loss, the impact of a 2% increase in their fair value at the reporting date on profit or loss would have been an increase of INR 61.82 lakhs after tax (31 March, 2020: INR 65.26 lakhs ). An equal change in the opposite direction would have decreased profit or loss by INR 61.82 lakhs after tax (31 March, 2020: INR 65.26 lakhs)

44. Capital Management

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to equity shareholders.

The Company manages its capital structure and makes adjustments to it as and when required. To maintain or adjust the capital structure, the company may pay dividend or repay debts, raise new debt or issue new shares. No major changes were made in the objectives, policies or processes for managing capital during the year ended 31 March 2021 and 31 March 2020.

The Company monitors capital using a ratio of ‘adjusted net debt’ to ‘adjusted equity’. For this purpose, adjusted net debt is defined as total liabilities comprising interest bearing loans and borrowings and obligations under finance leases, less cash and cash equivalents. Adjusted equity comprises all components of equity

The Company capital consists of equity attributable to equity holders that includes equity share capital, retained earnings and long term borrowings.

and long term borrowings.
	As at	As at
	31 March 2021	31 March 2020
Total liabilities	1,567.06	10,800.24
Less: Cash & Cash equivalent	2,873.38	5,758.70
Adjusted net debt(a)	(1,306.32)	5,041.54
Total equity (b)	63,349.09	52,692.55
Total equityand net debt(a+b)= c	62,042.77	57,734.09
Capitalgearingratio(a/c)	-2.11%	8.73%

As a part of its capital management policy the Company ensures compliance with all covenants and other capital requirements related to its contractual obligations.

153

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

45. Segment reporting

A. Basis for segmentation

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other components, and for which discrete financial information is available.

The Company’s board of directors have been identified as the Chief Operating Decision Makers (CODM) since they are responsible for all major decisions in respect of allocation of resources and assessment of the performance on the basis of the internal reports/ information provided by functional heads. The board examines the performance of the Company based on such internal reports which are based on operations in various geographies and accordingly, have identified the following reportable segments:

India
Europe, Middle East and Africa (EMEA)
• Asia Pacific (APAC)
United States of America (USA)
• Australia

B. Information about reportable segments

==> picture [479 x 175] intentionally omitted <==

----- Start of picture text -----

Particulars Reportable segments
India eMeA APAC uSA Australia Total Segment
Revenue
External revenue 19,723.17 16,770.68 8,446.68 16,092.54 6.40 61,039.47
Inter-segment revenue - - - - - -
Total Segment Revenue 19,723.17 16,770.68 8,446.68 16,092.54 6.40 61,039.47
Segment profit/(loss) before 4,545.60 4,963.27 4,015.43 5,250.09 (506.02) 18,268.37
income tax
Segment assets 9,245.75 11,635.05 3,812.78 4,023.53 492.00 29,209.11
Segment liabilities 5,591.38 6,634.20 1,889.88 2,209.21 97.89 16,422.56
Capital expenditure during 9,850.16 - - - - 9,850.16
the year
----- End of picture text -----

Year ended 31 March 2020

==> picture [479 x 175] intentionally omitted <==

----- Start of picture text -----

Particulars Reportable segments
India eMeA APAC uSA Australia Total Segment
Revenue
External revenue 19,499.82 20,324.55 6,707.70 11,199.85 8.20 57,740.12
Inter-segment revenue - - - - - -
Total Segment Revenue 19,499.82 20,324.55 6,707.70 11,199.85 8.20 57,740.12
Segment profit before 1,731.78 4,408.82 2,068.93 1,754.44 (389.20) 9,574.77
income tax
Segment assets 10,181.02 14,196.50 4,631.89 4,730.38 499.13 34,238.92
Segment liabilities 5,348.08 6,339.14 1,350.75 1,844.44 395.32 15,277.73
Capital expenditure during 3,863.14 - - - - 3,863.14
the year
----- End of picture text -----

154

Financial Statements

Company Overview

Statutory Reports

Notes

to the Standalone Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

C. Reconciliations of information on reportable segments to Ind AS

==> picture [480 x 244] intentionally omitted <==

----- Start of picture text -----

Particulars For the year For the year
ended ended
31 March 2021 31 March 2020
(a) Revenue
Total revenue for reportable segments 61,039.47 57,740.12
Elimination of inter-segment revenue -
Total revenue 61,039.47 57,740.12
(b) Profit / (loss) before tax
Total profit before tax for reportable segments 18,268.37 9,574.77
Unallocated amounts:
- Unallocated income 1,430.95 2,084.60
- Other corporate expenses (2,730.18) (3,101.01)
Total profit before tax from operations 16,969.13 8,558.36
(c) Assets
Total assets for reportable segments 29,209.11 34,238.92
Other unallocated amounts 55,087.77 46,345.92
Total assets 84,296.88 80,584.84
(d) Liabilities
Total liabilities for reportable segments 16,422.56 15,277.73
Other unallocated amounts 4,525.23 12,614.56
Total liabilities 20,947.79 27,892.29
----- End of picture text -----

C. Information about major customers

No customer individually accounted for more than 10% of the revenues in the year ended 31 March 2021 and 31 March 2020.

D. Unallocated assets, liabilities, revenue and expenses

Certain assets, liabilities, revenue and expenses are not specifically allocable to individual segments as the underlying services are used interchangeably. The Company believes that it is not practicable to provide segment disclosures relating to such assets, liabilities, revenue and expenses and accordingly such assets, liabilities, revenue and expenses are separately disclosed as ‘unallocated’.

46. As at 31 March 2021, the Company has gross foreign currency receivables amounting to INR 12,651.72 lakhs (previous year INR 18,849.78 lakhs). Out of these receivables, INR 492.42 lakhs (previous year INR 1,992.90 lakhs) is outstanding for more than 15 months. As per circular RBI/2019-20/206 A. P. (DIR series) circular no. 27 , receipt for export goods should be realized within a period of 15 months from the date of export, for the exports made up to or on July 31, 2020. The Company must file extension with AD Bank & as per the requirements of circular no. RBI/2015-16/395 A. P. (DIR series) Circular no. 68 dated May12, 2016, in one calendar year, the Company is allowed to seek extension for an amount equivalent to 10% of the average export collection of the last 3 years only and pursuant to the same, the Company is in the process of applying for approval to seek extension of time beyond 15 months from export date. The management is of the view that the Company will be able to obtain approvals from the authorities for realizing such funds beyond the stipulated timeline without levy of any penalties as it had bonafide reasons that caused the delays in realization.

As per our report of even date attached

For B S R & Associates LLP Chartered Accountants Firm Registration No.: 116231W / W-100024

For and on behalf of the Board of Directors of Newgen Software Technologies Limited

Sandeep Batra Diwakar Nigam Partner Membership No.: 093320 DIN: 00263222 UDIN:21093320AAAAAS9805 Place: Gurugram Place: New Delhi Date: 25 May 2021 Date: 25 May 2021

T.S.Varadarajan Arun Kumar Gupta Whole Time Director Chief Financial Officer DIN: 00263115 Membership No: 056859

Chairman & Managing Director Whole Time Director DIN: 00263222 DIN: 00263115

Place: Chennai Place: Noida Date: 25 May 2021 Date: 25 May 2021

Aman Mourya Company Secretary Membership No: F9975 Place: Noida Date: 25 May 2021

155

Newgen Software Technologies Limited

Annual Report 2020-21

Independent Auditors’ Report

To the Members of Newgen Software Technologies Limited

Report on the Audit of Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of Newgen Software Technologies Limited (hereinafter referred to as the “Holding Company”) and its subsidiaries (Holding Company and its subsidiaries together referred to as “the Group”), which comprise the Consolidated Balance Sheet as at 31 March 2021, and the Consolidated Statement of Profit and Loss (including other comprehensive income), Consolidated Statement of Changes in Equity and Consolidated Statement of Cash Flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of other auditors on separate financial statements of such subsidiaries as were audited by the other auditors, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013 (“Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at 31 March 2021, of its consolidated

profit and other comprehensive income, consolidated changes in equity and consolidated cash flows for the year then ended.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in terms of the Code of Ethics issued by the Institute of Chartered Accountants of India and the relevant provisions of the Act, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence obtained by us along with the consideration of audit reports of the other auditors referred to in sub paragraph (a) of the “Other Matters” paragraph below, is sufficient and appropriate to provide a basis for our opinion on the consolidated financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Description of Key Audit Matter

Revenue from operations (refer note 26 to the consolidated financial statements) The key audit matter

How the matter was addressed in our audit

In view of the significance of the matter we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence:

Revenue relating to implementation services from fixed price contracts is recognised based on percentage of completion method which is estimated by the Group basis the completion of milestones and activities agreed with the customers. Due to complexity and volume of transactions, significant judgements are required to estimate percentage of completion and determine timing and accuracy of recognition of revenue.
Evaluated the design and implementation of internal controls and tested the operating effectiveness of internal controls relating to determination of percentage of completion and estimation of efforts required to complete the performance obligation;
Involved specialists to assess the design, implementation and operating effectiveness of key IT controls over the IT environment in which the business systems operate and to test information technology system controls used in recording revenue.
Selected specific/statistical samples of existing and new contracts and performed the following procedures:

156

Financial Statements

Company Overview

Statutory Reports

==> picture [249 x 165] intentionally omitted <==

Inspected key terms, including price, deliverables, timetable and milestones set out in the contract for selected sample of contracts and identified the distinct performance obligations
Tested project management tool for budgeted efforts and related percentage completion milestones and establishing accuracy of milestones based on actualisation of efforts for delivered projects.
Tested the details of activities completed with those stated in the customer contract, details of activities completed as provided by the project head and confirmation/acceptance of completion of such activities by the customer.

Trade receivables (refer note 11 to the consolidated financial statements)

The key audit matter

Significant management judgement in determining the recoverable amount of trade receivables as estimating the recoverable amount involves inherent uncertainty.

How the matter was addressed in our audit

In view of the significance of the matter we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence:

Obtained an understanding of and assessed the design and implementation of Group’s key internal controls relating to debt collection and making provision for doubtful debts;
Assessed, on a sample basis that items in the receivables’ ageing report were classified within the correct ageing bracket by comparing individual items in the report with underlying documentation, which included sales invoices, proof of delivery and customers sign offs;
Assessed the assumptions and estimates made by the Group for the provision for doubtful debts with reference to our understanding of the debtors’ financial condition, the industry in which the debtors are operating, the ageing of overdue balances and historical and post year-end cash receipts from the debtors and by performed a retrospective analysis of the historical accuracy of these estimates; and
Tested the accuracy and completeness of underlying data for “expected credit loss model”.

Other Information

The Holding Company’s management and Board of Directors are responsible for the other information. The other information comprises the information included in the holding Company’s annual report, but does not include the consolidated financial statements and our auditors’ report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on

the work we have performed and based on the work done/ audit report of other auditors, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management’s and Board of Directors’ Responsibilities for the Consolidated Financial Statements

The Holding Company’s Management and Board of Directors are responsible for the preparation and presentation of these consolidated financial statements in term of the requirements of the Act that give a true and fair view of the consolidated state of affairs, consolidated profit/ loss and other comprehensive income (loss), consolidated statement of changes in equity and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India, including the Indian Accounting

157

Newgen Software Technologies Limited

Annual Report 2020-21

Standards (Ind AS) specified under section 133 of the Act. The respective Management and Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of each company. and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Management and Directors of the Holding Company, as aforesaid.

In preparing the consolidated financial statements, the respective Management and Board of Directors of the companies included in the Group are responsible for assessing the ability of each company to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The respective Board of Directors of the companies included in the Group is responsible for overseeing the financial reporting process of each company.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis

for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on the internal financial controls with reference to the consolidated financial statements and the operating effectiveness of such controls based on our audit.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.

Conclude on the appropriateness of Management and Board of Directors use of the going concern basis of accounting in preparation of consolidated financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the appropriateness of this assumption. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of such entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of financial information of such entities included in the consolidated financial statements of which we are the independent auditors. For the other entities included in the consolidated financial statements, which have been audited by other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion. Our responsibilities in this regard are further described in para (a) of the section titled ‘Other Matters’ in this audit report.

158

Financial Statements

Company Overview

Statutory Reports

We believe that the audit evidence obtained by us along with the consideration of audit reports of the other auditors referred to in sub-paragraph (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.

We communicate with those charged with governance of the Holding Company and such other entity included in the consolidated financial statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

We did not audit the financial statements of five subsidiaries, whose financial statements reflect total assets of Rs. 4,186.32 lakhs as at 31 March 2021, total revenues of Rs. 7,924.29 lakhs and net cash outflows amounting to Rs. 130.21 lakhs for the year ended on that date, as considered in the consolidated financial statements. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, and our report in terms of sub-section (3)P of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries is based solely on the audit reports of the other auditors.

Certain of these subsidiaries are located outside India whose financial statements and other financial information have been prepared in accordance with accounting principles generally accepted in their

respective countries and which have been audited by other auditors under generally accepted auditing standards applicable in their respective countries. The Company’s management has converted the financial statements of such subsidiaries located outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have audited these conversion adjustments made by the Company’s management. Our opinion in so far as it relates to the balances and affairs of such subsidiaries located outside India is based on the report of other auditors and the conversion adjustments prepared by the management of the Company and audited by us.

Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements/financial information certified by the Management.

Report on Other Legal and Regulatory Requirements

A. As required by Section 143(3) of the Act, based on our audit and on the consideration of reports of the other auditors on separate financial statements of such subsidiaries as were audited by other auditors, as noted in the ‘Other Matters’ paragraph, we report, to the extent applicable, that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.
b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors.
c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss (including other comprehensive income), the Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flows dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements.
d) In our opinion, the aforesaid consolidated financial statements comply with the Ind AS specified under section 133 of the Act.
e) On the basis of the written representations received from the directors of the Holding Company as on 31 March 2021 taken on record by the Board of

159

Newgen Software Technologies Limited

Annual Report 2020-21

  - Directors of the Holding Company and the reports of the statutory auditors of its subsidiary company incorporated in India, none of the directors of the Group companies incorporated in India is disqualified as on 31 March 2021 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Holding Company and its subsidiary company incorporated in India and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”.
B. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditor’s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors on separate financial statements of the subsidiaries, as noted in the ‘Other Matters’ paragraph:
i. The consolidated financial statements disclose the impact of pending litigations as at 31 March 2021 on the consolidated financial position of the Group. Refer Note 35 to the consolidated financial statements.
ii. The Group did not have any material foreseeable losses on long-term contracts including derivative contracts during the year ended 31 March 2021.
iii. There are no amounts which are required to be transferred to the Investor Education and Protection Fund by the Holding Company or its subsidiary company incorporated in India during the year ended 31 March 2021.
iv. The disclosures in the consolidated financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made in the consolidated financial statements since they do not pertain to the financial year ended 31 March 2021.
C. With respect to the matter to be included in the Auditor’s report under section 197(16):

In our opinion and according to the information and explanations given to us and based on the reports of the statutory auditors of such subsidiary company incorporated in India which were not audited by us, the remuneration paid during the current year by the Holding Company and its subsidiary company to its directors is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director by the Holding Company and its subsidiary company is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

For B S R & Associates LLP Chartered Accountants Firm’s Registration No.: 116231W / W-100024

Sandeep Batra

Partner

Place: Gurugram Membership No. 093320 Date: 25 May 2021 UDIN: 21093320AAAAAT2425

160

Financial Statements

Company Overview

Statutory Reports

ANNexuRe A

to the Independent Auditors’ report on the consolidated financial statements of Newgen Software Technologies Limited for the year ended 31 March 2021

Report on the internal financial controls with reference to the aforesaid consolidated financial statements under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013

(Referred to in paragraph (A)(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

Opinion

In conjunction with our audit of the consolidated financial statements of Newgen Software Technologies Limited (hereinafter referred to as “the Holding Company”) as of and for the year ended 31 March 2021, we have audited the internal financial controls with reference to consolidated financial statements of the Holding Company and such company incorporated in India under the Companies Act, 2013 which is its subsidiary company, as of that date.

The Holding Company has 5 subsidiary companies incorporated outside India and operating effectiveness of internal financial controls with reference to financial statements is not applicable to such subsidiary companies.

In our opinion, the Holding Company and such company incorporated in India which is its subsidiary company, have, in all material respects, adequate internal financial controls with reference to consolidated financial statements and such internal financial controls were operating effectively as at 31 March 2021, based on the internal financial controls with reference to consolidated financial statements criteria established by such companies considering the essential components of such internal controls stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the “Guidance Note”).

Management’s Responsibility for Internal Financial Controls The respective Company’s management and the Board of Directors are responsible for establishing and maintaining internal financial controls with reference to consolidated financial statements based on the criteria established by the respective Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013 (hereinafter referred to as “the Act”).

Auditors’ Responsibility

Our responsibility is to express an opinion on the internal financial controls with reference to consolidated financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to consolidated financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to consolidated financial statements were established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to consolidated financial statements and their operating effectiveness. Our audit of internal financial controls with reference to consolidated financial statements included obtaining an understanding of internal financial controls with reference to consolidated financial statements,

assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of the internal controls based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors of the relevant subsidiary company in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls with reference to consolidated financial statements.

Meaning of Internal Financial controls with Reference to Consolidated Financial Statements

A company’s internal financial controls with reference to consolidated financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial controls with reference to consolidated financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial controls with Reference to consolidated Financial Statements

Because of the inherent limitations of internal financial controls with reference to consolidated financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to consolidated financial statements to future periods are subject to the risk that the internal financial controls with reference to consolidated financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Other Matters

Our aforesaid reports under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls with reference to consolidated financial statements insofar as it relates to one subsidiary company, which is a company incorporated in India, is based on the corresponding report of the auditors of such company incorporated in India.

For B S R & Associates LLP Chartered Accountants Firm’s Registration No.: 116231W / W-100024

Sandeep Batra Partner Place: Gurugram Membership No. 093320 Date: 25 May 2021 UDIN: 21093320AAAAAT2425

161

Newgen Software Technologies Limited

Annual Report 2020-21

Consolidated Balance Sheet as at 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [500 x 509] intentionally omitted <==

----- Start of picture text -----

Note As at As at
31 March 2021 31 March 2020
ASSeTS
Non-current assets
Property, plant and equipment 4 15,783.39 6,641.33
Capital work-in-progress 4 - 9,072.62
Right-of-use assets 18 4,647.42 6,252.30
Intangible assets 5 64.12 139.56
Financial assets
Loans 6 343.75 437.76
Other fnancial assets 7 3,353.46 358.29
Deferred tax assets (net) 32 1,979.74 2,265.97
Income tax assets (net) 8 985.82 1,581.18
Other non-current assets 9 6.83 91.20
Total non-current assets 27,164.53 26,840.21
Current assets
Financial assets
Investments 10 8,317.46 7,610.67
Trade receivables 11 23,854.30 26,939.67
Cash and cash equivalents 12 7,174.94 10,011.04
Other bank balances 12A 17,000.00 6,516.11
Loans 13 201.11 132.18
Other financial assets 14 7,604.02 8,260.42
Other current assets 15 741.32 797.35
Total current assets 64,893.15 60,267.44
TOTAL ASSeTS 92,057.68 87,107.65
eQuITY AND LIABILITIeS
equity
Share capital 16 6,930.60 6,908.98
Other equity 17
Securities premium 10,173.59 10,069.60
Retained earnings 46,362.60 35,113.48
Others (including items of other comprehensive income) 3,102.88 2,814.58
Total equity attributable to the owners of the Company 66,569.67 54,906.64
Non-current liabilities
Financial liabilities
Lease liabilities 18 1,391.36 2,296.15
Deferred tax liability 32 - 17.39
Provisions 19 2,857.89 2,332.36
Total non-current liabilities 4,249.25 4,645.90
Current liabilities
Financial liabilities
Lease liabilities 18 617.76 1,334.14
Borrowings 20 - 7,453.21
Trade payables 21 2,264.31 2,750.76
Other fnancial liabilities 22 4,383.04 4,119.73
Deferred income 23 10,391.66 10,090.39
Other current liabilities 24 1,348.30 1,305.60
Provisions 25 461.58 407.96
Income tax liabilities (net) 8A 1,772.11 93.32
Total current liabilities 21,238.76 27,555.11
Total liabilities 25,488.01 32,201.01
TOTAL eQuITY AND LIABILITIeS 92,057.68 87,107.65
Summary of significant accounting policies 3
----- End of picture text -----

The accompanying notes are an integral part of the Consolidated Financial Statements As per our report of even date attached

For B S R & Associates LLP

For and on behalf of the Board of Directors of Newgen Software Technologies Limited

Chartered Accountants

Firm Registration No.: 116231W / W-100024

Sandeep Batra

Diwakar Nigam

T.S.Varadarajan

Arun Kumar Gupta Chief Financial Officer Membership No: 056859

Partner Chairman & Managing Director Whole Time Director Membership No.: 093320 DIN: 00263222 DIN: 00263115 UDIN: 21093320AAAAAT2425

Partner

Place: Gurugram Place: New Delhi Date: 25 May 2021 Date: 25 May 2021

Place: Chennai Place: Noida Date: 25 May 2021 Date: 25 May 2021

Aman Mourya Company Secretary Membership No: F9975

Place: Noida Date: 25 May 2021

162

Financial Statements

Company Overview

Statutory Reports

Consolidated Statement of Profit and Loss for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [499 x 521] intentionally omitted <==

----- Start of picture text -----

Note For the year ended For the year ended
31 March 2021 31 March 2020
Income
Revenue from operations 26 67,262.44 66,075.62
Other income 27 1,503.74 2,096.29
Total income 68,766.18 68,171.91
expenses
Employee benefits expense 28 32,761.76 34,239.46
Finance costs 29 562.58 1,091.21
Depreciation and amortisation expense 30 2,014.97 1,991.11
Other expenses 31 15,310.17 21,375.96
Total expenses 50,649.48 58,697.74
Profit before tax 18,116.70 9,474.17
Tax expense 32
Current tax 3,977.42 2,572.19
Tax expense for earlier years 1,288.86 78.85
Deferred tax charge / (credit) 202.19 (450.33)
Income tax expense 5,468.47 2,200.71
Profit for the year 12,648.23 7,273.46
Other comprehensive income / (loss)
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit liability (asset) 102.73 (106.35)
Income tax relating to items that will not be reclassified to profit or loss (35.90) 37.16
Net other comprehensive income / (loss) not to be reclassified 66.83 (69.19)
subsequently to profit or loss
Items that will be reclassified subsequently to profit or loss
Debt instruments through other comprehensive income - net change in fair value 75.25 5.72
Income tax relating to items that will be reclassified to profit or loss (26.30) (2.00)
Exchange differences on translation of foreign operations 117.69 307.17
Net other comprehensive income to be reclassified subsequently to 166.64 310.89
profit or loss
Other comprehensive income for the year, net of income tax 233.47 241.70
Total comprehensive income for the year 12,881.70 7,515.16
Profit attributable to:
Owners of the Company 12,648.23 7,273.46
Non-Controlling Interests - -
Profit for the year 12,648.23 7,273.46
Other comprehensive income attributable to:
Owners of the Company 233.47 241.70
Non-Controlling Interests - -
Other comprehensive income for the year 233.47 241.70
Total comprehensive income attributable to:
Owners of the Company 12,881.70 7,515.16
Non-Controlling Interests - -
Total comprehensive income for the year 12,881.70 7,515.16
earnings per equity share 34
Nominal value of share INR 10 (31 March 2020: INR 10)
Basic earning per share (INR) 18.28 10.56
Diluted earning per share (INR) 18.10 10.51
Summary of significant accounting policies 3
----- End of picture text -----

The accompanying notes are an integral part of the Consolidated Financial Statements As per our report of even date attached

For B S R & Associates LLP

For and on behalf of the Board of Directors of Newgen Software Technologies Limited

Chartered Accountants

Firm Registration No.: 116231W / W-100024

Sandeep Batra Partner

Diwakar Nigam

T.S.Varadarajan Arun Kumar Gupta Whole Time Director Chief Financial Officer DIN: 00263115 Membership No: 056859

Chairman & Managing Director Whole Time Director DIN: 00263222 DIN: 00263115

Membership No.: 093320 UDIN: 21093320AAAAAT2425

Place: Gurugram Date: 25 May 2021

Place: New Delhi Date: 25 May 2021

Place: Chennai Place: Noida Date: 25 May 2021 Date: 25 May 2021

Aman Mourya Company Secretary Membership No: F9975

Place: Noida Date: 25 May 2021

163

Newgen Software Technologies Limited

Annual Report 2020-21

Consolidated Statement of Changes in Equity

for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [470 x 651] intentionally omitted <==

----- Start of picture text -----

Amount 6,958.57 37.00 6,995.57 86.59 6,908.98 6,995.57 - 6,995.57 64.97 6,930.60 Total attributable to owners of the Group 43,191.45 (250.56) 42,940.89 7,273.46 241.71 196.10 39.69 (2,087.57) (429.11) 87.03 (19.63) - 48,242.57
Debt instruments through OCI 16.80 16.80 - 3.72 - - - - - (19.63) - 0.89
Total share captial - - - - - - - -
(27.10) (27.10) (69.18) (96.29)
37.00 86.59 - 64.97 Remeasurement of defined benefit liability
Amount 6,958.57 6,995.57 6,908.98 6,995.57 6,995.57 6,930.60 - - - - - - - -
Foreign reserve 80.03 80.03 307.17 387.20
Items of Other comprehensive income currency translation
Share options reserve 459.20 459.20 - - - - - - 87.03 - (140.48) 405.75
-
outstanding
equity share capital Number 3,70,000 8,65,888 6,49,696 Newgen eSOP Trust reserve 257.78 257.78 - - - 39.69 - - - - - 297.47
6,95,85,701 6,99,55,701 6,90,89,813 6,99,55,701 6,99,55,701 6,93,06,005
Others Capital reserve 0.21 0.21 - - - - - - - - - 0.21
General reserve - - - - - - - - -
- - - - - - - - -
87.95 1,731.39 87.95 1,731.39 87.95 1,731.39
Capital redemption reserve
Retained earnings (250.56) 7,273.46 - - - (429.11) - - -
- - 196.10 - - (2,087.57) - - - 140.48
Securities premium 9,977.93 30,607.26 9,977.93 30,356.70 10,314.50 35,113.48
Other equity
Particulars Balance as at 1 April 2019 Add: Issued during the year to Newgen ESOP Trust Balance as at 31 March 2020 Less: Shares held by Newgen ESOP Trust Total Share capital as at 31 March 2020 Balance as at 1 April 2020 Add: Issued during the year to Newgen ESOP Trust Balance as at 31 March 2021 Less: Shares held by Newgen ESOP Trust Total Share capital as at 31 March 2021 b. Particulars Balance as at 1 April 2019 Transition impact of Ind AS 116- Leases, net of taxes (refer note 17) Restated balance as at 1 April 2019 Profit for the year Other comprehensive income/(loss) (net of tax) Securities premium on issue of shares to Newgen ESOP Trust Transactions with owners, recorded directly in equity Addition to Newgen ESOP Trust reserve Contributions by and distributions to owners Dividend on equity shares Dividend distribution tax on dividend on equity shares Employee stock compensation expense (Gain) of debt instrument transferred to statement of profit & loss Transferred to securities premium account on exercise of stock options Balance as at 31 March 2020
----- End of picture text -----*

164

Financial Statements

Company Overview

Statutory Reports

Consolidated Statement of Changes in Equity for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Total attributable to owners of the Group	Total attributable to owners of the Group	244.91	47,997.66	48,242.56		12,648.23	233.48		106.85		(1,399.11)	64.59	8.99	(21.62)	59,883.98	244.91	59,639.07
ive income	Debt instruments through OCI	-	0.89	0.89	-	-	48.96		-		-	-	8.99	-	58.84	-	58.84
Other comprehens	Remeasurement of defned beneft liability	-	(96.29)	(96.29)	-	-	66.83		-		-	-	-	-	(29.46)	-	(29.46)
Items of	Foreign currency translation reserve	-	387.20	387.20	-	-	117.69		-		-	-	-	-	504.89	-	504.89
	Share options outstanding reserve	-	405.75	405.75	-	-	-		-		-	64.59	-	(125.62)	344.72	-	344.72
	Newgen eSOP Trust reserve	-	297.47	297.47	-	-	-		106.85		-	-	-	-	404.32	-	404.32
Others	Capital reserve	-	0.21	0.21	-	-	-		-		-	-	-	-	0.21	-	0.21
	General reserve	-	1,731.39	1,731.39	-	-	-		-		-	-	-	-	1,731.39	-	1,731.39		Note 3
	Capital redemption reserve	-	87.95	87.95	-	-	-		-		-	-	-	-	87.95	-	87.95		Summary of signifcant accounting policies
Retained earnings		-	35,113.48	35,113.48	-	12,648.23	-		-		(1,399.11)	-	-	-	46,362.60	-	46,362.60
Securities premium		244.91	10,069.60	10,314.50	-	-	-		-		-	-	-	104.00	10,418.50	244.91	10,173.59
Particulars		Less: Securities premium on shares held by Newgen ESOP Trust	Balance as at 31 March 2020	Balance as at 1 April 2020	Total comprehensive income for the year ended 31 March 2021	Proft for the year	Other comprehensive income/(loss) (net of tax)	Transactions with owners, recorded directly in equity	Addition to Newgen ESOP Trust reserve	Contributions by and distributions to owners	Dividend on equity shares	Employee stock compensation expense	(Gain) of debt instrument transferred to Statement of Proft and Loss	Transferred to securities premium account on exercise of stock options	Balance as at 31 March 2021	Less: Securities premium on shares held by Newgen ESOP Trust	Balance as at 31 March 2021	* Refer note 17

165

Newgen Software Technologies Limited

Annual Report 2020-21

Consolidated Statement of Cash Flows for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [500 x 598] intentionally omitted <==

----- Start of picture text -----

Particulars For the year ended For the year ended
31 March 2021 31 March 2020
A. Cash flows from operating activities
Net profit before tax 18,116.70 9,474.17
Adjustments for:
Depreciation and amortisation 2,010.23 1,991.10
Gain on sale of property, plant and equipment (10.16) (1.10)
Loss allowance on trade receivables 3,061.38 2,235.77
Liabilities/ provision no longer required written back (7.27) (169.22)
Loss allowance on other financial assets - 23.72
Unrealised foreign exchange gain (13.71) (368.45)
Share based payment - equity settled 64.59 87.03
Finance cost on lease liabilities 282.75 344.78
Finance cost 192.70 649.65
Fair value changes of financial assets at FVTPL (70.60) (173.01)
(Profit)/Loss on redemption of mutual funds (net) at FVTPL (125.98) 6.85
Loss on redemption of bonds at FVTOCI 27.78 7.07
Interest income on security deposits at amortised cost (38.69) (40.09)
Interest income from government and other bonds at FVTOCI (240.64) (148.11)
Interest income from bank deposits (755.86) (804.51)
Profit on lease termination (87.49) -
Operating cash flow before working capital changes 22,405.73 13,115.65
Increase in trade receivables (55.23) (2,752.31)
Decrease/(Increase) in loans 74.50 (108.73)
Decrease/(Increase) in other financial assets 868.46 (1,773.63)
Decrease in other assets 50.67 43.46
Increase in provisions 679.37 353.49
Increase in other financial liabilities 723.70 167.22
Increase in other liabilities 460.19 2,742.66
(Decrease)/Increase in trade payables (489.97) 435.37
Cash generated from operations 24,717.42 12,223.18
Income taxes paid (net) (3,147.52) (3,217.85)
Net cash generated from operating activities (A) 21,569.90 9,005.33
B. Cash flows from investing activities
Acquisition or construction of property, plant and equipment including intangible (1,171.15) (4,379.06)
assets, capital work-in-progress and capital advances
Proceeds from sale of property plant and equipment 12.33 2.79
Purchase of mutual funds and government bonds (14,893.34) (4,742.85)
Proceeds from redemption of mutual funds and bonds 14,444.43 2,467.46
Interest income from bonds 168.20 168.30
Interest received on bank deposits and others 627.36 502.06
Investment in bank deposits (net of maturities) (13,483.99) (4,415.10)
Net cash used in investing activities (B) (14,296.16) (10,396.40)
----- End of picture text -----

166

Financial Statements

Company Overview

Statutory Reports

Consolidated Statement of Cash Flows for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [500 x 327] intentionally omitted <==

----- Start of picture text -----

Particulars For the year ended For the year ended
31 March 2021 31 March 2020
C. Cash flows from financing activities
(Repayment of) / proceeds from short-term borrowings (net) (7,453.21) 454.03
Repayment of lease liabilities (1,446.13) (2,442.88)
Proceeds from issue of equity shares under ESOP scheme - 380.97
Dividend paid (1,399.11) (2,087.57)
Dividend distribution tax - (429.11)
Interest expense on borrowings (86.71) (635.26)
Gain on transfer of equity shares by Newgen ESOP trust 153.95 39.69
Net cash used in financing activities (C) (10,231.21) (4,720.13)
Net decrease in cash and cash equivalents (A + B + C) (2,957.47) (6,111.20)
Cash and cash equivalents at the beginning of the year 10,011.04 15,775.13
Effect of exchange differences on translation of foreign currency cash and cash 121.37 347.11
equivalents
Cash and cash equivalents at the end of the year 7,174.94 10,011.04
Components of cash and cash equivalents: (refer note 12)
Cash in hand 3.08 4.51
Balances with banks:
- in current accounts 7,011.86 6,006.53
- balances with scheduled banks in deposit accounts with original maturity of less than 160.00 4,000.00
3 months
7,174.94 10,011.04
----- End of picture text -----

Notes:

The cash flow statement has been prepared under the indirect method as set out in the Ind AS 7 “Statement of Cash Flows”

The accompanying notes are an integral part of the Consoldiated Financial Statements As per our report of even date attached

For B S R & Associates LLP

For and on behalf of the Board of Directors of Newgen Software Technologies Limited

Chartered Accountants

Firm Registration No.: 116231W / W-100024

Sandeep Batra Diwakar Nigam T.S.Varadarajan Partner Chairman & Managing Director Whole Time Director Membership No.: 093320 DIN: 00263222 DIN: 00263115 UDIN: 21093320AAAAAT2425

T.S.Varadarajan Arun Kumar Gupta Whole Time Director Chief Financial Officer DIN: 00263115 Membership No: 056859

Place: Gurugram Place: New Delhi Place: Chennai Place: Noida Date: 25 May 2021 Date: 25 May 2021 Date: 25 May 2021 Date: 25 May 2021

Aman Mourya

Company Secretary Membership No: F9975

Place: Noida Date: 25 May 2021

167

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

1. Background

Newgen Software Technologies Limited (‘Newgen’ or ‘the Company’ or “the holding company”) and its subsidiaries (the Holding company and its subsidiaries together referred to as “the group”) is a public company domiciled and incorporated under the provisions of the Companies Act applicable in India. The registered office of the Company is situated at A-6, Satsang Vihar Marg, Qutab Institutional Area, New Delhi - 110067. The Company raised money by way of initial public offer during the year ended 31 March 2018 and its shares were listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) of India.

2. Basis of Preparation

A. Statement of compliance

The consolidated financial statements have been prepared in accordance with Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. The consolidated financial statements for the year ended 31 March 2018 were the first financial statements that the Group had prepared in accordance with Ind AS.

The consolidated financial statements were authorised for issue by the Company’s Board of Directors on 25 May 2021.

Details of the Group’s accounting policies are included in Note 3.

B. Basis of Consolidation

The Consolidated financial statements have been prepared in accordance with Ind AS notified under the Companies (Indian Accounting standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

==> picture [222 x 175] intentionally omitted <==

----- Start of picture text -----

Name of Subsidiaries Country of Effective
Incorporation Shareholding (%)
Newgen Software Inc. U.S.A 100
Newgen Software Canada 100
Technologies Canada,
Limited
Newgen Software Australia 100
Technologies PTY Limited.
Newgen Software Singapore 100
Technologies PTE, Limited
Newgen Software United 100
Technologies (UK) Limited Kingdom
Newgen Computers India 100
Technologies Limited
----- End of picture text -----

The consolidated financial statements have been prepared on the following basis:

The financial statements of the Holding Company and its subsidiary companies are combined on a line-by-line basis by adding the book values of like items of assets, liabilities, income and expenses after eliminating intragroup balances/transactions and unrealized profits in full in accordance with Ind AS 110 – “Consolidated Financial Statements”. The amounts shown in respect of reserves comprise the amount of the relevant reserves as per the balance sheet of the parent company and its share in the post-acquisition increase/decrease in the reserves of the consolidated entities.

The excess/deficit of cost to the parent company of its investment over its portion of net worth in the consolidated entities at the respective dates on which investment in such entities was made is recognized in the consolidated financial statements as goodwill/ capital reserve. The parent company’s portion of net worth in such entities is determined on the basis of book values of assets and liabilities as per the financial statements of the entities as on the date of investment and if not available, the financial statements for the immediately preceding period adjusted for the effects of significant changes.

The financial statements of the foreign non integral subsidiaries (collectively referred to as the ‘foreign non integral operations’) are translated into Indian rupees as follows:-

i. Share capital and opening reserves and surplus are carried at historical cost.
ii. All assets and liabilities, both monetary and nonmonetary, (excluding share capital, opening reserves and surplus) are translated using the year-end rates.

168

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

iii. Profit and loss items are translated at the respective weighted average rates or the exchange rate that approximates the actual exchange rate on date of specific transactions.
iv. The resulting net exchange difference is credited or debited to the foreign currency translation reserve.

C. Functional and presentation currency

These financial statements are presented in Indian Rupees (INR), which is also the Company’s functional currency. All amounts have been rounded-off to the nearest lakhs, unless otherwise indicated.

D. Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following items:

==> picture [224 x 79] intentionally omitted <==

----- Start of picture text -----

Items Measurement basis
Certain financial assets Fair value
and liabilities
Net defined benefit Fair value of plan assets
(asset)/ liability less present value of
defined benefit obligations
----- End of picture text -----

e. use of estimates and judgements

Judgments

Information about judgments 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 3(i) and Note 26 – revenue recognition from fixed price contracts of software implementation services: percentage of completion method to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended.

F.

Note 3(l) and Note 18 – determination of lease term;

Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending 31 March 2021 is included in the following notes:

Note 3(c)(iii) –Estimation of Useful lives of intangible assets and Property, plant and equipment
Note 28 – Measurement of defined benefit obligations: key actuarial assumptions;
Note 32 – Recognition of deferred tax assets: availability of future taxable profit against which tax losses carried forward can be used;
Note 34 –Fair value of share based payments
Note 42(a) – Impairment of trade receivables and financial assets.
Note 18 – Recognition of right of use asset and lease liability

Impact of COVID-19 (pandemic)

The Group has taken into account all the possible impacts of COVID-19 in preparation of these consolidated financial statements, including but not limited to its assessment of, liquidity and going concern assumption, recoverable values of its financial and nonfinancial assets, impact on revenue recognition owing to changes in cost budgets of fixed price contracts and impact on leases. The Group has carried out this assessment based on available internal and external sources of information upto the date of approval of these consolidated financial statements and believes that the impact of COVID-19 is not material to these financial statements and expects to recover the carrying amount of its assets. The impact of COVID-19 on the consolidated financial statements may differ from that estimated as at the date of approval of these consolidated financial statements owing to the nature and duration of COVID-19.

Current and non-current classification

The Group presents assets and liabilities in the balance sheet based on current / non-current classification.

An asset is classified as current when it satisfies any of the following criteria:

it is expected to be realized in, or is intended for sale or consumption in, the Group’s normal operating cycle.

169

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

it is held primarily for the purpose of being traded;
it is expected to be realized within 12 months after the reporting date; or
it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

A liability is classified as current when it satisfies any of the following criteria:

it is expected to be settled in the Group’s normal operating cycle;
it is held primarily for the purpose of being traded;
it is due to be settled within 12 months after the reporting date; or
the Group does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Operating cycle

Based on the nature of the operations and the time between the acquisition of assets for processing and their realization in cash or cash equivalents, the Group has ascertained its operating cycle as twelve months for the purpose of current/non-current classification of assets and liabilities.

G. Measurement of fair values

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Group has an established control framework with respect to the measurement of fair values. The finance team has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the chief financial officer. The Group regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the Group assesses the evidence obtained from the third parties

to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.

Significant valuation issues are reported to the Group’s audit committee.

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 Group 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 Group recognises 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 measuring fair values is included in the following notes:

Note 34 – Share-based payment arrangements; and

Note 43 – Financial instruments.

3. Significant Accounting Policies

a. Foreign currency

i. Functional currency

The Group financial statements are presented in INR, which is also the Group’s functional currency.

ii. Foreign currency transactions

Transactions in foreign currencies are translated into INR, the functional currency of the Group, at the exchange rates at the dates of the transactions or

170

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

an average rate if the average rate approximates the actual rate at the date of the transaction.

b. Financial instruments

i. Recognition and initial measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument.

the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as FVTPL:

the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets: Business model assessment

ii. Classification and subsequent measurement

Financial assets:

On initial recognition, a financial asset is classified as measured at

Amortised cost;
Fair value through Other Comprehensive Income (FVOCI) – debt investment;
Fair Value through Other Comprehensive Income (FVOCI) – equity investment; or
FVTPL

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Group changes its business model for managing financial assets.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as FVTPL:

the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management, for instance the stated policies and objectives for the portfolio, frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for de-recognition are not considered sales for this purpose, consistent with the Group’s continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

Financial assets: Assessment whether contractual cash flows are solely payments of principal and Interest.

For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial

171

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers:

contingent events that would change the amount or timing of cash flows;
terms that may adjust the contractual coupon rate, including variable interest rate features;
prepayment and extension features; and

Basis the above classification criteria, Group’s investments are classified as below:Investments in government and other bonds have been classified as FVOCI.

are recognised in OCI. On de-recognition, gains and losses accumulated in OCI are reclassified to profit or loss.

equity investments at FVOCI

These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to Statement of profit or loss.

Financial liabilities: Classification, subsequent

measurement and gains and losses

iii. Derecognition

Financial assets

Investments in Mutual funds have been classified as FVTPL.

Financial assets: Subsequent measurement and gains and losses

Financial assets at FVTPL

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.

Financial assets at amortised cost

Debt investments at FVOCI

The Group de-recognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.

If the Group enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not de-recognised.

Financial liabilities

The Group de-recognises a financial liability when its contractual obligations are discharged or cancelled, or expire.

The Group also de-recognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case,

172

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

iv. Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

v. Derivatives and Embedded derivatives

Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognised in profit or loss.

Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

c. Property, plant and equipment

i. Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in Statement of profit or loss.

ii.

Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

iii. Depreciation

Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values over their estimated useful lives using the straight-line method, and is generally recognised in the statement of profit and loss. Assets acquired under finance leases are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold land is not depreciated.

The estimated useful lives of items of property, plant and equipment for the current and comparative periods are as follows:

==> picture [223 x 172] intentionally omitted <==

Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

Depreciation on addition (disposal) is provided on a pro-rata basis i.e. from (upto) the date on which asset is ready for use (disposed off).

*Leasehold improvements are depreciated over the period of the lease term of the respective property or 3 years whichever is lower.

173

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Leasehold land is amortised over the lease period of 90 years.

d. Intangible assets

Recognition and measurement

Intangible assets that are acquired by the Group are measured initially at cost. After initial recognition, an intangible asset is carried at its cost less accumulated amortisation and accumulated impairment loss, if any.

is ‘credit- impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

The Group measures loss allowances at an amount equal to lifetime expected credit losses.

Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits from the specific asset to which it relates.

Amortization

Intangible assets of the Group represents computer software and are amortized using the straight-line method over the estimated useful life (at present 3-4 years) or the tenure of the respective software license, whichever is lower. The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement profit or loss when the asset is derecognized.

In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over which the Group is exposed to credit risk.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Group considers a financial asset to be in default when:

the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held); or
the financial asset is 90 days or more past due.

The Group considers a debt security to have low credit risk when its credit risk rating is equivalent to ‘investment grade’ e.g. BBB or higher as per renowned rating agencies.

e. Impairment

i. Impairment of financial instruments

The Group recognises loss allowances for expected credit losses on:
financial assets measured at amortised cost; and
financial assets measured at FVOCIdebt investments.

Measurement of expected credit losses

Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive).

At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt securities at FVOCI are credit-impaired. A financial asset

As a practical expedient, the Group uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is

174

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward‐looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward‐looking estimates are analysed.

Presentation of allowance for expected credit losses in the balance sheet

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

For debt securities at FVOCI, the loss allowance is charged to profit or loss.

Write-off

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

ii. Impairment of Non-financial assets

The carrying amounts of assets are reviewed at each reporting date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset (or cash generating unit) exceeds its recoverable amount. The recoverable amount is the greater of the asset’s (or cash generating units) net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset (or cash generating unit).

f. Employee benefits

i. Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the

related service is provided. A liability is recognised for the amount expected to be paid, if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.

ii.

Share-based payment transactions

The grant date fair value of equity settled share-based payment awards granted to employees of the Group and subsidiaries of the Group is recognised as an employee expense and deemed investment, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as expense/deemed investment is based on the estimate of the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense/ dement investment is based on the number of awards that do meet the related service and non-market vesting conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

iii. Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Group makes specified monthly contributions towards Government administered provident fund scheme. Obligations for contributions to defined contribution plans are recognized as an employee benefit expense in profit or loss in the periods during which the related services are rendered by employees.

Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

Defined benefit plans

iv.

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group’s gratuity scheme is a defined benefit plan. The present value of obligations under such defined benefit plans are determined based on actuarial valuation carried out by an independent actuary using the Projected Unit Credit Method, which recognizes each period of service as giving rise to an additional unit of employee benefit

175

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

entitlement and measures each unit separately to build up the final obligation.

the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pretax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not provided for. Provisions are reviewed by the management at each reporting date and adjusted to reflect the current best estimates.

Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income and are never reclassified to profit or loss. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in the profit or loss as past service cost.

v. Other long-term employee benefits

The Group’s net obligation in respect of long-term employee benefits other than post-employment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted.

The employees can carry-forward a portion of the unutilized accrued compensated absences and utilize it in future service periods or receive cash compensation on termination of employment. Since the compensated absences do not fall due wholly within twelve months after the end of the period in which the employees render the related service and are also not expected to be utilized wholly within twelve months after the end of such period, the benefit is classified as a long-term employee benefit. The Group records an obligation for such compensated absences in the period in which the employee renders the services that increase this entitlement. The obligation is measured on the basis of independent actuarial valuation using the projected unit credit method. Re measurements as a result of experience adjustments and changes in actuarial assumptions are recognized in the profit or loss.

g. Provisions (other than for employee benefits)

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting

h.

i.

Onerous contracts

A contract is considered to be onerous when the expected economic benefits to be derived by the Group from the contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision for an onerous contract is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before such a provision is made, the Group recognises any impairment loss on the assets associated with that contract.

Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation, or a present obligation whose amount cannot be estimated reliably. The Group does not recognize a contingent liability but discloses its existence in the financial statements

Revenue

Effective 1 April 2018, the Group has applied Ind AS 115 which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised. Ind AS 115 replaces Ind AS 18 Revenue and Ind AS 11 Construction Contracts. The Group has adopted Ind AS 115 using the cumulative effect method. The adoption of the standard did not have any material impact to the consolidated financial statements of the Group.

176

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

services (“performance obligations”) to customers in an amount that reflects the consideration the Group has received or expects to receive in exchange for these products or services (“transaction price”). When there is uncertainty as to collectability, revenue recognition is postponed until such uncertainty is resolved.

i. Sale of License

ii. Rendering of services

Software Implementation Services

The Group is also involved in time and material contracts and recognizes revenue as the services are performed.

Digitization services

Revenue from digitization services is recognized as services are rendered to the customer.

Annual Technical services

Revenue from annual technical service and maintenance contracts is recognised ratably over the term of the underlying maintenance arrangement.

iii. Sale of right to use software

Software-as-a-service, that is, a right to access software functionality in a cloud-based-infrastructure provided by the Group. Revenue from arrangements where the customer obtains a “right to access” is recognized over the access period.

Revenue from client training, support and other services arising due to the sale of license is recognized as the performance obligations are satisfied.

iv.

Multiple deliverable arrangements

When two or more revenue generating activities or deliverables are provided under a single arrangement, the Group has applied the guidance in Ind AS 115, Revenue from contract with customer, by applying the revenue recognition criteria for each distinct performance obligation. The arrangements with customers generally meet the criteria for considering license for software products and related services as distinct performance obligations. For allocating the transaction price, the Group has measured the revenue in respect of each performance obligation of a contract at its relative standalone selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. In cases where the Group is unable to determine the standalone selling price, the Group uses the expected cost plus margin approach in estimating the standalone selling price.

177

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Arrangements to deliver software products generally have three elements license, implementation and Annual Technical Services (ATS). The Group has applied the principles under Ind AS 115 to account for revenues from these performance obligations. When implementation services are provided in conjunction with the licensing arrangement and the license and implementation have been identified as two separate performance obligations, the transaction price for such contracts are allocated to each performance obligation of the contract based on their relative standalone selling prices. In the absence of standalone selling price for implementation, the performance obligation is estimated using the expected cost plus margin approach.

Deferred contract costs are incremental costs of obtaining a contract which are recognized as assets and amortized over the term of the contract.

Contract assets are recognised when there is excess of revenue earned over billings on contracts. Contract assets are classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms.

Unearned and deferred revenue (“contract liability”) is recognised when there is billings in excess of revenues.

j. Recognition of dividend income, interest income or expense

Dividend income is recognised in statement profit or loss on the date on which the Group’s right to receive payment is established.

Interest income or expense is recognised using the effective interest method.

The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

the gross carrying amount of the financial asset; or
the amortised cost of the financial liability.

credit-impaired, then the calculation of interest income reverts to the gross basis.

k. Sale of investments

Profit on sale of investments is recorded on transfer of title from the Group and is determined as the difference between the sales price and the carrying value of the investment.

l. Leases

The Group as a lessee

The Group’s lease asset classes primarily consist of leases for land and buildings. The group assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the group assesses whether: (1) the contract involves the use of an identified asset (2) the group has substantially all of the economic benefits from use of the asset through the period of the lease and (3) the group has the right to direct the use of the asset.

At the date of commencement of the lease, the Group recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short term and low value leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.

178

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the group changes its assessment if whether it will exercise an extension or a termination option.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

m. Income tax

Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to an item recognised directly in equity or in other comprehensive income.

i. Current tax

ii. Deferred tax

temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss at the time of the transaction;

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Minimum Alternative Tax (‘MAT’) under the provisions of the Income-tax Act, 1961 is recognised as current tax in the Statement of Profit and Loss. The credit available under the Act in respect of MAT paid is recognised as an asset only when and to the extent there is convincing evidence that the Group will pay normal income tax during the period for which the MAT credit can be carried forward for set-off against the normal tax liability. MAT credit recognised as an asset is reviewed at each balance sheet date and written down to the extent the aforesaid convincing evidence no longer exists.

179

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

n. Cash and cash equivalents

o. Earnings per share (“EPS”)

Basic earnings per share is calculated by dividing the profit attributable to the owners of the Group by the weighted average number of equity shares outstanding during the year.

q. Basis of segmentation

Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM).

Identification of segments:

r. eSOP Trust

The ESOP Trust has been treated as an extension of the Company and accordingly shares held by ESOP Trust are netted off from the total share capital. Consequently, all the assets, liabilities, income and expenses of the trust are accounted for as assets and liabilities of the Company, except for profit / loss on issue of shares to the employees and dividend received by trust which are directly adjusted in the Newgen ESOP Trust reserve.

p. Share Capital

Equity Shares

Equity shares are classified as equity. Incremental costs directly attributable to the issuance of new equity shares are recognized as a deduction from equity.

Dividends

s. Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise stated

t. Standards issued but not yet effective

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards. There is no such notification which would have been applicable from 1 April 2021.

180

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [469 x 652] intentionally omitted <==

----- Start of picture text -----

in-progress# 8,321.36 3,959.24 (3,207.98) - 9,072.62 9,072.62 437.91 (9,510.53) - - - - - - - - - - - 9,072.62 -
4.88 - - 1.19
Total Capital work- 1,389.96 8,008.64 - (3,523.68) 3,816.59 443.72 1.66 - 62.96 37.61 1,797.72 8,243.46 1,797.72 8,243.46 9,846.59 289.11 (0.08) (2.01) - 147.84 82.41 2,004.34 17,940.20 612.13 1,245.16 (118.50) - 299.51 535.55 0.47 37.08 61.26 875.03 1,602.14 875.03 1,602.14 700.58 317.80 (0.23) 0.00 82.19 145.67 1,110.64 2,156.81 922.69 6,641.33 893.70 15,783.39
Computer and servers
Furniture and fixtures 344.56 - 99.24 3.19 - 3.89 443.10 443.10 283.97 (1.92) - 16.71 708.44 104.96 - 47.12 0.70 3.25 149.53 149.53 57.59 (0.14) 15.54 191.44 293.57 517.00
Office equipment 422.44 - 745.76 0.03 - 7.05 1,161.18 1,161.18 171.46 (0.00) - 16.44 1,316.20 145.73 - 70.89 0.01 6.99 209.64 209.64 128.84 (0.10) 16.25 322.14 951.54 994.06
Vehicles 244.85 - - - - 244.85 244.85 - - - 16.20 228.65 76.43 - 34.58 - - 111.01 111.01 34.49 - 16.20 129.30 133.84 99.35
Leasehold improvements 5.99 - - - - 5.99 5.99 - - - - 5.99 5.98 - 0.01 - 5.99 5.99 - - - 5.99 - -
Plant and machinery 344.49 - 141.87 - 14.41 471.95 471.95 299.31 - - 16.08 755.18 107.34 - 42.05 - 13.94 135.45 135.45 54.56 - 15.49 174.52 336.50 580.66
Buildings land 3,523.68 1,728.40 - 2,386.00 - - - - - - 4,114.40 - 4,114.40 8,802.73 - - - - - - - - 12,917.13 74.09 118.50 (118.50) - 41.40 - - - - - 115.49 - 115.49 - 107.30 - - - - - 222.79 - - 3,998.90 - 12,694.34
Leasehold
Freehold land 4.28 - (3,523.68) - - - 4.28 4.28 - - - - 4.28 - - - - - - - - - - - 4.28 4.28
Cost Balance as at 1 April 2019 Transition impact of Ind AS 116 (refer note 18) Additions during the year Translation exchange difference during the year Capitalized during the year Less: Disposals during the year Balance as at 31 March 2020 Balance as at 1 April 2020 Additions during the year Translation exchange difference during the year Capitalized during the year Less: Disposals during the year Balance as at 31 March 2021 Accumulated Depreciation Balance as at 1 April 2019 Transition impact of Ind AS 116 (refer note 18) Additions during the year Translation exchange difference during the year Less: Disposals during the year Balance as at 31 March 2020 Balance as at 1 April 2020 Additions during the year Translation exchange difference during the year Less: Disposals during the year Balance as at 31 March 2021 Carrying amount (net) Balance as at 31 March 2020 Balance as at 31 March 2021 As at 31 March 2021 properties with a carrying amount of INR 374.60 lakhs (31 March 2020 : INR 382.70 lakhs) are subject to first charge to working capital loans from banks. Represents land at Chennai and Noida location taken on finance lease for a term of 99 and 90 years respectively. # Capital work in progress represents acquistion and further construction of office premises at Noida, Uttar Pradesh wherein cost incurred upto 31 March 2020 amounting to INR 9,072.62 lakhs. During the year ended 31 March 2021, additional cost was incurred amounting to Rs. INR 437.91 lakhs on construction of building and the total amount of INR 9,510.53
----- End of picture text -----

181

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

5. Intangible assets

==> picture [499 x 226] intentionally omitted <==

6. Loans (unsecured, considered good, unless otherwise stated)

6. Loans (unsecured, considered good, unless otherwise stated)
		As at	As at
	31	March 2021	31 March 2020
Securitydeposits		343.75	437.76
		343.75	437.76

7. Other financial assets (non-current)

==> picture [499 x 140] intentionally omitted <==

----- Start of picture text -----

As at As at
31 March 2021 31 March 2020
Bank deposits
- pledged with tax authorities 4.42 4.14
- held as margin money 3,289.36 287.96
Interest accrued on deposits 47.40 31.80
Earnest money deposits
Unsecured, considered good 12.28 34.39
Unsecured, considered doubtful 164.75 164.75
Less: Loss allowance for doubtful deposits (164.75) (164.75)
3,353.46 358.29
----- End of picture text -----*

*Bank deposits held as margin money represents deposits made on account of guarantees issued to government customers amounting to INR 282.03 lakhs (31 March 2020: INR 282.21 lakhs) and deposits made to avail overdraft facilities amounting to INR 3,000.00 lakhs (31 March 2020: INR Nil)

Information about Company’s exposure to credit and market risks and fair value measurement is included in Note 42(c).

8. Income tax assets (net)

8. Income tax assets (net)
	As at	As at
	31 March 2021	31 March 2020
Advance income tax (net of provision of INR 5,453.20 lakhs (31 March 2020:	985.82	1,581.18
INR 12,005.47 lakhs))
	985.82	1,581.18

182

Statutory Reports Financial Statements

Company Overview

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

8A Income tax liabilities (net)

8A Income tax liabilities (net)
	As at	As at
	31 March 2021	31 March 2020
Provision for tax (net of advance tax of INR 7,084.45 lakhs (31 March 2020:	1,772.11	93.32
INR Nil))
	1,772.11	93.32

9. Other non-current assets

9. Other non-current assets
	As at	As at
	31 March 2021	31 March 2020
Prepaid expenses	6.83	31.66
Capital advances	-	59.54
	6.83	91.20

10. Investments (refer note 40)

==> picture [499 x 165] intentionally omitted <==

----- Start of picture text -----

As at As at
31 March 2021 31 March 2020
Investments in bonds (unquoted)
Bonds at FVOCI
Investment in government bonds 3,561.72 1,982.38
Investment in other bonds - 608.54
3,561.72 2,590.92
Investments in mutual funds (unquoted)
Mutual funds at FVTPL 4,755.74 5,019.75
4,755.74 5,019.75
8,317.46 7,610.67
Aggregate book value of unquoted investments 8,317.46 7,610.67
----- End of picture text -----

11. Trade receivables

==> picture [499 x 138] intentionally omitted <==

----- Start of picture text -----

As at As at
31 March 2021 31 March 2020
(Unsecured, considered good, unless stated otherwise)
Unsecured
- Considered good 23,854.30 26,939.67
- Considered doubtful 4,366.11 5,488.49
28,220.41 32,428.16
Less: Loss allowance for trade receivables
- unsecured, considered doubtful (4,366.11) (5,488.49)
23,854.30 26,939.67
----- End of picture text -----*

*No trade or other receivables are due from directors or other officers of the Company either severally or jointly with any other person. Nor any trade or other receivables are due from firms or private companies respectively in which any director is a partner, director or a member.

Trade receivables are non-interest bearing and are generally on terms of 30-45 days.

The Company’s exposure to credit and currency risks and loss allowances related to trade receivables are discussed in note 42(c).

183

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

12. Cash and cash equivalents

12. Cash and cash equivalents
	As at	As at
	31 March 2021	31 March 2020
Cash on hand	3.08	4.51
Balances with banks
- in current accounts*	7,011.86	6,006.53
Balances with scheduled banks in deposit accounts with original maturity of less than 3 months	160.00	4,000.00
	7,174.94	10,011.04

*Current account balances with banks include INR 142.43 lakhs (31 March 2020: INR 118.65 lakhs) held at a foreign branch.

12A. Other bank balances

12A. Other bank balances
	As at	As at
	31 March 2021	31 March 2020
Balances with scheduled banks in deposit accounts	17,000.00	6,516.11
- Original maturityof less than 12 months	17,000.00	6,516.11
13. Current fnancial assets - Loans
	As at	As at
	31 March 2021	31 March 2020
Loans to employees*	9.04	7.54
Securitydeposits	192.07	124.64
	201.11	132.18

*These are interest bearing loans - repayable within one year given to employees, chargeable at the rate of 12% p.a.

14. Current financial assets - Others

14. Current fnancial assets - Others
	As at	As at
	31 March 2021	31 March 2020
(unsecured consideredgood,unless otherwise stated)
Interest accrued on deposits	519.11	406.97
Interest accrued but not due ongovernment bonds	158.87	86.43
Unbilled revenue*
- other than relatedparties	6,926.04	7,767.02
	7,604.02	8,260.42

*Unbilled revenue represents amounts recognized based on services performed in advance of billing in accordance with contract terms.

During the year ended 31 March 2021 INR 3,224.27 lakhs (31 March 2020 INR 3,536.00 lakhs) of unbilled revenue as of 1 April 2020 has been reclassified to trade receivables upon billing to customers on completion of milestones.

15. Other current assets

15. Other current assets
	As at	As at
	31 March 2021	31 March 2020
Advances to vendors	20.85	19.49
Balances withgovernment authorities*	-	26.54
Deferred contract cost	93.90	123.00
Advance to employees	51.67	163.93
Prepaid expenses	569.89	438.48
Other current assets	5.01	25.91
	741.32	797.35

*Balances with government authorities comprises of Goods and Service tax.

184

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

16. Share Capital

==> picture [499 x 100] intentionally omitted <==

==> picture [499 x 113] intentionally omitted <==

----- Start of picture text -----

As at 31 March 2021 As at 31 March 2020
Number Amount Number Amount
of shares of shares
Issued, subscribed and paid up
Equity share capital of INR 10 each, fully paid up 6,99,55,701 6,995.57 6,95,85,701 6,958.57
Add: Issued during the year to Newgen ESOP Trust - - 3,70,000 37.00
Balance 6,99,55,701 6,995.57 6,99,55,701 6,995.57
Less : Shares held by Newgen ESOP Trust 6,49,696 64.97 8,65,888 86.59
Total share capital 6,93,06,005 6,930.60 6,90,89,813 6,908.98
----- End of picture text -----

Reconciliation of shares outstanding at the beginning and at the end at the reporting year

==> picture [499 x 122] intentionally omitted <==

----- Start of picture text -----

As at 31 March 2021 As at 31 March 2020
Number Amount Number Amount
of shares of shares
equity share capital of INR 10 each, fully paid up
At the beginning of the year 6,99,55,701 6,995.57 6,95,85,701 6,958.57
Add: Issued during the year to Newgen ESOP Trust - - 3,70,000 37.00
At the end of the year 6,99,55,701 6,995.57 6,99,55,701 6,995.57
Less: Shares held by Newgen ESOP Trust 6,49,696 64.97 8,65,888 86.59
Total equity share capital 6,93,06,005 6,930.60 6,90,89,813 6,908.98
----- End of picture text -----

Terms/rights attached to equity shares

16 A. Details of shareholders holding more than 5% shares in the Company

==> picture [499 x 125] intentionally omitted <==

----- Start of picture text -----

As at 31 March 2021 As at 31 March 2020
Number % Holding Number % Holding
of shares of shares
Equity shares of INR 10 each, fully paid up held by:
- Mr. Diwakar Nigam 1,84,72,406 26.41% 1,84,72,406 26.41%
- Mr. T.S. Varadarajan 1,50,09,306 21.46% 1,50,09,306 21.46%
- Mrs. Priyadarshini Nigam 79,68,906 11.39% 79,68,906 11.39%
- Mrs. Usha Varadarajan 45,28,320 6.47% 45,28,320 6.47%
- Malabar India Fund Limited 49,78,931 7.12% 56,78,931 8.12%
----- End of picture text -----

185

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

16 B. Shares reserved for issue under employee stock option plan

Terms attached to stock options granted to employees are described in note 34 regarding share based payments.
16 C. Aggregate number of shares issued for consideration other than cash during the period of five years immediately preceding the reporting date.

Equity shares have been issued under Employee stock options plans to trust for which only exercise price has been received in cash.

==> picture [500 x 498] intentionally omitted <==

----- Start of picture text -----

For the year For the year For the year For the year For the year
ended ended ended ended ended
31 March 2021 31 March 2020 31 March 2019 31 March 2018 31 March 2017
Equity shares of INR 10 each - 3,70,000 3,50,000 10,50,000 -
17. Other equity
As at As at
31 March 2021 31 March 2020
Securities premium 10,173.59 10,069.60
Retained earnings 46,362.60 35,113.48
Capital redemption reserve 87.95 87.95
General reserve 1,731.39 1,731.39
Capital reserve 0.21 0.21
Newgen ESOP Trust reserve 404.32 297.47
Share options outstanding reserve 344.72 405.75
Foreign currency translation reserve 504.89 387.20
Other comprehensive gain/(loss) 29.38 (95.39)
59,639.05 47,997.66
Securities premium (refer note (i) below) As at As at
31 March 2021 31 March 2020
Balance as at beginning of the year 10,314.51 9,977.93
Securities premium on issue of shares to Newgen ESOP Trust - 196.10
Transferred from share options outstanding reserve on exercise of stock 104.00 140.48
options
Balance as at end of the year 10,418.51 10,314.51
Less: Securities premium on shares held by Newgen ESOP Trust 244.91 244.91
Balance as at end of the year 10,173.60 10,069.60
Retained earnings (refer note (ii) below) As at As at
31 March 2021 31 March 2020
Balance as at beginning of the year 35,113.49 30,607.26
Transistion impact of Ind AS 116-Leases, net of tax (refer note 18) - (250.56)
Profit for the year 12,648.22 7,273.46
Dividend on equity shares (1,399.11) (2,087.57)
Dividend distribution tax on dividend on equity shares - (429.11)
Balance as at end of the year 46,362.60 35,113.49
----- End of picture text -----

186

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)
Capital redemption reserve	As at	As at
	31 March 2021	31 March 2020
Balance as at beginningof theyear	87.95	87.95
Balance as at end of theyear	87.95	87.95

General reserve	As at	As at
	31 March 2021	31 March 2020
Balance as at beginningof theyear	1,731.39	1,731.39
Balance as at end of theyear	1,731.39	1,731.39

Capital reserve	As at	As at
	31 March 2021	31 March 2020
Balance as at beginningof theyear	0.21	0.21
Balance as at end of theyear	0.21	0.21

Newgen ESOP Trust reserve (refer note (iii) below)	As at	As at
	31 March 2021	31 March 2020
Balance as at beginningof theyear	297.47	257.78
Addition to Newgen ESOP Trust reserve	106.85	39.69
Balance as at end of theyear	404.33	297.47

Share options outstanding reserve (refer note (iv) below)	As at	As at
	31 March 2021	31 March 2020
Balance as at beginningof theyear	405.75	459.20
Employee stock compensation expense	64.59	87.03
Transferred to securitiespremium account on exercise of stock options	(125.62)	(140.48)
Balance as at end of theyear	344.72	405.75

Other comprehensive income/(loss)(refer note (v) below)	As at	As at
	31 March 2021	31 March 2020
Remeasurement of defned beneft liability
Balance as at beginningof theyear	(96.28)	(27.10)
Other comprehensive (loss) (net of tax)	66.83	(69.18)
Balance as at end of theyear	(29.45)	(96.28)

Debt instruments through other comprehensive income	As at	As at
	31 March 2021	31 March 2020
Balance as at beginningof theyear	0.89	16.80
Other comprehensive income (net of tax)	166.64	3.72
(Proft)/loss on sale of debt instrument transferred toproft and loss	(108.70)	(19.63)
Balance as at end of theyear	58.83	0.89

187

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)
Foreign currency translation reserve (refer note (vi) below)	As at	As at
	31 March 2021	31 March 2020
Balance as at beginningof theyear	387.20	80.03
Other comprehensive income(net of tax)	117.69	307.17
Balance as at end of theyear	504.89	387.20

(i) Securities premium is used to record the premium received on issue of shares. It will be utilised in accordance with the provisions of the Companies Act, 2013.

(ii) Retained earnings represents accumulated balances of profits over the years after appropriations for general reserves and adjustments of dividend.

(iv) The Company has established various equity-settled share-based payment plans for certain employees of the Company. Refer to note 34 for further details on these plans.

(v) Refer Statement of Changes in Equity for analysis of other comprehensive income, net of tax.

(vi) Foreign currency translation reserve comprises of all exchange differences arising from translation of financial statements of foreign subsidiaries into functional and presentational currency.

18. Right-of-use assets

Changes in the carrying value of right of use assets for the year ended 31 March 2020

==> picture [499 x 116] intentionally omitted <==

----- Start of picture text -----

Particulars Category of ROu asset Total
Leasehold land Buildings
Balance as at 1 April 2019 - 1,799.68 1,799.68
Reclassified on account of adoption of Ind AS 116 3,405.18 - 3,405.18
Addition - 2,483.05 2,483.05
Termination of leases - (58.45) (58.45)
Translation exchange difference - (10.55) (10.55)
Depreciation (39.40) (1,327.20) (1,366.61)
Balance as at 31 March 2020 3,365.78 2,886.52 6,252.30
----- End of picture text -----*

Changes in the carrying value of right of use assets for the year ended 31 March 2021

==> picture [498 x 103] intentionally omitted <==

----- Start of picture text -----

Particulars Category of ROu asset Total
Leasehold land Buildings
Balance as at 1 April 2020 3,365.78 2,886.52 6,252.30
Addition - 320.58 320.58
Termination of leases - (689.48) (689.48)
Translation exchange difference - (5.60) (5.60)
Depreciation (39.30) (1,191.08) (1,230.38)
Balance as at 31 March 2021 3,326.48 1,320.94 4,647.42
----- End of picture text -----

*Right of use assets recognised in the balance sheet at the date of initial recognition.

The aggregate depreciation expense on ROU assets is included under depreciation and amortization expense in the Statement of Profit and Loss.(refer note 30)

Lease liabilities

Break up of current and non-current lease liabilities as at 31 March 2021

Lease liabilities Break up of current and non-current lease liabilities as at 31 March 2021
Particulars	As at	As at
	31 March 2021	31 March 2020
Non-current lease liabilities	1,391.36	2,296.15
Current lease liabilities	617.76	1,334.14
Total	2,009.12	3,630.29

188

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Movement in lease liabilities during the year ended 31 March 2020

==> picture [500 x 265] intentionally omitted <==

----- Start of picture text -----

Particulars As at
31 March 2020
Balance as at 1 April 2019 [#] 2,047.74
Reclassified on account of adoption of Ind AS 116 1,320.15
Addition 2,434.24
Finance cost 335.74
Termination of leases (62.35)
Payment of lease liabilities (2,445.23)
Balance as at 31 March 2020 3,630.29
Movement in lease liabilities during the year ended 31 March 2021
Particulars As at
31 March 2021
Balance as at 1 April 2020 3,630.29
Addition 320.58
Finance cost 282.75
Termination of leases (771.61)
Translation exchange difference (8.46)
Payment of lease liabilities (1,444.43)
Balance as at 31 March 2021 2,009.12
----- End of picture text -----

Lease liabilities recognised in the balance sheet at the date of initial recognition.

Details regarding the contractual maturities of lease liabilities as at 31 March 2021 on an undiscounted basis:

Particulars	As at	As at
	31 March 2021	31 March 2020
Less than oneyear	751.82	1,678.70
One to fveyears	1,257.01	2,205.39
More than fveyears	5,201.79	5,267.64
Total	7,210.62	9,151.73

Finance lease

The Company has leases that were classified as finance leases applying Ind AS 17. For such leases, the carrying amount of the right-of-use asset and the lease liability at the date of initial application of Ind AS 116 is the carrying amount of the lease asset and lease liability on the transition date as measured applying Ind AS 17. Accordingly, during the year ended 31 March 2020, an amount of Rs.3,405.18 lakhs has been reclassified from property, plant and equipment to right-of-use assets. An amount of Rs. 291.59 lakhs has been reclassified from other current financial liabilities to lease liability – current and an amount of Rs. 1,028.55 lakhs has been reclassified from Non-current financial liabilities to lease liability – non-current.

Rental expense recorded for short-term leases was INR 257.83 lakhs for the year ended 31 March 2021 (31 March 2020: INR 424.54 lakhs)

Effective interest rate of 10.43% has been applied to lease liabiliites recognised in the balance sheet at the date of initial application.

189

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

19. Non-current provisions

	As at	As at
	31 March 2021	31 March 2020
Provision for employee benefts(refer note 28)
-provision forgratuity	2,196.75	1,799.02
-provision for compensated absences	661.14	533.34
	2,857.89	2,332.36

20. Current financial liabilities - Borrowings

20. Current fnancial liabilities - Borrowings
	As at	As at
	31 March 2021	31 March 2020
Loans from banks
Pre-shipment loans(secured)*	-	7,453.21
	-	7,453.21

*Pre-shipment loans carry interest rate @ LIBOR plus margin which varied from 1.47% to 3.70% per annum. These are secured by first pari passu charge over all future and present stock, book debts and equitable mortgage of land and building with carrying amount of INR 374.60 lakhs (31 March 2020: INR 382.70 lakhs) and are repayable within 180 days from the date of disbursement.

21. Trade payables

21. Trade payables
	As at	As at
	31 March 2021	31 March 2020
- Total outstandingdues to micro enterprises and small enterprises	-	-
- Total outstandingdues to creditors other than micro and small enterprises	2,264.31	2,750.76
	2,264.31	2,750.76

Trade payables are non-interest bearing and are generally on terms of 30-45 days

a) Refer note 36 for disclosures under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED)

b) The Group’s exposure to currency and liquidity risks related to trade payables is disclosed in note 42(c).

22. Current financial liabilities - Others

22. Current fnancial liabilities - Others
	As at	As at
	31 March 2021	31 March 2020
Employee relatedpayables	4,237.22	3,511.39
Payable in respect of retention money	127.82	180.54
Interest accrued but not due on deferred liability	-	14.39
Earnest moneydeposits	1.00	1.00
Payable for capital assets	17.00	412.41
	4,383.04	4,119.73

23. Deferred income

23. Deferred income
	As at	As at
	31 March 2021	31 March 2020
Advance billing*	10,358.98	10,058.34
Advance from customers	32.68	32.05
	10,391.66	10,090.39
Non-current	-	-
Current	10,391.66	10,090.39
	10,391.66	10,090.39

190

Statutory Reports Financial Statements

Company Overview

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

*Changes in deferred income (advance billing) is as follows:

*Changes in deferred income (advance billing) is as follows:
	As at	As at
	31 March 2021	31 March 2020
Balance at the begining of theyear	10,058.34	6,736.52
Revenue recognised that was included in deferred income at the beginning ofthe year	(9,812.25)	(6,497.70)
Increase due to invoicing during the year, excluding amount recognised as	10,153.54	9,773.13
revenue during the year Translationexchange diference Balance at the end of the year	(40.65) 10,358.98	46.39 10,058.34

24. Other current liabilities

24. Other current liabilities
	As at	As at
	31 March 2021	31 March 2020
Statutoryduespayable	1,344.27	1,278.05
Advancefromemployeesforshare options	0.26	21.22
Othercurrentliabilities	3.77	6.33
	1,348.30	1,305.60

25. Current provisions

	As at	As at
	31 March 2021	31 March 2020
Provision for employee benefts(refer note 28)
-provision forgratuity	313.84	278.87
-provision forcompensated absences	147.74	129.09
	461.58	407.96

26. Revenue from operations

	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Sale ofproducts - softwares	13,049.26	11,765.80
Sale ofservices
- Implementation	14,799.48	16,492.14
-Scanning	702.82	954.90
- AMC/ATS	15,060.29	13,030.30
-Support	18,689.20	20,005.30
-SaaSrevenue	4,961.39	3,827.18
	67,262.44	66,075.62

Performance obligations and remaining performance obligations

(i) The performance obligation is part of a contract that has an original expected duration of one year or less.
(ii) The revenue recognized corresponds directly with the value to the customer of the entity’s performance completed to date, typically those contracts where invoicing is on time and material basis.

The aggregate value of performance obligations that are completely or partially unsatisfied as at 31 March 2021, other than those meeting the exclusion criteria mentioned above is INR Nil.

191

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

27. Other income

==> picture [500 x 202] intentionally omitted <==

----- Start of picture text -----

For the year For the year
ended ended
31 March 2021 31 March 2020
Interest income under the effective interest rate method:
- on security deposits at amortised cost 38.69 40.09
- government and other bonds at FVOCI 240.64 148.11
Interest income on deposits with banks 755.81 804.51
Gain on lease termination 87.49 6.05
Gain on sale of property, plant and equipment 10.16 1.10
Profit on sale of mutual funds (net) at FVTPL 132.79 -
Fair value changes of financial assets at FVTPL 70.60 173.01
Liabilities / provision no longer required written back 7.27 169.22
Net foreign exchange fluctuation gain - 710.64
Bad debts recovered 43.10 -
Miscellaneous income 117.19 43.56
1,503.74 2,096.29
----- End of picture text -----

28. Employee benefits expense

28. Employee benefts expense	1,503.74	2,096.29
	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Salaries,wages and bonus	30,555.65	31,927.25
Contribution toprovident funds(refer note i below)	995.96	994.27
Expenses related to compensated absences(refer note ii below)	444.36	359.39
Share basedpayment - equitysettled	64.59	87.03
Expense related to defned beneftplan(refer note iii below)	614.89	371.73
Staf welfare expenses	86.31	499.79
	32,761.76	34,239.46

(i) Defined contribution plans:

(ii) Compensated absences:

The Principal assumptions used in determining the compensated absences benefit obligation are as given below:

	As at	As at
	31 March 2021	31 March 2020
Discountingrate(p.a.)	6.88%	6.90%
Future salaryincrease( p.a.)	6.00%	6.00%

(iii) Defined Benefit Plan:

192

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

A. Movement in net defined benefit (asset) liability

The following table shows a reconciliation from the opening balances to the closing balances for net defined benefit (asset) liability and its components

==> picture [499 x 130] intentionally omitted <==

----- Start of picture text -----

Particulars As at As at
31 March 2021 31 March 2020
Balance at the beginning of the year 2,077.88 1,740.26
Benefits paid (123.72) (129.12)
Current service cost 471.52 238.43
Interest cost 143.37 133.30
Acturial (gains) losses recognised in OCI
change in demographic assumptions 20.87 (21.33)
change in financial assumptions 3.28 (33.40)
experience adjustments (82.63) 149.75
Balance at the end of the year 2,510.57 2,077.88
----- End of picture text -----

B. i) Expense recognised in profit and loss

Particulars	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Current service cost	471.52	238.43
Interest cost Total expense recognised inStatement of proft and loss	143.37 614.89	133.30 371.73

ii) Remeasurements recoginsed in other comprehensive income

ii) Remeasurements recoginsed in other comprehensive income
Particulars	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Actuarial loss on defned beneft obligation	(58.48)	95.01
Total remeasurements recognised in other comprehensive income	(58.48)	95.01

C. Defined benefit obligations

i. Actuarial assumptions

The following were the principal actuarial assumptions at the reporting date:

C. Defned beneft obligations i. Actuarial assumptions The followingwere theprincipal actuarial assumptions at the reportingdate:
Particulars	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Discount rate	6.88	6.90
Salaryescalation rate	6.00	6.00
Mortality rate	100% of IALM	100% of IALM
	(2012- 14)	(2012 - 14)

ii. Sensitivity analysis

==> picture [499 x 50] intentionally omitted <==

----- Start of picture text -----

31 March 2021 31 March 2020
Increase Decrease Increase Decrease
Discount rate (0.50% movement) (77.78) 83.10 (73.76) 79.01
Future salary growth (0.50% movement) 83.40 (78.76) 79.32 (74.70)
----- End of picture text -----

Attrition rate (0.50% movement)

Sensitivities due to mortality & withdrawals are not material & hence impact of change not calculated.

193

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement and life expectancy are not applicable being a lump sum benefit on retirement.

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

==> picture [499 x 168] intentionally omitted <==

----- Start of picture text -----

31 March 2021 31 March 2020
Net defined benefit liability
Liability for gratuity 2,510.58 2,077.89
Liability for compensated absences 808.88 662.43
Total employee benefit liabilities 3,319.46 2,740.32
Non-current:
Gratuity 2,196.75 1,799.02
Compensated absences 661.14 533.34
Current:
Gratuity 313.84 278.87
Compensated absences 147.74 129.09
----- End of picture text -----

29. Finance costs

29. Finance costs
	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Finance cost on lease liabilities	282.75	344.78
Interest expense on borrowings	86.71	649.65
Other fnance costs	193.12	96.78
	562.58	1,091.21

30. Depreciation and amortization

30. Depreciation and amortization
	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Depreciation ofproperty, plant and equipment(refer note 4)	700.58	535.82
Depreciation of right-of use assets(refer note 18)	1,230.38	1,366.61
Amortisation of intangible assets(refer note 5)	84.01	88.68
	2,014.97	1,991.11

194

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

31. Other expenses

==> picture [500 x 557] intentionally omitted <==

----- Start of picture text -----

For the year For the year
ended ended
31 March 2021 31 March 2020
Rent 249.91 416.61
Repairs and maintenance 261.90 264.76
Rates and taxes 488.74 772.96
Travelling and conveyance 865.55 6,311.94
Legal and professional fees 2,857.97 2,958.98
Cloud hosting services 1,245.75 959.98
Payment to auditors 72.31 75.40
Electricity and water 355.98 419.36
Advertising and sales promotion 463.01 1,067.32
Membership and subscription fee 408.23 366.35
Brokerage and commission 910.07 1,038.14
Communication costs 349.25 522.41
Software and license maintenance 795.12 656.75
Expenditure on corporate social responsibility 201.27 186.27
Donation 29.00 36.18
Recruitment charges 123.28 316.97
Insurance 1,131.21 1,045.64
Operation and maintenance 464.56 680.95
Printing, stationery and scanning charges 293.12 460.18
Property, plant and equipment written off 0.12 -
Loss allowance on trade receivables 3,061.38 2,235.77
(net of adjustment for bad debts written off of INR 4,183.76 lakhs (previous year
INR 527.43 lakhs)
Loss allowance on other financial assets - 23.72
Security charges 229.12 263.05
Net foreign exchange fluctuation loss 168.75 13.45
Loss on redemption of bonds (net) at FVOCI 27.78 7.07
Loss on redemption of mutual funds (net) at FVTPL - 6.85
Miscellaneous expenses 256.79 268.90
15,310.17 21,375.96
Payment to auditors
As auditor:
- Statutory audit fee 39.50 39.50
- Limited review fee 22.50 22.50
- Certification fee 6.95 8.25
- Reimbursement of expenses 3.36 5.15
72.31 75.40
----- End of picture text -----

195

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

32. Income Tax

A. The major components of income tax (expense) / income recognised in Statement of Profit or Loss

	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Tax expense	3,977.42	2,572.19
Tax expense for earlier years	1,288.86	78.85
Deferred tax charge/(credit)	202.19	(450.33)
Total	5,468.47	2,200.71

Recognised in Other comprehensive income
Tax impact on
- Re-measurement on defned beneft plan	(35.90)	37.16
- Fair value of debt instruments through other comprehensive income/(loss)	(26.30)	(2.00)
Total	(62.20)	35.16

B. Reconciliation of effective tax rate

==> picture [499 x 185] intentionally omitted <==

----- Start of picture text -----

31 March 2021 31 March 2020
Profit before tax 18,116.70 9,474.17
Tax using the Company's tax rate 34.94% 6,330.70 34.94% 3,310.65
Impact of different rate in each jurisdiction -0.79% (142.26) -0.91% (86.44)
Effect of deduction under section 10AA of the Income tax -12.53% (2,270.61) -12.17% (1,152.56)
Act, 1961
Effect of expenses permanently disallowed under the 0.23% 41.98 0.32% 29.91
Income Tax Act, 1961
Effect of income exempt/ non taxable/ taxed on lower rate -0.63% (114.75) -0.28% (26.92)
Effect of profit on sale of mutual funds taxable under 0.62% 111.75 0.01 48.46
Income tax Act, 1961
Tax expense for earlier years 7.11% 1,288.86 0.83% 78.85
Others 1.23% 222.80 -0.01% (1.24)
Income tax recognised in statement of profit and loss for 30.18% 5,468.47 23.23% 2,200.71
the current year
----- End of picture text -----

C. Deferred tax assets (net)

==> picture [499 x 153] intentionally omitted <==

----- Start of picture text -----

Deferred tax relates to the following: As at As at
31 March 2021 31 March 2020
Deferred tax related to items recognised in OCI:
Deferred tax assets (gross)
Investments at fair value through OCI 1.42 1.42
Remeasurement of defined benefit liability (asset) 15.48 51.37
(a) 16.90 52.79
Deferred tax liabilities
Investments at fair value through OCI 31.15 -
(b) 31.15 -
----- End of picture text -----

196

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [499 x 272] intentionally omitted <==

----- Start of picture text -----

Deferred tax relates to the following: As at As at
31 March 2021 31 March 2020
Deferred tax related to items recognised in Statement of
Profit and Loss:
Deferred tax liabilities (gross)
Property, plant and equipment 606.72 373.98
Others 170.82 145.20
(c) 777.54 519.18
Deferred tax assets (gross)
Loss allowance on other financial assets 57.57 57.57
Loss allowance on trade receivables 1,466.39 1,681.52
Provision for employee benefits 1,222.51 934.43
Lease liabilities 39.00 58.84
(d) 2,785.47 2,732.36
(e) = (d) - (c) 2,007.93 2,213.18
Deferred tax assets (net) (e) + (a) - (b) 1,993.67 2,265.97
Total deferred tax assets (net) 1,993.67 2,265.97
----- End of picture text -----

D. Deferred tax liabilities (gross)

	As at	As at
	31 March 2021	31 March 2020
Property, plant and equipment	13.93	17.39
Deferred tax liabilities(net)	13.93	17.39

E. Movement in temporary differences

31 March 2021

31 March 2021
Particulars	Balance as at	Transition	Recognised	Recognised	Balance as
	1 April 2020	impact	in	in OCI during	at
		of Ind AS	Statement	the year	31 March
		116-Leases	of Proft or		2021
			Loss during
			theyear
Deferred tax liabilities(net)
Property, plant and equipment	17.39	-	(3.46)	-	13.93
Total	17.39	-	(3.46)	-	13.93
Deferred tax assets(net)
Investments at fair value through OCI	1.42	-	-	(31.15)	(29.73)
Remeasurement of defned beneft liability	51.37	-	-	(35.90)	15.47
(asset)
Property, plant and equipment	(373.98)	-	(232.75)	-	(606.72)
Loss allowance on other fnancial assets	57.57	-	-	-	57.57
Loss allowance on trade receivables	1,681.52	-	(215.13)	-	1,466.39
Provision for employee benefts	934.43	-	288.08	-	1,222.51
Others	(145.20)	-	(26.01)	-	(170.82)
Lease liabilities	58.84	-	(19.84)	-	39.00
Total	2,265.97	-	(205.65)	(67.05)	1,993.67

197

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

31 March 2020
Particulars	Balance as	Transition	Recognised	Recognised	Balance as
	at	impact	in	in OCI	at
	1 April 2019	of Ind AS 116-Leases	Statement of Proft or	during the year	31 March 2020
			Loss during
			the year
Deferred tax liabilities (net)
Property, plant and equipment	11.01	-	6.38	-	17.39
Total	11.01	-	6.38	-	17.39
Deferred tax assets (net)
Investments atfair value throughOCI Remeasurement ofdefned beneftliability (asset) Property, plant and equipment Loss allowance onother fnancialassets Loss allowance ontradereceivables Provision foremployee benefts Others	(7.12) 14.21 (278.40) 51.03 1,258.97 772.84 (84.54)	- - - - - - -	- - (95.58) 6.54 422.55 161.59 (60.66)	8.54 37.16 - - - - -	1.42 51.37 (373.98) 57.57 1,681.52 934.43 (145.20)
Leaseliabilities	(29.89)	67.93	20.80	-	58.84
Total	1,697.08	67.93	455.24	45.70	2,265.97

33. Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Group by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Group by the weighted average number of equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

i. Profit attributable to equity holders of the Group

i. Proft attributable to equity holders of the Group
	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Proft attributable to equityholders ofthe Group Proft attributable to equity holders of the Group for basic and diluted earnings	12,648.23 12,648.23	7,273.46 7,273.46

ii. Weighted average number of ordinary shares

ii. Weighted average number of ordinary shares
	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Opening balance ofequity's shares Efect ofshare options exercised	6,90,89,813 1,00,973	6,84,57,610 4,22,753
Weighted average number of shares for basic ePS Efect of dilution: Add: Equity shares held by Newgen ESOP Trust with respect to options not	6,91,90,786 7,02,162	6,88,80,363 3,48,839
exercised by employees but outstanding
Weighted average number of shares for diluted ePS	6,98,92,948	6,92,29,202

Basic and diluted earnings per share

	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
	INR	INR
Basic earnings per share	18.28	10.56
Diluted earnings per share	18.10	10.51

198

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

34. Share-based payment arrangements:

A. Description of share-based payment arrangements

i. Share option programmes (equity-settled)

The Group established Newgen Employees Stock Option Scheme 2014 (Newgen ESOP 2014) in the year 2014-15, administered through a new Trust ‘Newgen ESOP Trust’. The maximum numbers of shares to be issued under this Scheme shall be limited to 3,783,800 equity shares of the Group. Pursuant to the scheme, during the year 2014-15, the Group has granted 3,653,525 options at an exercise price of INR 63 per option, to the employees of the Group. Further, during the year 2017-18 grant of options 353,000, 130,000, and 79,250 through grant II, III and IV on 1 Jul 2017, 1 Sep 2017 and 1 Oct 2017 respectively under the same scheme and with same vesting conditions was made. During the year 2020-21, the Group has granted 2,33,000 options under Newgen ESOP 2014 on 25 March 2021.Under the terms of the plans, these options are vested on a graded vesting basis over a maximum period of four years from the date of grant and are to be exercised either in part(s) or full, within a maximum period of five from the date of last vesting.

During the year, the Group has established Newgen Software Technologies Restricted Stock Units Scheme – 2021 (Newgen RSU – 2021), administered through a new trust “Newgen RSU Trust” The maximum numbers of shares to be issued under this Scheme shall be limited to 14,00,000 equity shares of the Group. No RSUs are granted under Newgen RSU - 2021 as on 31 March 2021.

==> picture [479 x 164] intentionally omitted <==

----- Start of picture text -----

Particulars Newgen eSOP 2014 Newgen RSu – 2021
Maximum number of shares under 3783800 1400000
the plan
Method of settlement (cash/equity) Equity Cash/ Equity
Vesting period (maximum) 4 years "5 years
1 year - 10% at the end of 3rd year - 50%
2 year - 20% at the end of 5th year - 50%"
3 year- 30%
4 year-40%
Exercise period from the date of 5 year from last vesting 5 year from last vesting
vesting (maximum)
Vesting conditions Service period Perfomance based
----- End of picture text -----

Newgen ESOP trust has been treated as an extension of the Group and accordingly shares held by Newgen ESOP Trust are netted off from the total share capital. Consequently, all the assets, liabilities, income and expenses of the trust are accounted for as assets and liabilities of the Group, except for profit / loss on issue of shares to the employees and dividend received by trust which are directly adjusted in the Newgen ESOP Trust reserve.

Following table represents general terms of the grants for the eSOP outstanding as on 31 March 2021.

==> picture [480 x 176] intentionally omitted <==

199

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

B. Reconciliation of outstanding share options

The number and weighted-average exercise prices of share options under the share option programmes were as follows.

Newgen employees Stock Option Scheme 2014	Number of	Weighted	Number of	Weighted
(Newgen ESOP 2014)	options	average	options	average
	31 March	exercise	31 March	exercise
	2021	price	2020	price
		31 March		31 March
		2021		2020
Options outstandingas at the beginningof theyear	8,84,598	INR 63.00	15,57,524	INR 63.00
Add: Optionsgranted duringtheyear	2,33,000	INR 63.00	-	-
Less: Options lapsed duringtheyear	-	-	40,723	INR 63.00
Less: Options exercised duringtheyear	2,16,192	INR 63.00	6,32,203	INR 63.00
Options outstandingas at theyear end	9,01,406	INR 63.00	8,84,598	INR 63.00
Exercisable as atyear end	4,89,498		5,71,519
Weighted - average contractual life	5.20years		4.85years

C. Expense recognised in Statement of Profit and Loss

For details on the employee benefits expense, refer note 28

35. Contingent liabilities and commitments (to the extent not provided for)*

	31 March 2021	31 March 2020
a. Estimated amount of contracts remaining to be executed on capital account and notprovided for net of advances,tangible assets** - 84.18 ~~-------------------~~
b. Income Tax matters(Financialyear 2015-16 to 2019-20)***	-	1,058.36

The Group is committed to operationally, technically and financially support the operations of its certain subsidiary companies.

** For other commitments – Non-cancellable operating and finance leases, refer note 18

***During the year ended 31 March 2021, the Company has filed an application under ‘Direct Tax Vivad Se Vishwas Act, 2020’ in respect of assessment orders pertaining to financial years 2015-16 and 2016-17, against which appeals were pending with Commissioner of Income Tax (Appeal). The application for both the years was accepted by the department. Accordingly an amount of Rs. 463.50 lakhs has been recorded as tax expense during the current year. The dispute primarily involved partial disallowances made by the assessing officer with respect to foreign withholding tax credit claimed as a set off. . The Company has likewise claimed foreign withholding tax credit in the subsequent financial years. Based on management evaluation, the effect of similar disallowances has been recognised in respect of subsequent assessment years, without prejudice to any rights, and additional tax expense of Rs. 847.07 lakhs relating to financial years 2017-18 to 2019-20 and Rs. 231.80 lakhs in respect of year ended 31 March 2021 has been recorded in the current year.

In February 2019, there was a judicial pronouncement with respect to provident fund. It is not currently clear whether the interpretation set out in the pronouncement has retrospective application. If applied retrospectively, the interpretation would result in an increase in contributions payable by the Group for past and future periods for certain of its employees. There are numerous interpretative challenges concerning the retrospective application of the judgment. Due to such challenges and a lack of interpretive guidance, it is currently impracticable to reliably estimate the timing and amount of any payments the Group may be required to make. The Group will continue to monitor and evaluate its position based on future events and developments.

36. Details of dues to Micro, Small and Medium Enterprises as defined under the MSMED Act, 2006

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as on 31 March 2021 and 31 March 2020 has been made in the financial statements based on information received and available with the Group. Based on the information currently available with the Group, there are no dues payable to Micro and Small Suppliers as defined in the Micro, Small and Medium Enterprises Development Act, 2006.

200

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

37. After the reporting date the following dividend were proposed by the Board of Directors, subject to the approval of shareholders at Annual General Meeting; Accordingly, the dividends have not been recognised as liabilities. The Finance Act 2020 has repealed the Dividend Distribution Tax (DDT). The Group is now required to pay/distribute dividend after deducting applicable taxes.

Particulars	For the year	For the year
	ended	ended
	31 March 2021	31 March 2020
Final dividend of INR 3.50 /- per share (31 March 2020: INR 2/-)	2,448.45	1,399.11

38. utilization of Corporat Social Responsibility expenses

As per Section 135 of the Companies Act 2013, the following is the detail of CSR expenses incurred by the Group: Gross amount to be spent by the Group during the year ended 31 March 2021 is INR 201.09 lakhs as approved by the Board of Directors (previous year INR. 186.27 lakhs). Amount spent during the year ended 31 March 2021:

==> picture [479 x 43] intentionally omitted <==

----- Start of picture text -----

Particulars Amount spent Amount to be Total
during the year spent
i) For purpose mentioned as under 201.27 - 201.27
----- End of picture text -----*

*The areas for CSR activities are promoting education, health care, sanitation, digital literacy and livelihood enhancement. The funds were primarily utilized through the year on the activities which are specified in Schedule VII of the Companies Act, 2013.

39. The Group has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income-tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Group has got the updated documentation for the international transactions entered into with the associated enterprises during the financial year. During the year ended 31 March 2020, the holding Group has also started availing services from its overseas subsidiaries in accordance with the transfer pricing methodology under sections 92-92F of the Income Tax Act, 1961. The management is of the opinion that its international transactions are at arm’s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

40. Details of current Investments (refer note 10)

==> picture [499 x 273] intentionally omitted <==

201

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [499 x 368] intentionally omitted <==

----- Start of picture text -----

Particulars Number of units as at Amount in lakhs as at
31 March 2021 31 March 2020 31 March 2021 31 March 2020
Aditya Birla Liquid Fund Direct plan 4,72,293.51 - 1,565.81 -
Growth option
ICICI Prudential Liquid Fund Growth 4,92,315.98 - 1,500.27 -
HDFC Liquid Fund -Direct Growth 7,622.95 - 308.39 -
IDFC Cash Fund - Growth- Direct 20,704.45 - 514.71 -
Plan
Investment in government
bonds-FVTOCI
8.40% IRFC 15YRS SR2A 18022029 40,000.00 40,000.00 494.26 467.71
(18-Feb-2029)
7.35% NHAI LTD Tax free Bond 45,000.00 45,000.00 539.85 500.96
15YRS SR2A Annual (11-Jan-2031)
8.54% PFC Tax free Bonds (Series 16,500.00 16,500.00 204.13 203.32
2A) 16/11/2028
7.04% IRFC Bond 03/03/2026 15.00 15.00 164.73 166.38
8.3% NHAI Tax free Bonds 30,000.00 30,000.00 352.97 355.96
25/01/2027
8.63% IRFC Bonds 26/03/2029 22,000.00 22,000.00 275.62 288.04
8.30% IRFC Bonds 23/02/2027 87,000.00 - 1,016.65 -
8.20% NHAI Bonds 25/01/2022 50,000.00 - 513.51 -
Investment in other bonds-
FCTOCI
State Bank of India Series 1 9.56% - 30.00 - 306.31
NCD perpetual FVRS10Lac
ICICI Bank Limited SR DDE18AT 9.90 - 30.00 - 302.22
BD Perpetual FVRS10LAC
8,317.45 7,610.67
----- End of picture text -----

41. Related party transactions

A. List of subsidiaries

Set out below is the list of subsidiaries:

==> picture [500 x 115] intentionally omitted <==

----- Start of picture text -----

Name of the company Country of Ownership interest
incorporation 31 March 2021 31 March 2020
Newgen Software Inc. United States of America 100% 100%
Newgen Software Technologies Pte Ltd. Singapore 100% 100%
Newgen Software Technologies Canada Limited Canada 100% 100%
Newgen Software Technologies (UK) Ltd. United Kingdom 100% 100%
Newgen Software Technologies Pty Ltd. Australia 100% 100%
Newgen Computers Technologies Limited India 100% 100%
----- End of picture text -----

The principal place of business of all the entities listed above is the same as the respective country of incorporation.

202

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

B. Transactions with Key Management Personnel

A number of key management personnel, or their related parties hold positions in other entities that result in them having control or significant influence over those entities.

Compensation of the Group’s key managerial personnel includes salaries, non-cash benefits and contributions to post - employment defined benefit plan(see note 28)

Executive officers also participate in the Group’s share option plan as per the conditions laid down in that scheme (see note 28 and note 34).

List of key management personnel and their relatives

Diwakar Nigam - Managing Director

T.S. Varadarajan - Whole Time Director

Priyadarshini Nigam - Whole Time Director

Arun Kumar Gupta - Chief Financial Officer

Virender Jeet - Senior Vice President (Sales and Marketing/Product)

Surender Jeet Raj - Senior Vice President (HR/Operations)

Tarun Nandwani - Senior Vice President (Business Management)

Usha Varadarajan - Relative of Whole Time Director - T.S. Varadarajan

Shubhi Nigam - Relative of Managing Director

Aman Mourya- Company Secretary

List of non-executive and independent directors

Kaushik Dutta - Independent Director

Saurabh Srivastava - Independent Director

Subramaniam R Iyer - Independent Director

Padmaja Krishnan - Independent Director

Key management personnel compensation

==> picture [498 x 191] intentionally omitted <==

203

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [498 x 304] intentionally omitted <==

----- Start of picture text -----

Transaction value Balance payable
For the year For the year As at As at
ended ended 31 March 2021 31 March 2020
31 March 2021 31 March 2020
Dividend paid (excluding 935.83 1,402.83 - -
dividend distribution tax)
Diwakar Nigam 369.45 552.67 - -
T.S. Varadarajan 300.19 450.28 - -
Priyadarshini Nigam 159.38 239.07 - -
Arun Kumar Gupta 1.10 2.10 - -
Virender Jeet 4.98 7.47 - -
Surender Jeet Raj 4.99 7.48 - -
Tarun Nandwani 5.14 7.87 - -
Usha Varadarajan 90.57 135.85 - -
Aman Mourya 0.03 0.04
Share-based payments 99.84 93.69 - -
Arun Kumar Gupta - 4.60 - -
Virender Jeet 77.72 - - -
Surender Jeet Raj - 56.92 - -
Tarun Nandwani 19.75 29.81 - -
Aman Mourya 2.37 2.36
----- End of picture text -----

excludes provision for gratuity and compensated absences, as these are determined on the basis of actuarial valuation for the Group as a whole and includes share-based payments and commission.

Key management personnel compensation

==> picture [498 x 230] intentionally omitted <==

----- Start of picture text -----

Transaction value Balance payable
For the year For the year As at As at
ended ended 31 March 2021 31 March 2020
31 March 2021 31 March 2020
Sitting fees to independent 50.00 45.25 - 12.35
directors
Kaushik Dutta 15.00 18.25 - 6.95
Saurabh Srivastava 14.00 13.00 - 2.70
Subramaniam R Iyer 15.00 14.00 - 2.70
Padmaja Krishnan 6.00 - - -
Commission to independent 95.80 50.01 88.60 47.49
directors
Kaushik Dutta 23.95 16.67 22.15 15.83
Saurabh Srivastava 23.95 16.67 22.15 15.83
Subramaniam R Iyer 23.95 16.67 22.15 15.83
Padmaja Krishnan 23.95 - 22.15 -
----- End of picture text -----

204

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

42. Financial instruments – Fair values and risk management

A Accounting classification and fair values

The following table shows the carrying amounts and fair value of financial assets and financial liabilities, including their levels in the fair value hirarchy.

==> picture [479 x 546] intentionally omitted <==

----- Start of picture text -----

31 March 2021 Carrying amount Fair value
Note FVTPL FVTOCI Amortised Total Level 1 Level 2 Level 3 Total
Cost
Financial assets
Financial assets measured
at fair value
Investments in mutual funds 10 4,755.74 - - 4,755.74 4,755.74 - - 4,755.74
Investments in bonds 10 - 3,561.72 - 3,561.72 3,561.72 - - 3,561.72
Financial assets not
measured at fair value
Other non-current financial 7 - - 3,353.46 3,353.46 - - - -
asset
Trade receivables 11 - - 23,854.30 23,854.30 - - - -
Cash and cash equivalents 12 - - 7,174.94 7,174.94 - - - -
Other bank balances 12A - - 17,000.00 17,000.00
Loans 6 and 13 - - 544.86 544.86 - - - -
Other fnancial assets 14 - - 7,604.02 7,604.02 - - - -
4,755.74 3,561.72 59,531.58 67,849.04 8,317.46 - - 8,317.46
Financial liabilities Financial laibilities not measured at fair value Lease liabilities 18 - - 2,009.12 2,009.12 - - - - Trade payables 21 - - 2,264.31 2,264.31 - - - - Other financial liabilities 22 - - 4,383.04 4,383.04 - - - - - - 8,656.47 8,656.47 - - - - 31 March 2020 Carrying amount Fair value Note FVTPL FVTOCI Amortised Total Level 1 Level 2 Level 3 Total Cost Financial assets Financial assets measured at fair value Investments in debt mutual 10 5,019.75 - - 5,019.75 5,019.75 - - 5,019.75 funds Investments in bonds 10 - 2,590.92 - 2,590.92 2,590.92 - - 2,590.92 Financial assets not measured at fair value Other non-current financial 7 - - 358.29 358.29 - - - - asset Trade receivables 11 - - 26,939.67 26,939.67 - - - - Cash and cash equivalents 12 - - 10,011.04 10,011.04 - - - - Other bank balances 12A - - 6,516.11 6,516.11 Loans 6 and 13 - - 569.94 569.94 - - - - Other fnancial assets 14 - - 8,260.42 8,260.42 - - - - 5,019.75 2,590.92 52,655.47 60,266.14 7,610.67 - - 7,610.67 Financial liabilities
Financial laibilities not
measured at fair value
Long-term maturities of finance 18 - - 3,630.28 3,630.28 - - - -
lease obligations (secured)
Short term borrowings 20 - - 7,453.21 7,453.21 - - - -
Trade payables 21 - - 2,750.76 2,750.76 - - - -
Other financial liabilities 22 - - 4,119.73 4,119.73 - - - -
- - 17,953.99 17,953.99 - - - -
----- End of picture text -----

205

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

B. Measurement of fair values

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable inputs

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

==> picture [479 x 393] intentionally omitted <==

There have been no transfers in either direction for the years ended 31 March 2021 and 31 March 2020.

C. Financial risk management

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk and liquidity risk.

206

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

i. Risk management framework

The Group’s board of directors has framed a Risk Management Policy and plan for enabling the Group to identify elements of risk as contemplated by the provisions of the Section 134 of the Companies Act 2013. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and `procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Group’s audit committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit.

ii. Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises partially from the Group’s receivables from customers, loans and investment in debt securities. The carrying amount of financial assets represent the maximum credit risk exposure. The Group has credit policies in place and the exposures to these credit risks are monitored on an ongoing basis.

The carrying amount of financial assets represent the maximum credit risk exposure. The maximum exposure to credit risk at the reporting was:

credit risk at the reporting was:
Particulars	As at	As at
	31 March 2021	31 March 2020
Trade receivables	23,854.30	26,939.67
Loans	544.86	569.94
Cash and cash equivalents	7,174.94	10,011.04
Other bank balances	17,000.00	6,516.11
	48,574.10	44,036.76

To cater to the credit risk for investments in mutual funds and bonds, only high rated mutual funds/bonds are accepted.

The Group has given security deposits to vendors for rental deposits for office properties, securing services from them, government departments. The Group does not expect any default from these parties and accordingly the risk of default is negligible or nil.

Trade receivables and unbilled revenues are typically unsecured and derived from revenue earned from customers primarily located in India, USA, EMEA and APAC.

Credit risk has always been managed by the Group through credit approval, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Group grants credit term in normal course of business. Credit limits are established for each customers and received quarterly.

Any sales/services exceeding these limits require approval from the risk management committee.

The Group establishes an allowance for impairment that represents its expected credit losses in respect of trade receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or legal entity, industry and existence of previous financial difficulties, if any.

Trade and other receivables

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

207

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

The Group establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management establishes an allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables. An impairment analysis is performed at each reporting date.

The Group’s exposure to credit risk for trade receivables by geographic region is as follows

==> picture [480 x 110] intentionally omitted <==

----- Start of picture text -----

Carrying amount
As at As at
31 March 2021 31 March 2020
India 6,085.39 7,103.27
USA 5,687.25 6,783.82
EMEA 8,787.21 9,503.08
APAC 3,294.45 3,549.50
23,854.30 26,939.67
----- End of picture text -----

The following table provides information about the exposure to credit risk and expected credit loss for trade receivables from individual customers:

==> picture [479 x 425] intentionally omitted <==

----- Start of picture text -----

As at 31 March 2021 Gross carrying Weighted- Loss allowance Credit-impaired
amount average loss
rate
0-3 months past due 21,991.89 2.44% 537.52 No
3-6 months past due 941.15 7.83% 73.67 No
6-9 months past due 652.25 21.87% 142.66 No
9-12 months past due 411.58 36.89% 151.85 No
12-15 months past due 784.53 51.49% 403.95 No
15-18 months past due 502.46 56.93% 286.06 No
18-21 months past due 443.03 65.64% 290.79 No
21-24 months past due 48.30 71.19% 34.39 No
above 24 months past due 2,445.22 100.00% 2,445.22 No
28,220.41 4,366.11
As at 31 March 2020 Gross carrying Weighted- Loss allowance Credit-impaired
amount average loss
rate
0-3 months past due 20,135.75 1.55% 312.75 No
3-6 months past due 4,309.99 6.52% 281.08 No
6-9 months past due 1,218.95 9.82% 119.65 No
9-12 months past due 320.71 16.14% 51.76 No
12-15 months past due 588.00 36.84% 216.59 No
15-18 months past due 399.55 48.07% 192.05 No
18-21 months past due 332.39 52.33% 173.95 No
21-24 months past due 557.74 59.47% 331.70 No
above 24 months past due 4,565.08 83.44% 3,808.96 No
32,428.16 5,488.49
Balance as at 1 April 2019 3,933.65
Impairment loss recognised 2,235.77
Amounts written off 680.93
Balance as at 31 March 2020 5,488.49
Impairment loss recognised 3,061.38
Amounts written off 4,183.76
Balance as at 31 March 2021 4,366.11
----- End of picture text -----

208

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The Group uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Group’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

Debt securities

The Group limits its exposure to credit risk by investing only in liquid debt securities and only with counterparties that have a credit rating A to AAA from renowned rating agencies.”

The Group monitors changes in credit risk by tracking published external credit ratings. For its investment in bonds, Group also reviews changes in government bond yields together with available press and regulatory information about issuers

The exposure to credit risk for debt securities at FVTOCI and at FVTPL is as follows:-

	Net carrying amount
	As at 31 March 2021 As at 31 March 2020
India	8,317.46 7,610.67
	8,317.46 7,610.67

Basis experienced credit judgement, no risk of loss is indicative on Group’s investment in mutual funds and government bonds.

Cash and cash equivalents and other bank balances

The Group held cash and cash equivalents of INR 7,174.94 lakhs at 31 March 2021 (31 March 2020: INR 10,011.04 lakhs) and other bank balances of INR 17,000.00 lakhs as at 31 March 2021 (31 March 2020: INR 6,516.11 lakhs). The cash and cash equivalents are held with bank and financial institution counterparties, which are rated AA- to AAA, based on renowned rating agencies.

iii. Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group’s primary sources of liquidity include cash and bank balances, deposits, undrawn borrowings and cash flow from operating activities. As at 31 March 2021, the Group had a working capital of INR 43,654.39 lakhs (31 March 2020: INR 32,712.33 lakhs) including cash and cash equivalent of INR 7,174.94 lakhs (31 March 2020: INR 10,011.04 lakhs), other bank balances of INR 17,000.00 lakhs ( 31 March 2020: 6,516.11 lakhs) and current investments of INR 8,317.46 lakhs (31 March 2020: INR 7,610.67 lakhs).

Consequently, the Group believes its revenue, along with proceeds from financing activities will continue to provide the necessary funds to cover its short term liquidity needs. In addition, the Group projects cash flows and considering the level of liquid assets necessary to meet liquidity requirement.

In addition, the Group had access to the following undrawn borrowing facilities at the end of the reporting year

==> picture [458 x 59] intentionally omitted <==

209

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

exposure to liquidity risk

==> picture [500 x 515] intentionally omitted <==

----- Start of picture text -----

Contractual cash flows
31 March 2021 Carrying Total 2 months 2-12 1-2 years 2-5 years More than
amount or less months 5 years
Non-derivative financial liabilities Finance lease 2,009.12 7,210.62 145.84 605.97 432.54 824.46 5,201.79 obligations (including current maturities) Employee related 4,237.22 4,237.22 2,533.29 1,607.78 96.16 - - payables Trade and other 2,264.31 2,264.31 2,264.31 - - - - payables Payable in respect of 127.82 127.82 - 127.82 - - - retention money Earnest money deposits 1.00 1.00 - 1.00 - - - Payable for capital 17.00 17.00 - 17.00 - - - assets Total 8,656.47 13,857.97 4,943.44 2,359.57 528.70 824.46 5,201.79 Contractual cash flows 31 March 2020 Carrying Total 2 months 2-12 1-2 years 2-5 years More than amount or less months 5 years Non-derivative
financial liabilities
Finance lease 3,630.29 9,151.73 322.58 1,356.53 1,310.38 894.60 5,267.64
obligations (including
current maturities)
Employee related 3,511.39 3,511.39 2,560.80 950.59 - - -
payables
Trade and other 2,750.76 2,750.76 2,750.76 - - - -
payables
Pre-shipment loans 7,453.21 7,453.21 - 7,453.21 - - -
(secured)
Payable in respect of 180.54 180.54 - 180.54 - - -
retention money
Earnest money deposits 1.00 1.00 - 1.00 - - -
Payable for capital 412.41 412.41 - 412.41 - - -
assets
Total 17,939.61 23,461.05 5,634.14 10,354.29 1,310.38 894.60 5,267.64
----- End of picture text -----

Interest payment on variable interest rate loan in the table above reflect market forward interest rates at the reporting dates and these amount may change as market interest changes

210

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

iv. Market risk

Market risk is the risk that changes in market prices – such as foreign exchange rates, interest rates and equity prices – will affect the Group’s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of our investments. Thus, our exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs.

v. Currency risk

The foreign currency exchange management policy is to minimize economic and transactional exposures arising from currency movements against the US dollar, Euro, Great Britain Pound, Canadian dolar, Abar Emirates Dhiram, Saudi Riyal, Singapore dollar, Australian dollar, Malaysian Ringgit and Hong Kong dollar. The Company manages the risk by netting off naturally-occurring opposite exposures wherever possible, and then dealing with any material residual foreign currency exchange risks if any.

exposure to currency risk

The currency profile of financial assets and financial liabilities as at 31 March 2021 and 31 March 2020 are as below:

==> picture [478 x 389] intentionally omitted <==

gross of loss allowance

211

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

==> picture [499 x 182] intentionally omitted <==

----- Start of picture text -----

Effect in Lakhs of INR For the year ended 31 March 2021 For the year ended 31 March 2020
Strengthening Weakening Strengthening Weakening
1% movement
USD 121.76 (121.76) 83.13 (83.13)
EUR1 1.04 (1.04) 0.64 (0.64)
GBP1 0.11 (0.11) 3.34 (3.34)
CAD1 0.27 (0.27) 2.67 (2.67)
SGD1 (0.46) 0.46 12.14 (12.14)
AED1 2.24 (2.24) 2.38 (2.38)
SAR1 - - 0.42 (0.42)
HKD1 - - 0.01 (0.01)
MYR1 1.73 (1.73) 0.28 (0.28)
AUD1 (0.98) 0.98 (3.78) 3.78
125.71 (125.71) 101.23 (101.23)
----- End of picture text -----

vi. Interest rate risk

a) Exposure to interest rate risk

The Group is exposed to both fair value interest rate risk as well as cash flow interest rate risk arising both on shortterm and long-term floating rate instruments.

The currency profile of financial assets and financial liabilities as at 31 March 2021 and 31 March 2020 are as below:

==> picture [460 x 153] intentionally omitted <==

----- Start of picture text -----

Nominal amount in INR
31 March 2021 31 March 2020
Fixed-rate instruments
Financial assets 24,216.61 13,531.31
Financial liabilities 3,630.29 3,630.29
27,846.90 17,161.60
Variable-rate instruments `
Financial assets - -
Financial liabilities - (7,453.21)
- (7,453.21)
Total 27,846.90 9,708.39
----- End of picture text -----

b) Sensitivity analysis

Fair value sensitivity analysis for fixed-rate instruments

The Group accounts for investments in government and other bonds as fair value through other comprehensive income. Therefore, a change in interest rate at the reporting date would have impact on equity.

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity by INR 23.15 lakhs after tax (31 March 2020: INR 16.84 lakhs).

212

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Cash flow sensitivity analysis for variable-rate instruments

==> picture [460 x 112] intentionally omitted <==

----- Start of picture text -----

Profit or loss
100 bp increase 100 bp decrease
31 March 2021
Variable-rate instruments - -
Cash flow sensitivity (net) - -
31 March 2020
Variable-rate instruments 74.53 74.53
Cash flow sensitivity (net) 74.53 74.53
----- End of picture text -----

Market price risk

a) Exposure

The Group’s exposure to mutual funds and bonds price risk arises from investments held by the Group and classified in the balance sheet as fair value through profit and loss and at fair value through other comprehensive income respectively.

To manage its price risk arising from investments, the Group diversifies its portfolio. Diversification of the portfolio is done in accordances with the limits set by the Group.

b) Sensitivity analysis

Group is having investment in mutual funds, government bonds, other bonds and investment in subsidiaries.

For such investments classified at Fair value through other comprehensive income, a 2% increase in their fair value at the reporting date would have increased equity by INR 46.30 lakhs after tax (31 March, 2020: INR 33.68 lakhs ). An equal change in the opposite direction would have decreased equity by INR 46.30 lakhs after tax (31 March, 2020: INR 33.68 lakhs )

43. Capital Management

The Group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to equity shareholders.

The Group manages its capital structure and makes adjustments to it as and when required. To maintain or adjust the capital structure, the Group may pay dividend or repay debts, raise new debt or issue new shares. No major changes were made in the objectives, policies or processes for managing capital during the year ended 31 March 2021 and 31 March 2020.

The Group monitors capital using a ratio of ‘adjusted net debt’ to ‘adjusted equity’. For this purpose, adjusted net debt is defined as total liabilities comprising interest bearing loans and borrowings and obligations under finance leases, less cash and cash equivalents. Adjusted equity comprises all components of equity

The Group capital consists of equity attributable to equity holders that includes equity share capital, retained earnings and long term borrowings.

213

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

mounts are in lakhs of Indian Rupees, unless otherwise stated)
	As at	As at
	31 March 2021	31 March 2020
Total liabilities	2,009.12	11,083.49
Less: Cash and cash equivalent	7,174.94	10,011.04
Adjusted net debt(a)	(5,165.82)	1,072.45
Total equity (b)	66,569.67	54,906.64
Total equityand net debt(a+b)= c	61,403.85	55,979.09
Capitalgearingratio(a/c)	-8.41%	1.92%

As a part of its capital management policy the Group ensures compliance with all covenants and other capital requirements related to its contractual obligations.

44. Segment reporting

A. Basis for segmentation

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components, and for which discrete financial information is available.

The Group’s board of directors have been identified as the Chief Operating Decision Makers (CODM) since they are responsible for all major decisions in respect of allocation of resources and assessment of the performance on the basis of the internal reports/ information provided by functional heads. The board examines the performance of the Group based on such internal reports which are based on operations in various geographies and accordingly, have identified the following reportable segments:

India
Europe, Middle East and Africa (EMEA)
Asia Pacific (APAC)
United States of America (USA)
Australia

B. Information about reportable segments

Year ended 31 March 2021

==> picture [479 x 162] intentionally omitted <==

----- Start of picture text -----

Particulars Reportable segments
India eMeA APAC uSA Australia Total Segment
Revenue
External revenue 19,723.17 17,146.49 9,213.83 21,178.95 (0.00) 67,262.44
Inter-segment revenue - - - - - -
Total Segment Revenue 19,723.17 17,146.49 9,213.83 21,178.95 (0.00) 67,262.44
Segment profit/(loss) before income 4,552.39 4,965.95 4,224.60 6,075.94 (475.74) 19,343.14
tax
Segment assets 9,275.72 11,922.12 5,058.01 10,187.25 526.82 36,969.92
Segment liabilities 5,593.20 6,818.10 2,404.16 6,112.25 35.09 20,962.80
Capital expenditure during the year 9,850.16 0.75 0.74 3.51 - 9,855.16
----- End of picture text -----

214

Financial Statements

Company Overview

Statutory Reports

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Year ended 31 March 2020

==> picture [479 x 128] intentionally omitted <==

----- Start of picture text -----

Particulars Reportable segments
India eMeA APAC uSA Australia Total Segment
Revenue
External revenue 19,499.82 20,734.45 7,556.53 18,284.82 0.00 66,075.62
Inter-segment revenue - - - - - -
Total Segment Revenue 19,499.82 20,734.45 7,556.53 18,284.82 0.00 66,075.62
Segment profit before income tax 1,738.54 4,431.59 2,263.24 2,422.78 (377.24) 10,478.91
Segment assets 10,204.77 14,386.81 5,669.50 10,373.98 126.65 40,761.71
Segment liabilities 5,349.50 6,467.29 1,928.31 5,803.79 37.54 19,586.43
Capital expenditure during the year 3,863.14 0.50 0.96 48.02 1.67 3,914.29
----- End of picture text -----

C. Reconciliations of information on reportable segments to Ind AS

==> picture [480 x 244] intentionally omitted <==

----- Start of picture text -----

Particulars For the year For the year
ended ended
31 March 2021 31 March 2020
(a) Revenue
Total revenue for reportable segments 67,262.44 66,075.62
Elimination of inter-segment revenue - -
Total revenue 67,262.44 66,075.62
(b) Profit / (loss) before tax
Total profit before tax for reportable segments 19,343.14 10,478.91
Unallocated amounts:
- Unallocated income 1,503.74 2,096.29
- Other corporate expenses 2,730.17 (3,101.03)
Total profit before tax from operations 23,577.05 9,474.17
(c) Assets
Total assets for reportable segments 36,969.92 40,761.71
Other unallocated amounts 55,087.77 46,345.94
Total assets 92,057.68 87,107.65
(d) Liabilities
Total liabilities for reportable segments 20,962.80 19,586.43
Other unallocated amounts 4,525.21 12,614.58
Total liabilities 25,488.01 32,201.01
----- End of picture text -----

C. Information about major customers

No customer individually accounted for more than 10% of the revenues in the year ended 31 March 2021 and 31 March 2020.

D. unallocated assets, liabilities, revenue and expenses

Certain assets, liabilities, revenue and expenses are not specifically allocable to individual segments as the underlying services are used interchangeably. The Group believes that it is not practicable to provide segment disclosures relating to such assets, liabilities, revenue and expenses and accordingly such assets, liabilities, revenue and expenses are separately disclosed as ‘unallocated’.

45. As at 31 March 2021, the holding company has gross foreign currency receivables amounting to INR 12,651.72 lakhs (previous year INR 18,849.78 lakhs). Out of these receivables, INR 492.42 lakhs (previous year INR 1,992.90 lakhs) is outstanding for more than 15 months. As per circular RBI/2019-20/206 A. P. (DIR series) circular no. 27 , receipt for export goods should be realized within a period of 15 months from the date of export, for the exports made up to or on July 31, 2020. The Company must file extension with AD Bank & as per the requirements of circular no. RBI/2015-16/395 A. P. (DIR series) Circular no. 68 dated May12, 2016, in one calendar year, the Company is allowed to seek extension for an amount equivalent to 10% of the average export collection of the last 3 years only and pursuant to the same, the Company is in the process of applying for approval to seek extension of time beyond 15 months from export date.

215

Newgen Software Technologies Limited

Annual Report 2020-21

Notes

to the Consolidated Financial Statements for the year ended 31 March 2021

(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

The management is of the view that the Company will be able to obtain approvals from the authorities for realizing such funds beyond the stipulated timeline without levy of any penalties as it had bonafide reasons that caused the delays in realization.

46. Additional information pursuant to Para 2 of general instruction for the preparation of consolidated financial statement

==> picture [479 x 210] intentionally omitted <==

----- Start of picture text -----

Name of the enterprise Net assets (Total assets-Total liabilities)
31 March 2021 31 March 2020
As % of Amount As % of Amount
consolidated consolidated
net assets net assets
Parent 95.16% 63,349.12 95.97% 52,692.54
Newgen Software Technologies Limited
Indian Subsidiary
Newgen Computers Technologies Limited 0.11% 74.65 0.13% 68.83
Foreign Subsidiaries
Newgen Software Inc. USA. 3.91% 2,600.78 3.78% 2,072.91
Newgen Software Technologies UK Ltd. 0.42% 281.90 0.44% 240.89
Newgen Software Technologies Canada Ltd. 0.38% 251.92 0.35% 194.83
Newgen Software technologies PTE Ltd 1.27% 848.39 1.05% 576.77
Newgen Software technologies PTY Ltd 0.88% 588.67 0.87% 476.35
Adjustment arising out of consolidation -2.14% (1,425.74) -2.58% (1,416.48)
Total 100.00% 66,569.67 100.00% 54,906.64
----- End of picture text -----

==> picture [479 x 212] intentionally omitted <==

----- Start of picture text -----

Name of the enterprise Share in profit and loss after tax
31 March 2021 31 March 2020
As % of Amount As a % of Amount
consolidated consolidated
net assets profit and loss
Parent 92.97% 11,759.46 90.62% 6,591.23
Newgen Software Technologies Limited
Indian Subsidiary
Newgen Computers Technologies Limited 0.05% 5.81 0.09% 6.30
Foreign Subsidiaries
Newgen Software Inc. USA. 5.01% 633.23 7.51% 546.45
Newgen Software Technologies UK Ltd. 0.16% 19.75 0.36% 26.52
Newgen Software Technologies Canada Ltd. 0.30% 38.05 0.62% 45.02
Newgen Software technologies PTE Ltd 2.02% 254.94 2.67% 194.34
Newgen Software technologies PTY Ltd 0.12% 14.65 0.00 14.12
Adjustment arising out of consolidation -0.61% (77.66) -2.07% (150.52)
Total 100.00% 12,648.23 100.00% 7,273.46
----- End of picture text -----

As per our report of even date attached

For B S R & Associates LLP Chartered Accountants

For and on behalf of the Board of Directors of Newgen Software Technologies Limited

Firm Registration No.: 116231W / W-100024

Sandeep Batra Partner

Diwakar Nigam

T.S.Varadarajan Whole Time Director DIN: 00263115

Arun Kumar Gupta Chief Financial Officer Membership No: 056859

Chairman & Managing Director Whole Time Director DIN: 00263222 DIN: 00263115

Membership No.: 093320 UDIN: 21093320AAAAAT2425

Place: Gurugram Place: New Delhi Date: 25 May 2021 Date: 25 May 2021

Place: Chennai Place: Noida Date: 25 May 2021 Date: 25 May 2021

Aman Mourya Company Secretary Membership No: F9975

Place: Noida Date: 25 May 2021

216

Newgen Software Technologies Limited https://www.newgensoft.com

AI assistant

Newgen Software Technologies Limited — AGM Information 2021

61831_rns_2021-06-30_e4e4ac25-9805-4a18-a31d-5829ffb9bff9.pdf

Newgen Software Technologies Limited

For Newgen Software Technologies Limited

NEWGEN SOFTWARE TECHNOLOGIES LIMITED

NOTICE OF 29[TH] ANNUAL GENERAL MEETING

ORDINARY BUSINESS:

NOTES:

29. Cut-off Date for electronic means/Remote e-voting:

30. Voting through electronic means / Remote e-voting:

Details on Step 1 are mentoned below:

Details on Step 2 are mentoned below:

OTHER INSTRUCTIONS:

EXPLANATORY STATEMENT ANNEXED TO THE NOTICE CONVENING THE 29TH ANNUAL GENERAL MEETING TO BE HELD ON TUESDAY, 27TH JULY 2021.

Item No. 4

DETAILS OF THE DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT THE 29th ANNUAL GENERAL MEETING

Expediting Digital Transformation

Contents

Company Overview

Forward-looking statement

Statutory Reports

Financial Statements

Expediting Digital Transformation

Newgen Today: A Snapshot (FY ‘21)

Newgen Today: Financial Snapshot (FY ‘21)

Rapidly Accelerating Digital Transformation with Industry-Recognized Products

Contextual Content Services (ECM)

Omnichannel Customer Communication (CCM)

Transforming Businesses

Newgen Contextual Content Services (ECM)

Digitize Workplace with Contextual Automation, Compliance and Intelligence – On Cloud

Case Study

Newgen Low-code Process Automation (BPM)

Enable Rapid Application Development for Deep & Complex Business Applications across Devices

Case Study

Newgen Omnichannel Customer Communication (CCM)

Use Business Data and Manage the Communication Output – Personalized and at Scale

Case Study

Expediting Success

(Key Recognitions)

Gartner

Key Awards

Financial Performance

Financial Snapshot

Revenue Split

FY’21 Revenue Streams by Segment (%)

FY’21 Revenue Concentration by Geography (%)

FY’21 Revenue Split by Vertical (%)

Chairman’s Message

Ensuring Employee Well-Being

Empowering Customers

Dear Shareholders,

Demonstrating Steady Performance

Transition to Subscription Model

Focussing on Innovation and Enhancement of Product Platforms

Building a powerful Newgen Brand and strengthening

Sales and Marketing

Outlook

Strengthening the GSI ecosystem

Diwakar Nigam

Transforming Customer Experience through Fast-Paced Innovation

New Features

Key Patents Issued

Empowering Customers and Partners

Newgen as a Family – Standing Together through Tough Times

Continuing to Provide a Safe Remote Working Environment

Imbibing Newgen’s Values and Culture

Enhancing Talent Management

Steering Capability Management

Empowering People with Effective Engagement

Maintaining Our Commitment to Ethics and Compliance

Making an Impact - Building Opportunities. Transforming Lives.

Newgen’s CSR initiatives are focussed at contributing to two Sustainable Development Goals:

CSR Thematic Area - Promotion of Education

Newgen Digital Discovery Paathshala (NDDP)

NDDP Alumni Association Initiative

Highlights

Making an Impact: Stories from Our Students

Remedial Education Programme

Newgen Software Technologies Limited AGM Information 2021