NEWGEN•

Newgen Software Technologies Limited

CIN: L72200DL 1992PLC049074
E-44/13, Okhla Phase-11, New Delhi- II 0 020, INDIA
Tel: +91-11-4653 3200 Fax: +91-11-2638 3963
Email: [email protected] URL: https://newgensoft.com

Date: August 10,2018

BSE Limited National Stock Exchange of India Limited

Phiroze Jeejeebhoy Towers, Exchange Plaza, Plot No. C/1, G Block,
Dalal Street, Bandra- Kurla Complex
Mumbai - 40000 I Bandra (E), Mumbai- 400051

Ref.: Newgen Software Technologies Ref.: Newgen Software Technologies Limited

Limited (NEWGEN/INE619B01017)
(NEWGEN/INE619B01 017)
ScriJ! Code - 540900

Subject: Annual Report under Regulation 34(1) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015:

Dear Sir/ Ma'am,

Pursuant to the provisions of Regulation 34(1) of SEBI (Listing O~ligations and Disclosure
Requirements) Regulations, 2015, please find enclosed herewith a copy of the Annual Report of the
Company for the Financial Year 2017-18.

The same shall also be available on the website of the Company at https://newgensoft.com.

This is for your information and records.

Thanking you,

Yours truly

For Newgen Software Technologies Limited

~
i\man Mourya
Company Secretary & Complianc(\'{J'1J.b~

Encl.: Annual Report

Registered Office: A-6, Satsang Vihar Marg, Qutab Institutional Area, New Delhi- II 0 067 INDIA
Email: [email protected]
Tel: +91-11-4077 0100, +91-11-2696 3571,2696 4733, Fax: +91-11-2685 6936
 Reinvent Your Workplace

2017-18
Newgen Software Technologies Limited Annual Report
https://newgensoft.com Newgen Software Technologies Limited
IN D E X

_01
Forward-looking statement
This report contains forward-looking
Corporate statements, which may be identified
by their use of words like ‘plans’,
Review ‘expects’, ‘will’, ‘anticipates’, ‘believes’,
‘intends’, ‘projects’, ‘estimates’ or
other words with similar meaning. All
01 Newgen Today statements that address expectations of
02 Transformative Platforms projections about the future, including

_06
but not limited to statements about
03 Solution Accelerators the Company’s strategy for growth,
04 Leadership Position product development, market position,
across Platforms expenditures and financial results, are
Chairman’s Message forward-looking statements. Forward-
06 
Chairman’s Message looking statements are based on certain
08 Research & Development assumptions and expectations of future
events. The Company cannot guarantee
09 Market Strategy that these assumptions and expectations
10 Newgen - A Great are accurate or will be realised. The
Place to Work Company’s actual results, performance
or achievements could thus differ
11 Making an Impact - CSR materially from those projected in any
12 
Board of Directors such forward-looking statements. The
13 
Management Team Company assumes no responsibility to
publicly amend, modify or revise any
14 
Financial Performance forward-looking statements, on the
15 Corporate Information basis of any subsequent developments,
information or events. The Company

_16 _10
has sourced the industry information
from the publicly available resources
Governance and has not verified that information
independently.
Reports Newgen - A Great Place to Work

16 Directors’ Report
55 
Report on Corporate
Governance
77 
Management Discussion
and Analysis

_84
Financial
Statements

84 Standalone Financial
_11
Making an Impact - CSR
Statements
164 Consolidated Financial
Statements

To read this report online and

for other information log on to
https://newgensoft.com
Newgen Today

26 520+ 120
years of proven Active Customers New Customer
track record during the year Additions during the
year

60+ 37* 5
Countries Patent Core Verticals
Applications

2,600+ 300+ `5,124 mn

Consolidated
Personnel Partners
Revenues

* 5 patents registered in India, 28 outstanding patent applications in India and 4 outstanding patent applications in
the USA

Our Global Offices

Toronto
London

Virginia
India
Tampa Dubai
Singapore

India
Mumbai
Chennai
Bengaluru
Kolkata
Hyderabad
Noida
Global Office HQ Gurugram
New Delhi
REINVENT YOUR WORKPLACE WITH OUR
TRANSFORMATIVE PLATFORMS
Our comprehensive and dynamic low code product platform integrates systems,
processes, people and things – so that businesses can increase their efficiency and
responsiveness and enhance customer experience.

Transformative product platforms

OmniDocs OmniFlow iBPS OmniOMS

Enterprise Content Business Process & Case Customer Communication
Management Management Management
Deliver contextual content Create smarter processes, Create, personalise
for smarter decision-making empower knowledge and deliver interactive
and improved collaboration workers and build communication to enhance
responsive business customer experience

powered by digital transformation enablers

Digital Sensing RPA Enterprise Analytics Cloud

Mobility

02 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

REINVENT THE CORE OF YOUR BUSINESS

We possess multi-vertical
Solution Accelerators
industry expertise with
solutions in 17 different Banking
verticals (with 5 core Account Opening
verticals). Retail Lending
Commercial Lending
We build domain rich
FATCA Compliance
solution frameworks.
Trade Finance
Applications developed
Collections and Payment Systems
on the Newgen platform
extend multiple benefits
to our customers, such Government/PSUs
as fit to purpose with Correspondence Management
minor changes. They are Agenda Management
adaptable to customer Citizen-Centric Services
needs and changing
Office Automation
regulations.
Grants Management

Further, specialised centre

of excellence teams have BPO/IT

been set up to guide and Accounts Payable

train both implementation Accounts Receivable
partners and customers Invoice Processing
on best practices for Vendor Portal
effective and quick
implementations. HEALTHCARE
Provider Contract Management
Appeals and Grievances
Management
Mobile Member Enrolment
Claims Repair

Insurance
New Business Underwriting
Claims Processing
Policy Servicing

ANNUAL REPORT 2017-18 03

LEADERSHIP POSITION ACROSS Platforms

A “Leader” in The Forrester A “Leader” in The Forrester A “Leader” in The Forrester WaveTM:
WaveTM: Cloud-Based Dynamic WaveTM: Digital Process Automation Enterprise Content Management –
Case Management (DCM), Q1 2018 Software, Q3 2017 Transactional Content Services,
Q2 2017

Forrester in its Q1 2018 report states that “enterprises often choose Newgen for its
geographic diversity, with many installations in the Middle East and Asia-Pacific, its
strong product features, quality of consultants, ease of implementation, and lower
total cost of ownership”
Forrester WaveTM: Cloud-Based Dynamic Case Management (DCM), Q1 2018
*

Gartner
A Visionary in Magic Quadrant A Niche Player in Magic Quadrant Named all 6 use-cases in Critical
for Intelligent Business Process for Content Services Platform, Capabilities for Intelligent Business
Management Suites, 2017, 2017, 05 October 2017, Karen A. Process Management Suites, 2018,
24 October 2017, Rob Dunie et al Hobert et al Rob Dunie et al, 19 February 2018
Named all 5 use-cases in Critical
Capabilities for Content Services
Platform, 2017, Michael Woodbridge
et al, 13 November 2017

ICRA D&B
A2+ [ICRA] Short Term Rating Assigned Indicative Risk Rating of 5A2
for Line of Credit by Dun & Bradstreet and overall status
on Composite Appraisal as ‘Good’

Key Awards
I.T. Innovations Awards – MSME for innovation “Preferred Partner for ECM solutions” Award
in Robotic Process Automation at Express IT at Infosys Finacle Global Partner Meet 2017
Awards 2017
Newgen’s ECM and BPM implementation at
“Analytics Solution of the Year” Award for NIC Bank won the Asian Banker Award 2017
advanced analytics at Express IT Awards 2017 for Best Branch Automation Project

*
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 organisation
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.

04 Newgen Software Technologies Limited

CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Other Achievements

Successful listing
in January 2018
on National Stock
Exchange and BSE Ltd.

25 years of Newgen:
NEWS Celebration

ANNUAL REPORT 2017-18 05

Chairman’s Message
Dear Shareholders,
It gives me immense pleasure to present to you the Annual Report of your
Company for the Financial Year ended 31st March 2018. I hope this will provide you
a deeper understanding of our business, ecosystem, performance and prospects.
This would also highlight, how, through leading-edge solutions, we are reinventing
workplaces. I would also like to thank all the shareholders for the overwhelming
response to the IPO and look forward to their continued support and faith in the
organisation

Due to global thrust on scalable, secure, cloud-ready, consolidated basis, we reported

digitalisation, customers are highly available, and usable on all revenues of ` 5,124 million in
looking for software solutions that devices. We provide both on- Fiscal 2018, that is a 20% growth
empower their transformation to premise and cloud solutions to suit (YoY) compared to the previous
a digital integrated enterprise. customer needs. year revenues of ` 4,271 million.
Our comprehensive product We continue to remain well
portfolio presents us an excellent During Fiscal 2018, we have diversified across geographies,
opportunity for growth. Our continued with our strong growth with India comprising 35% of our
proven platforms innovatively and profitability momentum and revenues, EMEA comprising 33%,
connect systems, processes, delivered broadbased growth USA comprising 23% and APAC
people and things. The across geographies by expanding (excluding India) comprising 9%
applications built on our platform our sales distribution, both direct of revenues. This year, EMEA
are extremely powerful and help and indirect, with an emphasis on and APAC were two strong
organisations achieve their critical expanding our recurring revenues growth centers for us. In USA,
objectives. Our applications are and operating cash flows. On a the business is focused on SaaS/

06 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Cloud and thus the upfront We are building vertical service

revenues are in line with the accelerators to enhance the
business model, but these would overall portfolio. We possess
be better quality revenue streams multi-vertical industry expertise
in future. and target a broad spectrum
of services in our business and On a consolidated
Newgen continues to be a global product offerings. This has helped basis, we reported
business; well diversified across us build solution frameworks revenues of ` 5,124
geographies, customers and which are enriched with domain Million in Fiscal 2018,
verticals. Our product leadership knowledge from the relevant that is a 20% growth
has enabled us to establish a sector and subject matter experts
YoY compared to
marquee and diversified global across several industries. These
customer base with long- frameworks have been built on the previous year
standing relationships. We have our platform and are scalable and revenues of ` 4,271
an active customer base of 520+ adaptable based on a particular Million.
clients running their businesses customer’s unique and constantly
and critical operations on our evolving business needs. Banking
platforms in 60+ countries. We are & Financial Services vertical
continued to be a stronghold played a pivotal role in expanding
providing solutions to some of the
for us. During the year, we have our outreach. We will continue to
world’s leading banks, insurance
built high level domain expertise leverage our association with our
companies, healthcare firms,
and created robust frameworks partners to accelerate business
global manufacturers etc. We have
for Retail and Corporate lending growth.
made substantial customer wins
during the year and added 120 which are successfully operating
across banks and geographies. Our outstanding performance
new customers including some
is due to the efforts of our
Fortune 500 companies. Our
The Company witnessed substantial dedicated, skilled and professional
investments in USA are starting to
improvements in the operational employees. To ensure that we have
bear fruit and we have seen large
performance, which reflect in the the right mix of next-generation
customer wins in this area.
39% increase in EBITDA (adjusted skills to achieve our goals, we
for other income). The Company will continue to attract, develop
Newgen continues to strengthen
reported the EBITDA (adjusted for and retain the best talent in the
its horizontal product platform
other income) of `975 million in industry. Our people are our most
with constant focus on Research &
Fiscal 2018 as against ` 702 million important asset and we remain
Development. We have continued
in Fiscal 2017. PAT improved by 42% committed to provide them with a
to enhance our solutions to take
from `513 million in Fiscal 2017 to workplace that fosters innovation,
advantage of market trends and
touch `729 million in Fiscal 2018. collaboration and satisfaction.
released product upgrades for
our customers. Our new offerings We continue to strike a fine balance
between investing for our future We are heading towards exciting
include Mobility (Newgen
growth and managing our margins. and transformative times in
Enterprise Mobility Framework),
the industry as well as for the
Virtual Repository Services,
We are focusing on scaling our organisation. Our performance
Dynamic Case Management, RPA
Cloud / Saas business by increasing in Fiscal 2017-18 has set the
with BPM, Digital Sensing and
penetration and strengthening the foundation for the future.
Flexible Designing and Authoring.
platforms to meet all compliance/
regulatory requirements. SaaS We continue to work towards
Newgen’s commitment to delivering
revenues witnessed robust growth improvement of our products to
innovative products and solutions
of 3X and comprised 2% of revenue make them future-ready and look
makes us one of the few software
from operations. forward to the continued support
products organisations which have
from all our stakeholders.
attracted multiple recognitions
from leading advisory and research Apart from our direct presence in
With Best Regards,
firms from time to time including several countries around the world,
Forrester and Gartner. our robust partner network has Diwakar Nigam

ANNUAL REPORT 2017-18 07

Focus on Research and Development

250+ 37
R&D Employees Patents Applied(1)
(with 5 Registrations)

5 patents registered in India, 28 outstanding patent applications in India and 4 outstanding patent applications in the USA
(1)

Newgen is proud of its skilled R&D team of 250+ employees with deep product
domain expertise which continuously focuses on driving innovation and adopting
solutions in line with rapidly-evolving technological trends. The Company has 32
patent applications under process and 5 patents granted as of March 2018.

We aim at expansion of product We, at Newgen, are making continuous investments to develop Cloud
portfolio to address the and SaaS delivery models. Our Cloud-based infrastructure is certified
digitisation market opportunity for various security and industry compliances and is witnessing strong
and lay strong emphasis on traction in mature markets, including the US specifically in banking and
elements like Digital Sensing, healthcare verticals and witnessed a 3X revenue growth in Fiscal 2018.
Robotic Process Automation, The customer base increased from 8 in Fiscal 2017 to 2022 in Fiscal 2018.
Enterprise Mobility, Analytics and
Cloud that are ruling the new
world order.

R&D Expenses
(` in Million)
Product Pipeline

369
ECM NXT Virtual Repository Corrus
313 Services
250

Digital Sensing BPM NXT RPA with BPM

FY16 FY17 FY18

08 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Multi-pronged go-to-market strategy

Our go-to-market strategy consists of direct sales supplemented by sales through

our channel partners. Our direct sales are made by our Company in India and our
Subsidiaries located in USA, UK, Singapore and Canada, through our sales and
marketing teams, of 270+ employees.

Key Events
We have now strengthened our
worldwide partner network to over
300 partners across 60+ countries.
The Company is involved in
various initiatives including partner
management and enablement
through workshops, webinars,
certification courses, trainings
etc. It also provides continuous
support to partners through
architectural reviews, providing
solutions, troubleshooting etc.

Further, we have a differentiated

‘land and expand’ model. Our
customers receive the complete
set of modules and functionality
of our platform with their
initial purchase / subscription,
which facilitates the seamless
creation of new applications.
Many of our customers begin by
building a single application and
eventually grow to build dozens of
applications on our platform due
to an effective reduction in the
per-user cost of each application
and to save substantial costs of
switching over to a new platform.

ANNUAL REPORT 2017-18 09

Newgen - a great place to work
Our people are our biggest source of energy and inspiration and the torch-
bearers of our values-led journey. Cognizant of their invaluable role towards
accomplishing our purpose of reinventing workplaces globally, we believe we first
have a moral responsibility to make Newgen a great workplace. Investing in our
people, empowering them with next-generation skills and remaining committed
to their happiness and satisfaction; we are continually implementing strategic HR
programmes that make Newgen a thriving workplace.

Capacity Management In-house certifications, behavioural ESOPs (Employee Stock Options)

Human capital management is and technical training such as granted from time to time for
of critical importance in ensuring Newgen Certified Implementation employees concurrent growth
that an organisation operates Professional (NCIP), Newgen BI with the Company
smoothly, especially in a knowledge Certification, Newgen Emerge and
business like ours. Our key efforts Soul of Leading Teams and several Ethics and Compliance
to strengthen our focus on capacity other workshops under Newgen’s An unwavering commitment to
management include: iLearn and iEvolve initiative integrity and ethical practices is
the only way for conducting our
Attracting the brightest people Engagement and business. To uphold a culture of
in the industry through Talent Empowerment compliance in which employees
Acquisition, Internal Job Postings, Our ability to excel and lead clients understand what the Company
and Employee Referrals on their digital transformation is expects them to practice at work
driven by the collective excellence every day, we have implemented the
Making the on-boarding process
of our people. In the past years, we following initiatives:
smoother for new recruits through
reinforced our focus on leadership
structured programmes such
development and building an Articulating our ethical focus
as Newgen Broad Spectrum
engaged workforce through the by sharing and enforcing the
Orientation, Product Training and
following initiatives: Newgen’s Code of Ethics and
Mentorship Programmes
Business Conduct
We have an employee base Holding town hall meetings with
Focused awareness campaigns,
of 2,400+ across several the senior management, aligning
robust complaints and redressal
developmental centres in leading all Newgenites with a shared vision
mechanisms
metros including Noida, Gurugram,
Conducting an Annual Employee
New Delhi, Mumbai and Chennai Making all internal policies
Engagement Survey aimed at
gender neutral to establish the
assessing the overall health of the
Capability Management philosophy of ‘Zero Tolerance to
Company and devising strategic
In a dynamic and evolving Sexual Harassment’ at every level.
interventions to strengthen the
marketplace, the need of the hour (Prevention of Sexual Harassment)
Employee Engagement Index
is an integrated and proactive
Establishment of a Vigil
approach towards competency Recognising employees for their
Mechanism and Whistle
development to achieve business outstanding contributions through
Blower Policy
objectives and enhance employee a well-thought-out Reward and
and client satisfaction levels. Our key Recognition (R&R) Policy
efforts in this direction include:
Supporting platforms such as
Newgen Women’s Forum and
Goal-based assessment system
Newgen Employee Welfare
to align individual’s goals with
Society (NEWS) for giving
Company’s mission and vision
employees a forum to engage
in collaborative discussions and
activities

10 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Making an Impact - CSR

With Newgen’s Corporate Social presentations. Under the aegis help to build self confidence,
Responsibility initiative, we aim to of NDDP, Newgen has adopted self-esteem and enhance the
actively contribute in the social and Government’s Girls’ Senior personality development of
economic development of the less Secondary School, Harkesh Nagar, the children. As a monitoring
privileged children. We concentrate Okhla. It is currently conducting mechanism, the organisation
our efforts to raise the Human classes for 1,300 + children of submits an impact report of the
Development Index of our nation classes 6th, 7th and 8th. Newgen activities conducted during
by enhancing their quality of lives. has also equipped the school’s the year.
Our objective is to make CSR a key Computer lab with colourful
business process for sustainable furniture, iPads and projector. In addition to these initiatives,
development of the society and the promoters of the Company
to have an insightful business Newgen adopted Soami Nagar have also taken up the Sadbhavna
engagement with society at large. Model School to run its NDDP Project, which looks at the holistic
programme in April 2017, for 150+ development of children, with the
We believe in corporate children of classes 6th, 7th and 8th. members offering tutorials for
responsibility and contributing scholastic curriculums as well as
to the communities in which we S.O.S. Village guidance for vocational education.
operate. While being focused on Newgen has adopted three
sustained financial performance, families at the SOS Children’s
we are also aware of the Village, Surajkund, Greenfields
necessity and importance of in Faridabad and also supports
social stewardship. As part of our another three families at SOS
initiatives to realise our CSR vision, Children’s Village in Bhopal. Each
we seek to, inter alia, promote house accommodates ten children
education, care of abandoned and are looked after by a mother.
children and gender equality. NDDP classes are
Newgen volunteers occasionally interesting way to learn
Major Social Development visit the families and conduct fun
about new topics. I
Projects learning activities such as arts
liked the sessions in
Newgen Digital Discovery and craft, diya painting, quizzes,
which I learnt various
Paathshala (NDDP) quilling workshops and others.
topics using a real iPad.
The digital literacy programme I learned about using
aims at stimulating the minds Akshaya Patra Foundation
Newgen has partnered with
internet for search by
of children through the use of using keywords. Our
iPads and internet. The NDDP Akshaya Patra, in March 2018 to
sponsor mid-day meals for search topics were
programme aims at transforming then explained by the
classroom sessions into fun– 1,000+ children.
teachers to us. Also,
learning activities and making
S.O.S. Youth Hostel Videos related to our
education more meaningful, taking
Personality Development sessions NCERT curriculum were
the school curriculum as
the baseline. are conducted by “I AM” a shown, topics were
professional organisation, dealing discussed and quiz given
The Digital Paathshala is a fun with youth. The organisation from them. I learned a
place to learn textbook concepts conducts personality development lot in the NDDP classes
digitally through iPads. Also, and career counselling sessions. while having fun!
Newgen’s facilitators conduct Once a month, children from SOS -Satnoor Saran, Class VII
sessions using methodologies like Youth hostel and Sadbhavna join (NDDP Programme)
role plays, quizzes, movies and in the session. These sessions

ANNUAL REPORT 2017-18 11

board of directors

Diwakar Nigam T S Varadarajan Priyadarshini Nigam

Chairman and Managing Director Whole-time Director Whole-time Director
Diwakar co-founded Newgen. He is Varadarajan co-founded Newgen. Priyadarshini has been on our
also a founding member of NASSCOM, He has been on our Board since its Board since 1997. Previously, she
India’s apex Information Technology incorporation. Prior to promoting was a journalist with over 10 years
industry association. He was one of the Newgen, he promoted Softek Private of experience. She has freelanced
members of NASSCOM’s Anti Piracy Limited and was associated with it for and published with South-North
Task Group. Prior to joining Newgen, 13 years. He has more than 35 years News Service and Depthnews Press
he founded Softek and was associated of experience in the field of software Foundation Asia.
with it for 12 years. designing and development. He did
She holds a bachelor’s and a master’s
his bachelor’s in science from the
Diwakar has been on our Board since degree in Economics.
Bangalore University and engineering
April 1, 1993 and has more than 35
(electrical technology) from the Indian
years of experience in the information
Institute of Science, Bengaluru. He
technology industry. He is an alumnus
holds a master’s degree in technology
of University of Allahabad, IIT Delhi
(computer science) from IIT, Madras.
and IIT, Madras.

Subramaniam Ramnath Iyer Kaushik Dutta Saurabh Srivastava

Independent Director Independent Director Independent Director
Subramaniam Ramnath Iyer is an Kaushik is an Independent Director of Saurabh is an Independent Director of
Independent Director of our Company. our Company. He previously served our Company. He is an alumnus of the
A qualified chartered accountant, as Partner of Lovelock and Lewes Indian Institute of Technology, Kanpur
company secretary and cost and Price Waterhouse, Bangalore. and the Harvard University, USA.
accountant and holds a bachelor’s He has served as an expert with the He has also been awarded Padma
degree in Commerce from Shri Ram Indian Institute of Corporate Affairs Shri by the Government of India.
College of Commerce, University and Serious Fraud Investigation Office Mr. Saurabh Srivastava has several
of Delhi. He is the sole proprietor of the MCA. He is the founder and years of experience in the field of
of S.R. Iyer & Associates, Chartered co-director of Thought Arbitrage Information Technology. He is one of
Accountants. He has more than 36 Research Institute. India’s leading IT entrepreneurs, angel
years of experience in the field of investors and venture capitalists. He
He graduated in commerce from St.
finance, accounting and corporate law. is a founder director of Indian Angel
Xavier’s College, University of Calcutta.
Network and a former chairman
He is a qualified chartered accountant
of NASSCOM.
and a fellow member of ICAI.

12 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

management team

S J Raj Virender Jeet

Senior Vice President (HR Operations) Senior Vice President,
Raj has been with us for over 25 years (Sales & Marketing / Products)
and is responsible for our human Jeet has been with us for over 26 years
resources strategy, global operations and manages the overall strategic and
and programmes aligned with human operational responsibility for our entire
resource strategy. Before joining portfolio of offerings. He oversees the
Newgen, he worked with Eicher key functions of product development,
Goodearth, SRF Nippondenso, PCS global sales and marketing and
Data Products and Semiconductor business enabling functions. He has led
Complex Limited. us in filing of more than 37 patents in
He holds a master’s degree in Arts with India, of which five have been granted.
specialisation in Social Work from the He holds a bachelor’s degree in
Jamia Millia Islamia University, Engineering from the Savitribai Phule
New Delhi. Pune University.

Arun Kumar Gupta Tarun Nandwani

Chief Financial Officer Vice President,
Arun has been with us since 2010. He (Customer Relations / Delivery)
oversees financial planning, treasury, Tarun has been with us for over
global taxation, investor relations, 25 years. He is responsible for
business finance, and compliances implementation of our products and
as well as financial reporting. He has solutions across industry segments,
25 years of experience in finance. improving implementation processes,
Previously, he worked with companies systems, policies, talent management
like Maersk, Thermax, Satyam. He holds and leadership development with
a bachelor’s degree in Science from the a focus on customer relationship
University of Calcutta. He is a qualified management, delivery management
Chartered Accountant, Cost and Works and development centre management.
Accountant and a Company Secretary.
He holds a bachelor’s degree in
Engineering from the University
of Delhi.

ANNUAL REPORT 2017-18 13

Financial Performance (Consolidated)
Revenue (` in Million) Fiscal 2018 Revenue Streams (%)
Revenue Growth (CAGR) - 20% Digitisation
4%

Implementation Sale of
5,124 26% Products
4,271
27%
3,468
3,085
2,484
ATS/AMC
17%

Support
SaaS
24%
FY14 FY15 FY16 FY17 FY18 2%

Fiscal 2018 Revenue Concentration by

Geography (%)
Ebitda (Adjusted for other income) APAC (Ex-India)
(` in Million) 9%

USA
23%
975

India
702
35%
578
481
393

EMEA
33%
FY14 FY15 FY16 FY17 FY18 520+ active customers(1) in over 60 countries

Fiscal 2018 Revenue Split by Vertical (%)

PAT (` in Millions) Others
14%
Healthcare
6%
729
513
464 Insurance
411 4% Banking
54%

BPO/IT
278 8%

Govt/PSUs
FY14 FY15 FY16 FY17 FY18 14%
Multi-vertical Industry expertise

Note: FY14, FY15 and FY16 are restated Consolidated Financials as per IGAAP. FY 17 and FY 18 financials are Consolidated
Financials as per Ind AS

14 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

corporate information
Directors Mr. Arun Kumar Gupta
Chief Financial Officer
Mr. Diwakar Nigam
Chairman & Managing Director
Mr. Aman Mourya
Company Secretary &
Mr. T.S. Varadarajan
Compliance Officer
Whole-time Director
Bankers
Ms. Priyadarshini Nigam Standard Chartered Bank
Whole-time Director
Citi Bank

Mr. Kaushik Dutta Statutory Auditors

Independent Director B S R & Associates, LLP
Chartered Accountants
Gurgaon, (Firm Registration No.:
Mr. Saurabh Srivastava
116231W-100024)
Independent Director

Secretarial Auditors
Mr. Subramaniam Aijaz & Associates
Ramnath Iyer Practicing Company Secretaries, Delhi
Independent Director (C. P. No. 7040)

Key Managerial Personnel Internal Auditors

Grant Thornton India LLP
Mr. Virender Jeet Noida
Senior Vice President
(Sales & Marketing / Products) Registered Office &
Corporate Office
Mr. S.J. Raj A-6, Satsang Vihar Marg,
Senior Vice President (HR Operations) Qutab Institutional Area,
New Delhi–110 067

Mr. Tarun Nandwani

Vice President
(Customer Relations / Delivery)

ANNUAL REPORT 2017-18 15

Directors’ Report
Dear Shareholders,
Your Directors are pleased to present the 26th Report of the Board of Directors (the “Board”) of Newgen Software
Technologies Limited (the “Company” or “Newgen”) along with the Audited Standalone and Consolidated
Financial Statement for the Financial Year ended March 31, 2018.

Business Overview:
 ewgen Software Technologies Limited, is a global provider of Business Process Management (BPM), Enterprise
N
Content Management (ECM), Customer Communication Management (CCM) solutions with a footprint in over
60 countries with large, mission-critical solutions deployed at Banks, Governments, BPO’s & IT Companies,
Insurance firms and Healthcare Organisations. For over two decades organisations have relied on Newgen’s
innovative technologies and solutions to drive smarter business decisions. Newgen through its proven platforms
provides a perfect amalgamation of information / content, technology and processes; the building blocks of
Digital Transformation. This has enabled clients to reinvent their workplaces and achieve greater agility, accuracy
and efficiency in transforming processes, managing information, enhancing overall customer satisfaction and
driving enterprise profitability.

Financial Results:
TABLE 1

(` in Lakhs)
Standalone Consolidated
2017-18 2016-17 2017-18 2016-17
Net Sales 45952.36 38311.41 51242.78 42709.80
Other Income 758.19 826.61 760.98 826.78
Total Income 46710.55 39138.02 52003.76 43536.58
Total Expenditure 36529.01 31805.19 41489.15 35687.13
EBIDTA 10181.54 7332.83 10514.61 7849.45
Finance Cost 520.68 525.60 520.68 525.60
Depreciation and amortisation expense 567.68 481.87 580.67 491.82
Profit before Tax 9093.18 6325.36 9413.25 6832.03
Provision for Tax (net of deferred tax credit) 1965.58 1406.73 2060.06 1572.39
Provision for Tax relating to earlier years 64.50 126.24 64.50 126.63
written off/Provided
Profit after Tax 7063.09 4792.39 7288.68 5133.01
Add: Balance brought forward from previous year 15598.43 11581.82 15928.02 11570.79
Less: Dividend and Dividend Distribution tax for 1160.99 775.78 1160.99 775.78
Financial Year 2016-17 and paid during the year
Profit available for Appropriation 21500.53 15598.43 22055.71 15928.02
Balance carried to Balance Sheet 21500.53 15598.43 22055.71 15928.02

Your Company’s financial statements for the year ended March 31, 2018 are the first financial statements prepared in accor-
dance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015. Accordingly, numbers for all the
comparative periods have been restated to comply with Ind AS. Necessary disclosures as regards to the key impact areas &
Other adjustments upon transition to Ind-AS reporting have been made under the Notes to Financial Statements.

On a Consolidated basis: •  BITDA stood at ` 10514.61 Lakhs registering an

E
•  he Company’s revenue from operations stood at
T increase of 33.95% in the FY 2017-18.
` 51242.78 Lakhs reflecting an increase of 20% in •  rofit after Tax (PAT) for the year was ` 7288.68
P
FY 2017-18. Lakhs showing an increase of around 42%.

•  ver last 5 Financial Years, the company has

O
On Standalone basis:
•  evenue from operations for FY 2017-18 is at
R
been able to maintain 20% compounded
` 45952.36 Lakhs was higher by 19.94% over
annualised growth rate.
previous corresponding FY 2016-17.

16 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

• EBITDA are ` 10181.54 Lakhs registering an Company increased from ` 6535.82 Lakhs (comprised
increase of 38.85%. of 6,53,58,150 equity shares) to ` 6923.57 Lakhs
(comprised of 6,92,35,701 equity shares). The Equity
• Profit after Tax (PAT) for the year is ` 7063.09
Shares in the IPO were offered at a price of ` 245 per
Lakhs registering an increase of 47.38%.
equity share (including share premium of ` 235 per
equity share). The Company listed its Equity Shares
Credit Rating and Liquidity:
on BSE Limited and National Stock Exchange of India
ICRA has reaffirmed the short-term rating of [ICRA]
Limited on January 29, 2018.
A2+ (pronounced ICRA A two plus) assigned earlier
to the ` 7050 Lakhs line of credit of the Company,
Utilisation of IPO Proceeds:
and also assigned a short-term rating of [ICRA] A2+
There is no deviation or variation proposed or
(pronounced ICRA A two plus) to the additional limit
contemplates in the use of net proceeds of IPO
of ` 1000 Lakhs.
fund from the objects stated in the prospectus. As
on March 31, 2018, the net proceeds of the IPO Fund
The Company follows a conservative investment
have been deposited in the Scheduled Commercial
policy and invests in high quality debt instruments
bank. As per stated object of the IPO, your Company
and bonds. As on March 31, 2018, on Standalone basis,
has identified an Institutional building near Noida-
cash and cash equivalents were ` 13520.79 Lakhs and
Greater Noida Expressway, Uttar Pradesh for an
in addition to that ` 5022.07 Lakhs was invested in
Office Premises. After completion of satisfactory due
mutual funds & bonds and ` 204.74 Lakhs in non-
diligence, requisite agreements will be executed in
current fixed deposits. As on March 31, 2018, on
this respect. After taking possession of the building,
Consolidated basis, cash and cash equivalents were
furnishing of the office premises will start.
` 14548.34 Lakhs and in addition to that ` 5022.07
Lakhs was invested in mutual funds & bonds and
Details Pertaining to Shares in Suspense Account:
` 210.49 Lakhs in non-current fixed deposits.
Disclosures with respect to demat suspense account/
unclaimed suspense account as provided in Para
Dividend:
F of Schedule V of the SEBI (Listing Obligations &
Considering the Company’s financial performance,
Disclosure Requirements) Regulations, 2015 are
your Directors are pleased to recommend a dividend
provided in the Corporate Governance Report forming
@ 20 % i.e. ` 2 per share for the Financial Year ended
a part of this Report.
March 31, 2018 (dividend declared in previous year
was @ 15 % i.e. ` 1.5 per share). The total outgo for the
Details of Significant and Material Orders
current year amounts to ` 1668.65 Lakhs, including
Passed by the Regulators or Courts or Tribunals
dividend distribution tax of ` 283.94 Lakhs as against
Impacting the Going Concern Status and
` 1160.99 Lakhs including dividend distribution tax of
Company’s Operations in Future:
` 196.37 Lakhs in the previous year.
Nil

Change in the Nature of Business, if any: Quality Systems & Information Security Initiative:
There is no change of nature of business of the Newgen has sustained its commitment to the
Company during the Financial Year 2017-18. highest levels of quality, robust information security
management practices that have collectively helped
Share Capital: in achieving significant milestone during the year.
Authorised Share Capital: Newgen’s Quality and Information Security System
During the Financial Year 2017-18, there is a change journey has been a steady one and with full conviction
in share capital structure of the Company. During the starting from 1997. The same is evident from the
year under review, the Authorised Share Capital of implementation of industry standards namely ISO
the Company was increased from ` 7,640 Lakhs to 9001:2008, ISO 27001:2013 and Process Improvement
` 11,000 Lakhs. Models namely CMMi Dev v1.3 and CMMi Svc v1.3.
Emphasis has been on System driven transparent
Initial Public Offering: process, which delivers exceptional Quality first time
During the year under review, the Company offered right with the required level of Security.
its equity shares of ` 10 each (“Equity Shares”) for
subscription by the public, by way of Initial Public The Company has focused on continuous
Offer (“IPO”). The IPO comprised of fresh issue of improvements in Customer engagements as well
3,877,551 equity shares by your Company for cash at as internal operations leveraging best-in-class
a price of ` 245/- per share and an offer for sale by methodologies and information security practices.
outgoing investors of 1,34,53,932 equity shares for Cross-functional Teams monitor and optimize the
cash at a price of ` 245/- per share. Consequently, processes & policies to meet the ever growing
the Paid up, Issued and Subscribed Capital of the demands of Newgen’s engagements.

ANNUAL REPORT 2017-18 17

The Company’s commitment towards customer Deposits:
satisfaction and resilient systems/services has resulted During the year under review, the Company has not
into the adaptation of other industry standards/acts accepted any fixed deposit within the meaning of
namely PCI-DSS, HIPAA, ISAE3402/SoC-1 Type-2 and Section 73 of the Companies Act, 2013 and the rules
Soc-2+HITRUST Type-2 attestation. These standards made thereunder.
provide assurance to the customers on the design
and operating effectiveness of the security controls. Statutory Auditors:
The Company also drives the process and product The tenure of the Statutory Auditors of the
improvements based on Voice of Customer i.e. Customer Company M/s. B S R & Associates, LLP, Chartered
Satisfaction Surveys (CSS). These surveys are conducted Accountants, having Firm Registration number
at the specific project mile stone as well as at the 116231W/W-100024 is upto five years with effect
organisational level on an annual basis by a third party to from conclusion of 24th Annual General Meeting
get an independent feedback from its customers. held on August 22, 2016 till the conclusion of 29th
Annual General Meeting.
Subsidiary Companies:
The Company has five wholly owned subsidiaries Auditors’ Report:
(WOS). There are no associate companies or joint The Statutory Auditors’ Report for the Financial Year
venture companies within the meaning of Section 2017-18 does not contain any qualification, reservation
2(6) of the Companies Act, 2013 (“Act”). There has or adverse remarks.
been no material change in the nature of the business
of the subsidiaries. Secretarial Audit:
The Secretarial Audit Report from M/s Aijaz &
Names of wholly owned subsidiaries: Associates, Company Secretaries in Practice, New Delhi,
1. Newgen Software Inc. USA, for the Financial Year ended March 31, 2018 is enclosed
herewith as “Annexure-2”. The Secretarial Audit Report
2. Newgen Software Technologies Pte. Ltd., (Singapore)
for the Financial Year 2017-18 does not contain any
3. Newgen Software Technologies Canada Ltd., qualification, reservation or adverse remarks.

4. Newgen Software Technologies (UK) Ltd. Employee Stock Options Schemes:

5. Newgen Computers Technologies Limited During the year under review, the Newgen ESOP
Scheme 1999 and Newgen ESOP Scheme 2000 have
Pursuant to first proviso to sub-section (3) of been closed, no Options granted thereunder are
Section 129 of the Act read with Rule 5 of Companies outstanding. At present the Company has in place
(Accounts) Rules, 2014 the statement containing Newgen Employees Stock Option Scheme-2014
salient features of the financial statement of (Newgen ESOP 2014). The Scheme is operated
subsidiaries is enclosed in form AOC-1 as Annexure -1. through demat mode only. Newgen ESOP 2014 is
administered by the Nomination & Remuneration
Financial Statements of the aforesaid subsidiary Committee of the Board, through Newgen ESOP
companies are kept open for inspection by the Trust. The information on Options granted, exercised
Members at the Registered Office of the Company and lapsed during the Financial Year 2017-18 and
during business hours on all days except Saturday other particulars as required under Companies
& Sunday up to the date of the AGM as required Act 2013 read with its rules and SEBI (Share Based
under Section 136 of the Act. Any Member desirous Employee Benefits) Regulation, 2014 with regard to
of obtaining a copy of the said Financial Statements Employees’ Stock Options is enclosed herewith as
may write to the Company at its Registered Office “Annexure-3”.
or to the Compliance Officer of the Company.
The Financial Statements including the Extract of the Annual Return:
Consolidated Financial Statements and all other As required under Section 92(3) of the Act, the extract
documents required to be attached to this Report of the Annual Return in Form No. MGT–9 is enclosed
have been uploaded on the website of the Company herewith as Annexure-4
at https://newgensoft.com.
Particulars of Employees and Related Disclosures:
To comply with the provisions of Regulation 16(c) of The information required pursuant to Section 197(12)
SEBI (LODR) Regulations, the Board of Directors of of the Companies Act 2013 read with Rule 5 of
the Company have adopted a Policy for determining the Companies (Appointment and Remuneration
Material Subsidiary. The policy on Material Subsidiary of Managerial Personnel) Rules, 2014 and SEBI
has been uploaded on the website of the Company Regulations in respect of employees of the Company,
https://newgensoft.com. is enclosed herewith as Annexure–5.

18 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Directors and Key Managerial Personnel: Independent Directors had a separate meeting
A) Changes in Directors and Key Managerial on April 25, 2017 during Financial Year 2017-18.
Personnel:
During the year under review, the Board of C) Board Annual Evaluation:
Directors appointed Mr. Saurabh Srivastava and Pursuant to the provisions of the Companies
Mr. Subramaniam Ramnath Iyer as Non-Executive Act, 2013 and Regulation of SEBI (LODR)
Independent Directors for a period of five years Regulations, the Board has carried out the annual
with effect from August 30, 2017 and November performance evaluation of its own performance,
22, 2017 respectively, subject to the approval of Board Committee(s) and that of the Individual
shareholders at the ensuing 26th Annual General Director(s). The performance of the Board was
Meeting of the Company. evaluated by the Board itself after seeking inputs
from all the individual directors on the basis
Mr. Sudhir Kumar Sethi and Mr. Sunil Kumar of criteria such as structure & composition of
Kolangara who were appointed as Nominee Board Culture, effectiveness of Board processes,
Directors on behalf of IDGVI and Ascent Capital functioning, execution and performance of
respectively, ceased to be Directors of the specific duties, obligations and governance etc.
Company on September 18, 2017, consequent The performance of all the Committees was
to the withdrawal of their nomination. Mr. Mohit evaluated by the Board after seeking inputs from
Goyal has resigned from the Board of the respective Committee members. The manner in
Company on November 22, 2017. which the annual performance evaluation has
been stated in the Corporate Governance Report
which forms a part of this Report.
Pursuant to the provisions of Section 152 of
the Companies Act, 2013, Mr. T.S. Varadarajan,
In a separate meeting of Independent Directors
Whole-time Director of the Company is liable to
held on 16th May 2018, performance of the non-
retire by rotation at the ensuing Annual General
independent directors, performance of the Board
Meeting and being eligible, seeks re-appointment
as a whole and performance of the Chairman
in the ensuing Annual General Meeting.
was evaluated, taking into account the views of
executive directors and non-executive directors.
KMPs and Senior Management Personnel of the
Company are:
D) Remuneration Policy:
1. Mr. Diwakar Nigam – Chairman & Managing The Board, on the recommendation of the
Director Nomination & Remuneration Committee framed
a policy for selection and appointment of
2. Mr. T.S. Varadarajan – Whole-time Director
Directors, Senior Management Personnel and their
3. Ms. Priyadarshini Nigam - Whole-time remuneration. The Policy is available on the website
Director of the Company at https://newgensoft.com. and is
enclosed with this report as annexure–6.
4. Mr. Surender Jeet Raj - Sr. Vice President
(HR Operations)
E) Meetings:
5. Mr. Virender Jeet - Sr. Vice President (Sales The number of meetings of the Board and
and Marketing/Product) various Committees of your Company are set out
6. Mr. Tarun Nandwani - Vice President in the Corporate Governance Report which forms
(Customer Relations/Delivery) part of this Report. The intervening gap between
Board Meetings was within the period prescribed
7. Mr. Arun Kumar Gupta – Chief Financial under the provisions of Section 173 of the Act
Officer and the SEBI (LODR) Regulations.
8. Mr. Aman Mourya - Company Secretary &
Compliance Officer Whistle Blower Policy / Vigil Mechanism for
Directors and Employees:
The Company has adopted a Whistle Blower Policy
B) Declaration by Independent Director(s)
and Vigil Mechanism that provides a mechanism to
and re- appointment, if any:
report violations, any unethical behaviour, suspected
The Independent Directors have submitted
or actual fraud, violation of the Code of Conduct
required declarations that they fulfill the
etc. During the year under review no case has been
requirements as stipulated in Section 149(6)
reported under Whistle Blower Policy of the Company.
of the Companies Act, 2013 and SEBI (LODR)
Regulations. Pursuant to Clause VII (1) of Whistle Blower Policy / Vigil Mechanism is available on
Schedule IV of the Companies Act, 2013. the the website of the Company at https://newgensoft.com.

ANNUAL REPORT 2017-18 19

CSR Initiative: Particulars of Loans, Guarantees or Investments
The brief outline of the Corporate Social Responsibility Under Section 186 of the Companies Act, 2013:
(CSR) policy of the Company and the initiatives The Company has not given any loans or guarantees
undertaken by the Company on CSR activities during covered under the provisions of Section 186 of the
the year are set out in Annexure-7 of this report in Companies Act, 2013. The details of the investments
the format prescribed in the Companies (Corporate made by Company have been set out in the financial
Social Responsibility Policy) Rules, 2014. As part of statements.
its initiatives under “Corporate Social Responsibility
(CSR), the Company has undertaken projects in Particulars of Contracts or Arrangements with
the areas of Digital Literacy Education, Livelihood, Related Parties:
besides personality development of the students. All Related Party Transactions with the subsidiary
other details regarding Company’s CSR activities Companies are on an arm’s length basis and were
and CSR Policy are available on the website of the in the ordinary course of business. Information
Company at https://newgensoft.com. on transactions with related parties pursuant to
section 134(3)(h) of Companies Act, 2013 read with
Risk Management: rule 8(2) of Companies (Accounts) Rules, 2014 are
The Company has framed a Risk Management Policy given in Annexure–10 in form AOC-2.
and plan for enabling the Company to identify
elements of major risks as contemplated by the Conservation of Energy, Technology Absorption
provisions of Section 134 of the Companies Act 2013. and Foreign Exchange Earnings and Outgo:
The Company recognizes that these risks need to The particulars as prescribed under section 134 of
be managed and mitigated to protect the interest of the Companies Act, 2013, read with the Companies
the stakeholders and to achieve business objectives. (Accounts) Rules, 2014 are as follows:
This risk management policy is aimed at effectively
mitigating the Company’s various business and a) Details of Conservation of energy
operational risks, through strategic action plan. The operations of your Company do not
consume high levels of energy. Nevertheless,
Internal Control Systems and their Adequacy: adequate measures have been taken to
Your Company has in place adequate Internal Financial conserve energy by using energy-efficient
Controls. The Report on Internal Financial Controls computers and related equipment with the
issued by the Statutory Auditor is attached with the latest technologies. Your Company is on a
Auditor Report on the Financial Statements of the constant look out for newer and efficient energy
Company and it does not report any weakness. Your conservation technologies and introduces them
Board has also reviewed the internal processes, systems appropriately. As the cost of energy consumed
and the internal financial and operational controls were by your Company forms a very small portion of
also tested by Grant Thornton, Internal Auditor on behalf the total costs, the impact of changes in energy
of the Board. The Directors’ Responsibility Statement cost on total costs is not significant.
contains a confirmation as regards adequacy of the
internal financial and controls. For more details, please b) Research and Development:
refer MD&A section. The Company has made and will continue
to make, significant investments in software
Corporate Governance: product research and development and related
Your Company is committed to maintain the highest product opportunities. For fiscals 2017, 2016
standards of the Corporate Governance and adhere and 2015, the Company spent 8.55%, 7.92% and
to the Corporate Governance requirements as set 7.91% (as a proportion of our total expenditure)
out by SEBI. The report on Corporate Governance respectively on research and development.
as stipulated under the SEBI (LODR) Regulations For fiscal 2018 under review, the Company
forms an integral part of this Report and the same had spent 8.67% (as a proportion of the total
is enclosed herewith as Annexure – 8. The requisite expenditure) on research and development.
certificate from Independent Company Secretaries We believe that the industry, in which we
confirming compliances with the conditions of compete, witnesses rapid technological
Corporate Governance is also attached with the advances in software development due to
Corporate Governance Report. constantly evolving customer preferences
and requirements. The Company believes that
Management Discussion and Analysis:
emphasis on R&D has enabled us to remain up-
The Management Discussion and Analysis (MD&A),
to-date with the technological developments,
highlighting the important aspects of the business
as well as to cater to the evolving needs of
of the Company is enclosed as Annexure 9 to
our customers.
this Report.

20 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

c) Technology Absorption, Adaptation and VI. The Directors had devised proper system to
Innovation: ensure compliance with the provisions of all
Your Company realizes the importance of applicable laws and that such system were
innovation and constant improvement in key areas adequate and operating effectively.
of business. We are focused on driving innovation
and adopting solutions in line with rapidly evolving Number of Complaints Relating to Child Labour,
technological trends. Our inherent culture of Forced Labour, Involuntary Labour, Sexual
innovation has enabled us to develop a track Harassment in the Last Financial Year and
record of product innovation, expand the range Pending, as on the end of the Financial Year:
of our offerings and improve the delivery of our The Company has in place a policy on Prevention of
products and services. We have a dedicated team Sexual Harassment, Prohibition and Redressal of Sexual
of skilled individuals with technical background Harassment at Workplace in line with the requirements
and domain expertise in each of our industry of the Sexual Harassment of Women at the Workplace
verticals with a focus on evolving technologies. (Prevention, Prohibition and Redressal) Act, 2013. Taking
These teams follow a structured innovation and a step further, Newgen has formed an Internal Complaints
solutions development process and work with Committee where employees can register their
delivery functions to identify the key concerns of complaints against sexual harassment. This is supported
our customers and generate solutions, ideas and by the Sexual Harassment Policy which ensures a free
concepts to address such concerns. and fair enquiry process with clear timelines.

d) Foreign exchange Earnings and Outgo: During the year under review, two complaints on
sexual Harassment were reported out of which one
TABLE 2 is pending as at the end of the Financial Year 2017-18.
(` In Lakhs)
During the year under review, no case/ complaint
Particulars March 31, March 31, was reported under Child labour/ forced labour/
2018 2017 involuntary labour and Discriminatory employment
Foreign Exchange 27885.83 21363.76 related matters.
Earnings
Foreign Exchange 5116.78 3957.23 Cautionary Statements:
Outgo Statements in the Board’s Report and the Management
Discussion & Analysis describing the Company’s
Directors’ Responsibility Statement: objectives, expectations or forecasts may be forward
In terms of Section 134 (5) of the Companies Act, looking within the meaning of applicable laws and
2013 (the “Act”), the Directors would like to state that: regulations. Actual results may differ materially from
I. In the preparation of the annual accounts, the those expressed in the statements.
applicable accounting standards have been
followed. Appreciation:
Your Company’s organisational culture upholds
II. The Directors have selected such accounting professionalism, integrity and continuous
policies and applied them consistently and made improvement across all functions, as well as efficient
judgments and estimates that were reasonable utilisation of the Company’s resources for sustainable
and prudent so as to give a true and fair view of and profitable growth.
the state of affairs of the Company at the end of
the Financial Year and of the profit or loss of the Your Board acknowledges with gratitude and places
Company for the year under review. on record its appreciation for the dedication and
commitment of your Company’s employees at all levels
III. The Directors have taken proper and sufficient care
which has continued to be our major strength. Your
for the maintenance of adequate accounting records
Board also thanks the shareholders, investors, customers,
in accordance with the provisions of this Act for
business partners, bankers and other stakeholders for
safeguarding the assets of the Company and for
their confidence in the Company and its management
preventing and detecting fraud and other irregularities.
and looks forward for their continuous support.
IV. The Directors have prepared the annual accounts
on a going concern basis. For and on behalf of the Board of Directors
V. The Directors had laid down internal financial
controls to be followed by the Company and that Date: May 17, 2018 Diwakar Nigam
such internal financial controls are adequate and Place: New Delhi Chairman & Managing Director
were operating effectively. DIN: 00263222

ANNUAL REPORT 2017-18 21

Annexure 1
Form AOC-I
(Pursuant to first proviso to sub-Section (3) of Section 129 read with Rule 5
of Companies (Accounts) Rules, 2014)
Statement containing salient features of the financial statement of
subsidiaries/ associate companies/ joint ventures
Part “A”: Subsidiaries
((Information in respect of each subsidiary to be presented with amounts in ` (in Lakhs)

TABLE 3

1 S. No. 1 2 3 4 5
Name of the Newgen Newgen Newgen Newgen Newgen
subsidiary Computers Software Software Inc. Software Software
Technologies Technologies USA, Technologies Technologies
Ltd (UK) Ltd. Canada Ltd Pte. Ltd
(Singapore)
Reporting period – – – – –
for the subsidiary
concerned, if different
from the holding
company’s reporting
period
Reporting currency INR GBP @ USD @ CAD @ SGD @
and Exchange rate 92.28 65.04 50.51 49.68
as on the last date of
the relevant Financial
Year in the case of
foreign subsidiaries.
Share capital 21.00 184.56 780.48 50.51 124.20
Reserves & surplus 36.91 8.13 76.20 52.93 81.19
Total assets 60.24 314.56 4418.03 566.89 584.98
Total Liabilities 2.33 121.87 3561.35 463.45 379.59
Investments 0.00 0.00 0.00 0.00 0.00
Turnover 0.00 317.24 10873.47 957.93 1224.65
Profit before taxation 5.73 -2.69 248.76 26.76 28.16
Provision for taxation 1.50 -0.44 67.38 7.18 1.89
Profit after taxation 4.22 -2.25 181.39 19.58 26.26
Proposed Dividend - - - - -
% of shareholding 100% 100% 100% 100% 100%

2 Names of subsidiaries which are yet to commence operations

Not Applicable

3 Names of subsidiaries which have been liquidated or sold during the year.
Not Applicable

22 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Part “B”: Associates and Joint Ventures

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

Name of Associates/Joint Ventures There are no associates or joint venture of the Company During
the year

1. Latest audited Balance Sheet Date - NA

2. Shares of Associate/Joint Ventures held by the company on the year end - NA

Amount of Investment in Associates/Joint Venture - NA

Extend of Holding % - NA

3. Description of how there is significant influence - NA

4. Reason why the associate/joint venture is not consolidated - NA

5. Networth attributable to Shareholding as per latest audited Balance Sheet - NA

6. Profit / Loss for the year - NA

i. Considered in Consolidation - NA

ii. Not Considered in Consolidation - NA

1. Names of associates or joint ventures which are yet to commence operations - NA

2. Names of associates or joint ventures which have been liquidated or sold during the year. - NA

For and on behalf of the Board of Directors

Diwakar Nigam T. S. Varadarajan Arun Kumar Gupta Aman Mourya

Date: May 17, 2018 Managing Director Whole Time Director Chief Financial Officer Company Secretary
Place: New Delhi DIN: 00263222 DIN: 00263115 PAN: ADTPG6017D ACS: 27299

ANNUAL REPORT 2017-18 23

Annexure 2
SECRETARIAL AUDIT REPORT
(For the Financial Year ended 31.03.2018)
[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 (iv) Foreign Exchange Management Act, 1999 and

The Members, the rules and regulations made thereunder to the
Newgen Software Technologies Limited extent of Foreign Direct Investment, Overseas
A-6, Satsang Vihar Marg, Qutab Institutional Area Direct Investment and External Commercial
New Delhi- 110067 Borrowings;
(v) The following Regulations and Guidelines
We have conducted the Secretarial Audit of the
prescribed under the Securities and Exchange
compliance of applicable statutory provisions and the
Board of India Act, 1992 (‘SEBI Act’):
adherence to good corporate practices by Newgen
Software Technologies Limited (hereinafter called a. The Securities and Exchange Board of
the ‘Company’). Secretarial Audit was conducted India (Substantial Acquisition of Shares and
in a manner that provided us a reasonable basis Takeovers) Regulations, 2011;
for evaluating the corporate conducts/statutory
compliances and expressing our opinion, subject to b. The Securities and Exchange Board of India
Annexure ‘A’ to this report, thereon. (Prohibition of Insider Trading) Regulations,
2015;
Based on our verification of the Company’s books,
papers, minute books, forms and returns filed and c. The Securities and Exchange Board of
other records maintained by the Company and also India (Issue of Capital and Disclosure
the information provided by the Company, its officers, Requirements) Regulations, 2009;
agents and authorised representatives during the
conduct of secretarial audit, we hereby report that in d. The Securities and Exchange Board of
our opinion the Company has, during the audit period India (Share Based Employee Benefits)
covering the Financial Year ended on March 31, 2018 Regulations, 2014;
(‘audit period’) complied with the statutory provisions
listed hereunder and also that the Company has e. The Securities and Exchange Board of
proper Board processes and compliance-mechanism India (Issue and Listing of Debt Securities)
in place to the extent, in the manner and subject to Regulations, 2008 [Not Applicable];
the reporting made hereinafter:
f. The Securities and Exchange Board of India
We have examined the books, papers, minute books, (Registrars to an Issue and Share Transfer
forms and returns filed and other records maintained Agents) Regulations, 1993 regarding the
by the Company for the Financial Year ended on Companies Act and dealing with client [Not
March 31, 2018. According to the provisions of: Applicable];

(i) The Companies Act, 2013 (the ‘Act’) and the rules g. The Securities and Exchange Board of India
made thereunder; (Delisting of Equity Shares) Regulations,
2009 [Not applicable];
(ii) The Securities Contracts (Regulation) Act, 1956
(‘SCRA’) and the rules made thereunder;
h. The Securities and Exchange Board of India
(iii) The Depositories Act, 1996 and the Regulations (Buyback of Securities) Regulations, 1998
and Bye laws framed thereunder; [Not applicable].

24 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

(vi) The company carries business of software § Advance notice is given to all directors to schedule
development and related activities for which the Board Meetings, agenda and detailed notes
it has registration with the SEZ Noida and the on agenda were sent at least seven days in
Management has identified and confirmed the advance, and a system exists for seeking and
following laws as specifically applicable to the obtaining further information and clarifications
Company: on the agenda items before the meeting and for
a) The Information Technology Act, 2000; meaningful participation at the meeting.

b) The Special Economic Zone Act, 2005; § All decisions at Board Meetings and Committee
c) The Indian Copyright Act, 1957; Meetings are carried out unanimously as recorded
in the minutes of the meetings of the Board or
d) The Patents Act, 1970; and Committees of the Board, as the case may be.
e) The Trade Marks Act, 1999.
We further report that there are adequate systems
We have also examined compliance with the and processes in the Company commensurate with
applicable clauses of the following: the size and operations of the Company to monitor
and ensure compliance with applicable laws, rules,
(i) Secretarial Standards with regard to Meeting of regulations and guidelines.
Board of Directors (SS-1) and General Meetings
(SS-2) issued by The Institute of Company We further report that during the audit period the
Secretaries of India; company has:

(ii) The Listing Agreements entered into by the i) Pursuant to the resolution passed by the Board
Company with Bombay Stock Exchange Limited at its meeting held on January 24, 2018, allotment
(BSE) and National Stock Exchange of India of 38,77,551 Equity Shares of the face value of
Limited (NSE) and SEBI (Listing Obligations and 10/- (Rupees Ten Only) @ ` 245/- per Equity
Disclosure Requirements) Regulations, 2015. share (including a premium of ` 235/- per Equity
Share) was made through IPO of the Company,
During the period under review, the company has which were listed on National Stock Exchange of
complied with the provisions of the Acts, Rules, India (“NSE”) & Bombay Stock Exchange of India
Regulations, Guidelines, Standards, etc., mentioned (“BSE”) w.e.f. January 29, 2018.
above.
ii) Increased Authorised Share Capital from
We further report that:- ` 76,40,00,000 to ` 1,10,00,00,000.
§ The Board of directors of the Company is
duly constituted with proper balance of iii) Increased paid up share capital by public issue to
Executive Directors, Non-executive Directors the tune of ` 3,87,75,510/-.
and Independent Directors. The changes in
the composition of the Board of Directors that iv) Declared and distributed dividend at the 25th
took place during the audit period were carried Annual General Meeting held on July 28, 2017
out in compliance with the provisions of the @ ` 1.5 per share.
Act, however, the change in the appointment
of two Independent Directors is subject to the v) Altered its MoA and AoA according to the above
ratification/approval by the members of the events.
Company at ensuing Annual General Meeting.

Place: New Delhi Name of Firm : Aijaz & Associates

Date : May 04, 2018 FCS No. : 6563
C.P. No. : 7040

ANNUAL REPORT 2017-18 25

Annexure ‘A’

To,
The Members,
Newgen Software Technologies Limited
New Delhi

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

1. 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.

2. 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.

3. We have not verified the correctness and appropriateness of financial records and books of accounts of the
company.

4. Where ever required, we have obtained the Management Representation about the compliance of laws,
rules and regulations and happening of events, etc.

5. 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.

6. 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: New Delhi Name of Firm : Aijaz & Associates

Date : May 04, 2018 FCS No. : 6563
C.P. No. : 7040

26 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Annexure 3
Information Regarding Employees Stock Option Schemes Pursuant to Rule 12 of Companies
(Share Capital and Debentures) Rules, 2014 and Regulation 14 of Sebi (Share Based Employee
Benefits) Regulations, 2014

1) Details related to the Schemes:

As on March 31, 2018, 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 in 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 no. 34 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:

TABLE 4

Particulars
Fully diluted EPS pursuant to issue of Equity Shares on exercise of stock Options Basic: 11.44
calculated in accordance with Ind AS - 33 ‘Earning Per Share’ (Consolidated) Diluted: 11.15

C. Other Details relating to Newgen ESOP 2014

TABLE 5

S. Particulars Fiscal Fiscal Fiscal Fiscal

No. 2018 2017 2016 2015
i. a) Date of shareholders’ approval As on March 31, 2018, the Company has
in place a Newgen Employees Stock
Option Scheme – 2014 (“NEWGEN ESOP
2014”), as approved by the shareholders
on November 13, 2014, which was further
amended and modified on July 28, 2017
by the shareholders of the Company,
to be compliant with the Securities and
Exchange Board of India (Share Based
Employee Benefits) Regulations, 2014
during IPO procedure
b) Total number of Options approved The maximum number of 3,783,800 shares
can be issued under NEWGEN ESOP 2014
c) Total number of Options granted 562,550 NIL NIL 3,653,525
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.

ANNUAL REPORT 2017-18 27

 S. Particulars Fiscal Fiscal Fiscal Fiscal
No. 2018 2017 2016 2015
Number of Options Vesting schedule
vested
10% of the Options One year from the
granted date of grant
20% of the Options Two years from the
granted date of grant
30% of the Options Three years from the
granted date of the grant
40% of the Options Four years from the
granted date of grant
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 five 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 Company uses Trust Route for implementing
combination) this Scheme. Source of Share to the Trust
as on March 31, 2018 is Primary. For more
Information please refer details related to
Newgen ESOP Trust as provided in this
disclosure.
h) Variation in terms of Options Except for the amendment of the
NEWGEN ESOP 2014 in order to comply
with the SEBI SBEB Regulations, no terms
of the NEWGEN ESOP 2014 have been
amended, modified or varied.
ii. Method used to account for NEWGEN ESOP 2014 Fair Value Method
iii. Difference between the employee compensation During the Financial Year 2017-18,
cost using the intrinsic value of stock Options and Company followed fair value accounting
the employee compensation cost that shall have of stock Options.
been recognised if it had used the fair value of the
Options. The impact of this difference on profits
and on EPS of the Company.
iv Option movement during Financial Year 2017-18
a) Number of Options outstanding at the 30,61,209
beginning of the year
b) Number of Options granted during the year 5,62,550
c) Number of Options forfeited / lapsed during 1,26,096
the year
d) Number of Options vested during the year 9,43,211
e) Number of Options exercised during the year 12,54,180
f) Number of shares arising as a result of exercise 12,54,180
of Options
g) Money realised by exercise of Options (`), 7,90,13,340
if scheme is implemented directly by the
company
h) Loan repaid by the Trust during the year from 8,53,02,000
exercise price received
i) Number of Options outstanding at the end of 22,43,483
the year
j) Number of Options exercisable at the end of 4,45,616
the year
v. Weighted-average exercise prices and weighted- § Weighted-average exercise prices: ` 63/-
average fair values of Options shall be disclosed
separately for Options whose exercise price either § Weighted-average fair values of Options
equals or exceeds or is less than the market price granted during the year: ` 100.23/-
of the stock.

28 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

vi. Employee wise details of the Options granted:

TABLE 6

Particulars Name Designation No. of Options granted Exercise

during the year Price
a) Senior Virender Jeet Sr. Vice President 42,000 ` 63/-
Managerial (Sales and Marketing/
Personnel & Product)
KMPs
Surender Jeet Raj Sr. Vice President 39,000 ` 63/-
(HR/Operations)
Tarun Nandwani Vice President 22,000 ` 63/-
(Customer Relations/
Delivery)
Arun Kumar Gupta Chief Financial Officer 13,000 ` 63/-
Aman Mourya Company Secretary 5,000 ` 63/-
b) Any other employee who receives a grant in any one year of Option amounting to 5% or more of Option
granted during that year – Nil
c) Identified employees who were granted Option 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. – Nil
vii. A Description of Method and Black-Scholes formula
significant assumptions used during
the year to estimate the fair value
of Options including the following
information:
a) the weighted-average values of share 134.53
price
b) weighted average exercise price 63
c) Expected volatility 55.59%
d) Expected Option life Grant Name Grant Date Number Exercise Remaining
of Options Period Life (In Years)
outstanding
ESOP 2014/ 01-01-2015 17,02,708 31-12-2023 5.75
Grant I
ESOP 2014/ 01-07-2017 3,35,025 30-06-2026 8.25
Grant II
ESOP 2014/ 01-09-2017 1,30,000 31-08-2026 8.42
Grant III
ESOP 2014/ 01-10-2017 75,750 30-09-2026 8.50
Grant IV
e) Expected dividends 0%
f) Risk-free interest rate and any other 6.78%
inputs to the model
g) The method used and the assumptions N.A.
made to incorporate the effects of
expected early exercise;
h) How expected volatility was Since the Company was unlisted during grant of Option. So,
determined, including an explanation average volatility of closing price of two peer listed companies
of the extent to which expected from 10/01/2012 to 29/09/2017 were considered
volatility was based on historical
volatility; and
i) Whether and how any other features Not Considered
of the Option grant were incorporated
into the measurement of fair value,
such as a market condition

ANNUAL REPORT 2017-18 29

Disclosure under Newgen ESOP Scheme 1999 Scheme. Further, all Options that were outstanding,
and Newgen ESOP Scheme 2000 including Options that had not been granted or had
been granted but not exercised under the NEWGEN
Under NEWGEN ESOP SCHEME 1999 a maximum
ESOP SCHEME 1999, whether outstanding as on
of 2,93,160 Options could be granted to eligible
date of or any future date were made available under
employees, determined in terms of the NEWGEN
NEWGEN ESOP SCHEME 2000, and consequently,
ESOP SCHEME 1999, convertible into 2,93,160 Equity
an aggregate of 8,62,850 Options were available
Shares. Subsequently, additional Options were made
for grant under the NEWGEN ESOP SCHEME 2000.
available under the NEWGEN ESOP SCHEME 1999 to
Subsequently, additional Options were made available
give effect to the bonus issue by the Company and,
under the NEWGEN ESOP Scheme 2000 to give effect
accordingly, an aggregate of 7,33,610 Options were
to the bonus issue by the Company and, accordingly,
available for grant under the NEWGEN ESOP SCHEME
an aggregate of 12,92,300 Options were available
1999, which were convertible into 7,33,610 Equity
for grant under the NEWGEN ESOP SCHEME 1999,
Shares. Our Company has granted an aggregate
which were convertible into 12,92,300 Equity Shares.
of 6,82,400 Employee Stock Options under the
Our Company has granted an aggregate of 15,55,150
NEWGEN ESOP SCHEME 1999 to eligible employees
Options under the NEWGEN ESOP SCHEME 2000
(after adjusting bonus stock Option), of which,
to eligible employees (after adjusting bonus stock
cumulatively, 2,46,160 Options were exercised and
Option), of which 9,48,170 Options were exercised
consequently, 2,46,160 Equity Shares were transferred
and 9,48,170 Equity Shares were transferred from the
from the Newgen Employees Trust to such eligible
Newgen Employees Trust to such eligible employees
employees at an exercise price of ` 80.00, which
at an exercise price of ` 40 per Equity Share, which
was further adjusted due to bonus Option issue, per
was further adjusted pursuant to a bonus issue by our
Equity Share. Further, 2,41,950 Options granted under
Company. Prior to IPO and as on the date of RHP, the
the NEWGEN ESOP SCHEME 1999 lapsed. Prior to
NEWGEN ESOP SCHEME 2000 has been closed, no
IPO and as on the date of filing RHP, the NEWGEN
Options are outstanding and no additional Options
ESOP SCHEME 1999 has been closed, no Options
will be granted by our Company under the NEWGEN
granted thereunder are outstanding and no additional
ESOP SCHEME 2000.
Options will be granted by our Company under the
NEWGEN ESOP SCHEME 1999.
Furtherance to the above, no Option was granted
under (“NEWGEN ESOP SCHEME 1999”) and
Under NEWGEN ESOP SCHEME 2000 a maximum (“NEWGEN ESOP SCHEME 2000”), in three years
of 6,00,000 Options could be granted to eligible prior to IPO and all the Options granted under these
employees, determined in terms of the NEWGEN two schemes were exercised or lapsed. Prior to IPO,
ESOP SCHEME 2000, convertible into 6,00,000 Equity both the schemes were closed and no Option was
Shares on exercise of such Options, as permitted in the outstanding under these schemes.

A. Other Details relating to Newgen ESOP 2000 and Newgen ESOP 1999

TABLE 7

S. Particulars Fiscal Fiscal Fiscal Fiscal

No. 2018 2017 2016 2015
i. a) Date of shareholders’ approval NEWGEN ESOP SCHEME 1999:
February 20, 1999
NEWGEN ESOP SCHEME 2000:
May 5, 2000
b) Total number of Options approved As explained above in the brief description
of the respective Schemes.
c) Total number of Options granted No Option was granted under (“NEWGEN
ESOP 1999”) and (“NEWGEN ESOP 2000”),
in three years prior to IPO.
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.

30 Newgen Software Technologies Limited

CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

S. Particulars Fiscal Fiscal Fiscal Fiscal

No. 2018 2017 2016 2015
Number of Options Vesting schedule
vested
10% of the Options One year from the
granted date of grant
20% of the Options Two years from the
granted date of grant
30% of the Options Three years from the
granted date of the grant
40% of the Options Four years from the
granted date of grant
e) Exercise price or pricing formula As explained above in brief description of
the respected schemes.
f) Maximum term of Options granted Prior to IPO, both the schemes were closed
and no Option was outstanding under
these schemes
g) Source of shares (primary, secondary or Company used Trust Route for implementing
combination) this Scheme.
h) Variation in terms of Options No variation.
ii. Method used to account for NEWGEN ESOP 1999 Intrinsic value Method. No cost impact in
& 2000 Schemes the Financial Year 2017-18
iii. Difference between the employee compensation During the Financial Year 2017-18,
cost using the intrinsic value of stock Options and Company followed fair value accounting
the employee compensation cost that shall have of stock Options.
been recognised if it had used the fair value of the
Options. The impact of this difference on profits
and on EPS of the Company.
iv Option movement during Financial Year 2017-18
a) Number of Options outstanding at the Newgen ESOP 1999: 52600
beginning of the year Newgen ESOP 2000: 386700
b) Number of Options granted during the year NIL
c) Number of Options forfeited / lapsed during NIL
the year
d) Number of Options vested during the year NIL
e) Number of Options exercised during the year Newgen ESOP 1999: 52600
Newgen ESOP 2000:386700
f) Number of shares arising as a result of exercise Newgen ESOP 1999: 52600
of Options Newgen ESOP 2000: 386700
g) Money realised by exercise of Options (`), Newgen ESOP 1999: 233807
if scheme is implemented directly by the Newgen ESOP 2000: 2578129
company
h) Loan repaid by the Trust during the year from N.A.
exercise price received
i) Number of Options outstanding at the end of Newgen ESOP 1999: Nil
the year Newgen ESOP 2000: Nil
j) Number of Options exercisable at the end of Newgen ESOP 1999: Nil
the year Newgen ESOP 2000: Nil
v. Weighted-average exercise prices and weighted- Newgen ESOP 1999
average fair values of Options shall be disclosed Weighted-average exercise prices: ` 4.45
separately for Options whose exercise price either
Newgen ESOP 2000:
equals or exceeds or is less than the market price
of the stock. Weighted-average exercise prices: ` 6.67

ANNUAL REPORT 2017-18 31

vi. Employee wise details of the Option granted during the year:
TABLE 8

Particulars Name Designation No. of Options granted Exercise

during the year Price
a) Senior NIL NIL NIL N.A.
Managerial
Personnel &
KMPs
b) Any other employee who receives a grant in any one year of Option amounting to 5% or more of Option
granted during that year – Nil
c) Identified employees who were granted Option 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. – Nil
vii. A Description of Method and significant Note Applicable.
assumptions used during the year
No cost impact in the Financial Year 2017-18
to estimate the fair value of Options
including the following information:
a) the weighted-average values of share N.A.
price
b) weighted average exercise price Newgen ESOP 1999 Scheme: ` 4.45/-
Newgen ESOP 2000 Scheme: ` 6.67/-
c) Expected volatility N.A.
d) Expected Option life N.A.
e) Expected dividends NIL
f) Risk-free interest rate and any other NIL
inputs to the model
g) The method used and the assumptions N.A.
made to incorporate the effects of
expected early exercise;
h) How expected volatility was N.A.
determined, including an explanation
of the extent to which expected
volatility was based on historical
volatility; and
i) whether and how any other features N.A.
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 utilize 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 including transfer of shares from any existing shareholder. Newgen ESOP
2000 and Newgen ESOP 1999, which were already been closed, were also implemented through trust route
and accordingly a Newgen Employees Trust was constituted to implement these two schemes.

32 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

(i) Details:
TABLE 9

S. Particulars Newgen ESOP Trust Newgen Employees Trust

No. (For Newgen ESOP (For Newgen ESOP 2000
2014) and Newgen ESOP 1999
1. Name of the Trust Newgen ESOP Trust Newgen Employees Trust
2. Details of the Trustee (s) Mr. A K Sharan Mr. A K Sharan
Mr. Arvind Kaul Mr. Arvind Kaul
3 Amount of Loan disbursed by the Company/ ` 661.50 Lakhs NIL
any company in the Group during the year
4 Amount of loan outstanding (repayable to ` 391.23 Lakhs NIL
Company/ any company in the Group) as at
the end of the year*
5. Amount of Loan, if any, taken from any NIL NIL
other sources for which the Company or
any company in the group has provided any
security or guarantee
6. Any other Contribution made to the Trust NIL NIL
during the year
*excluding Interest of ` 53,52,899/- on Loan payable by Newgen ESOP Trust.

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

TABLE 10

S. Particulars Newgen ESOP Trust Newgen Employees Trust

No. (For Newgen ESOP 2014) (for Newgen ESOP 2000
and Newgen ESOP 1999)
1. Number of shares held at the beginning 15,32,384 4,62,680
of the year
2. Number of shares acquired during Primary Issue: 10,50,000 NIL
the year through (i) primary issuance (1.63% of paid up capital
(ii) secondary acquisition, also as a as at the end of the
percentage of paid up equity capital Previous Financial year
as at the end of the Previous Financial 2016-17.)
Year, along with information on weighted
Weighted average cost of
average cost of acquisition per share;
primary acquisition: ` 63/-
Shares obtained from
Newgen Employees Trust:
23,380/-*
Secondary acquisition:
Nil**
3 Number of shares transferred to the 12,54,180 a. Shares transferred to
employees / sold along with the purpose the Employees due to
thereof during the year exercise of Options:
4,39,300
b. Shares transferred to
the Newgen ESOP
Trust: 23,380/-*
4. Number of shares held at the end of the 13,51,584 Nil
year.
*At the time of closure of the old schemes viz Newgen ESOP 2000 and Newgen ESOP 1999, Newgen Employees trust
had transferred remaining shares to the Newgen ESOP Trust without monetary consideration for the common object of
implementing Newgen ESOP Schemes.
**As defined under SEBI (Share Based Employee Benefits) Regulations 2014, secondary acquisition” means acquisition
of existing shares of the company by the trust on the platform of a recognised stock exchange for cash consideration.

ANNUAL REPORT 2017-18 33

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

TABLE 11

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 Newgen Employees Trust
Held at the beginning of the year Nil Nil
Acquired during the year Nil Nil
Sold during the year N.A. N.A.
Transferred to the employees N.A. N.A.
during the year*
Held at the end of the year N.A. N.A.

 For and on behalf of the Board of Directors

Date: May 17, 2018 Diwakar Nigam

Place: New Delhi Chairman & Managing Director
DIN: 00263222

34 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Annexure 4
FORM NO. MGT 9
EXTRACT OF ANNUAL RETURN
As on financial year ended on March 31, 2018
Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company
(Management & Administration) Rules, 2014

I. Registration & Other Details:

TABLE 12

1. CIN L72200DL1992PLC049074
2. Registration Date June 5, 1992
3. Name of the Company Newgen Software Technologies Limited
4. Category/Sub-category of the Company Company limited by Shares/ Non-govt Company
5. Class of Company Public
6. Address of the Registered office & contact A-6, Satsang Vihar Marg, Qutab Institutional Area,
details New Delhi - 110067; Tel: +91 11 4077 0100;
Email: [email protected]
7. Whether listed company Listed
8. Name, Address & contact details of the M/s Karvy Computershare Private Limited
Registrar & Transfer Agent, if any. Karvy Selenium Tower B, Plot 31 and 32,
Gachibowli, Financial District, Nanakramguda,
Hyderabad 500 032
Tel: +91 40 6716 2222; Fax: +91 40 2342 0814;
Email: [email protected];
Website: www.karvycomputershare.com

II. Principal Business Activities of the Company (All the business activities contributing 10% or more of
the total turnover of the company shall be stated)

TABLE 13

S. Name and Description of main products / services NIC Code of the % to total turnover
No. Product/service of the company
1 Software Product 6201 100%

III. Particulars of Holding, Subsidiary and Associate Companies
table 14

S. Name and Address of The CIN/GLN Holding/ % of Applicable

No. Company Subsidiary/ shares Section
Associate held
1 Newgen Computers Technologies U74899DL1993PLC051791 Subsidiary 100% 2(87)
Limited, A-6, Satsang Vihar Marg,
Qutab Institutional Area
New Delhi -110 067
2 Newgen Software Inc. USA, 1364, NA Subsidiary 100% 2(87)
Beverly Road, Suite # 300,
McLean, Virginia - 22101

ANNUAL REPORT 2017-18 35

 S. Name and Address of The CIN/GLN Holding/ % of Applicable
No. Company Subsidiary/ shares Section
Associate held
3 Newgen Software Technologies NA Subsidiary 100% 2(87)
Canada Ltd., 199, Bay Street Suite
4000, Toronto, Ontario M5L IA9
4 Newgen Software Technologies NA Subsidiary 100% 2(87)
Pte. Ltd, 6, Shenton way, # 32 – 01,
Singapore - 068809
5 Newgen Software Technologies NA Subsidiary 100% 2(87)
(UK) Ltd, 10, Finsbury Square,
London EC2A 1AF, United Kingdom.

IV. Share Holding Pattern (Equity Share Capital Breakup as percentage of Total Equity) Category-wise
Share Holding
(A) Category wise Shareholders:
table 15

Category of Shareholders No. of Shares held as on March 31, 2017 No. of Shares held as on March 31, 2018 % Change
during the
Demat Physical Total % of Total Demat Physical Total % of
year
Shares Total
Shares
A. Promoters & Promoters Group
(1) Indian
a) Individual / HUF 45928938 - 45928938 71.42 45928988 - 45928988 66.34 -5.08
b) Central Govt - - - - - - - - -
c) State Govt(s) - - - - - - - - -
d) Bodies Corp. - - - - - - - - -
e) Banks / FI - - - - - - - - -
f) Any other - - - - - - - - -
Sub Total (A) (1) 45928938 - 45928938 71.42 45928988 - 45928988 66.34 -5.08
(2) Foreign - - - - - - - - -
a) NRIs- Individuals - - - - - - - - -
b) Others- Individuals - - - - - - - - -
c) Bodies Corporate - - - - - - - - -
d) Banks/FI - - - - - - - - -
e) Any other - - - - - - - - -
Sub Total (A) (2) - - - - - - - - -
Total Shareholding of 45928938 - 45928938 71.42 45928988 - 45928988 66.34 -5.08
Promoters (A) =
(A)(1)+(A)(2)
B. Public Shareholding - - - - - - - - -
1. Institutions - - - - - - - - -
a) Mutual Funds - - - - 3748116 - 3748116 5.41 5.41
b) Banks / FI - - - - 73257 - 73257 0.11 0.11
c) Central Govt - - - - - - - - -
d) State Govt(s) - - - - - - - - -
e) Venture Capital Funds* 2324316 5982396 8306712 12.92 - - - 0.00 -12.92
f) Alternate Investment Funds - - - - 2051028 - 2051028 2.96 2.96
g) Foreign Portfolio Investors - - - - 6244480 - 6244480 9.02 9.02
h) Insurance Companies - - - - - - - - -
i) FIIs - - - - - - - - -
j) Foreign Bodies Corporates - - - - 60 - 60 0.00 0.00
k) Foreign Venture Capital 835506 4311834 5147340 8.00 - - - - -8.00
Funds*
l) Others - - - - - - - - -
Sub Total (B) (1) 3159822 10294230 13454052 20.92 12116941 - 12116941 17.50 -3.42
2. Non-Institutions
a) Bodies Corp. - - - - - - - - -
i) Indian - - - - - - - - -
ii) Overseas - - - - - - - - -
b) Individuals - - - - - - - - -

36 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Category of Shareholders No. of Shares held as on March 31, 2017 No. of Shares held as on March 31, 2018 % Change
during the
Demat Physical Total % of Total Demat Physical Total % of
year
Shares Total
Shares
i) Individual shareholders 219966 109560 329526 0.51 3710787 32550 3743337 5.41 4.894
holding nominal share
capital upto ` 1 lakh
ii) Individual shareholders 2010170 590400 2600570 4.04 3370484 67800 3438284 4.97 0.92
holding nominal share
capital in excess of ` 1
lakh
d) NBFCs registered with RBI - - - - 20000 20000 0.03 0.03
e) Others - - - - 2614967 21600 2636567 3.81 3.81
Sub-total (B)(2):- 2230136 699960 2930096 4.56 9716238 121950 9838188.00 14.21 9.65
Total Public Shareholding 5389958 10994190 16384148 25.48 21833179 121950 21955129.00 31.71 6.23
(B)=(B)(1)+ (B)(2)
C. Non Promoter- Non Public
Shareholding
1. Shares held by Custodian for - - - - - - - - -
GDRs & ADRs
2. Employee Benefit Trust (under 1995064 - 1995064 3.10 1351584 - 1351584 1.95 -1.15
SEBI(Share based Employee
Benefit) Regulations 2014)
Total Non-Promoter-Non 1995064 - 1995064 3.10 1351584 1351584 1.95 -1.15
Public Shareholding
(C) = (C)(1)+(C)(2)
Grand Total (A+B+C) 53313960 10994190 64308150 100.00 69113751 1,21,950.00 69235701 100.00 -0.02
*Includes Equity DVR

(B) Shareholding of Promoters & Promoter Group

table 16

S. Shareholder’s Name Shareholding at the beginning of Shareholding at the end of % change in

No. the year the year shareholding
during the
No. of % of total %of Shares No. of % of total %of Shares
year
Shares Shares Pledged / Shares Shares Pledged /
of the encumbered of the encumbered
company* to total shares company to total shares
Promoters
1 Diwakar Nigam 1,84,22,406 28.65 Nil 1,84,22,406 26.61 Nil -2.04
2 T.S. Varadarajan 1,50,09,306 23.34 Nil 1,50,09,306 21.68 Nil -1.66
Promoter Group
3 Priyadarshini Nigam 79,68,906 12.39 Nil 79,68,906 11.51 Nil -0.88
4 Ragini Goorha 0 0 Nil 50 0 Nil 0.00
5 Usha Varadarajan 45,28,320 7.04 Nil 45,28,320 6.54 Nil -0.50
Total 4,59,28,938 71.42 - 4,59,28,988 66.34 - -

(C) Change in Promoters and Promoter Group’s Shareholding

table 17

SN Particulars Shareholding at the Date Increase/ Reason Cumulative Shareholding

beginning of the year Decrease during the year
No. of % of total in No. of % of total
shares shares shareholding shares shares of the
of the Company
Company
Promoters
Diwakar Nigam
1 At the beginning of the year 1,84,22,406 28.65 31.03.2017 NIL NIL 1,84,22,406 26.61
2 At the end of the year 1,84,22,406 26.61 31.03.2018
T.S. Varadarajan
At the beginning of the year 1,50,09,306 23.34 31.03.2017 NIL NIL 1,50,09,306 21.68
At the end of the year 1,50,09,306 21.68 31.03.2018

ANNUAL REPORT 2017-18 37

 SN Particulars Shareholding at the Date Increase/ Reason Cumulative Shareholding
beginning of the year Decrease during the year
No. of % of total in No. of % of total
shares shares shareholding shares shares of the
of the Company
Company
Promoter Group
Priyadarshini Nigam
1 At the beginning of the year 7968906 12.39 31.03.2017 NIL NIL 7968906 11.51
2 At the end of the year 7968906 11.51 31.03.2018
Ragini Goorha
1 At the beginning of the year 0 0.00 31.03.2017 50 Market 50 0.00
Purchase
2 At the end of the year 50 0.00 31.03.2018
Usha Varadarajan
1 At the beginning of the year 4528320 7.04 31.03.2017 NIL NIL 4528320 6.54
2 At the end of the year 4528320 6.54 31.03.2018

(D) Shareholding Pattern of top ten Shareholders: (Other than Directors, Promoters, Promoter
Group and Holders of GDRs and ADRs):
table 18

SN For Each of the Top 10 Shareholding at the Date Increase/ Reason Cumulative Shareholding
Shareholders beginning of the year Decrease during the year
No. of % of total in share- No. of % of total
shares shares holding shares shares
of the during the of the
Company year Company
At the beginning of the year/ At the end of the year*
1 Goldman Sachs India 0 0.00 31.03.2017 29,79,640 Allotment 29,79,640 4.30
Limited under IPO
29,79,640 4.30 31.03.2018
2 Malabar India Fund Limited 0 0.00 31.03.2017 26,78,270 Allotment 26,78,270 3.87
under IPO
26,78,270 3.87 31.03.2018
3 Newgen ESOP Trust 15,32,384 2.38 2017-18 (12,54,180) ESOP 2,78,204 -
Transfer
23,380 Transfer 3,01,584 -
from
Newgen
Employees
Trust to
Newgen
ESOP Trust.
10,50,000 Allotment 13,51,584 1.95
13,51,584 1.95 31.03.2018
4 HDFC Trustee Company 0 0.00 31.03.2017 12,03,311 Allotment 12,03,311 1.74
Limited- HDFC Equity under IPO
Saving Fund
12,03,311 1.74 31.03.2018
5 Canara HSBC Oriental 0 0.00 31.03.2017 10,36,001 Allotment 10,36,001 1.50
Bank of Commerce Life under IPO
Insurance Company
Limited
10,36,001 1.50 31.03.2018
6 HDFC Trustee Company 0 0.00 31.03.2017 10,22,444 Allotment 10,22,444 1.48
Limited- HDFC Capital under IPO
Builder Fund
10,22,444 1.48 31.03.2018

38 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

SN For Each of the Top 10 Shareholding at the Date Increase/ Reason Cumulative Shareholding
Shareholders beginning of the year Decrease during the year
No. of % of total in share- No. of % of total
shares shares holding shares shares
of the during the of the
Company year Company
7 IL & FS Trust Company 0 0.00 31.03.2017 10,13,324 Allotment 10,13,324 1.46
Limited - FOREFRONT under IPO
ALTERNAT
10,13,324 1.46 31.03.2018
8 Aditya Birla Sun Life 0 0.00 31.03.2017 9,30,030 Allotment 9,30,030 1.34
Trustee Private Limited A/C under IPO
9,30,030 1.34 31.03.2018
9 Malabar Value Fund 0 0.00 31.03.2017 5,37,704 Allotment 5,37,704 0.78
under IPO
5,37,704 0.78 31.03.2018
10 Alchemy Leaders of 0 0.00 31.03.2017 5,00,000 Allotment 5,00,000 0.72
Tomorrow under IPO
5,00,000 0.72 31.03.2018

* Top Ten Shareholders as on 31.03.2018

(E) Shareholding of Directors and Key Managerial Personnel:

table 19

SN Shareholding of each Shareholding at the Date Increase/ Reason Cumulative Shareholding

Directors and each Key beginning of the year Decrease during the year
Managerial Personnel No. of % of total in No. of % of total
shares shares shareholding shares shares
of the of the
Company Company
At the beginning of the year/ At the end of the year
1 Diwakar Nigam 1,84,22,406 28.65 0 NIL 1,84,22,406 26.61
Chairman & Managing 1,84,22,406 26.61 31.03.2018
Director
2 T.S. Varadarajan 1,50,09,306 23.34 0 NIL 1,50,09,306 21.68
Whole-Time Director 1,50,09,306 21.68 31.03.2018
3 Priyadarshini Nigam 79,68,906 12.39 0 NIL 79,68,906 11.51
Whole-Time Director 79,68,906 11.51 31.03.2018
4 Virender Jeet* 2,16,000 0.34 33,000 ESOP 2,49,000 0.36
Sr. VP-Sales & Marketing/ 2,49,000 0.36 31.03.2018
Product
5 Surender Jeet Raj* 1,99,900 0.31 27,500 ESOP 2,27,400 0.33
Sr. VP- HR/Operations 2,27,400 0.33 31.03.2018
6 Tarun Nandwani* 2,21,700 0.34 16,500 ESOP 2,38,200 0.34
VP- Customer Relations/ 2,38,200 0.34 31.03.2018
Delivery
7 Arun Kumar Gupta 44,100 0.07 10,500 ESOP 54,600 0.08
Chief Financial Officer 54,600 0.08 31.03.2018
8 Aman Mourya 0 0.00 0 NIL 0 0.00
Company Secretary 0 0.00 31.03.2018
*Officer of the Company designated as Key Managerial Personnel.

ANNUAL REPORT 2017-18 39

V. Indebtedness - Indebtedness of the Company including interest outstanding/accrued but not
due for payment
table 20

(` In Lakh)
Secured Loans Unsecured Deposits Total
excluding deposits Loans Indebtedness
Indebtedness at the beginning of the
financial year
i) Principal Amount 5226.18 Nil Nil 5226.18
ii) Interest due but not paid Nil Nil Nil
iii) Interest accrued but not due Nil Nil Nil Nil
Total (i+ii+iii) 5226.18 Nil Nil 5226.18
Change in Indebtedness during the Nil Nil Nil Nil
financial year
* Addition 0 Nil Nil 0
* Reduction 279.91 Nil Nil 279.91
Net Change -279.91 Nil Nil -279.91
Indebtedness at the end of the Nil Nil Nil Nil
financial year
i) Principal Amount 4946.27 Nil Nil 4946.27
ii) Interest due but not paid Nil Nil Nil Nil
iii) Interest accrued but not due Nil Nil Nil Nil
Total (i+ii+iii) 4946.27 Nil Nil 4946.27

VI. Remuneration of Directors and Key Managerial Personnel as on March 31, 2018
(A) Remuneration to Managing Director, Whole-time Directors and/or Manager:
table 21

(in ` Lakh)
Particulars of Diwakar Nigam T.S. Varadarajan Priyadarshini Nigam Total
Remuneration: MD WTD WTD Amount
Salary as per provisions 1,59,70,240 75,43,360 38,88,400 2,74,02,000
contained in section 17(1)
of the Income Tax Act,
1961
Value of perquisites u/s 64,440 88,428 39,600 1,92,468
17(2) of the Income Tax
Act, 1961
Profits in lieu of salary 0 0 0 0
under
section 17(3) of the 0 0 0 0
Income Tax Act, 1961
Stock Option 0 0 0 0
Sweat Equity 0 0 0 0
Commission 0 0 0 0
Others 0 0 0 0
Total Amount 1,60,34,680 76,31,788 39,28,000 2,75,94,468
Ceiling as per the Act ` 909.32 Lakh (being 10% of the net profits of the Company calculated as
per Section 198 of the Companies Act, 2013)

40 Newgen Software Technologies Limited

CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

(B) Remuneration to other Directors:

table 22

Particulars of Remuneration: Kaushik Mohit Sudhir Sunil Kumar Saurabh Subrmaniam

Dutta Goyal Kumar Sethi Kolangara Srivastava* Ramnath Iyer
#3 #5 #4 #1 #2
Independent Independent Nominee Nominee Independent Independent
Director Director Director Director Director Director
Fee for attending board/ 14,00,000 8,00,000 Nil Nil 7,00,000 7,00,000
Committee meetings
Commission Nil Nil Nil Nil Nil Nil
Others Nil Nil Nil Nil Nil Nil
Total Amount 14,00,000 8,00,000 Nil Nil 7,00,000 7,00,000
Ceiling as per the Act ` 90.93 Lakh (being 1% of the net profits of the Company calculated as per Section 198 of
the Companies Act, 2013). However sitting fee shall not be included in this %.

Mr. Saurabh Srivastava was appointed as an Independent Director of the Company w.e.f. August 30, 2017 subject to the
#1

approval of shareholders in the ensuing AGM.

Mr. Subramaniam Ramnath Iyer was appointed as an Independent Director of the Company w.e.f. November 22, 2017
#2

subject to the approval of shareholders in the ensuing AGM.

#3
Mr. Mohit Goyal ceased to be a director of the Company w.e.f. November 22, 2017 due to resignation.
Mr. Sunil Kumar Kolanagara has resigned from the Directorship of the Company w.e.f. September 18, 2017 due to withdrawal
#4

of nomination.
Mr. Sudhir Kumar Sethi has resigned from the Directorship of the Company w.e.f. September 18, 2017 due to withdrawal
#5

of nomination.

(C) Remuneration to Key Managerial Personnel other than Managing Director/Manager/

Whome-time Director:
table 23

Particulars of Remuneration: Virender Surender Tarun Arun Kumar Aman Mourya

Jeet Jeet Raj Nandwani Gupta
Sr VP-Marketing/ Sr VP- HR/ VP-Customer CFO CS
Product Operations Relations/
Delivery
Salary as per provisions 71,56,335 67,28,310 59,26,065 48,11,220 9,88,705
contained in section 17(1) of the
Income Tax Act, 1961
Value of perquisites u/s 17(2) of 60,327 66,030 28,800 1,04,600 15,000
the Income Tax Act, 1961
Profits in lieu of salary under 0 0 0 0 0
section 17(3) of the Income Tax
Act, 1961
Stock Option 16,33,010 14,82,090 11,80,250 7,51,065 0
Sweat Equity 0 0 0 0 0
Commission 0 0 0 0 0
Others 78,02,020 66,27,696 61,85,467 26,71,619 2,436
Total Amount 1,66,51,692 1,49,04,126 1,33,20,582 83,38,504 10,06,141

ANNUAL REPORT 2017-18 41

VII. Penalties / Punishment / Compounding of Offences:
table 24

Type Section Brief Description Details of Authority Appeal

of the Penalty / [RD/NCLT/ made,
Companies Punishment/ COURT] if any
Act 2013/ Compounding (give
1956 fees imposed Details)
A. COMPANY
Penalty Nil Nil Nil Nil Nil
Punishment Nil Nil Nil Nil Nil
Compounding 441 & 134 Suo moto application made in respect 7,50,000 NCLT-Delhi Nil
of the of non disclosure in a report of its Bench
Companies Board of Directors of the Company,
Act, 2013 which shall include particulars of
contracts or arrangements of the
Company with related parties in Form
AOC-2.
441 & 177 Suo moto application made, not 2,00,000 NCLT-Delhi Nil
of the taking approval or any subsequent Bench
Companies modification of transactions of the
Act, 2013 Company with related parties from
the Audit Committee.
441 of the Suo moto application made by the 2,00,000 NCLT-Delhi Nil
Companies Company due to not passing Special Bench
Act, 2013 & Resolution in respect of appointment
314 of the of relative of the Director of the
Companies Company to hold any “office or
Act, 1956 place of profit” in the wholly owned
subsidiary of the Company.
B. DIRECTORS
Penalty Nil Nil Nil Nil Nil
Punishment Nil Nil Nil Nil Nil
Compounding 441, 188 & Suo moto application made in respect 1,50,000 Regional Nil
189 of the of contract or arrangement with a Director
Companies related party with respect to related (North
Act, 2013 party’s appointment to office or place of Region)
profit in the wholly owned subsidiary of
the Company simultaneously unable to
maintain registers giving separately the
particulars of contracts or arrangements
to which inter-alia Section 188 applies
in such manner and containing such
particulars as specified under Rule 16 of
the Meetings of Board and its Powers
Rules.
441 & 129 Suo moto application made in respect 2,50,000 NCLT-Delhi Nil
of the of non disclosure of the transactions Bench
Companies between a reporting enterprise and
Act, 2013 its related parties in the financial
statement of the Company.
441 & 134 Suo moto application made in respect 4,50,000 NCLT-Delhi Nil
of the of non disclosure in a report of its Bench
Companies Board of Directors of the Company,
Act, 2013 which shall include particulars of
contracts or arrangements of the
company with related parties in
Form AOC-2.

42 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Type Section Brief Description Details of Authority Appeal

of the Penalty / [RD/NCLT/ made,
Companies Punishment/ COURT] if any
Act 2013/ Compounding (give
1956 fees imposed Details)
441 & 177 Suo moto application made, not 1,50,000 NCLT-Delhi Nil
of the taking approval or any subsequent Bench
Companies modification of transactions of the
Act, 2013 Company with related parties from
the Audit Committee.
441 of the Suo moto application made by the 1,50,000 NCLT-Delhi Nil
Companies Company due to not passing special Bench
Act, 2013 & resolution in respect of appointment
314 of the of relative of the Director of the
Companies Company to hold any “office or
Act, 1956 place of profit” in the wholly owned
subsidiary of the Company.
C. Other Officers in Default
Penalty Nil Nil Nil Nil Nil
Punishment Nil Nil Nil Nil Nil
Compounding 441 & 129 Suo moto application made in NCLT -Delhi 2,50,000 Nil
of the respect of non disclosure of the Bench
Companies transactions between a reporting
Act, 2013 enterprise and its related parties
in the financial statement of the
Company.
441 & 134 Suo moto application made in respect NCLT -Delhi 2,50,000 Nil
of the of non disclosure in a report of its Bench
Companies Board of Directors of the Company,
Act, 2013 which shall include particulars of
contracts or arrangements of the
company with related parties in
Form AOC-2.
441 & 177 Suo moto application made, not NCLT -Delhi 75,000 Nil
of the taking approval or any subsequent Bench
Companies modification of transactions of the
Act, 2013 Company with related parties from
the Audit Committee.
441 of the Suo moto application made by the NCLT -Delhi 50,000 Nil
Companies Company due to not passing special Bench
Act, 2013 & resolution in respect of appointment
314 of the of relative of the Director of the
Companies Company to hold any “office or
Act, 1956 place of profit” in the wholly owned
subsidiary of the Company.

For and on behalf of the Board of Directors

Diwakar Nigam
Date: May 17, 2018 Chairman & Managing Director
Place: New Delhi DIN: 00263222

ANNUAL REPORT 2017-18 43

Annexure 5
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 2017-18, the percentage increase in remuneration of each of the Director, Chief
Financial Officer and Company Secretary during the Financial Year 2017-18:

table 25

Sr. Name of the Person Remuneration for % increase in Ratio of Remuneration

No. Financial Year Remuneration in of Director to Median
2017-18 (In ` Lakhs) Financial Year Remuneration of
2017-18 employees
1. Mr. Diwakar Nigam 160.35 87.83 22.50
2. Mr. T S Varadarajan 76.32 80.29 10.71
3. Ms. Priyadarshini Nigam 39.28 28.20 5.51
4. Mr. Arun Kumar Gupta 83.39 55.98 11.70
5. Mr. Aman Mourya 10.06 15.23 1.41
 on-Executive Directors are not getting any remuneration except sitting fee paid to them for attending the Board and
N
Committee Meetings.

ii. The number of permanent employees as on March 31, 2018 were 1826 and the median remuneration was
` 7,12,534 annually. The median remuneration of employees in Financial Year 2017-18 has increased by 1.95%.

iii. The average percentile increases already made in the salaries of employees other than managerial personnel
in the last Financial Year was 12.20% and the average percentile increase in the remuneration of managerial
personnel was 74.28%. The higher percentage in the increase of managerial personnel was based on external
benchmarking, growth plans of the Company and individual performance of the managerial personnel.

iv. The remuneration of Directors and KMPs are in accordance with the Remuneration Policy of the Company
which is uploaded on the website of the Company at https://newgensoft.com

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 March
31, 2018 (also includes the details of top ten employees of the Company)

i. The names of the top ten employees in terms of remuneration drawn (remuneration paid in the Financial Year 2017-18)
and the name of every employee of the company, who - if employed throughout the Financial Year 2017-18, was in
receipt of remuneration which, in the aggregate, was not less than One Crore and Two Lakh rupees:

table 26

Sr. Name Designation Nature of Remuneration Age Qualification Experience Last Date of
No. employment, Received (in years) Employment Commencement
whether (in ` Lakhs) of Employment
contractual
or otherwise
1 Diwakar Nigam Chairman & Permanent 160.35 63 MSC, M. Tech. 35 N.A. He has been on
Managing the Board of the
Director Company since
01-04-1993
2 Virender Jeet Sr. Vice Permanent 166.52 49 B.E 25 N.A. 01-12-1992
President

44 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Sr. Name Designation Nature of Remuneration Age Qualification Experience Last Date of
No. employment, Received (in years) Employment Commencement
whether (in ` Lakhs) of Employment
contractual
or otherwise
3 Surender Jeet Sr. Vice Permanent 149.03 61 MSW 38 PCS DG 16-08-1993
Raj President
4. Tarun Nandwani Vice President Permanent 133.21 46 B.E 25 N.A. 15-07-1993
5 Arun Kumar CFO Permanent 83.39 48 CA, CS, CMA 22 Interra 15.10.2010
Gupta Infotech
6 R. Krishna Vice President Permanent 133.68 49 B.E 24 Wipro 01-08-2013
Kumar Infotech
7 Dushyant Kumar Vice President Permanent 146.17 58 B.E 36 Softek Ltd. 16-11-1999
8 Ashish Vikram Vice President Permanent 98.94 49 M.E 22 Pitney Bowes 13-01-2014
Singh
9 Atin Kumar Associate Permanent 82.03 44 MCA 21 N.A. 03-06-1997
Vice President
10 Binu Remani Regional Permanent 110.35 42 B.Tech 19 Cimcon 12-07-2010
Sundaresan Manager Software (I)
Pvt Ltd

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.

Notes:
a) Except Mr. Diwakar Nigam, Chairman & Managing Director (holding 26.6% of equity shares himself and 11.5%
of equity shares through his spouse), no other employee holding by himself or along with his/her spouse and
dependent children, 2% or more of equity shares of the Company.

b) Mr. Diwakar Nigam is the spouse of Ms. Priyadarshini Nigam, Whole-time Director of the Company

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. Nil

iii. Details of employee if employed throughout the Financial Year 2017-18 or part thereof, was in receipt of
remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate,
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 the Board of Directors

Date: May 17, 2018 Diwakar Nigam

Place: New Delhi Chairman & Managing Director
 DIN: 00263222

ANNUAL REPORT 2017-18 45

Annexure 6
NOMINATION AND REMUNERATION POLICY OF
NEWGEN SOFTWARE TECHNOLOGIES LIMITED

Document Title : Nomination and Remuneration Policy

Last Updated : May 7, 2015

1. Purpose:
This Nomination and Remuneration Policy (“Policy”) shall be in compliance with Section 178 of the
Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014, which is
formulated by Nomination and Remuneration Committee and approved by the Board of Directors, to
guide the Board on various issues on appointment, evaluate performance, remuneration of Directors, Key
Managerial Personnel and Senior Management.

2. Applicability:
This policy is applicable to all types of Directors, Key Managerial Personnel (KMP), and Senior Management
team and other employees of Newgen Software Technologies Limited (“Company”) as prescribed under
Companies Act, 2013

3. Objectives:
This policy is framed with the following objectives:

I. To guide the Board in relation to the appointment and removal of Directors, Key Managerial Personnel
and Senior Management.

II. To evaluate the performance of members of the Board and provide necessary report to the Board for
further evaluation.

III. To attract, retain and motivate the Senior Management including its Key Managerial Personnel,
evaluation of their performance and provide necessary report to the Board for further evaluation.

IV. The relationship of remuneration with performance is clear and meets appropriate performance
benchmarks.

V. To recommend the Board through this policy the Remuneration payable to the Directors, Key Managerial
Personnel and Senior Management.

VI. To promote and develop a high performance workforce in line with the Company strategy.

VII. To lay down criteria and terms and conditions with regard to identifying persons who are qualified
to become Director (Executive & Non-Executive/ Independent/ Nominee) and persons who may be
appointed in Senior Management, Key Managerial Personnel and determine their remuneration.

VIII. To determine the remuneration based on the Company’s size and financial position and practices in the
industry..

4. Definitions:
I. “Act” means Companies Act, 2013 and rules framed thereunder as amended from time to time.

“Board of Directors” or Board, in relation to the company, means the collective body of the Directors
II. 
of the Company.

46 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

“Committee” means Nomination and Remuneration Committee of the Company as constituted or

III. 
reconstituted by the Board.

IV. “Company” means “Newgen Software Technologies Limited”.

V. “Managerial Personnel” means Managerial Personnel or Persons as applicable under section 196
and other applicable provisions of the Companies Act, 2013.

VI. “Policy” or “This policy” means Nomination and Remuneration Policy.

VII. “Remuneration” means any money or its equivalent given or passed to any person for services
rendered by him and includes perquisites as defined under the Income Tax Act, 1961.

VIII. “Independent Director” means a Director referred to in Section 149 (6) of the Companies Act, 2013.

IX.  Key Managerial Personnel” (KMP) means the Chief Executive Officer or the Managing Director or
“
the Manager and in their absence the Whole-time Director; The Company Secretary and The Chief
Financial Officer.

X. “Senior Management” mean personnel of the company who are members of its core management
team excluding Board of Directors comprising all members of management one level below the
executive directors including the functional heads.

XI. “Manager” means an individual who, subject to the superintendence, control and direction of the
Board of Directors, has the management of the whole, or substantially the whole, of the affairs of
a company, and includes a director or any other person occupying the position of a manager, by
whatever name called, whether under a contract of service or not.

Unless the context otherwise requires, words and expressions used in this policy and not defined herein
but defined in the Companies Act, 2013 and or in any applicable laws/rules as may be amended from time
to time shall have the meaning respectively assigned to them therein.

5 Constitution of Nomination and Remuneration Committee:

5.1 The Nomination and Remuneration Committee shall be consist of three or more non-executive directors,
out of which at least one-half shall be independent director(s), provided that Chairperson of the Company
may be appointed as a member of this Committee but shall not chair such Committee.

5.2 The Board shall reconstitute/re-constitute the Committee as and when required to comply with the
provisions of the Companies Act, 2013 and other applicable statutory requirements.

5.3 The meeting of Committee shall be held at such regular intervals as may be required to carry out the
objectives set out in the Policy.

5.4 The Committee members may attend the meeting physically or through Video conference or through
permitted audio –visual mode, subject to the provisions of the applicable laws.

5.5 Minimum two (2) members shall constitute a quorum for the Committee meeting.

5.6 Membership of the Committee shall be disclosed in the Annual Report.

5.7 Term of the Committee shall be continued unless terminated by the Board of Directors.

5.8 Chairperson of the Committee shall be an Independent Director.

5.9 In the absence of the Chairperson, the members of the Committee present at the meeting shall choose one
amongst them to act as Chairperson.

5.10 Chairperson of the Company (whether executive or Non-Executive) may be appointed as a member of the
Committee but shall not be a Chairman of the Committee.

ANNUAL REPORT 2017-18 47

5.11 Chairman of the Nomination and Remuneration Committee meeting could be present at the Annual General
Meeting or may nominate some other member to answer the shareholders’ queries

5.12 A member of the Committee is not entitled to be present when his or her own remuneration is discussed
at a meeting or when his or her performance is being evaluated.

5.14 Matters arising for determination at Committee meetings shall be decided by a majority of votes of Members
present and voting and any such decision shall for all purposes be deemed a decision of the Committee.

5.15 In the case of equality of votes, the Chairman of the meeting will have a casting vote.

5.16 The Company Secretary shall act as Secretary to the Committee.

6 Applicability:
The Policy is applicable to Directors (Executive and Non Executive), Key Managerial Personnel and Senior
Management Personnel. This policy is divided into 3 parts as follows:

PART – A: Matters to be Dealt with, Perused and Recommended to the Board by the
6.1 
Nomination and Remuneration Committee:
The Committee shall:
I. Formulate the criteria for determining qualifications, positive attributes and independence of a
director.

II. Identify persons who are qualified to become Director and persons who may be appointed in Key
Managerial and Senior Management positions in accordance with the criteria laid down in this policy
as prescribed under section 178(2) of the Companies Act, 2013.

III. Recommend to the Board, appointment and removal of Director, KMP and Senior Management
Personnel with the criteria laid down in this policy.

PART – B: Policy for Appointment and Removal of Director, Independent Director Kmp and
6.1 
Senior Management:

6.1 Appointment:
I. The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the
person for appointment as Director and recommend to the Board his / her appointment.

II. A person to be act as director should possess adequate qualification, expertise and experience for
the position he / she is considered for appointment. The Committee has discretion to decide whether
qualification, expertise and experience possessed by a person is sufficient / satisfactory for the
concerned position.

III. The Company shall not appoint or continue the employment of any person as Whole-time Director/
Managing Director/CEO who has attained the age of seventy years. Provided that the term of the
person holding this position may be extended beyond the age of seventy years with the approval
of shareholders by passing a special resolution based on the explanatory statement annexed to the
notice for such motion indicating the justification for extension of appointment beyond seventy years.

IV. For appointing any person as an Independent Director he/she should possess qualifications as
mentioned in section 149 of the Companies Act, 2013 and Rule 5 of The Companies (Appointment and
Qualification of Directors) Rules, 2014.

V. The candidate for a position at Company Secretary, Chief Financial Officer and Senior Management
level is met by the Head-HR/ Managing Director and the interview is targeted at assessing the candidate
on his/her functional and leadership capabilities and cultural fitment to the organisation. The Head-
HR/ Managing Director shall ensure that the person possesses adequate qualification, expertise and
experience for the position he / she is considered for appointment.

48 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

VI. The Head-HR/ Managing Director Managing Director shall assess the shortlisted candidates for the
position of Company Secretary, Chief Financial Officer and Senior Management Level.

6.2.2 Disqualifications for Appointment of Directors:

I. A person shall not be eligible for appointment as a director of a company if (a). He/she is of unsound
mind and stands so declared by a competent court; (b). He/she is an undercharged insolvent; (c). He/
she has applied to be adjudicated as an insolvent and his application is pending; (d). He/she has been
convicted by a court of any offence, whether involving moral turpitude or otherwise, and sentenced in
respect thereof to imprisonment for not less than six months and a period of five years has not elapsed
from the date of expiry of the sentence:

II. If a person has been convicted of any offence and sentenced in respect thereof to imprisonment for a
period as prescribed in companies Act, 2013, he/she shall not be eligible to be appointed as a director;

III. If any order disqualifying him/her for appointment as a director has been passed by a court or Tribunal
and the order is in force;

IV. He/she has not paid any calls in respect of any shares of the company held by him/her, whether alone
or jointly with others, and six months have elapsed from the last day fixed for the payment of the call;

V. He/she has been convicted of the offence dealing with related party transactions under section 188 at
any time during the last preceding five years; or He has not complied with sub-section (3) of section 152.

VI. No person who is or has been a director of a company which (a). Has not filed financial statements
or annual returns for any continuous period of three Financial Years; or (b). Has failed to repay the
deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay
interest due thereon or pay any dividend declared and such failure to pay or redeem continues for one
year or more, shall be eligible to be re-appointed as a director of that company or appointed in other
company for a period of five years from the date on which the said company fails to do so.

VII. Other disqualification as may be prescribed under Companies Act, 2013 and under any other applicable
laws, rules.

6.2.3 Term / Tenure:

I. The tenure for Directors, Managing Director/ Whole-Time Director/CEO shall be governed by the terms
defined in the Companies Act, 2013.

II. The tenure for other KMPs and Senior Management Personnel will be governed by Newgen HR Policy.

6.2.4 Term / Tenure for Independent Director:

I. An Independent Director shall hold office for a term up to five consecutive years on the Board of the
Company and will be eligible for reappointment as specified in Companies Act, 2013. No Independent
Director shall hold office for more than two consecutive terms, but such Independent Director shall be
eligible for appointment after expiry of three years of ceasing to become an Independent Director.

II. Provided that an Independent Director shall not, during the said period of three years, be appointed
in or be associated with the Company in any other capacity, either directly or indirectly. At the time
of appointment of Independent Director, it should be ensured that number of Boards on which such
Independent Director serves is restricted to seven listed companies as an Independent Director and
three listed companies as an Independent Director in case such person is serving as a Whole-time
Director of a listed company.

III. The maximum tenure of Independent Directors shall also be in accordance with the Companies Act,
2013 and clarifications/ circulars issued by the Ministry of Corporate Affairs, in this regard, from time
to time.

ANNUAL REPORT 2017-18 49

6.2.5 Evaluation:
I. The HR-Head/Managing Director performs the evaluation of performance of Company Secretary, Chief
Financial Officer and Senior Management Personnel at regular intervals as per Newgen HR Policy or
he can authorised any official person or respective reporting head of evaluated person to perform this
function.

II. The performance evaluation of Independent Directors shall be done by the Board, excluding the Director
being evaluated, basis the contributions made to the Board deliberations on various matters including
business strategy, financial strategy, operations, cost and risk management, etc., and suggestions given
in this regard.

6.2.6 Removal:
I. Due to reasons for any disqualification mentioned in the Companies Act, 2013, rules made thereunder
or under any other applicable Act, rules and regulations, the Committee may recommend, to the Board
with reasons recorded in writing, removal of a Director, subject to the provisions and compliance of the
said Act, rules and regulations.

II. For other KMP or Senior Management Personnel the removal will be governed by Newgen HR Policy.

6.2.7 Retirement:
I. The Director, KMP and Senior Management Personnel shall retire as per the applicable provisions of the
Companies Act, 2013 and the prevailing Newgen HR Policy.

II. The Managing Director will have the discretion to retain the Director, KMP, Senior Management
Personnel in the same position/remuneration or otherwise even after attaining the retirement age, for
the benefit of the Company subject to the applicable laws and rules.

PART – C: Policy Relating to the Remuneration for the Whole-Time Director, KMP and Senior
6.3 
Management Personnel:

6.3.1 Evaluation Process :

I. 
The performance metrics shall be defined by the Nomination and Remuneration Committee for
Directors, Managing Director/ Whole-Time Director/ CEO and for other KMPs & Senior Management
Personnel the metrics shall be determined by the Managing Director and / or HR-Head as per Newgen
HR Policy.

II. An holistic view of the ratings will be reviewed by the Board in relation to Directors, Managing Director/
Whole-Time Director/ CEO, whereas for other KMPs and Senior Management Personnel the same shall
be reviewed by the Managing Director and / or HR-Head as per Newgen HR Policy. The Managing
Director/ HR-Head shall do qualitative review of the performance based on the efforts put in by the
employee, results achieved and impact of the external and internal factors to arrive at the Final Rating.

6.3.2 Remuneration:
I. The revision in the total remuneration is directly linked to the Final Rating for all employees. The
remuneration / compensation / commission etc., to other KMPs and Senior Management Personnel will
be determined by the Managing Director/ HR-Head in accordance with the Newgen HR Policy, which
is based on the Final rating, employee potential and market benchmark compensation.

II. The ESOP’s to the Senior Management Personnel will be determined by the Managing Director/ HR-
Head as prescribed under Newgen ESOP Scheme/(s) of the Company.

III. The remuneration/compensation/commission etc., to the Directors and Managing Director/ Whole-
Time Director/ CEO shall be subject to the prior / post approval of the Shareholders of the Company
and Central Government wherever required as per Companies Act, 2013.

50 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

IV. The remuneration and commission to be paid to Whole Time Director/Managing Director/Independent
Director shall be in accordance with the percentage/ slabs/ conditions laid down in the Articles of
Association of the Company and as per the provision of the Companies Act, 2013 and the rules made
thereunder.

V. If any Managerial Personnel draws or receives, directly or indirectly by way of remuneration any such
sums in excess of the limits prescribed under the Companies Act, 2013 or without the prior sanction
of the Central Government, where required, he / she shall refund such sums to the Company and until
such sum is refunded, hold it in trust for the Company.

VI. Increments to the existing Remuneration /compensation structure may be recommended by the
Managing Director to the Committee and the Board which should be within the slabs approved by
the Shareholders in the case of Whole time Director/ Managing Director. Where any insurance is taken
by the Company on behalf of its Whole-Time Director, Managing Director, Chief Executive Officer,
Chief Financial Officer, Company Secretary and any other employee for indemnifying them against any
liability, the premium paid on such insurance shall not be treated as part of the remuneration payable
to any such personnel. Provided that if such person is proved to be guilty, the premium paid on such
Insurance may be treated as part of the remuneration.

VII. An Independent Director, promoter director shall not be entitled to any stock Option of the Company
as prescribed under Companies Act, 2013.

6.3.3 Sitting Fees:

I. The Non- Executive / Independent Director may receive remuneration by way of fees for attending
meetings of Board or Committee thereof and by way of other means as may be prescribed by
applicable laws. Provided that the amount of such fees shall not exceed the maximum amount as
provided in the Companies Act, 2013, per meeting of the Board or Committee or such amount as
may be prescribed by the Central Government from time to time.

7 Amendment to the Policy:

The Board of Directors on its own and / or as per the recommendations of Nomination and Remuneration
Committee can amend this Policy, as and when deemed fit. However, any amendment in respect of criteria
for determining qualifications, positive attributes and independence of directors shall be done with the
approval of Nomination and Remuneration Committee only.

In case of any amendment(s), clarification(s), circular(s) etc. issued by the relevant authorities, not being
consistent with the provisions laid down under this Policy, then such amendment(s), clarification(s),
circular(s) etc. shall prevail upon the provisions hereunder and this Policy shall stand amended accordingly
from the effective date as laid down under such amendment(s), Clarification, circular(s) etc.

ANNUAL REPORT 2017-18 51

Annexure 7
Corporate Social Responsibility (CSR) Report
[Pursuant to section 134 of the Companies Act, 2013 and Rule 9 of the Companies
(Corporate Social Responsibility) Rules, 2014]

1. A brief outline of the Company’s CSR policy, including overview of projects or programs proposed to
be undertaken and a reference to the web-link to the CSR policy and projects or programs:

Newgen looks at CSR differently. We relate this to the Company’s core values, precisely driven by the
Newgen’s Code of Ethics & Business Conduct. We see our employees as a part of Newgen family and thus
the Community we dwell in becomes our extended family. We thus do not connect it to our business or
profit. It is not only our moral and social responsibility as a Corporate, but the obligation to empower them
so that India becomes an empowered nation in the years to come.

Newgen’s sustainability strategy is premised on the belief that transformational capacity of business can be
very effectively leveraged to create significant societal value through a spirit of innovation and enterprise.
The sustainability strategy aims to significantly contribute to both social and economic development of
young minds who would impact future of the nation. Presently we are dealing with 1500+ children under
our Newgen Digital Discovery Paathshala (NDDP) program and 1000+ children for mid-day meal with
Akshaya Patra Foundation. Our CSR Programs are as below:

i. Newgen Digital Discovery Paathshala (NDDP): The NDDP program is based on empowering children
through Digital Education. This stems from the vision of Newgen’s Chairman & Managing Director, Mr.
Diwakar Nigam. It aims at transforming their classroom sessions into fun–learning activities. To make
their education more meaningful, to achieve the same, their school curriculum is taken as the baseline.
The Newgen Digital Discovery Paathshala is a fun place to learn the textbook concepts digitally. Also,
Newgen’s facilitators are using methodologies like role play, quiz, movies and presentations while
conducting the sessions.

ii. NDDP at Harkesh Nagar: Newgen has adopted Government’s Girls’ Senior Secondary School, Harkesh
Nagar, Okhla. It is currently conducting classes for 1300+ children of 6th, 7th and 8th standard.

iii. NDDP at Soami Nagar: After the successful completion of NDDP Pilot run for 150 children in the month of
February 2017, for 6th, 7th and 8th standard students at Soami Nagar Model School, Newgen has adopted
the school in April 2017. The students are taught lessons using I-Pads, presentations and audio visuals.

iv. Partnership with Akshaya Patra Foundation: Newgen has recently collaborated with Akshaya Patra
to provide mid-day meal to 1000+ children in Government schools.

v. Partnership with SOS Village: Newgen has adopted six family houses at SOS Children’s Village. Three
are in Greenfields, Faridabad i.e. house number 6, 10 and 11 and three family houses at SOS Bhopal i.e.
house number 1, 2 and 3. Each house has ten children looked after by one mother. Newgen volunteers
conduct fun learning activities like arts & craft, diya painting, quizzes, quelling workshop with the
children and SOS mothers.

vi. SOS Youth Hostel: Personality Development sessions are conducted by “I AM” a professional
organisation, dealing with youth. The organisation conducts Personality development and career
counseling sessions. Once a month, children from SOS Youth hostel and Sadbhavna join in the session.
These sessions help to build self confidence, self esteem and enhance the personality development of
the children. As a monitoring mechanism the organisation submits an impact report of the activities
conducted during the year.

52 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Web-link to the CSR Policy:

https://newgensoft.com/company/about-newgen/corporate-social-responsibility/

2. The Composition of the CSR Committee:

CSR Committee of the Board of Directors consists of Ms. Priyadarshini Nigam, Whole –Time Director, Mr. T.S.
Varadarajan, Whole time Director and Mr. Kaushik Dutta, Independent Director. Ms. Priyadarshini Nigam is
the Chairperson of the CSR Committee.

3. Average net profit of the company for last three Financial Years:
` 5306.58 Lakhs

4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above):
` 106.13 Lakhs

5. Details of CSR spent during the Financial Year 2017-18:

(a) Total amount spent during the Financial Year: ` 107.31 Lakhs
(b) Amount unspent, if any: Nil
(c) Manner in which the amount spent during the Financial Year is detailed below.

TABLE 27

(1) (2) (3) (4) (5) (6) (7) (8)

S. CSR project Sector Projects or Amount Amount Cumulative Amount
No or activity in programs outlay spent on the expenditure spent: Direct
identified which (1) Local (budget) projects or upto to the or through
the area or other project or programs reporting implementing
Project (2) Specify programs Sub – heads: period agency*
is covered the State wise (1) Direct
and district expenditure
where on projects
projects or or programs
programs (2)
were Overheads
undertaken
1. Adoption of Promoting Delhi NCR ` 33.75 ` 33.75 Lakhs ` 33.75 Implementing
SOS Village preventive Lakhs Lakhs Agency.
- Children healthcare & Through
Families Education SOS Children
Village
2. Adoption of Promoting Bhopal ` 33.75 ` 33.75 Lakhs ` 33.75 Lakh Implementing
SOS Village preventive Lakhs Agency.
Children healthcare & Through
Families, Education SOS Children
Training, and Village
educating
orphaned
children

ANNUAL REPORT 2017-18 53

 (1) (2) (3) (4) (5) (6) (7) (8)
S. CSR project Sector Projects or Amount Amount Cumulative Amount
No or activity in programs outlay spent on the expenditure spent: Direct
identified which (1) Local (budget) projects or upto to the or through
the area or other project or programs reporting implementing
Project (2) Specify programs Sub – heads: period agency*
is covered the State wise (1) Direct
and district expenditure
where on projects
projects or or programs
programs (2)
were Overheads
undertaken
3. Newgen Promoting Delhi NCR ` 28.12 ` 28.12 Lakhs ` 28.12 Lakhs Direct
Digital Preventive Lakhs
Discovery Healthcare,
Paathshala Sanitation,
Education &
empowering
Women
4. Personality Promoting Delhi NCR ` 1.69 ` 1.69 Lakhs ` 1.69 Lakhs Direct
development, Preventive Lakhs
Training, Healthcare,
education of Sanitation,
children Education &
empowering
Women
5. Akshaya Promoting Delhi NCR ` 10 Lakhs ` 10 Lakhs ` 10 Lakhs Implementing
Patra preventive Agency.
Foundation- healthcare & Through
Partnership Education Akshaya Patra
Foundation
6. Expenditure N.A. N.A. N.A. N.A. N.A. N.A.
on
administrative
overheads
TOTAL 107.31 107.31 107.31
Lakhs Lakhs Lakhs

6. In case the Company has failed to spend the two per cent of the average net profit of the last three
Financial Years or any part thereof, the company shall provide the reasons for not spending the amount
in its Board report.
Not Applicable

7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR
Policy, is in compliance with CSR objectives and Policy of the Company
The CSR Committee has confirmed that the implementation and monitoring of CSR Policy, is in compliance
with CSR objectives and Policy of the Company.

 For and on behalf of the Board of Directors

Date: May 17, 2018 Priyadarshini Nigam Diwakar Nigam

Place: New Delhi (Chairperson -CSR Committee) Chairman & Managing Directors
DIN: 00267100 DIN: 00263222

54 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Annexure 8
Report on Corporate Governance

The SEBI (Listing Obligations and Disclosure companies. Further none of them is a member
Requirements) Regulations, 2015 became applicable of more than ten Committees or chairman
to the Company w.e.f. January 29, 2018, i.e. the date of more than five Committees across all the
when the Equity Shares of face value of ` 10/- of public companies in which he is a Director, as
the Company got listed on BSE Limited (BSE) and prescribed under SEBI (Listing Obligations
National Stock Exchange of India Limited (NSE). The and Disclosure Requirements) Regulations,
information stated herein pertains to the Financial 2015. Necessary disclosures regarding their
Year 2017-18. directorship and the Committee positions in
other public companies as on March 31, 2018
I. Corporate Governance Philosophy: have been made by the Directors.
Your Company’s philosophy on Corporate
Governance envisages accomplishment of a c) Independent Directors are non-executive
high level of transparency, integrity, honesty and directors as defined under Regulation 16(1)
accountability in the conduct of its businesses (b) of the SEBI (Listing Obligations and
and puts high prominence towards regulatory Disclosure Requirements) Regulations,
compliances. Effective corporate Governance 2015 read with Section 149(6) of the Act.
practices constitute the strong foundation on The maximum tenure of independent
which successful business organisation are built directors is in compliance with the Act.
to last. At Newgen, Corporate Governance is All the Independent Directors have
considered as a benchmark for efficient working confirmed that they meet the criteria
of the Board of Directors, Management reviews, of independence as mentioned under
strong control procedures and a guiding culture Regulation 16(1)(b) of the SEBI Listing
for employees. Your Company always strives to Regulations read with Section 149(6) of
adopt best global practices in the Corporate the Companies Act, 2013.
Governance and remains up-to-date with the
continuous developments in the Corporate d) As on March 31, 2018, there are no
Governance practices. institutional nominee director on the Board
of the Company.
II. Board of Directors:
a) As on March 31, 2018, the Board comprises e) The names and categories of the Directors
of six Directors, out of which three Directors on the Board, their attendance at Board
(i.e. 50%) are Executive Directors including Meetings held during the Financial Year
one-woman Director and three Directors 2017-18 and at the last Annual General
(i.e. 50%) are Non-Executive Directors in Meeting (AGM) and the number of
the category of Independent Directors. The Directorships and Committee Chairmanships
profiles of the Directors can be found on the / Memberships held by them in other public
Company’s website: https://newgensoft.com. limited companies as on March 31, 2018
The composition of the Board is in conformity are given herein below. For the purpose
with the requirements of the Companies Act, of determination of the limit of Directors,
2013 (the “Act”) including the rules framed in the Committees, chairpersonship and
thereunder and the SEBI (Listing Obligations membership of the Audit Committee and
and Disclosure Requirements) Regulations, 2015. Stakeholders’ Relationship Committee has
alone been considered as per SEBI (Listing
b) None of the Directors on the Board hold Obligations and Disclosure Requirements)
directorships in more than ten public Regulations, 2015.

ANNUAL REPORT 2017-18 55

TABLE 28

Name of the Category & Designation Whether Number of Number of Number

Director attended Directorship memberships in of post of
last AGM in other Committee(s) Chairperson in
held on July public listed in other public Committee (s)
28, 2017 entities #1 listed entities. in other public
listed entities.
Mr. Diwakar Promoter, Executive, Yes - - -
Nigam#2 Chairman and Managing
Director
Mr. T.S. Promoter, Executive, Yes - - -
Varadarajan Whole - Time Director
Ms. Priyadarshini Executive, Whole - Time No - - -
Nigam Director
Mr. Kaushik Dutta Non - Executive, No 2 2 2
Independent Director
Mr. Saurabh Non - Executive, N.A. 4 5 2
Srivastava#3 Independent Director
Mr. Subramaniam Non - Executive, N.A. - - -
Ramnath Iyer#4 Independent Director
Mr. Mohit Goyal#5 Non- Executive, Yes N.A. N.A. N.A.
Independent Director
Mr. Sunil Non- Executive, No N.A. N.A. N.A.
Kolanagara#6 Nominee Director
Mr. Sudhir Sethi#7 Non- Executive, No N.A. N.A. N.A.
Nominee Director
#1 The above list of other Directorship is based on declaration given by respective Director and does not include Directorship in
private limited companies, Foreign Companies and Section 8 Company of the Companies Act, 2013.
#2 Mr. Diwakar Nigam, Managing Director was also appointed as the Chairman of the Company w.e.f. June 14, 2017.
#3 Mr. Saurabh Srivastava was appointed as an Independent Director of the Company w.e.f. August 30, 2017 subject to the approval
of shareholders in the ensuing AGM.
#4 Mr. Subramaniam Ramnath Iyer was appointed as an Independent Director of the Company w.e.f. November 22, 2011 subject to the
approval of shareholders in the ensuing AGM.
#5 Mr. Mohit Goyal ceased to be a director of the Company w.e.f. November 22, 2017 due to resignation.
#6 Mr. Sunil Kolangara has resigned from the Directorship of the Company w.e.f. September 18, 2017 due to withdrawal of nomination
by Ascent India Fund III
#7 Mr. Sudhir Sethi has resigned from the Directorship of the Company w.e.f. September 18, 2017 due to withdrawal of nomination by
IDG Ventures India Fund II LLC

56 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

f) During the Financial Year 2017-18, total 9 Board meetings were held as per details given below:

TABLE 29

Name of the Category Date(s) of the Board Meetings

Director 25.04. 14.06. 18.09. 21.09. 24.11. 05.01. 19.01. 24.01. 28.03.
2017 2017 2017 2017 2017 2018 2018 2018 2018
Mr. Diwakar Nigam Promoter, Chairman Yes Yes Yes Yes Yes Yes Yes Yes Yes
and Managing Director
Mr. T.S. Varadarajan Promoter, Executive, Yes Yes Yes Yes No Yes No Yes Yes
Whole - Time Director
Ms. Priyadarshini Executive, Whole - Time Yes Yes Yes Yes Yes Yes Yes Yes Yes
Nigam Director
Mr. Kaushik Dutta Non- Executive and Yes Yes Yes Yes No Yes Yes No Yes
Independent Director
Mr. Saurabh Non- Executive and N.A. N.A. Yes No Yes No Yes Yes Yes
Srivastava Independent Director
Mr. Subramaniam Non- Executive and N.A. N.A. N.A. N.A. Yes Yes Yes Yes Yes
Ramnath Iyer Independent Director
Mr. Mohit Goyal Non- Executive and Yes Yes Yes No N.A. N.A. N.A. N.A. N.A.
Independent Director
Mr. Sunil Kolanagara Non-executive and Yes Yes No N.A. N.A. N.A. N.A. N.A. N.A.
Nominee Director
Mr. Sudhir Sethi Non-executive and No Yes Yes N.A. N.A. N.A. N.A. N.A. N.A.
Nominee Director

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

g) Disclosure of relationship between Directors inter-se:

Except Ms. Priyadarshini Nigam, Whole-time Director who is the spouse of Mr. Diwakar Nigam, Chairman &
Managing Director of the Company, none of the other Director is a relative of another Director(s).

h) Details of Equity Shares of the Company held by the Directors as on March 31, 2018 are given below:

TABLE 30

Name of the Director Category Number of Equity Shares

Mr Diwakar Nigam Chairman and Managing Director 1,84,22,406
Mr. T.S. Varadarajan Whole-time Director 1,50,09,306
Ms. Priyadarshini Nigam Whole-time Director 79,68,906
Mr. Kaushik Dutta Independent Director Nil
Mr. Saurabh Srivastava Independent Director Nil
Mr. Subramaniam Ramnath Iyer Independent Director Nil
As on March 31, 2018, the Company does not have any outstanding convertible instruments.

i) The details of the familiarisation programme for The Company has divided the familiarisation
Independent Directors are given below: initiatives in two parts viz, orientation programme
With a view to familiarise Independent upon induction of new director and other
Directors, as required under Regulation 25(7) initiatives to update the directors on a continuing
of the SEBI (Listing Obligations and Disclosure basis.
Requirements) Regulations, 2015 and Schedule
IV to the Companies Act, 2013, Newgen Orientation Programme upon Induction of New
Software Technologies Limited (the “Company”) Director:
has introduced a program to familiarize the A set of information is being handed over to
Independent Directors with the Company, their the new inductee, which includes the latest
roles, rights and responsibilities in the Company, Annual Report and various policies such as
nature of the industry in which the Company Code of Conduct, Whistle Blower Policy,
operates, business model of the Company etc. Nomination & Remuneration Policy, Policy on

ANNUAL REPORT 2017-18 57

 Related Party Transactions, Insider Trading etc. Role of Audit Committee
A detailed Appointment Letter is being issued The role of the Audit Committee shall include the
to the Independent Directors incorporating the following:
role, duties and responsibilities, remuneration
(1) Oversight of the Company’s financial
and performance evaluation process etc. A
reporting process and the disclosure of
brief introduction is being provided about
its financial information to ensure that the
the Company, its subsidiaries and associate
financial statements are correct, sufficient
companies.
and credible;

Other Initiatives to update the Directors on a (2) Recommendation for appointment, re-
continuing basis: appointment, replacement, remuneration
Meetings with Company’s officials have been and terms of appointment of auditors of the
arranged as and when necessary to understand Company and the fixation of the audit fee;
the business and operations of the Company.
(3) Approval of payment to statutory auditors
The presentations at Board meetings include
for any other services rendered by the
updates on business operations and financial
statutory auditors;
performance, working capital management,
senior management changes, compliances, (4) Reviewing, the financial statements with
cash flow, budgets, operation of the Company’s respect to its unlisted Subsidiary(ies),
subsidiaries. in particular investments made by such
subsidiary(ies) of the Company;
The familiarisation of Independent Directors (5) Reviewing, with the management, the annual
can be find on the website of the Company: financial statements and auditor’s report
https://newgensoft.com. thereon before submission to the Board for
approval, with particular reference to:
III. Composition of Committees of the Board:
There are total five (5) Board Committees as on a. Matters required to be included in the
March 31, 2018 comprising four (4) mandatory Directors’ Responsibility Statement
Committees and one (1) other Committee that to be included in the Board’s report in
have been constituted considering the best terms of clause (c) of sub-section 3 of
practices in Corporate Governance and needs of section 134 of the Companies Act, 2013;
the Company:
b. Changes, if any, in accounting policies
1. Audit Committee: and practices and reasons for the same;
The Board had constituted first Audit Committee
c. Major accounting entries involving
at its meeting held on November 18, 2002 and
estimates based on the exercise of
subsequently reconstituted the Committee
judgment by management;
from time to time. At present, Committee was
constituted by the Board on November 22, 2017 d. Significant adjustments made in the
and is in compliance with Section 177 of the financial statements arising out of audit
Companies Act, 2013 and Regulation 18 of the SEBI findings;
(Listing Obligations and Disclosure Requirements)
Regulations, 2015. e. Compliance with listing and other
legal requirements relating to financial
The terms of reference of the Audit Committee statements;
are as set forth below:
f. Disclosure of any related party
transactions; and
Powers of Audit Committee:
The Audit Committee shall have powers, including g. Modified opinion(s) in the draft audit
the following: report.
(1) To investigate any activity within its terms of
reference; (6) Reviewing, with the management, the
quarterly, half-yearly and annual financial
(2) To seek information from any employee; statements before submission to the Board
(3) To obtain outside legal or other professional for approval;
advice; and
(7) Reviewing, with the management, the
(4) To secure attendance of outsiders with statement of uses / application of funds
relevant expertise, if it considers necessary. raised through an issue (public issue, rights

58 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

issue, preferential issue, etc.), the statement of (18) Looking into the reasons for substantial
funds utilised for purposes other than those defaults in the payment to depositors,
stated in the offer document / prospectus debenture holders, shareholders (in case of
/ notice and the report submitted by the non-payment of declared dividends) and
monitoring agency monitoring the utilisation creditors;
of proceeds of a public or rights issue, and
making appropriate recommendations to (19) Recommending to the board the
the Board to take up steps in this matter; appointment and removal of the external
auditor, fixation of audit fees and approval
(8) Reviewing and monitoring the auditor’s for payment for any other services;
independence and performance, and
effectiveness of audit process; (20) Reviewing the functioning of the whistle
blower mechanism;
(9) Approval of any subsequent modification
of transactions of the Company with (21) Overseeing the vigil mechanism established
related parties and omnibus approval for by the Company, with the chairman of
related party transactions proposed to be the audit Committee directly hearing
entered into by the Company, subject to the grievances of victimisation of employees
conditions as may be prescribed; and directors, who used vigil mechanism
to report genuine concerns in appropriate
Explanation: The term “related party and exceptional cases;
transactions” shall have the same meaning
as provided in Clause 2(zc) of the SEBI (22) Carrying out any other functions required
Listing Regulations and/or the applicable to be carried out by the audit Committee in
Accounting Standards and/or the Companies terms of applicable law.
Act, 2013.
The audit Committee shall mandatorily review
(10) Scrutiny of inter-corporate loans and the following information:
investments;
a) Management discussion and analysis
(11) Valuation of undertakings or assets of the of financial condition and results of
Company, wherever it is necessary; operations;

(12) Evaluation of internal financial controls and b) Statement of significant related party
risk management systems; transactions (as defined by the audit
Committee), submitted by management;
(13) Reviewing, with the management,
performance of statutory and internal c) Management letters / letters of internal
auditors, adequacy of the internal control control weaknesses issued by the statutory
systems; auditors;

(14) Reviewing the adequacy of internal audit d) Internal audit reports relating to internal
function, if any, including the structure control weaknesses;
of the internal audit department, staffing
e) The appointment, removal and terms of
and seniority of the official heading the
remuneration of the chief internal auditor
department, reporting structure coverage
shall be subject to review by the audit
and frequency of internal audit;
Committee; and
(15) Discussion with internal auditors of any
f) Statement of deviations in terms of the SEBI
significant findings and follow up there on;
listing regulations:
(16) Reviewing the findings of any internal
investigations by the internal auditors into i. Quarterly statement of deviation(s)
matters where there is suspected fraud or including report of monitoring agency,
irregularity or a failure of internal control if applicable, submitted to stock
systems of a material nature and reporting exchange(s) in terms of the SEBI listing
the matter to the board; regulations;

(17) Discussion with statutory auditors before ii. Annual statement of funds utilised for
the audit commences, about the nature purposes other than those stated in
and scope of audit as well as post-audit the offer document/prospectus/notice in
discussion to ascertain any area of concern; terms of the SEBI listing regulations.

ANNUAL REPORT 2017-18 59

A. Composition of the Audit Committee during the Financial Year 2017-18:
TABLE 31

Name of the Committee Member Category & Designation Chairman/ Member

Mr. Kaushik Dutta Non-Executive, Independent Director Chairman
Mr. Saurabh Srivastava#1 Non-Executive, Independent Director Member
Mr. Subramaniam Ramnath Iyer#2 Non-Executive, Independent Director Member
Mr. Mohit Goyal#3 Non-Executive, Independent Director Member
Mr. Sunil Kolangara#4 Non-Executive, Nominee Director Member
#1 Mr. Saurabh Srivastava was appointed as an Independent Director of the Company w.e.f. August 30, 2017 subject to the
approval of shareholders in the ensuing AGM. He was appointed as member of the Committee by the Board of Directors in
its meeting held on September 18, 2017.
#2 Mr. Subramaniam Ramnath Iyer was appointed as an Independent Director of the Company w.e.f. November 22, 2017 subject
to the approval of shareholders in the ensuing AGM. He was appointed as Member of the Committee on November 22, 2017
through Board Circular Resolutions.
#3 Mr. Mohit Goyal ceased to be a member of the Committee w.e.f. November 22, 2017 due to resignation from the directorship
of the Company.
#4 Mr. Sunil Kolangara ceased to be a member of the Committee w.e.f. September 18, 2017 due to withdrawal of nomination.

B. Attendance of the members at the Audit Committee meeting held during the Financial Year 2017-18:
TABLE 32

Name of the Category & Designation Date(s) of the meeting

Committee Member 14.06.2017 18.09.2017 24.11.2017 28.03.2018
Mr. Kaushik Dutta Non-Executive, Independent Director YES YES NO YES
Mr. Saurabh Non-Executive, Independent Director N.A. N.A. YES YES
Srivastava
Mr. Subramaniam Non-Executive, Independent Director N.A. N.A. YES YES
Ramnath Iyer
Mr. Mohit Goyal Non-Executive, Independent Director YES YES N.A. N.A.
Mr. Sunil Kolangara Non-Executive, Nominee Director YES NO N.A. N.A.

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

2. Nomination & Remuneration Committee: recommend to the Board a policy relating

The Board had constituted Remuneration to the remuneration of the directors, key
Committee at the Board Meeting held on managerial personnel and other employees;
November 18, 2002. It was renamed as The Nomination & Remuneration Committee,
“Nomination & Remuneration Committee” on while formulating the above policy, should
June 12, 2014 and was last reconstituted on ensure that:
November 22, 2017. The composition and terms
of reference of the Nomination & Remuneration § the level and composition of remuneration
Committee are in compliance with Section 178 be reasonable and sufficient to attract,
of the Companies Act, 2013 and Regulation 19 retain and motivate directors of the quality
of the SEBI (Listing Obligations and Disclosure required to run the Company successfully;
Requirements) Regulations, 2015. § relationship of remuneration to
performance is clear and meets appropriate
A. The terms of reference of the Nomination & performance benchmarks; and
Remuneration Committee:
The Nomination & Remuneration Committee
§ remuneration to directors, key managerial
personnel and senior management involves
shall be responsible for, among other things,
a balance between fixed and incentive pay
as may be required by the stock exchanges
reflecting short and long term performance
from time to time, the following:
objectives appropriate to the working of
§ Formulation of the criteria for determining the Company and its goals.
qualifications, positive attributes § Formulation of criteria for evaluation of
and independence of a director and independent directors and the Board;

60 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

§ Devising a policy on Board diversity; § delegation of duties and powers in whole

or in part as it determines, to one or more
§ Identifying persons who are qualified
officers of the Company and/ or to any
to become directors and who may be
one or more sub-Committees in respect of
appointed in senior management in
Newgen ESOP schemes;
accordance with the criteria laid down, and
recommend to the Board their appointment § to choose eligible employees for grant of
and removal and shall carry out evaluation Options and formulate the detailed terms
of every director’s performance (including and conditions of the scheme;
independent director);
§ to meet at such intervals as may be
§ Whether to extend or continue the term of required for consideration of grant of
appointment of the independent director, Options and for giving Options to exercise;
on the basis of the report of performance § to take decision about the criteria of
evaluation of directors; and employees to whom shares, under Newgen
ESOP-2014 scheme, to be directly issued
§ Carrying out any other functions required
to be undertaken by the Nomination or through transfer of shares from trust as
& Remuneration Committee under may be set up under this scheme; and
applicable law.” § to do all such other act and matters as may
Administer and implement the Newgen be provided in the Newgen ESOP-2014
ESOP-2014 Scheme including: Scheme and empowered by the Board of
Directors time to time.

B. Composition of the Nomination & Remuneration Committee during the Financial Year 2017-18:
TABLE 33

Name of the Committee Member Category Chairman/ Member

Mr. Subramaniam Ramnath Iyer#1 Non-Executive, Independent Director Chairman
Mr. Saurabh Srivastava#2 Non-Executive, Independent Director Member
Mr. Kaushik Dutta Non-Executive, Independent Director Member
Mr. Mohit Goyal#3 Non-Executive, Independent Director Member
Mr. Sudhir Sethi#4 Non-Executive, Nominee Director Member
#1 Mr. Saurabh Srivastava was appointed as an Independent Director of the Company w.e.f. August 30, 2017 subject to the
approval of shareholders in the ensuing AGM. He was appointed as member of the Committee by the Board of Directors in
its meeting held on September 18, 2017.
#2 Mr. Subramaniam Ramnath Iyer was appointed as Chairman of the Committee w.e.f. November 22, 2017 subject to the
approval of shareholders in the ensuing AGM. He was appointed as Member of the Committee on November 22, 2017 through
passing Board Circular Resolutions.
#3 Mr. Mohit Goyal, Chairman of the Committee, ceased to be a member of the Committee w.e.f. November 22, 2017 due to
resignation from the directorship of the Company.
#4 Mr. Sudhir Sethi ceased to be a member of the Committee w.e.f. September 18, 2017 due to withdrawal of nomination.

C. Meetings and attendance of the Nomination & Remuneration Committee meeting held during the
Financial Year 2017-18:
During the Financial Year 2017-18 total 3 Nomination & Remuneration Committee meetings were held as below:
TABLE 34

Name of the Committee Category Date of the meeting

Member 14.06.2017 30.08.2017 18.09.2017
Mr. Subramaniam Ramnath Iyer Non-Executive, Independent Director N.A. N.A. N.A.
Mr. Saurabh Srivastava Non-Executive, Independent Director N.A. N.A. N.A.
Mr. Kaushik Dutta Non-Executive, Independent Director YES YES YES
Mr. Mohit Goyal Non-Executive, Independent Director YES YES YES
Mr. Sudhir Sethi Non-Executive, Nominee Director YES YES YES

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

ANNUAL REPORT 2017-18 61

D. Board Annual Evaluation: Directors, performance of the Board as a whole
Pursuant to the provisions of Section 178 of the and performance of the Chairman was evaluated,
Companies Act, 2013 and Regulation 19(4) read taking into account the views of executive
with Part D of the Schedule II to the SEBI (Listing directors and non-executive directors. The same
Obligations and Disclosure Requirements) was discussed in the board meeting held on May
Regulations, 2015, the Board has carried out 17, 2018.
the annual performance evaluation of its own
performance, Board Committees and that of the The performance evaluation of the Independent
Individual Director. Directors was carried out by the entire Board. All
the Directors expressed their satisfaction with
The performance of the Board was evaluated the evaluation process.
by the Board itself after seeking the inputs from
all the directors on the basis of the criteria such E.Details of the Remuneration of Directors:
as structure & composition of Board Culture, (i) Pecuniary transactions with Non-Executive
effectiveness of Board processes, functioning, Directors:
execution and performance of specific duties, During the year under review, there was no
obligations and governance etc. The performance pecuniary transaction with any of the Non-
of Committees was evaluated by the Board Executive Director of the Company except
after seeking inputs from respective Committee payment of sitting fees.
members on the basis of the criteria such as
composition of Committees, effectiveness The Register of Contracts is maintained by
of Committee meetings, and quality of the Company under Section 189 of the Act
recommendation to the Board etc. and the same is placed before the Board for
approval from time to time, as required.
The Board and the Nomination & Remuneration
Committee reviewed the performance of the (ii) Criteria of making payments to Non-Executive
individual directors on the basis of the criteria Directors:
such as the contribution of the individual Independent Directors (“ID”) and Non-
director to the Board and Committee meetings Executive Directors (“NED”) receive
like preparedness on the issues to be discussed, remuneration of ` 1,00,000 (Rupees One
meaningful and constructive contribution and Lakh) by way of sitting fees for attending
inputs in meetings, etc. In addition, the Chairman each of the meeting of the Board and of
was also evaluated on the key aspects of his the Committees which is within the limits
role. In a separate meeting of Independent prescribed under the provisions of the
Directors, performance of Non-Independent Companies Act, 2013.

(iii) Details of Remuneration to Directors:

TABLE 35

§ Non-Executive Directors:
Name Sitting Fees (` in Lakhs) Other Expenses reimbursed, if any
Kaushik Dutta 14 Nil
Saurabh Srivastava 7 Nil
Subramaniam Ramnath Iyer 7 Nil
Mohit Goyal 8 Nil

§ Executive Directors: (in `)

Particulars Name of the Executive Directors
Diwakar Nigam T.S. Varadarajan Priyadarshini Nigam
Salary 15970240 7543360 3888400
Benefits, Perquisites & Allowances 64440 88428 39600
Commission - - -
Bonus - - -
ESOPs - - -
§ Mr. Diwakar Nigam has been appointed as Managing Director by the shareholders, in 25th Annual
General Meeting, for the period of three years with effect from June 1, 2017.

62 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

§ Mr. T.S. Varadarajan has been appointed as A. The terms of reference of the Stakeholders’
Whole-time Director by the shareholders, in Relationship Committee:
25th Annual General Meeting, for the period a. Considering and resolving grievances of
of three years with effect from June 1, 2017. shareholders, and other security holders;

§ Ms. Priyadarshini Nigam has been appointed b. Redressal of grievances of the security
as Whole-time Director by the shareholders, holders of the Company, including complaints
in 25th Annual General Meeting, for the period in respect of allotment of Equity Shares,
of three years with effect from June 1, 2017. transfer of Equity Shares, non-receipt of
declared dividends, annual reports, balance
3. Stakeholders’ Relationship Committee: sheets of the Company, etc.;
The Board constituted the Stakeholders c. Allotment of Equity Shares;
Relationship Committee on June 14, 2017
d. Issue of duplicate certificates and new
and had last reconstituted the Committee on
certificates on split/consolidation/renewal,
November 22, 2017 and the composition is in
etc.; and
compliance with Section 178 of the Companies
Act, 2013 and Regulation 20 of the SEBI (Listing e. Carrying out any other functions required to be
Obligations and Disclosure Requirements) undertaken by the Stakeholders’ Relationship
Regulations, 2015. Committee under applicable law.

B. Composition of the Stakeholders’ Relationship Committee during the Financial Year 2017-18:
TABLE 36

Name of the Committee Member Category Chairman/ Member

Mr. Subramaniam Ramnath Iyer Non-Executive, Independent Director Chairman
Mr. Diwakar Nigam Executive Director Member
Mr. T.S. Varadarajan Executive Director Member

C. Meetings and attendance of the Stakeholders’ Newgen Software Technologies Limited

Relationship Committee meeting held during E-44/13, Okhla Phase - II,
the Financial Year 2017-18: New Delhi - 110 020
During the Financial Year 2017-18 no meeting of Phone: 91-11 46533200
the Committee was held. E-mail: [email protected]
D. Details of Investor Complaints received and
redressed during the year 2017-18 are as follows: 4. Corporate Social Responsibility Committee
In view of listing of Company’s equity shares on (CSR):
stock exchanges, during the year i.e. effective The Board has constituted Corporate Social
January 29, 2018, the communication and / or Responsibility Committee on June 12, 2014 and
correspondence received during the aforesaid its composition and terms of reference are in
period were primarily pertaining to the Initial compliance with Section 135 of the Companies
Public Offer of the equity shares of the Company Act, 2013.
of ` 10 each (“IPO”). These correspondences
included queries regarding: A. The terms of reference of the Corporate Social
Responsibility Committee:
§ non- receipt of refund order; and
§ non-receipt of electronic credit of shares. § To formulate and recommend to the Board, a
Corporate Social Responsibility Policy of the
During the period from the date of listing till Company which shall indicate the activities to
March 31, 2018, the Company received and be undertaken by the Company as specified in
disposed off 79 investor queries/ complaints. Schedule VII of the Companies Act, 2013;
All the grievances were resolved to the
satisfaction of shareholders and investors, and as § To recommend the amount of expenditure to
on March 31, 2018, there were no pending issues be incurred on activities referred in the law;
to be addressed or resolved. § To monitor the Corporate Social Responsibility
Policy of the Company from time to time;
E. Name, Designation and Contact details of
Compliance Officer: § To take decisions and to spend the amount in
Mr. Aman Mourya, CSR related activities and projects as defined
Company Secretary & Compliance Officer in the CSR Policy of the Company.

ANNUAL REPORT 2017-18 63

B. Composition of the Corporate Social Responsibility Committee during the Financial Year 2017-18:
TABLE 37

Name of the Committee Member Category Chairman/ Member

Ms. Priyadarshini Nigam Executive Director Chairperson
Mr. Kaushik Dutta Non-Executive, Independent Director Member
Mr. T.S. Varadarajan Executive Director Member

C. Meetings and attendance of the Corporate Social Responsibility Committee meeting held during the
Financial Year 2017-18:
During the Financial Year 2017-18 one Corporate Social Responsibility Committee meeting was held as below:

TABLE 38

Name of the Committee Category Date of the meeting

Member 14.06.2017
Ms. Priyadarshini Nigam Executive Director YES
Mr. Kaushik Dutta Non-Executive, Independent Director YES
Mr. T.S. Varadarajan Executive Director YES

5. Other Committees
5.1. Finance and Operations Committee:
The Board has constituted the Finance Committee on January 22, 2008 and it was last reconstituted
and renamed as “Finance and Operations Committee” on March 28, 2018.

A. The terms of reference of the Finance and Operations Committee:

1. To provide the authorisation for applying, negotiating and finalising, 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;
2. To provide authorisation to open, operate and close the Bank Account(s) of the Company, to
change the Authorised Signatories therein from time to time; and to provide authorisation in
respect of executing/ submitting bank related documents.
3. To provide authorisation 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.
4. To act as per the Investment Policy approved by the Board of Directors.
5. To provide authorisation 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 2017-18:

TABLE 39

Name of the Committee Member Category Chairman/ Member

Mr. T.S. Varadarajan Executive Director Chairman
Mr. Diwakar Nigam Executive Director Member
Ms. Priyadarshini Nigam Executive Director Member
Whereas, Mr. Arun Kumar Gupta will be permanent invitee to this Committee.

64 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

C. Meetings and attendance of the Finance ii. Mr. T.S. Varadarajan, Whole Time Director,
and Operation Committee meeting held (Member); and
during Financial Year 2017-18:
iii. Ms. Priyadarshini Nigam, Whole-time
During the Financial Year 2017-18 no meeting
Director, (Member);
of the Committee was held.
During the year under review, the IPO
5.2. IPO Committee and Investors Selling
Committee met 2 times on September 27, 2017
Shareholders Committee:
and January 15, 2018.
The Board constituted two Committees
viz (1) IPO Committee to complete
The Investors Selling Shareholders
various legal, statutory and procedural
Committee was comprised of the following
formalities, including appointment of various
members:
intermediaries, filing the draft red herring
prospectus (the “DRHP”) with the SEBI i. Mr. Sudhir Kumar Sethi (nominee of
and filing the red herring prospectus (the Investor);
“RHP”) and the prospectus in relation to
ii. Mr. Sunil Kumar Kolangara (nominee of
the Offer (the “Prospectus”) with the SEBI,
Investor); and
the stock exchanges, and the Registrar of
Companies or any other statutory agencies iii. Mr. Diwakar Nigam (nominee of the
or relevant authorities in respect of Initial Promoter)
Public Offer (the “offer”) and (2) Investors
Selling Shareholders Committee to facilitate The Investors Selling Shareholders
the matters pertaining to the QIPO as stated Committee did not convene any meeting
in the Amendment to SHA agreement. Both during the Financial Year 2017-18.
the aforementioned Committees were on
September 18, 2017. The Board has dissolved both the
Committees (i.e. IPO Committee &
The IPO Committee was comprised of the Investors Selling Shareholders Committee)
following Directors: on March 28, 2018 as the purposes of the
i. Mr. Diwakar Nigam, Chairman & Managing Committees were accomplished after
Director, (Chairperson); successful IPO.

IV. General Meetings:

A. Annual General Meeting (“AGM”):
During the preceding three years, the AGMs of the Company were held at D-152, Okhla Phase-I, New Delhi
- 110 020; details thereof are tabulated below:

TABLE 40

AGM Date & Time of AGM Details of Special resolutions

23rd AGM 17.08.2015 at 4.30 PM 1. Alteration of Articles of Association (“AOA”) by replacing clause
38 in relation to quorum for Board Meeting.
2. Alteration of AOA by replacing clause 40 in relation to notice of
Board Meeting.
3. Alteration of AOA by replacing clause 44A to make AOA
consistent with Companies Act, 2013

ANNUAL REPORT 2017-18 65

 AGM Date & Time of AGM Details of Special resolutions
24th AGM 22.08.2016 at 4.30 PM 1. Modification in AOA by inserting new definition of “QIPO”
2. Modification in AOA by replacing clause 52 in relation to “QIPO”
3. Modification in AOA by replacing clause 58.6: Promoters issue
Buy- back response notice
4. Re-appointment & Remuneration of Mr. Diwakar Nigam as
Managing Director of the company.
5. Re-appointment & Remuneration of Mr. T.S. Varadarajan as
Whole-time Director of the company.
6. Re-appointment & Remuneration of Ms. Priyadarshini Nigam as
Whole-time Director of the company.
7. To increase the borrowing powers/limits upto ` 1,25,00,00,000
8. SR under Section 180(1)(a) of the Companies Act 2013 to
increase the limit upto ` 1,25,00,00,000

25th AGM 28.07.2017 at 4.30 PM 1. Authorisation to Newgen ESOP trust for Secondary Acquisition
of Equity Shares.
2. To increase the Authorised Share Capital to ` 1,10,00,00,000 &
consequent alteration in MOA.
3. AdOption of new set of AOA with requirements of Companies
Act & SEBI Regulations.
4. Raising of Capital through IPO
5. Increase in FPI shareholding limit to 49% of paid up equity share
capital of the Company.
6. Increase in NRI shareholding limit to 24% of paid up equity share
capital of the Company.
7. Revision of remuneration of Mr. Diwakar Nigam, Managing
Director.
8. Revision of remuneration of Mr. T.S. Varadarajan, Whole-time
Director.
9. Revision of remuneration of Ms. Priyadarshini Nigam, Whole-
time Director.
10. Ratification of Appointment of Ms. Shubhi Nigam, daughter
of Mr. Diwakar Nigam, Chairman & Managing Director and Ms.
Priyadarshini Nigam, Whole-time Director, to hold an office or
place of profit
11. To approve & take on record the expiration of Equity Shares with
DVR.
12. Amendment to Newgen Employee Stock Option Scheme-2014.
13. Approval for extending benefits of Newgen Employee Stock
Option Scheme-2014 to employees of Subsidiary Company(s).

66 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

B. Extra-Ordinary General Meeting (“EGM”):

During the preceding three years, the EGMs of the Company were held as tabulated below:

TABLE 41

Date & Time of EGM Place of Meeting Details of Special Resolution

27.03.2015 at 11.30 AM A-6, Satsang Vihar Marg, No special resolution was required to pass.
Qutub Institutional Area,
New Delhi - 110 067.
17.03.2017 at 10.30 AM D-152, Okhla Phase-I, 1. Increase in Authorised Share Capital to
New Delhi - 110 020. ` 76,40,00,000 & consequent alteration of
Memorandum of Association
2. Alteration of AOA due to change in Authorised
Share Capital
3. Conversion of Compulsorily Convertible
Preference Shares into equity shares.
No resolution of shareholders was passed through postal ballot in the above-mentioned AGMs and EGMs.

V. Means of Communication: is provided hereunder:

During the year under review, your Company Day & Date : Thursday, August 9, 2018
before getting its equity shares listed on stock
exchange (i.e. BSE and NSE) published its Time : 11:00 A.M.
financial results on its website. Post listing of Venue : National Cooperative Consumers’
the Company, (w.e.f. January 29, 2018) quarterly Federation of India Limited
and annual financial results are published on the (NCUI) Complex,
website of the Company: https://newgensoft.com 3, Siri Institutional Area,
also in Financial Express and Jansatta, which are August Karanti Marg, Hauz Khas,
national and local daily newspapers respectively. New Delhi - 110 016.

The Investor Relations team also conducts B. Next Financial Year:

conference call with investors / analysts on the Financial Year: April 1, 2018 to March 31, 2019.
results published, if any, after Board meeting. The
Company also informs the Stock Exchanges in C. Date of Dividend Payment:
a prompt manner, all price sensitive information Dividend on equity shares, if declared, at the
and such other matters which, in its opinion, are ensuing AGM, will be credited/dispatched on
material and relevant for the shareholders. The or after August 9, 2018 within the time limit as
Company’s website: https://newgensoft.com, prescribed under Companies Act 2013. as under:
contains information as prescribed under the
Companies Act and the SEBI (Listing Obligations i. the book closure period will be from August 3,
and Disclosure Requirements) Regulations, 2018 to August 9, 2018 inclusive of both days;
2015, including details of the contact persons
ii. to all those beneficial owners holding shares
and Registrar & Transfer Agent of the Company,
in electronic form, as per the beneficial
shareholding pattern, etc. Information published
ownership data made available to the
by the Company i.e. financial results, press release
Company by National Securities Depository
are also available on Company’s website. Further,
Ltd. (NSDL) and Central Depository Services
all news releases, transcripts of conference
(India) Ltd. (CDSL) as of the close of business
calls, Investor Presentation, if any and other
hours on August 2, 2018; and
communications to stock exchanges, are also
uploaded on the Company’s website. iii. to all those shareholders holding shares
in physical form, after giving effect to all
VI. General Shareholder Information: the valid share transfers lodged with the
A. 26th Annual General Meeting: Company/Registrar and Transfer Agent (i.e.
The date, time and venue of the Twenty sixth Karvy Computershare Private Limited) on or
(26th) Annual General Meeting of the Company before the closing hours on August 2, 2018.

ANNUAL REPORT 2017-18 67

D. Listing on Stock Exchanges:
The Equity Shares of face value of ` 10/- each of the Company got listed on January 29, 2018, on the
following Stock Exchanges with the ISIN INE619B01017:

TABLE 42

Sr. No. Name of the Stock Exchange Address Stock Code

1. BSE Limited (BSE) 1st Floor, Phiroze Jeejeebhoy Towers, 540900
Dalal Street, Mumbai 400 001
2. National Stock Exchange of Exchange Plaza, Bandra - Kurla Complex, NEWGEN
India Limited (NSE) Bandra (E), Mumbai 400 051

Pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company
has entered into uniform listing agreements with BSE and NSE, the listing fee payable to these stock
exchanges have been paid in full at the time of listing of the equity shares of the Company.

E. Market Price Data:

Monthly highs and lows of Company’s shares during the Financial Year 2017-18:

TABLE 43

Month BSE NSE BSE Sensex CNX Nifty

High Low High Low (Closing) (Closing)
Apr-17 - - - - 29,918.4 9,304.05
May-17 - - - - 31,145.8 9,621.25
Jun-17 - - - - 30,921.6 9,520.9
Jul-17 - - - - 32,514.9 10,077.1
Aug-17 - - - - 31,730.5 9,917.9
Sep-17 - - - - 31,283.7 9,788.6
Oct-17 - - - - 33,213.1 10,335.3
Nov-17 - - - - 33,149.4 10,226.55
Dec-17 - - - - 34,056.8 10,530.7
Jan-18 266.5 234.65 266.7 234.4 35,965.0 11,027.7
Feb-18 261 215.1 261 215 34,184.0 10,492.85
Mar-18 248 218 248 221.05 32,968.7 10,113.7
The charts below show the comparison of the Company’s share price (monthly high) movement vis-à-vis the movement of the BSE
Sensex and CNX Nifty for the Financial Year 2017-18* (based on month end closing).

Company’s performance Vs. BSE Sensex: Company’s performance Vs. CNX Nifty:

38,000 300 12,000 300

11,500
36,000 250 250
11,000
34,000 200 200
Axis Title

Axis Title

10,500
32,000 150 10,000 150

100 9,500
30,000 100
9,000
28,000 50 50
8,500
26,000 0 8,000 0
Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-17

Oct-17

Nov-17

Dec-17

Jan-18

Feb-18

Mar-18

Apr-17

May-17

Jun-17

Jul-17

Aug-17

Sep-17

Oct-17

Nov-17

Dec-17

Jan-18

Feb-18

Mar-18

Axis Title Axis Title

BSE Sensex Newgen Nifty Newgen

*The monthly high and low share price for the months from April 2017 to December 2017, cannot be provided since the equity shares of
the Company got listed on BSE and NSE w.e.f. January 29, 2018.

68 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

F. Registrar to an Issue and Share Transfer Agent:

Karvy Computershare Private Limited*
Karvy Selenium Tower B, Plot No 31-32 Gachibowli, Financial District, Nanakramguda Hyderabad-500 032
Tel: +91 40 67162222
Facsimile: 91 40 23431551
Email: [email protected]
Contact Person: Mr. M Murali Krishna

*The Board has appointed the above agency on June 14, 2017, to act as its Registrar and Share Transfer Agent (“RTA”). The RTA is,
inter alia, responsible for processing of requests pertaining to share transfers/ transmission/ dematerialisation/ rematerialisation
and other activities related thereto for both electronic and physical shareholdings. Further, RTA also handles corporate actions
such as data requirements for conduct of AGMs, dividends etc. The RTA corresponds with the depositories viz. National Securities
Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) in this regard.

G. Share Transfer System:

Requests for transfer of equity shares held in physical form, received by the RTA/Company shall be
registered within 21 days from the date of receipt, provided the documents are complete in all respects. As
on March 31, 2018, the Company had only 14 shareholders who holds shares in physical form. During the
year 2017-18, there were no requests received by the RTA/Company for transfer of physical shares.

H. Distribution of Shareholding:
The below two tables provide details about the pattern of shareholding among various categories and
number of shares held, as on March 31, 2018.

TABLE 44

March 31, 2018

Categories Number of Shares Percentage
Promoter & promoter group 4,59,28,988 66.34%
Resident Individuals 71,81,621 10.37%
Others 9,56,050 1.38%
Bodies Corporate/ Foreign Corporate Bodies 17,73,834 2.56%
Trust 13,51,584 1.95%
Alternate Investment Funds/ Foreign Portfolio Investors/ Mutual 1,20,43,624 17.40%
Funds
Total 6,92,35,701 100.00%

Alternate Investment Funds/

Foreign Portfolio Investors/
Mutual Funds
17%

Trust
2%

Bodies Corporate/ Foreign

Corporate Bodies
3% Others
1%

Resident Individuals Promoter &

10% promoter group
66%

ANNUAL REPORT 2017-18 69

 Distribution Schedule - Consolidated As on 31-03-2018
TABLE 45

Category No. of % of Total Number Amount % of

(` Amount) Shareholders Shareholders of Shares (in `) Amount
1-5000 41,959 98.13 2,698,045 2,69,80,450 3.90
5001- 10000 246 0.58 2,06,126 20,61,260 0.30
10001- 20000 214 0.50 3,30,363 33,03,630 0.48
20001- 30000 58 0.14 1,47,601 14,76,010 0.21
30001- 40000 45 0.11 1,52,173 15,21,730 0.22
40001- 50000 29 0.07 1,31,014 13,10,140 0.19
50001- 100000 66 0.15 4,98,976 49,89,760 0.72
100001 & Above 143 0.33 6,50,71,403 65,07,14,030 93.99
Total 42,760 100.00 6,92,35,701 69,23,57,010 100.00

I. Dematerialisation/ Rematerialisation of Shares and liquidity:

There were no requests received by the RTA during the Financial Year 2017-18 for re-materialisation of equity
shares of the Company. During the Financial Year, the Company received total 31 dematerialisation requests.

The Company’s shares are compulsorily tradable in dematerialised form on NSE and BSE, which provide
sufficient liquidity to the investors. The Company has established connectivity with both the depositories i.e.
NSDL and CDSL. Shares held in physical and electronic mode as on March 31, 2018 are given in the table below:

TABLE 46

Category Total Shares % to Equity

Physical (A) 1,21,950 0.18
Dematerialised
NSDL 6,70,69,598 96.87
CDSL 20,44,153 2.95
Sub-total (B) 6,91,13,751 99.82
Total (A+B) 6,92,35,701 100.00

J. Outstanding Convertible Instruments/ADRs/GDRs/Warrants:

The Company does not have any outstanding convertible instruments/ ADRs/ GDRs/ Warrants.

K. Commodity price risk or foreign exchange risk and hedging activities:

Please refer to Management Discussion and Analysis Report for the same.

L. Address for Correspondence:

TABLE 47

Registrar and Share Transfer Agent Company

Karvy Computershare Private Limited Newgen Software Technologies Limited
Karvy Selenium Tower B, Plot No 31-32 Gachibowli, E-44/13, Okhla Phase - II, New Delhi - 110 020
Financial District, Nanakramguda, Hyderabad - 500 032 Contact person: Mr. Aman Mourya,
Contact Person: Mr. M Murali Krishna Company Secretary & Compliance Officer
Tel: +91 40 67162222 Tel: 91-11 46533200
Facsimile: 91 40 23431551 E-mail: [email protected]
Email: [email protected]

70 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

VII. Other Disclosures: employment practice. The Company affirms

that no employee has been denied access to
A. Related Party Transactions:
the Audit Committee in this respect. The said
In Compliance with requirement of SEBI (Listing
Policy is placed on the Company’s website at
Obligations and Disclosure Requirements)
https://newgensoft.com.
Regulations, 2015, the Board of Directors has
adopted a policy on materiality of Related Party
Transactions and also on dealing with Related
D. Code of Conduct for all Board members
Party Transactions between the Company
and Senior Management Personnel:
The Board has laid down a code of Conduct
and its Related Parties to ensure the proper
for all Board members and Senior Management
approval and reporting of such transactions. A
Personnel of the Company. The Code is
copy of the said Policy on dealing with Related
displayed on the website of the Company
Party Transactions is available on the website
https://newgensoft.com. All Board members and
of the Company at https://newgensoft.com.
Senior Management personnel have affirmed
There are no material significant related party
compliance requirement under the Code. A
transactions that may have potential conflict
declaration signed by the Managing Director to
with the interests of Company at large. Details of
this effect is enclosed at the end of this report.
related party transactions i.e. transactions of the
Company with the company, with its promoter, E. Disclosure of material transactions:
Directors, Key Managerial Personnel, subsidiaries In terms of Regulation 26(5) of the Listing
or relatives etc., are present under note 46 to Regulations, Senior Management has made
the annual account (Standalone & Consolidated disclosure to the Board relating to all material
Financial Statements) of the Annual Report. financial and commercial transactions, if any,
where they had personal interest or that might
During the year under review, the shareholders of have been in potential conflict with the interest
the Company in its 25th Annual General Meeting of the Company. Based on disclosures received
held on July 28, 2017, ratified the appointments none of the officials in senior management of the
of Ms. Shubhi Nigam daughter of Mr. Diwakar Company have personal interest in any financial
Nigam, Managing Director and Ms. Priyadarshini or commercial transactions within the Company.
Nigam, Whole-time director, of the Company,
as “Manager - Product & Solution” in Newgen F. Compliance of Mandatory and Non-
Software Inc. (“NSI”), a wholly owned subsidiary Mandatory requirements:
of the Company, incorporated in USA. § Mandatory:
The Company has complied with the mandatory
B. Details of Capital Market Non-Compliance, requirements of the SEBI (LODR) Regulations
if any: and there was no non-compliance in respect of
The equity shares of the Company were listed Corporate Governance Report.
on BSE and NSE with effect from January 29,
2018. There has been no non-compliance by the § Discretionary:
Company of any legal requirements; nor has The Company has adopted voluntary
there been any penalty/stricture imposed on the requirement relating to:
Company by any stock exchange, SEBI or any i. Modified opinion(s) in audit report: The
other statutory authority on any matter related Company confirms that its financial
to capital markets. statements for the year under review are
with unmodified audit opinion.
C. Whistle Blower Policy/ Vigil Mechanism:
Pursuant to Section 177(9) of the Act, the Board ii. Reporting of Internal Auditor: The Internal
at its meeting held on June 14, 2017, adopted Auditor reports directly to the Audit
the Whistle Blower Policy and revised by the Committee.
Board in its meeting held on March 28, 2018. The
Whistle Blower Policy includes vigil mechanism G. Subsidiary Companies:
as mandated under the Listing Regulations and The Company has five wholly owned subsidiaries
provides a mechanism for director/employee (WOS). There are no associate companies or joint
to report violations, any unethical behaviour, venture companies within the meaning of section
suspected or actual fraud, violation of the Code 2(6) of the Companies Act, 2013 (“Act”). There
of Conduct etc. which could be detrimental to the has been no material change in the nature of the
organisation’s interest. The mechanism protects business of the subsidiaries.
whistle blower from any kind of discrimination, 1. Newgen Software Inc. USA, incorporated in
harassment, victimisation or any other unfair USA

ANNUAL REPORT 2017-18 71

 2. Newgen Software Technologies Pte. Ltd., at its meeting held on September 18, 2017, and
incorporated in Singapore the same is placed on the Company’s website at
https://newgensoft.com. As per the materiality
3. Newgen Software Technologies Canada Ltd.,
policy, Newgen Software Inc. is our material
incorporated in Canada
subsidiary company incorporated in USA.
4. Newgen Software Technologies (UK) Ltd., Provisions to the extent applicable under the
incorporated in UK Listing Regulations with reference to subsidiary
companies were duly complied. During the year
5. Newgen Computers Technologies Limited,
under review, there were no investments made
incorporated in India
or any significant transactions and arrangements
entered into by the subsidiary companies. Minutes
A Policy for Determining Material Subsidiaries
of the Board meetings of subsidiary companies
in terms of Regulation 16(1)(c) of the Listing
were regularly placed before the Board.
Regulations had been approved by the Board

VIII. 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 Obligations and Disclosure Requirements) Regulations, 2015:
TABLE 48

Sr. Particulars Regulation Number Compliance status

No. (Yes/No/N.A.)
1 Independent director(s) have been appointed in terms 16(1)(b) & 25(6) Yes
of specified criteria of ‘independence’ and/or ‘eligibility’
2 Board composition 17(1) Yes
3 Meeting of Board of directors 17(2) Yes
4 Review of Compliance Reports 17(3) Yes
5 Plans for orderly succession for appointments to the 17(4) Yes
Board and Senior Management Personnel.
6 Code of Conduct for all members of the Board and 17(5) Yes
Senior Management Personnel.
7 Fees/compensation paid to directors 17(6) Yes
8 Minimum Information to be placed before the Board 17(7) Yes
9 Compliance Certificate from Managing Director and 17(8) Yes
CFO
10 Risk Assessment & Management 17(9) Yes
11 Performance Evaluation of Independent Directors 17(10) Yes
12 Composition of Audit Committee 18(1) Yes
13 Meeting of Audit Committee 18(2) Yes
14 Composition of nomination & remuneration Committee 19(1) & (2) Yes
15 Composition of Stakeholder Relationship Committee 20(1) & (2) Yes
16 Composition and role of Risk Management Committee 21(1),(2),(3),(4) N.A.
17 Vigil Mechanism 22 Yes
18 Policy for related party Transaction 23(1),(5),(6),(7) & (8) Yes
19 Prior or Omnibus approval of Audit Committee for all 23(2), (3) Yes
related party transactions, if any.
20 Approval for material related party transactions, if any. 23(4) Yes
21 Composition of Board of Directors of unlisted material 24(1) N.A.
Subsidiary incorporated in India.
22 Other Corporate Governance requirements with 24(2),(3),(4),(5) & (6) N.A.
respect to Indian subsidiary of listed entity.
23 Maximum Directorship & Tenure 25(1) & (2) Yes
24 Meeting of Independent Directors 25(3) & (4) Yes
25 Familiarisation of Independent Directors 25(7) Yes

72 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Sr. Particulars Regulation Number Compliance status

No. (Yes/No/N.A.)
26 Memberships in Committees 26(1) Yes
27 Affirmation with compliance to code of conduct 26(3) Yes
from members of Board of Directors and Senior
management personnel
28 Disclosure of Shareholding by Non-Executive Directors 26(4) Yes
29 Policy with respect to Obligations of directors and 26(2) & 26(5) Yes
senior management.
30 Disclosure on the website of the Company 46(2) Yes

IX. Certificate from Practicing Company Secretary on Compliance of Corporate Governance

Under Sebi (Listing Obligations and Disclosure Requirements) Regulations, 2015:
The Company has obtained a certificate from a M/s Aijaz & Associates, Practicing Company Secretaries
regarding compliance with the provisions relating to Corporate Governance laid down in Part E of Schedule
V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This certificate is
annexed to the Board’s Report and will be sent to the Stock Exchanges, along with the Annual Report to
be filed by the Company.

X. Disclosure with Respect to Demat Suspese Account/ Unclaimed Suspense Account:

In accordance with the requirement of Regulation 34(3) and Part F of Schedule V to the SEBI Listing
Regulations, the Company reports the following details in respect of equity shares lying in the suspense
account which were issued in dematerialised form pursuant to the public issue of the Company.

TABLE 49

Particulars Number of Equity Number of

Shareholders Equity Shares
Aggregate number of shareholders and the outstanding shares in 5 305
the suspense account lying w.e.f January 29, 2018*
Shareholders who approached the Company for transfer of shares 3 183
from suspense account during the year.
Number of shareholders to whom shares were transferred from 2 122
suspense account during the year.
Aggregate number of shareholders and the outstanding shares in 3 183
the suspense account lying as on March 31, 2018
*The date when the Equity Shares of face value of ` 10/- of the Company got listed on BSE Limited (BSE) and National Stock
Exchange of India Limited (NSE).

The voting rights on the shares outstanding in the suspense account as on March 31, 2018 shall remain frozen till the rightful
owner of such shares claims the shares.

ANNUAL REPORT 2017-18 73

XI. CEO and Cfo Certification: XIII. Disclosure of Compliance with Corporate
To comply with the Regulation 17(8) of SEBI Governance Requirements Specified in
(LODR) Regulations, the Chief Executive Officer Regulation 17 To 27 and Regulation 46 of
(CEO) or Managing Director and the Chief Sebi (Lodr) Regulations:
Financial Officer (CFO) of the Company have The Company has complied with the applicable
given Compliance Certificate stating therein provisions of SEBI (LODR) Regulations
matters prescribed under Part B of Schedule II of including Regulation 17 to 27 and Regulation
the said Regulations. 46 of SEBI (LODR) Regulations. The Company
submits a quarterly compliance report on
To comply with of Regulation 33(2) (a) of SEBI Corporate Governance signed by Compliance
(LODR) Regulations, the Managing Director and Officer to the Stock Exchange within 15 (fifteen)
CFO have certified the quarterly financial results days from the close of every quarter. Such
while placing the financial results before the quarterly compliance reports on Corporate
Board. Governance are also posted on the website of
the Company. Compliance of the Conditions of
XII. CEO and Cfo Certification: Corporate Governance has also been audited
Information on Deviation from Accounting by an Independent Firm of Practising Company
Standards, if any, the Company has adopted Secretaries. After being satisfied of the above
Indian Accounting Standards (Ind ASs) in compliances, they have issued a compliance
preparation of annual accounts for the Financial certificate in this respect. The said certificate is
Year 2017-18. attached to this report.

For and on behalf of the Board of Directors

Diwakar Nigam
Date: May 17, 2018 Chairman & Managing Director
Place: New Delhi DIN: 00263222

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 of the Company and the copy of the same has been uploaded on the website of the Company.
https://newgensoft.com.

I hereby declared that all the Directors and Senior Managerial personnel have affirmed the compliance with
the Code of Conduct and have given a confirmation thereto in this regard, in respect of Financial Year ended
March 31, 2018.

Date: May 04, 2018 Diwakar Nigam

Place: New Delhi Chairman & Managing Director
 DIN: 00263222

74 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

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 on March 31, 2018 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 incompliance
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. Significant changes in internal control, if any, over financial reporting during the year;
ii. Significant changes in accounting policies during the year and that the same have been disclosed in
the notes to the financial statements; and
iii. Instances of significant fraud of which we have become aware and the involvement therein, if any, of
the management or an employee having a significant role in the Company’s internal control system
over financial reporting.

Date: May 14, 2018 Diwakar Nigam Arun Kumar Gupta

Place: New Delhi Chairman & Managing Director Chief Financial Officer
DIN: 00263222 PAN: ADTPG6017D

ANNUAL REPORT 2017-18 75

 CERTIFICATE ON COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE

To
The Members,
Newgen Software Technologies Limited,

We have examined the compliance of conditions of Corporate Governance by Newgen Software Technologies
Limited (“the Company”), for the Financial Year ended March 31, 2018 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 (“Listing Regulations”).

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 substantially 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 Listing
Regulations, the compliances of which needs to be further strengthened.

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

Sd/-
M. Aijaz
Practicing Company Secretary
CP No: 7040
M. No.: 6563

Place: New Delhi

Date: May 04, 2018

76 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Annexure 9
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 continues to be a global business; well

Newgen Software Technologies is a software diversified across geographies, customers, revenues
products Company offering Enterprise Content and verticals. We have an active customer base of
Management (ECM), Business Process Management 520+ clients running their businesses and critical
(BPM) and Customer Communication Management operations on our platforms in countries including
(CCM) platform that enables organisations to rapidly India, USA, Canada, South Africa, UAE, Saudi Arabia,
develop powerful applications addressing their UK, Philippines, Indonesia, Singapore and many
strategic business needs. The applications created on more countries. We are providing solutions to some
the Company’s platform enable organisations to drive of the world’s leading banks, insurance companies,
digital transformation and competitive differentiation. healthcare firms, global manufacturers etc. We have
made substantial customer wins during the year and
The Company, with its best-in-class products added 120 new customers including some Fortune
and solutions, deep domain expertise and global 500 companies.
experience, is enabling 520+ customers across 60+
countries to transform their business through its During the year, the Company’s initial public offer
enterprise solutions. It offers products and solutions received an overwhelming response and was
across 17 industries and has been a preferred partner oversubscribed 8.25 times the offer size. The total
of some of the world’s leading Banks, Insurance size of the IPO was ` 425 crores which included a
companies, Healthcare organisations, Governments, fresh issue of ` 95 crores, which the company would
Telecom companies, Shared service centres, and utilise for purchase and furnishing of office premises
BPOs among others. and general corporate purposes. The Company was
listed on the stock exchanges on January 29, 2018.
Newgen’s commitment to delivering innovative
products and solutions makes it one of the few software Industry Overview
products organisations which have attracted multiple Ovum’s key indicators of digitalisation reveal that
recognitions from leading advisory and research firms the rapid pace of adoption of digital and enabling
from time to time. It has been positioned as a ‘Leader’ technologies is increasing across enterprises and
in Dynamic Case Management, Digital Process end users globally. Global technology spending is
Automation and Enterprise Content Management estimated at USD 2,385 billion in 2017. Spending is
by Forrester, a leading Independent Research Firm projected to grow at CAGR 3.36% from 2017 to 2021
in its WaveTM Reports. It has also been positioned and reach USD 2,722 billion by 2021.
by Gartner in its Magic Quadrants. During the year,
the Company has been named as a “Niche Player” in According to the Ovum Report, the Company’s core
Magic Quadrant for Content Services Platform and a addressable market (i.e. global ECM, BPM and CCM
“Visionary” in Magic Quadrant for Intelligent Business markets) were estimated at USD 14,935 million, USD
Process Management Suites. 6,100 million and USD 1,460 million, respectively in
2017. Newgen has expanded its addressable market
Given our constant focus on Research & Development, by developing solution frameworks in key verticals
during the year, we have continued to enhance our including banking, government/PSU, BPO/IT and
solutions to take advantage of market trends and healthcare. The Ovum Report estimates aPaaS to
released our product upgrades for our customers. account for a major share of PaaS spending. The
We have new offerings including Mobility (Newgen global PaaS market is estimated at USD 17.61 billion
Enterprise Mobility Framework), Virtual Repository in 2017 and forecasted at USD 46.66 billion in 2021.
Services, Dynamic Case Management, RPA with BPM, The Indian PaaS market is expected to grow from
Digital Sensing and Flexible Designing and Authoring USD 379 million in 2017 to USD 1.46 billion by the
creating a highly connected and digital workplace. end of 2021.

ANNUAL REPORT 2017-18 77

Ovum Reports forecasts that while ECM will grow at a CAGR of 7.13%, BPM and CCM will grow at a CAGR of
8.39% and 9.99%, respectively between 2017 and 2021. This reflects the fact that ECM is a very mature market
and that there are fewer opportunities, while CCM will enjoy new market opportunities afforded by the adoption
of the technology as a marketing tool to support the customer journey.

Financial Performance
Consolidated Financials in ` Lakhs
TABLE 50

(All amounts in ` Lakhs, except per share data and unless otherwise stated) FY 2018 FY 2017
Revenue
Revenue from operations 51,242.78 42,709.80
Other income 760.98 826.78
Total revenue 52,003.76 43,536.58
Expenses
Employee benefits 24,887.78 21,004.64
Finance costs 520.68 525.60
Depreciation and amortisation 580.67 491.82
Other expenses 16,601.38 14,682.49
Total expenses 42,590.51 36,704.55
Profit before tax 9,413.25 6,832.03
Profit after tax for the year 7,288.68 5,133.01
Other comprehensive income/(loss) for the year, net of income tax 82.31 -37.18
Total comprehensive income for the year 7,370.99 5,095.83

Revenue from Operations Company has been able to maintain 20% compounded
The Company’s business has multiple revenue streams annualised growth in its revenues.
including from:
Newgen’s License revenues were `13,695.06 Lakhs and
§ Sale of software products: one-time upfront license witnessed a 17% growth YoY. The Company witnessed
fees in relation to the platform deployed on-premise
strong growth momentum in our annuity revenues
§ Annuity based revenue: recurring fees/charges which grew by 25% during the year. The SaaS revenues
from the following: specifically (though smaller in base) grew 3 times.

SaaS: subscription fees for licenses in relation to

We have made substantial customer wins during the
platform deployed on cloud
year and added 120 new customers (including some
ATS/AMC: charges for annual technical support Fortune 500 companies) and currently have an active
and maintenance (including updates) of licences, customer base of 520+ clients.
and installation
Geographically, India comprising 35% of the revenues,
Support: charges for support and development
EMEA comprised 33%, USA comprised 23% and
services
APAC (excluding India) comprised 9% of revenues.
§ Sale of services: milestone-based charges for EMEA and APAC were two strong growth centres for
implementation and development, and charges for Newgen. In USA, the business is focussed on SaaS/
scanning services Cloud and thus the upfront revenues are in line with
the business model, but these are better quality
During the year, we delivered broad based growth revenue streams.
across geographies through expanding our sales
distribution, both direct and indirect, with an emphasis Newgen continues to strengthen its horizontal
on expanding our recurring revenues and operating product platform with vertical service accelerators to
cash flows. enhance the overall portfolio. During the year under
review, 54% revenues came from the BFSI. Moreover,
It is important to note that we have adopted Ind the contribution of IT / BPO and government/PSU
AS accounting standards in this Financial Year. On orders to the topline was 8% and 14% respectively.
a consolidated basis, the Company’s revenue from
operations stood at ` 51,242.78 Lakhs reflecting an Profits and Margins
increase of 20% in FY 2018 as against ` 42,709.80 The Company witnessed substantial improvements
Lakhs in FY 2017. Over last 5 Financial Years, the in the operational performance, which reflect in the

78 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

39% increase in EBITDA (adjusted for other income). Other Financial Assets (Current)
The Company reported the EBITDA (adjusted for Other Financial Assets largely comprise of unbilled
other income) of `9,753.63 Lakhs in FY 2018 as revenues pertaining to consideration receivable in
against `7,022.67 Lakhs in FY 2017. PAT improved respect of initial sale of software and services to the
by 42% from `5,133.01 Lakhs in FY 2017 to touch extent of ` 5,091.99 Lakhs
`7,288.68 Lakhs in FY 2018. We continue to strike a
fine balance between investing for our future growth Current Liabilities
and managing our margins. Current liabilities represent borrowings, trade payables,
other financial liabilities, deferred income short-term
Share Capital provisions and other current liabilities. As on March
Share Capital of the Company consists of Equity 31, 2018, the Current liabilities are ` 17,398.59 Lakhs
Share Capital. The equity Share Capital comprises (` 14,674.61 Lakhs as on March 31, 2017). Out of these,
of 6,92,35,701 shares of `10 each. At the time of the the deferred income comprises of ` 4,943.04 Lakhs.
IPO, the Company had issued 38,77,551 shares of `10
each. In addition, shares issued during the year to Opportunities
Newgen ESOP trust were 10,50,000 shares of `10 As per Ovum, the core addressable market of the
each. 13,51,584 shares are held by the Trust. Company in ECM, BPM and CCM is likely to grow
from USD 22 billion in 2017 to USD 30 billion in 2021—
Other Equity at a compounded annualised rate of 7.7%. However,
The total retained earnings as on March 31, 2018 was the market for light weight solutions such as aPaaS
` 22,055.71 Lakhs. During the year, the Company is likely to expand by nearly 28.0% compounded
earned net profit of ` 7,288.68 Lakhs. Newgen has annualised rate over a similar timeframe.
proposed a dividend of ` 2 per share.
The Company is likely to benefit from the emerging
Securities Premium account stands at `9,196.49 trends in digitalisation. Content management is at
Lakhs and witnessed additions during the year on the core of digital transformation. The Company
account of Securities Premium on issue of fresh is well positioned to take advantage of the market
issue of shares and Securities Premium on issue of opportunity with its strong product portfolio which
shares to ESOP Trust. endeavours to enable organisations to leverage the
innovations in mobile, analytics, social and cloud
Others comprised of Capital redemption reserve, technologies.
General reserve, Capital reserve, Foreign currency
translation reserve, Newgen ESOP Trust reserve, Risk Review
Share Options outstanding reserve as well as items Technology/ obsolescence risk: Rapid technological
of other comprehensive income and stands at advances, changing delivery models and evolving
`2,481.65 Lakhs standards in computer software development
and communications infrastructure, changing
Property, Plant & Equipment, Capital Work in and increasingly sophisticated customer needs
Progress and Intangible Assets and frequent new product introductions and
As at March 31, 2018, property, plant and equipment enhancements characterise the industry in which
stands at `6,757.93 Lakhs against `6,103.12 Lakhs we compete. Our success depends upon our ability
as on March 31, 2017. There are fresh additions of to anticipate, design, develop, test, market, license
`1,188.75 Lakhs during the year. The Company has and support new software products, services, and
Capital Work in Progress of `1,659.48 Lakhs as on enhancements of current products and services
March 31, 2018. on a timely basis in response to both competitive
threats and evolving industry requirements. However
The intangible assets of the Company are at `89.56 Lakhs our continuous investments in R&D and intellectual
properties help the Company mitigate this risk.
Investments
Investments comprise of investments in unquoted Currency Risk: The Company derives about 65%
bonds and mutual funds. The aggregate value of of its revenues from international markets and
these investments is ` 5,022.07 Lakhs thus is always exposed to unforeseen exchange
rate fluctuations that can potentially dent the
Trade Receivables revenues and profits of the Company. To tackle
Our trade receivables (net of allowances) as on March with this potential risk, the Company follows a well-
31, 2018 are ` 22,201.67 Lakhs (allowances at ` 4,139.83 documented hedging policy.
Lakhs), against ` 19,957.12 Lakhs (allowances of
` 6,325.98 Lakhs) on March 31, 2017. Market-specific risk: The IT spends in any market are
affected by the domestic as well as global economic
During the year, Debtor Days stood at 158 days as conditions. Considerable or a prolonged slowdown in
compared to 171 days in FY 2017. a particular country or a region or industry within a

ANNUAL REPORT 2017-18 79

region severely affects the IT spends. Similarly, policy to continue to expand the customer base in these
changes in global markets may also influence IT verticals in select mature markets, including USA and
spending pattern. To deal with such market-specific UK. The focus areas in the Caribbean include banking
risks, the Company endeavours to expand its clientele and government/PSUs in partnership with consulting
across industries and geographies continuously. firms. As part of the strategy to increase our customer
base in USA, the Company has made infrastructure
From about 48 countries in FY 2013, the Company and operational investments in USA including hiring
increased its presence across 60+ countries in FY 2018. of senior-level professional in sales and marketing for
Similarly, the Company now has 520+ active clients in the USA market in fiscal 2016.
FY 2018, adding 120 new clients during the year. To
deal with policy challenges the Company has been Newgen plans to expand the product portfolio through
giving an emphasis on growing its regional presence investments in advanced features and technologies.
and hiring local talent, without compromising on It is constantly engaged in enhancement of R&D
economies of scales and cost. capabilities, particularly with a view to create solutions
in emerging technologies that enhance the ability
Our Strategies to develop tools for enabling entry into new areas
Newgen’s strategies are based on addressing the and developing products that address customers in
market opportunities in enterprise platforms for specific industries. Key focus areas include business
ECM, BPM and CCM products, creating domain rich intelligence and analytics, RPA, digitalisation,
solution frameworks on platform and using low code blockchain, dev-ops and user experience. Newgen
platform capabilities to create solution frameworks. continues to work with customers in mature markets
These include: to build capabilities, both in domain and technology,
for enhancing the product offering, strengthening
Expansion of business and geographical the platform and expanding the number of features
footprint available to customers.
The Company plans to expand its market share across
key geographies and solutions. Its platform is designed The Company has built high level domain expertise
to be natively multi-lingual to address challenges and created robust frameworks for Retail and
in multi-national organisations. Newgen currently Corporate lending in the Banking domain which are
operates in over 60 countries and believes that it has successfully operating across banks and geographies
a significant opportunity to grow the international
footprint. It is investing in direct and indirect sales To further strengthen and expand our portfolio we
channels, professional services, customer support and may look at inorganic ways of growth as well.
channel partners to expand the geographical footprint.
The Company has a regional go-to-market strategy with Expansion of strategic business applications
specific strategies for mature markets such as USA and to new verticals
developing markets such as India and South-East Asia. The Company has used the platform to create vertical
domain rich products in several verticals, including
The Company plans to grow through its differentiated
banking, government/PSU, BPO/IT, insurance
‘land and expand’ model. The customers receive the
and healthcare. While the platforms are industry-
complete set of modules and functionality of the
agnostic, investments have been made to enhance
platform with their initial purchase/ subscription and
the expertise of sales and marketing for key industry
can eventually build a number of applications on the
verticals. Newgen believes that focusing on the
platform due to an effective reduction in the per-user
digital transformation needs of organisations within
cost of each application and also save substantial
these industry verticals can help drive adoption of
costs of switching over to a new platform.
the platform. It also plans to target new verticals
Newgen plans to develop new customer relationships including education, telecommunications, oil & gas,
by identifying potential customers that operate within retail, manufacturing, infrastructure and logistics.
the same verticals and engage in cross-selling of the
solutions. It aims to also begin developing new verticals Attract, develop and retain highly-skilled
such as telecommunications, retail, manufacturing employees
and education in developing markets. The Company The Company’s employees are one of its most
continues to leverage its in-depth industry expertise important assets. It focuses on the quality and level
and is continuously focusing on enhancing its global of service that the employees deliver by investing in
delivery model with onshore centres in proximity to large recruitment, development, retention, maintenance
customers and offshore centres at strategic locations. of a culture of innovation and by creating both
a challenging and rewarding work environment.
Focus on attractive verticals in select mature Newgen’s talent development strategy focuses
markets on engaging, motivating and developing a high
Newgen has a strong presence across regions in performing workforce and aims to create and sustain
the banking and healthcare verticals and intends a positive workplace culture for employees.

80 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Internal Controls Systems & their Adequacy thus values its human resources as its biggest asset.
The Company has aligned its current systems of The employees are provided a fair environment
internal financial control with the requirement of supported by transparent policies to foster their
Companies Act 2013. The explanation of the term personal growth along with attainment of corporate
‘Internal Financial Control’ has been provided only in objectives. It encourages all employees to strike a
the context of section 134(5)(e). It includes policies and perfect worklife balance. The Company’s policies are
procedures adopted by the company for ensuring the employee centric and aim at keeping its personnel
orderly and efficient conduct of its business, thereby motivated and satisfied. Nonetheless, the Company
covering not only the controls pertaining to financial has formed disciplinary policies and a code
statements but also include strategic and operational of due diligence to ensure smooth functioning of
controls pervasive across the entire business. the business.

Newgen internal controls are commensurate with During the year, critical functions of the organisation
its size and the nature of its operations. These have were strengthened with assessment of Leadership
been designed to provide reasonable assurance with bandwidth to build a strong team aligned to our
regard to recording and providing reliable financial and fundamentals and culture. Particular emphasis was
operational information, complying with applicable placed on attracting, developing and retaining talent
statutes, safeguarding assets from unauthorised use, and fostering a unique performance culture. As a
executing transactions with proper authorisation and strategic partner, the HR function launched numerous
ensuring compliance of corporate policies. In view initiatives to ensure a high-performing and engaged
of the above, and for safeguarding the assets of the workforce.
company, preventing and detecting fraud or other
irregularities and maintaining proper books of account As on March 31, 2018, we had 2,656 personnel
and to ensure adequate internal financial control, (consolidated) comprising 2,402 employees and 254
the Company is already pursuing various Standard contract workers. As a result of its visionary human
Operating Procedures (SOPs), Vigil Mechanism, audit resource policies, the Company has managed to attract
mechanism (through Internal Audit for Financial Year and retain talent.
2017-18, Secretarial Audit and Statutory Audit). Newgen
also undergoes periodic audit by specialised third Outlook
party consultants and professional for business specific Digital Transformation has become a central
compliances such as quality management, Information component for businesses across all industries. It
Security Management, etc. It has continued its efforts entails leveraging digital tools and technologies to
to align all its processes and controls with global best make life easier, bringing increased convenience,
practices. Our management assessed the effectiveness enhanced efficiency, improved affordability, and
of the Company’s internal control over financial better access to information, goods and services.
reporting as of March 31, 2018. B S R & Associates,
LLP, Chartered Accountant, the statutory auditors of Going forward, the Company aims to pursue growth
Newgen has audited the financial statements included strategies to expand its market share across key
in this annual report and also reported on our internal geographies and solutions. Newgen’s platform is
control over financial reporting (as defined in section designed to be natively multi-lingual to address
143 of Companies Act 2013). challenges in multi-national organisations. The
Company believes that focusing on the digital
The Audit Committee reviews reports submitted
transformation needs of organisations within
by the management and audit reports submitted
key industry verticals can help drive adoption of
by M/s Grant Thornton, internal auditors, and B S
its platform. As of March 31, 2018, the Company
R & Associates, LLP, statutory auditors. The audit
operated in 60+ countries and believes it has a
Committee also meets Newgen’s statutory auditors
significant opportunity to grow its international
to ascertain, inter alia, their views on the adequacy
footprint. It continues to invest in direct and
of internal control systems and keeps the Board
indirect sales channels, professional services,
of directors informed of its major observations
customer support and channel partners to expand
periodically. Based on its evaluation (as defined
its geographical footprint.
in section 177 of Companies Act 2013), our audit
Committee has concluded that, as of March 31, 2018,
To address the market opportunities arising from
our internal financial controls were adequate and
digitisation, Newgen seeks to continue to expand its
operating effectively.
product portfolio and is currently working on several
Human Resources projects including ECM NXT, Virtual Repository
The Company follows the philosophy of achieving Services, Digital Sensing, RPA with BPM, BPM NXT
mutually beneficial and all-inclusive growth and and Corrus.

ANNUAL REPORT 2017-18 81

Annexure 10
FORM NO. 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 transaction
under third proviso thereto.

1) Details of contracts or arrangements or transactions not at Arm’s length basis: 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 at arm’s length during FY 2017-18. The pricing
of the transactions are 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. In addition, the process goes through internal and external
checking, followed by quarterly reporting to the Audit Committee:

TABLE 51

a) Name (s) of the related party & nature of Ms. Shubhi Nigam daughter of Mr. Diwakar Nigam, Chairman
relationship and Managing Director and Ms. Priyadarshini Nigam, Whole-
time Director, of the Company
b) Nature of contracts/arrangements/transaction Employment
c) Duration of the contracts/arrangements/ April 27, 2017 till continuing
transaction
d) Salient terms of the contracts or arrangements Appointment of Ms. Shubhi Nigam as Manager - P & S in
or transaction including the value, if any Newgen Software Inc., a wholly-owned subsidiary of the
Company (Newgen Software Technologies Limited), on a
total remuneration of USD 1,00,000. She will be also entitled
for basic, additional, fixed and variable remunerations, bonus,
commission, incentives, allowances, benefits, perquisites, etc.
as per rules of her employer. The terms of employment and
remuneration of Ms. Shubhi Nigam may be varied from time
to time by her employer Newgen Software Inc. based on the
industry standards prevailing for similar position in USA and
based on her performance evaluation and its own Remuneration
Policy for similar position
e) Justification for entering into such contracts or Appointment on the basis of qualification. Bachelor’s in Applied
arrangements or transactions’ Science from University of Pennysylvania.
f) Date of approval by the Board June 14, 2017
g) Amount paid as advances, if any Not Applicable
h) Date on which the special resolution was July 28, 2017
passed in General meeting as required under
first proviso to section 188

82 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

2) Details of contracts or arrangements or transactions at Arm’s length basis:

TABLE 52

a) Name (s) of the related party & nature of relationship Not Applicable
b) Nature of contracts/arrangements/transaction Not Applicable
c) Duration of the contracts/arrangements/transaction Not Applicable
d) Salient terms of the contracts or arrangements or transaction including the Not Applicable
value, if any
e) Date of approval by the Board Not Applicable
f) Amount paid as advances, if any Not Applicable
Note: the above disclosure on material transactions are based on the principle that the transactions with wholly owned
subsidiaries are exempt for the purpose of section 188(1) of the Companies Act, 2013.

For and on behalf of the Board of Directors

Date: May 17, 2018  Diwakar Nigam

Place: New Delhi  Chairman and Managing Director
 DIN: 00263222

ANNUAL REPORT 2017-18 83

Independent Auditor’s Report

To Auditor’s Responsibility
The Members of Newgen Software Technologies Our responsibility is to express an opinion on these
Limited standalone Ind AS financial statements based on our
audit.
Report on the Audit of the Standalone Ind AS
Financial Statements We have taken into account the provisions of the Act,
We have audited the accompanying standalone the accounting and auditing standards and matters
Ind AS financial statements of Newgen Software which are required to be included in the audit report
Technologies Limited (“the Company”), which under the provisions of the Act and the Rules made
comprise the Balance Sheet as at 31 March 2018, thereunder.
the Statement of Profit and Loss (including other
We conducted our audit of the standalone Ind AS
comprehensive income), the Statement of Changes in
financial statements in accordance with the Standards
Equity and the Statement of Cash Flows for the year
on Auditing specified under Section 143(10) of the
then ended, and summary of the significant accounting
Act. Those Standards require that we comply with
policies and other explanatory information.
ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the
Management’s Responsibility for the Standalone
standalone Ind AS financial statements are free from
Ind AS Financial Statements material misstatement.
The Company’s Board of Directors is responsible for
the matters stated in Section 134(5) of the Companies An audit involves performing procedures to obtain
Act, 2013 (“the Act”) with respect to the preparation audit evidence about the amounts and the disclosures
of these standalone Ind AS financial statements that in the standalone Ind AS financial statements.
give a true and fair view of the state of affairs, profit The procedures selected depend on the auditor’s
(including other comprehensive income), changes in judgment, including the assessment of the risks of
equity and cash flows of the Company in accordance material misstatement of the standalone Ind AS
with the accounting principles generally accepted in financial statements, whether due to fraud or error. In
India, including the Indian Accounting Standards (Ind making those risk assessments, the auditor considers
AS) prescribed under section 133 of the Act. internal financial control relevant to the Company’s
preparation of the standalone Ind AS financial
This responsibility also includes maintenance of statements that give a true and fair view in order to
adequate accounting records in accordance with the design audit procedures that are appropriate in the
provisions of the Act for safeguarding the assets of circumstances. An audit also includes evaluating the
the Company and for preventing and detecting frauds appropriateness of the accounting policies used and
and other irregularities; selection and application of the reasonableness of the accounting estimates made
appropriate accounting policies; making judgments by the Company’s Directors, as well as evaluating the
and estimates that are reasonable and prudent; and overall presentation of the standalone Ind AS financial
statements.
design, implementation and maintenance of adequate
internal financial controls that were operating
We are also responsible to conclude on the
effectively for ensuring the accuracy and completeness
appropriateness of management’s use of the going
of the accounting records, relevant to the preparation
concern basis of accounting and, based on the audit
and presentation of the standalone Ind AS financial
evidence obtained, whether a material uncertainty
statements that give a true and fair view and are free exists related to events or conditions that may cast
from material misstatement, whether due to fraud or significant doubt on the entity’s ability to continue
error. as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention
In preparing the financial statements, management in the auditor’s report to the related disclosures in
is responsible for assessing the Company’s ability to the financial statements or, if such disclosures are
continue as a going concern, disclosing, as applicable, inadequate, to modify the opinion. Our conclusions
matters related to going concern and using the going are based on the audit evidence obtained up to the
concern basis of accounting unless management date of the auditor’s report. However, future events or
either intends to liquidate the Company or to cease conditions may cause an entity to cease to continue
operations, or has no realistic alternative but to do so. as a going concern.

84 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

We believe that the audit evidence we have obtained Directors, none of the directors is disqualified
is sufficient and appropriate to provide a basis for as on 31 March 2018 from being appointed as
our audit opinion on the standalone Ind AS financial a director in terms of Section 164(2) of the
statements. Act.

f) With respect to the adequacy of the

Opinion
internal financial controls with reference to
In our opinion and to the best of our information
and according to the explanations given to us, the financial statements of the Company and
aforesaid standalone Ind AS financial statements give the operating effectiveness of such controls,
the information required by the Act in the manner so refer to our separate Report in “Annexure
required and give a true and fair view in conformity B”.
with the accounting principles generally accepted in g) With respect to the other matters to
India of the state of affairs of the Company as at 31 be included in the Auditor’s Report in
March 2018, its profit (including other comprehensive accordance with Rule 11 of the Companies
income), changes in equity and its cash flows for the (Audit and Auditors) Rules, 2014, in our
year ended on that date.
opinion and to the best of our information
and according to the explanations given to
Report on Other Legal and Regulatory
us:
Requirements
1. As required by the Companies (Auditor’s Report) i. The Company does not have any
Order, 2016 (“the Order”) issued by the Central pending litigations which would impact
Government in terms of Section 143(11) of the its financial position;
Act, we give in “Annexure A” a statement on the
ii. The Company did not have any long-
matters specified in paragraphs 3 and 4 of the
term contracts including derivative
Order.
contracts for which there were any
material foreseeable losses;
2. As required by Section 143(3) of the Act, we
report that: iii. There were no amounts which were
required to be transferred to the
a) We have sought and obtained all the Investor Education and Protection Fund
information and explanations which to by the Company; and
the best of our knowledge and belief were
necessary for the purposes of our audit. iv. The disclosures in the financial
statements regarding holdings as well
b) In our opinion, proper books of account as dealings in specified bank notes
as required by law have been kept by the during the period from 8 November
Company so far as it appears from our
2016 to 30 December 2016 have not
examination of those books.
been made since they do not pertain to
c) The Balance Sheet, the Statement of Profit the financial year ended 31 March 2018.
and Loss (including other comprehensive However, amounts as appearing in the
income), the Cash Flow Statement and audited Standalone financial statements
Statement of Changes in Equity dealt with for the year ended 31 March 2017 have
by this Report are in agreement with the been disclosed.
books of account.
d) In our opinion, the aforesaid standalone Ind For B S R & Associates LLP
AS financial statements comply with the Chartered Accountants
Firm Registration No.:
Indian Accounting Standards prescribed
116231W/ W-100024
under section 133 of the Act.
e) On the basis of the written representations Rakesh Dewan
received from the directors as on 31 March Place: Gurugram Partner
2018 taken on record by the Board of Date: 17 May 2018 Membership No.: 092212

ANNUAL REPORT 2017-18 85

Annexure A
referred to in our Independent Auditor’s Report to the members of Newgen Software
Technologies Limited on the standalone financial statements for the year ended 31 March
2018, we report that:

(i) (a) The Company has maintained proper records (v) As per the information and explanations given to
showing full particulars, including quantitative us, the Company has not accepted any deposits
details and situation of fixed assets. as mentioned in the directives issued by the
Reserve Bank of India and the provisions of
(b) The Company has a regular program of section 73 to 76 or any other relevant provisions
physical verification of its fixed assets of the Act and the rules framed there under.
by which all fixed assets are verified in a Accordingly paragraph 3(v) of the order is not
phased manner over a period of two years. applicable.
In accordance with this programme, fixed
assets at certain locations were verified by the (vi) The Central Government has not prescribed the
management during the year. In our opinion, maintenance of cost records under sub section
this periodicity of physical verification is (1) of section 148 of the Companies Act, 2013 for
reasonable having regard to the size of the any of the activities carried out by the Company.
Company and the nature of its assets. As Accordingly paragraph 3(vi) of the order is not
informed to us, no material discrepancies applicable.
were noticed on such verification.
(vii) (a) According to the information and
(c) According to the information and explanations given to us and on the basis
explanations given to us and on the basis of our examination of the records of the
of our examination of the records of the Company, amounts deducted/ accrued in the
Company, the title deeds and lease deeds books of account in respect of undisputed
of the immovable properties are held in the statutory dues including Provident Fund,
name of the Company. Employees’ State Insurance, Income-tax,
Sales tax, Service tax, Goods and Service
(ii) The Company is a service company, primarily tax, Duty of customs, Value added tax, Cess
engaged in the business of software product and other material statutory dues have been
development including designing and delivering regularly deposited during the year by the
end-to-end software solutions covering the Company with the appropriate authorities.
entire spectrum of software services from As explained to us, the Company does not
workflow automation to document management have any dues on account of Duty of excise.
to imaging. Accordingly, it does not hold any
physical inventories at the end of the year. Thus, According to the information and
paragraph 3(ii) of the Order is not applicable. explanations given to us, no undisputed
amounts payable in respect of Provident
(iii) The Company has not granted any loans, secured Fund, Employees’ State Insurance, Income
or unsecured, to Companies, limited liability -tax, Sales tax, Service tax, Goods and
partnerships, firms or other parties covered in Service tax, Duty of customs, Value added
the register required under section 189 of the tax, Cess and other material statutory dues
Companies Act, 2013. Accordingly, para 3(iii) of were in arrears as at 31 March 2018 for a
the Order is not applicable. period of more than six months from the
date they became payable.
(iv) According to the information and explanations
given to us, provisions of section 186 of the (b) According to the information and
Companies Act, 2013 in respect of loan given explanations given to us, there are no dues
have been complied with by the Company. of Income tax, Sales tax, Service tax, Goods
There are no loans given by the company in and Service tax, Duty of customs and Value
respect of which provisions of Section 185 of the added tax which have not been deposited
Companies Act, 2013 are applicable. There are with the appropriate authorities on account
no investments, guarantees and securities given of any dispute. As explained above, the
in respect of which Section 185 and 186 of the Company does not have any dues on
Companies Act, 2013 are applicable. account of Duty of excise.

86 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

(viii) In our opinion, and according to the information (xii) According to the information and explanations
and explanations given to us, the Company has given to us, the Company is not a Nidhi Company.
not defaulted in repayment of loans/borrowings Accordingly, paragraph 3(xii) of the Order is not
to banks. Further, there were no dues payable to applicable.
financial institutions, government or debenture
holders during the year or outstanding as at 31 (xiii) According to the information and explanations
March 2018. given to us and on the basis of our examination
of the records of the Company, there are no
(ix) The Company raised money by way of initial transactions with the related parties which are
public offer. The proceeds from IPO is Rs. not in compliance with Section 177 and 188 of the
8,150.85 lakhs (net of issue related expenses) Companies Act, 2013 and the details have been
disclosed in the standalone financial statements
Details of utilization of IPO proceeds is as follows: of the Company, as required, by the applicable
accounting standards.

(xiv) According to the information and explanation

Particulars Net Utilized Unutilized
proceeds upto 31 amount as given to us and on the basis of our examination
March at 31 of the records of the Company, the Company has
2018 March not made any preferential allotment or private
2018
placement of shares or fully or partly convertible
Purchase and 8,150.85 - 8,150.85
debentures during the year.
furnishing of
office premises
near Noida- (xv) According to information and explanations given
Greater Noida to us, the Company has not entered into any
Expressway, non-cash transactions with directors or persons
Uttar Pradesh connected with them. Accordingly, paragraph
and general
3(xv) of the Order is not applicable.
corporate
expenses
Total 8,150.85 - 8,150.85 (xvi) According to the information and explanations
given to us, the Company is not required to be
The company has not raised money by way of registered under section 45-IA of the Reserve
further public offer (including debt instruments) Bank of India Act, 1934.
or term loans.
For B S R & Associates LLP
(x) According to the information and explanations Chartered Accountants
given to us, no fraud by the Company or on the Firm Registration No.:
Company by its officers or employees has been 116231W/ W-100024
noticed or reported during the year.
Rakesh Dewan
(xi) According to the information and explanations Place: Gurugram Partner
given to us and on the basis of our examination Date: 17 May 2018 Membership No.: 092212
of the records of the Company, the managerial
remuneration has been paid/provided by
the Company in accordance with provisions
of section 197 read with Schedule V of the
Companies Act, 2013.

ANNUAL REPORT 2017-18 87

Annexure B
to the Independent Auditor’s Report of even date on the standalone financial statements
of Newgen Software Technologies Limited for the year ended 31 March 2018

Report on the Internal Financial Controls under audit evidence about the adequacy of the internal
Clause (i) of Sub-section 3 of Section 143 of the financial controls system with reference to financial
Companies Act, 2013 (“the Act”) statements and their operating effectiveness. Our
We have audited the internal financial controls with audit of internal financial controls with reference
reference to financial statements of Newgen Software to financial statements included obtaining an
Technologies Limited (“the Company”) as of 31 March understanding of internal financial controls with
2018 in conjunction with our audit of the standalone reference to financial statements, assessing the risk
Ind AS financial statements of the Company for the that a material weakness exists, and testing and
year ended on that date. evaluating the design and operating effectiveness
of internal control based on the assessed risk.
Management’s Responsibility for Internal Financial The procedures selected depend on the auditor’s
Controls judgement, including the assessment of the risks of
The Company’s management is responsible for material misstatement of the financial statements,
establishing and maintaining internal financial whether due to fraud or error.
controls based on the internal control with reference
to financial statements criteria established by the We believe that the audit evidence we have obtained
Company considering the essential components of is sufficient and appropriate to provide a basis
internal control stated in the Guidance Note on Audit for our audit opinion on the Company’s internal
of Internal Financial Controls over Financial Reporting, financial controls system with reference to financial
issued by the Institute of Chartered Accountants of statements.
India (‘ICAI’). These responsibilities include the design,
implementation and maintenance of adequate internal Meaning of Internal Financial Controls with
financial controls that were operating effectively reference to financial statements
for ensuring the orderly and efficient conduct of its A Company’s internal financial control with reference
business, including adherence to Company’s policies, to financial statements is a process designed to
the safeguarding of its assets, the prevention and provide reasonable assurance regarding the reliability
detection of frauds and errors, the accuracy and of financial reporting and the preparation of financial
completeness of the accounting records, and the statements for external purposes in accordance
timely preparation of reliable financial information, as with generally accepted accounting principles. A
required under the Companies Act, 2013. Company’s internal financial control with reference
to financial statements includes those policies and
Auditors’ Responsibility procedures that pertain to the maintenance of
Our responsibility is to express an opinion on the records that, in reasonable detail, accurately and fairly
Company’s internal financial controls with reference reflect the transactions and dispositions of the assets
to financial statements based on our audit. We of the Company; (2) provide reasonable assurance
conducted our audit in accordance with the Guidance that transactions are recorded as necessary to permit
Note on Audit of Internal Financial Controls Over preparation of financial statements in accordance
Financial Reporting (the “Guidance Note”) and the with generally accepted accounting principles, and
Standards on Auditing, issued by ICAI and deemed to that receipts and expenditures of the Company are
be prescribed under section 143(10) of the Companies being made only in accordance with authorisations of
Act, 2013, to the extent applicable to an audit of management and directors of the Company; and (3)
internal financial controls, both applicable to an audit provide reasonable assurance regarding prevention
of Internal Financial Controls and, both issued by or timely detection of unauthorised acquisition, use,
the ICAI. Those Standards and the Guidance Note or disposition of the Company’s assets that could
require that we comply with ethical requirements have a material effect on the financial statements.
and plan and perform the audit to obtain reasonable
assurance about whether adequate internal financial Inherent Limitations of Internal Financial Controls
controls with reference to financial statements was with reference to financial statements
established and maintained and if such controls Because of the inherent limitations of internal
operated effectively in all material respects. financial controls with reference to financial
statements, including the possibility of collusion or
Our audit involves performing procedures to obtain improper management override of controls, material

88 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

misstatements due to error or fraud may occur and 2018, based on the internal control with reference
not be detected. Also, projections of any evaluation to financial statements criteria established by the
of the internal financial controls with reference to Company considering the essential components of
financial statements to future periods are subject internal control stated in the Guidance Note on
to the risk that the internal financial control with Audit of Internal Financial Controls Over Financial
reference to financial statements may become Reporting, issued by the ICAI.
inadequate because of changes in conditions, or
that the degree of compliance with the policies or
For B S R & Associates LLP
procedures may deteriorate.
Chartered Accountants
Firm Registration No.:
Opinion
116231W/ W-100024
In our opinion, the Company has, in all material
respects, an adequate internal financial controls
Rakesh Dewan
system with reference to financial statements and such Place: Gurugram Partner
internal financial controls with reference to financial Date: 17 May 2018 Membership No.: 092212
statements were operating effectively as at 31 March

ANNUAL REPORT 2017-18 89

Balance Sheet
as at March 31, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Note As at As at As at
31 March 2018 31 March 2017 1 April 2016
ASSETS
Non-current assets
Property, plant and equipment 4 6,664.89 6,044.15 6,229.12
Capital work-in-progress 4 1,659.47 1,108.29 604.61
Intangible assets 5 89.56 70.43 103.01
Investment in subsidiaries 6 918.19 908.11 723.05
Financial assets
Loans 7 264.79 206.43 194.85
Other financial assets 8 548.53 227.71 169.79
Deferred tax assets (net) 32 1,896.09 2,356.24 2,292.26
Income tax assets (net) 9 1,277.88 852.26 808.69
Other non-current assets 10 356.23 105.39 46.07
Total non-current assets 13,675.63 11,879.01 11,171.45
Current assets
Financial assets
Investments 11 5,022.07 4,866.04 4,516.14
Trade receivables 12 20,392.66 18,588.04 15,575.18
Cash and cash equivalents 13 13,520.79 2,818.68 2,083.99
Loans 14 317.27 68.04 35.04
Other financial assets 15 5,177.19 2,609.39 2,419.49
Other current assets 16 641.23 611.03 441.37
Total current assets 45,071.21 29,561.22 25,071.21
TOTAL ASSETS 58,746.84 41,440.23 36,242.66

EQUITY AND LIABILITIES

Equity
Share capital 17 6,788.41 6,231.30 6,208.44
Other equity
Securities premium 9,196.49 599.87 494.07
Retained earnings 21,500.53 15,598.43 11,581.82
Others (including items of other 2,485.79 2,339.54 2,251.95
comprehensive income)
Total equity attributable to the owners of 39,971.22 24,769.14 20,536.28
the Company
Non-current Liabilities
Financial liabilities
Borrowings 18 1,316.66 1,617.99 1,917.45
Derivative 19 - - 136.00
Provisions 20 1,653.37 1,442.97 1,121.59
Total non-current liabilities 2,970.03 3,060.96 3,175.04
Current liabilities
Financial liabilities
Borrowings 21 4,946.27 5,226.18 5,883.19
Trade payables 22 2,143.75 1,714.52 1,405.47
Other financial liabilities 23 3,575.91 2,869.36 2,046.76
Deferred income 24 3,607.99 3,038.66 2,594.28
Other current liabilities 24 1,320.39 527.74 411.77
Provisions 25 211.28 233.67 189.87
Total current liabilities 15,805.59 13,610.13 12,531.34
Total Liabilities 18,775.62 16,671.09 15,706.38

TOTAL EQUITY AND LIABILITIES 58,746.84 41,440.23 36,242.66

Summary of significant accounting policies 3
The accompanying notes are an integral part of the Standalone Financial Statements
As per our report of even date

For B S R & Associates LLP For and on behalf of the Board of Directors of
Chartered Accountants Newgen Software Technologies Limited
Firm Registration No.:
116231W / W-100024

Rakesh Dewan Diwakar Nigam T. S. Varadarajan Arun Kumar Gupta Aman Mourya
Partner Managing Director Whole Time Director Chief Financial Officer Company Secretary
Membership No.: 092212 DIN: 00263222 DIN: 00263115 Membership No: 27299

Place: Gurugram Place: New Delhi Place: New Delhi Place: New Delhi Place: New Delhi
Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018

90 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Statement of Profit and Loss

for the year ended March 31, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Note For the year ended For the year ended

31 March 2018 31 March 2017
Income
Revenue from operations 26 45,952.36 38,311.41
Other income 27 758.19 826.61
Total income 46,710.55 39,138.02
Expenses
Employee benefits expense 28 22,285.86 18,633.19
Finance costs 29 520.68 525.60
Depreciation and amortisation expense 30 567.68 481.87
Other expenses 31 14,243.15 13,172.00
Total expenses 37,617.37 32,812.66
Profit before tax 9,093.18 6,325.36
Tax expense 32
Current tax 1,549.01 1,540.62
Less: MAT entitlement (86.97) -
Tax expense for earlier years 64.50 126.24
Deferred tax (credit) 503.55 (133.89)
Income tax expense 2,030.09 1,532.97
Profit for the year 7,063.09 4,792.39
Other comprehensive income/(loss)
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit liability (asset) 126.35 (82.88)
Income tax relating to items that will not be reclassified to (43.73) 28.31
profit or loss
Net other comprehensive income/(loss) not to be 82.62 (54.57)
reclassified subsequently to profit or loss
Items that will be reclassified subsequently to profit or loss
Debt instruments through other comprehensive income - net (0.47) 26.59
change in fair value
Income tax relating to items that will be reclassified to profit or loss 0.16 (9.20)
Net other comprehensive (loss)/income to be reclassified (0.31) 17.39
subsequently to profit or loss
Other comprehensive income/(loss) for the year, net of 82.31 (37.18)
income tax
Total comprehensive income for the year 7,145.40 4,755.21
Profit attributable to:
Owners of the company 7,063.09 4,792.39
Profit for the year 7,063.09 4,792.39
Other comprehensive income/(loss) attributable to:
Owners of the company 82.31 (37.18)
Other comprehensive income/(loss) for the year 82.31 (37.18)
Total comprehensive income attributable to:
Owners of the company 7,145.40 4,755.21
Total comprehensive income for the year 7,145.40 4,755.21
Earnings per equity share
Nominal value of share INR 10 (31 March 2017: INR 10, 1 April
2016: INR 10)
Basic earning per share 11.09 7.72
Diluted earning per share 10.81 7.55
Summary of significant accounting policies 3
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
Chartered Accountants Newgen Software Technologies Limited
Firm Registration No.:
116231W / W-100024
Rakesh Dewan Diwakar Nigam T. S. Varadarajan Arun Kumar Gupta Aman Mourya
Partner Managing Director Whole Time Director Chief Financial Officer Company Secretary
Membership No.: 092212 DIN: 00263222 DIN: 00263115 Membership No: 27299

Place: Gurugram Place: New Delhi Place: New Delhi Place: New Delhi Place: New Delhi
Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018

ANNUAL REPORT 2017-18 91

92
Statement of Changes in Equity
as at 31 March 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

a. Share capital
Equity share capital Equity share capital Preference share capital Total
with differential voting share
right capital
Particulars Number Amount Number Amount Number Amount Amount
Balance as at 31 March 2016 54,013,800 5,401.38 120 0.01 10,294,230 1029.42 6,430.81
Less: Shares held by trust 2,223,735 222.37 - - - - 222.37
Total Share capital as at 31 March 2016 51,790,065 5,179.01 120 0.01 10,294,230 1,029.42 6,208.44

Newgen Software Technologies Limited

Balance as at 1 April 2016 54,013,800 5,401.38 120 0.01 10,294,230 1,029.42 6,430.81
Changes in equity share capital during the year on 10,294,230 1,029.42 - - (10,294,230) (1,029.42) -
account of conversion of compulsory convertible
preference shares
Balance as at 31 March 2017 64,308,030 6,430.80 120 0.01 - - 6,430.81
Less: Shares held by trust 1,995,064 199.51 - - - - 199.51
Total Share capital as at 31 March 2017 62,312,966 6,231.29 120 0.01 - - 6,231.30
Balance as at 31 March 2017 64,308,030 6,430.80 120 0.01 - - 6,430.81
Add: Equity shares with differential voting rights 120 0.01 (120) (0.01) - - -
reclassified to equity shares during the year
Add: Shares issued during the year through initial 3,877,551 387.76 - - - - 387.76
public offer
Add: Issued during the year to Newgen ESOP Trust 1,050,000 105.00 - - - - 105.00
Balance as at 31 March 2018 69,235,701 6,923.57 - - - - 6,923.57
Less: Shares held by trust 1,351,584 135.16 - - - - 135.16
Total Share capital as at 31 March 2018 67,884,117 6,788.41 - - - - 6,788.41
 b. Other equity
Particulars Securities Retained Others Items of Other comprehensive Total
premium* earnings income attributable
Capital General Newgen Share Remeasurement Debt to owners
redemption reserve ESOP Trust options of defined instruments of the
reserve reserve* outstanding benefit liability through OCI Company
reserve*
Balance as at 31 March 2016 1,141.87 11,581.82 87.95 1,731.39 175.75 259.07 - (2.21) 14,975.64
Less: Securities premium on shares held (647.80) (647.80)
CORPORATE REVIEW

by trust
Total Balance as at 31 March 2016 494.07 11,581.82 87.95 1,731.39 175.75 259.07 - (2.21) 14,327.84
Balance as at 1 April 2016 1, 141.87 11,581.82 87.95 1,731.39 175.75 259.07 - (2.21) 14,975.64
Total comprehensive income for the
year ended 31 March 2017
Profit for the year - 4,792.39 - - - - - - 4,792.39
Other comprehensive income /(loss) - - - - - - (54.57) 17.39 (37.18)
(net of tax)
Transactions with owners, recorded
directly in equity
Addition to Newgen ESOP Trust reserve - - - - 24.47 - - - 24.47
Contributions by and distributions to
STATUTORY REPORTS

owners
Dividend on equity shares - (540.14) - - - - - - (540.14)
Dividend distribution tax on dividend on - (110.59) - - - - - - (110.59)
equity shares
Dividend on preference shares - (103.80) - - - - - - (103.80)
Dividend distribution tax on dividend on - (21.25) - - - - - - (21.25)
preference shares
Employee stock compensation expense - - - - - 119.40 - - 119.40
Transferred to securities premium 26.82 - - - - (26.82) - - -
account on exercise of stock options
Adjustment on account of options issued - - - - - 7.72 - - 7.72
to subsidiaries employees
Balance as at 31 March 2017 1,168.69 15,598.43 87.95 1,731.39 200.22 359.37 (54.57) 15.18 19,106.65
Less: Securities premium on shares held (568.82) (568.82)
by trust
FINANCIAL STATEMENTS

Total Balance as at 31 March 2017 599.87 15,598.43 87.95 1,731.39 200.22 359.37 (54.57) 15.18 18,537.84
Balance as at 1 April 2017 1,168.69 15,598.43 87.95 1,731.39 200.22 359.37 (54.57) 15.18 19,106.65
Total comprehensive income for the
year ended 31 March 2018
Profit for the year - 7,063.09 - - - - - - 7,063.09
Other comprehensive income/(loss) (net - - - - - - 82.62 (0.31) 82.31
of tax)
Securities premium on issue of shares to 556.50 - - - - - - - 556.50
Newgen ESOP Trust
Securities premium on shares issued 9,112.24 - - - - - - - 9,112.24

ANNUAL REPORT 2017-18

through initial public offer
Utilized for share issue expenses (1,349.15) - - - - - - - (1,349.15)

93
 Particulars Securities Retained Others Items of Other comprehensive Total

94
premium* earnings income attributable
Capital General Newgen Share Remeasurement Debt to owners
redemption reserve ESOP Trust options of defined instruments of the
reserve reserve* outstanding benefit liability through OCI Company
reserve*
Transactions with owners, recorded
directly in equity
Addition to Newgen ESOP Trust reserve - - - - 31.43 - - - 31.43
Contributions by and distributions to
owners
Dividend on equity shares - (964.62) - - - - - - (964.62)
Dividend distribution tax on dividend on - (196.37) - - - - - - (196.37)
equity shares
Employee stock compensation expense - - - - - 215.64 - - 215.64
Transferred to securities premium 193.21 - - - - (193.21) - - -
account on exercise of stock options
Adjustment on account of options issued - - - - - 10.08 - - 10.08
to subsidiaries employees

Newgen Software Technologies Limited

Balance as at 31 March 2018 9,681.49 21,500.53 87.95 1,731.39 231.65 391.88 28.05 14.87 33,667.81
Less: Securities premium on shares held (485.00) (485.00)
by trust
Balance as at 31 March 2018 9,196.49 21,500.53 87.95 1,731.39 231.65 391.88 28.05 14.87 33,182.81
* Refer Note 17 D

Summary of significant accounting Note 3

policies

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
Chartered Accountants Newgen Software Technologies Limited
Firm Registration No.:
116231W / W-100024

Rakesh Dewan Diwakar Nigam T. S. Varadarajan Arun Kumar Gupta Aman Mourya
Partner Managing Director Whole Time Director Chief Financial Officer Company Secretary
Membership No.: 092212 DIN: 00263222 DIN: 00263115 Membership No: 27299

Place: Gurugram Place: New Delhi Place: New Delhi Place: New Delhi Place: New Delhi
Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018
 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Statement of Cash Flows

for the year ended March 31, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated

For the year ended For the year ended

31 March 2018 31 March 2017
A. Cash flows from operating activities
Net profit before tax 9,093.18 6,325.36
Adjustments for:
Depreciation and amortisation 567.68 481.88
Loss on sale of property, plant and equipment 3.15 0.12
Property, plant and equipment written off - 0.59
Interest income on security deposits at amortised cost (31.21) (24.16)
Impairment loss on trade receivables 462.52 1,353.40
Liability no longer required written back (229.75) -
Impairment loss on financial assets - 6.55
Fair value changes of financial assets at FVTPL (25.48) 5.57
Unrealised foreign exchange loss/(gain) (49.10) 95.01
Share based payment - equity settled 215.64 119.40
Reversal of derivative liability - (136.00)
Finance costs 520.68 525.60
Dividend income from mutual funds at FVTPL (87.86) (1.75)
Interest income from government and other bonds at FVOCI (131.56) (35.11)
Profit on sale of mutual funds (net) at FVTPL (60.73) (589.89)
Interest income from bank deposits and others (159.32) (24.18)
Operating cash flow before working capital changes 10,087.84 8,102.39
Increase in trade receivables (2,238.17) (4,487.85)
Increase in loans (276.38) (20.42)
Increase in other financial assets (2,686.55) (302.06)
Increase in other assets (45.31) (185.66)
Increase in provisions 314.36 282.31
Increase in other financial liabilities 1,140.88 1,153.82
Increase in other liabilities 792.65 115.97
Increase in trade payables 659.00 302.53
Cash generated from operations 7,748.32 4,961.03
Income taxes paid (net) (2,039.14) (1,621.43)
Net cash generated from operating activities (A) 5,709.18 3,339.60
B. Cash flows from investing activities
Purchase or construction of fixed assets (tangible and (1,869.57) (701.17)
intangible fixed assets and capital work-in-progress) and
capital advances
Proceeds from sale of fixed assets 6.96 2.29
Investment in subsidiary company - (177.34)
Purchase of mutual funds and government bonds (1,683.12) (8,680.24)
Proceeds from sale of mutual funds 1,699.60 8,942.99
Interest income from government bonds 86.21 28.06
Interest received on Bank deposit 73.57 32.19
Investment in bank deposits (net) (70.94) 24.08
Net cash used in investing activities (B) (1,757.29) (529.14)

ANNUAL REPORT 2017-18 95

Cash Flow Statement
for the year ended March 31, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

For the year ended For the year ended

31 March 2018 31 March 2017
C. Cash flows from financing activities
Repayment of from short-term borrowings (net) (259.79) (657.01)
Repayment of finance lease obligation (301.33) (299.46)
Proceed from issue of shares through initial public offer 9,500.00 -
Expenses paid for Initial Public Offer (1,349.15) -
Proceeds from issue of equity shares under ESOP scheme 169.35 22.87
Securities premium on issue of shared under ESOP scheme 640.31 78.98
Dividend paid (including corporate dividend distribution tax) (1,140.21) (628.63)
- Equity
Dividend paid (including corporate dividend distribution tax) - (125.05)
- Preference
Finance cost (519.60) (469.82)
Gain on transfer of equity shares by Newgen ESOP trust 10.64 2.37
Net cash generated from financing activities (C) 6,750.22 (2,075.77)
Net increase in cash and cash equivalents (A + B + C) 10,702.11 734.69
Cash and cash equivalents at the beginning of the year 2,818.68 2,083.99
Cash and cash equivalents at the end of the year 13,520.79 2,818.68
Components of cash and cash equivalents:
Cash in hand 4.52 6.26
Cheques and drafts on hand
Balances with banks:
- in current accounts 5,116.27 2,012.42
- on deposit accounts with original maturity upto 3 months 8,400.00 800.00
13,520.79 2,818.68
Notes:
1. The cash flow statement has been prepared under the indirect method as set out in the Ind AS 7 “Statement
of Cash Flows”.
2. Effective 1 April 2017, the Company adopted the amendment to Ind AS7, which require the entities to
provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from
financing activities, including both changes arising from cash flows and non-cash changes, suggesting
inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities
arising from financing activities, to meet the disclosure requirement. The adoption of amendment did not
have any material impact on the financial statements.

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
Chartered Accountants Newgen Software Technologies Limited
Firm Registration No.:
116231W / W-100024
Rakesh Dewan Diwakar Nigam T. S. Varadarajan Arun Kumar Gupta Aman Mourya
Partner Managing Director Whole Time Director Chief Financial Officer Company Secretary
Membership No.: 092212 DIN: 00263222 DIN: 00263115 Membership No: 27299

Place: Gurugram Place: New Delhi Place: New Delhi Place: New Delhi Place: New Delhi
Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018

96 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes
to standalone financial statements for the year ended March 31, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

adjustments were recognized directly through

Note 1 Background
retained earnings as at 1 April 2016.
Newgen Software Technologies Limited (‘Newgen’ or
‘the Company’) is a public company domiciled and Refer note 50 for the effect of transition to Ind
incorporated under the provisions of the Companies AS on the reported financial position, financial
Act applicable in India. The registered office of the performance and cash flows of the Company.
Company is situated at A-6, Satsang Vihar Marg,
Qutab Institutional Area, New Delhi - 110067. The The financial statements were authorised for
Company raised money by way of initial public offer issue by the Company’s Board of Directors on
during the year ended 31 March 2018 and its shares 17 May 2018.
are listed on the National Stock Exchange (NSE) and
Bombay Stock Exchange (BSE) of India. Details of the Company’s accounting policies are
included in Note 3.
The Company is a global software Company and
is engaged in the business of software product B. Functional and presentation currency
development including designing and delivering
These financial statements are presented in
end-to-end software solutions covering the entire
Indian Rupees (INR), which is also the Company’s
spectrum of software services from workflow
functional currency. All amounts have been
automation to Document management to imaging.
rounded-off to the nearest lakhs, unless otherwise
Newgen provides a complete range of software
that helps automate business processes. Newgen’s indicated.
solutions enable document intensive organizations/
industries such as Finance and Banking, Insurance and C. Basis of measurement
government departments to improve productivity The financial statements have been prepared on
through better document management and workflow the historical cost basis except for the following
implementation. items:

Note 2 Basis of Preparation

A. Statement of compliance Items Measurement basis
Certain financial Fair value
The financial statements of the Company
assets and liabilities
have been prepared in accordance with Indian
Net defined benefit Fair value of plan
Accounting Standards (“Ind AS”) notified under
(asset)/ liability assets less present
the Companies (Indian Accounting Standards) value of defined benefit
Rules, 2015 and Companies (Indian Accounting obligations
Standards) Amendment Rules, 2016. These
financial statements for the year ended 31 March E. Use of estimates and judgements
2018 are the first financial statements that the
The preparation of financial statements in
Company has prepared in accordance with Ind
conformity with Ind AS requires management
AS.
to make judgments, estimates and assumptions
that affect the application of accounting policies
Accordingly, the Company has followed the
provisions of Ind AS 101, ‘First Time Adoption and the reported amounts of assets, liabilities,
of Indian Accounting Standards’, in preparing income and expenses and the accompanying
its opening Ind AS Balance Sheet as of the disclosures. Uncertainty about the assumptions
date of transition, i.e. 1 April 2016. Certain of and estimates could result in outcomes that may
the Company’s Ind AS accounting policies used require material adjustment to the carrying value
in the opening balance sheet differed from its of assets or liabilities affected in future periods.
Indian GAAP policies applied as at 31 March
2016, and accordingly adjustments were made Estimates and underlying assumptions are
to restate the opening balances as per Ind AS. reviewed on an ongoing basis. Revisions to
The resulting adjustments arose from events and accounting estimates are recognized in the
transactions before the date of transition to Ind period in which the estimates are revised and in
AS. Therefore, as required by Ind AS 101, those any future periods affected.

ANNUAL REPORT 2017-18 97

 Judgements - it is expected to be settled in the Company’s
Information about judgements made in applying normal operating cycle;
accounting policies that have the most significant - it is held primarily for the purpose of being
effects on the amounts recognised in the financial traded;
statements is included in the following notes:
- it is due to be settled within 12 months after
• Note 35 – lease classification: classification the reporting date; or
of leases under finance lease or operating
lease; - the Company does not have an unconditional
right to defer settlement of the liability for
Assumptions and estimation uncertainties at least 12 months after the reporting date.
Terms of a liability that could, at the option
Information about assumptions and estimation
of the counterparty, result in its settlement
uncertainties that have a significant risk of
by the issue of equity instruments do not
resulting in a material adjustment in the year
affect its classification.
ending 31 March 2018 is included in the following
notes:
Current assets/liabilities include current portion
• Note 3(c)(iii) –Estimation of Useful lives of of non-current financial assets/liabilities
intangible and depreciable assets respectively. All other assets/ liabilities are
classified as non-current. Deferred tax assets and
• Note 28 – Measurement of defined benefit
liabilities (if any) are classified as non-current
obligations: key actuarial assumptions; assets and liabilities.
• Note 32 – Recognition of deferred tax
assets: availability of future taxable profit Operating cycle
against which tax losses carried forward can Based on the nature of the operations and the time
be used; between the acquisition of assets for processing
and their realization in cash or cash equivalents,
• Note 34 –Fair value of share based payments
the Company has ascertained its operating cycle
• Note 41 – Impairment of trade receivables as twelve months for the purpose of current/
and financial assets. non-current classification of assets and liabilities.

E. Current and non-current classification F. Measurement of fair values

The Company presents assets and liabilities in A number of the Company’s accounting policies
the balance sheet based on current / non-current and disclosures require the measurement of
classification. fair values, for both financial and non-financial
assets and liabilities. The Company has an
An asset is classified as current when it satisfies established control framework with respect
any of the following criteria: to the measurement of fair values. The finance
team has overall responsibility for overseeing all
- it is expected to be realized in, or is intended
significant fair value measurements, including
for sale or consumption in, the Company’s
Level 3 fair values, and reports directly to the
normal operating cycle.
chief financial officer. The Company regularly
- it is held primarily for the purpose of being reviews significant unobservable inputs and
traded; valuation adjustments. If third party information,
such as broker quotes or pricing services, is
- it is expected to be realized within 12 months
used to measure fair values, then the Company
after the reporting date; or
assesses the evidence obtained from the third
- it is cash or cash equivalent unless it is parties to support the conclusion that these
restricted from being exchanged or used to valuations meet the requirements of Ind AS,
settle a liability for at least 12 months after including the level in the fair value hierarchy in
the reporting date. which the valuations should be classified.

A liability is classified as current when it satisfies Significant valuation issues are reported to the
any of the following criteria: Company’s audit committee.

98 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Fair values are categorised into different levels in Monetary assets and liabilities denominated
a fair value hierarchy based on the inputs used in in foreign currencies are translated into the
the valuation techniques as follows. functional currency at the exchange rate at
the reporting date. Non-monetary assets
• Level 1: quoted prices (unadjusted) in active and liabilities that are measured at fair value
markets for identical assets or liabilities. in a foreign currency are translated into
the functional currency at the exchange
• Level 2: inputs other than quoted prices rate when the fair value was determined.
included in Level 1 that are observable for the Non-monetary assets and liabilities that
asset or liability, either directly (i.e. as prices) are measured based on historical cost in
or indirectly (i.e. derived from prices). a foreign currency are translated at the
exchange rate at the date of the transaction.
• Level 3: inputs for the asset or liability that
are not based on observable market data b. Financial instruments
(Unobservable inputs).
i. Recognition and initial measurement

When measuring the fair value of an asset or a Trade receivables and debt securities
liability, the Company uses observable market issued are initially recognised when they
data as far as possible. If the inputs used to are originated. All other financial assets and
measure the fair value of an asset or a liability financial liabilities are initially recognised
fall into different levels of the fair value hierarchy, when the Company becomes a party to the
then the fair value measurement is categorised contractual provisions of the instrument.
in its entirety in the same level of the fair value
hierarchy as the lowest level input that is A financial asset or financial liability is
significant to the entire measurement. initially measured at fair value plus, for an
item not at fair value through profit and loss
The Company recognises transfers between (FVTPL), transaction costs that are directly
levels of the fair value hierarchy at the end of the attributable to its acquisition or issue.
reporting period during which the change has
occurred. ii. Classification and subsequent
measurement
Further information about the assumptions Financial assets:
made in measuring fair values is included in the
On initial recognition, a financial asset is
following notes:
classified as measured at
Note 34 – Share-based payment arrangements;
- Amortised cost;
and
- Fair value through Other Comprehensive
Note 41 – Financial instruments.
Income (FVOCI) – debt investment;

Note 3 Significant Accounting Policies - Fair Value through Other Comprehensive

Income (FVOCI) – equity investment; or
a. Foreign currency
- FVTPL
i. Functional currency
The Company’s financial statements are Financial assets are not reclassified
presented in INR, which is also the company’s subsequent to their initial recognition,
functional currency. except if and in the period the Company
changes its business model for managing
ii. Foreign currency transactions financial assets.
Transactions in foreign currencies are
translated into INR, the functional currency A financial asset is measured at amortised
of the Company, at the exchange rates at cost if it meets both of the following
the dates of the transactions or an average conditions and is not designated as FVTPL:
rate if the average rate approximates the
actual rate at the date of the transaction.

ANNUAL REPORT 2017-18 99

 • the asset is held within a business this purpose, consistent with the Company’s
model whose objective is to hold assets continuing recognition of the assets.
to collect contractual cash flows; and
Financial assets that are held for trading
• the contractual terms of the financial or are managed and whose performance is
asset give rise on specified dates to evaluated on a fair value basis are measured
cash flows that are solely payments of at FVTPL.
principal and interest on the principal
amount outstanding. Financial assets: Assessment whether
contractual cash flows are solely payments
A debt investment is measured at FVOCI if it of principal and Interest.
meets both of the following conditions and For the purposes of this assessment,
is not designated as FVTPL: ‘principal’ is defined as the fair value of the
financial asset on initial recognition. ‘Interest’
• the asset is held within a business model is defined as consideration for the time value
whose objective is achieved by both of money and for the credit risk associated
collecting contractual cash flows and with the principal amount outstanding
selling financial assets; and during a particular period of time and for
other basic lending risks and costs (e.g.
• the contractual terms of the financial liquidity risk and administrative costs), as
asset give rise on specified dates to well as a profit margin.
cash flows that are solely payments of
principal and interest on the principal In assessing whether the contractual cash
amount outstanding. flows are solely payments of principal
and interest, the Company considers the
All financial assets not classified as measured contractual terms of the instrument. This
at amortised cost or FVOCI as described includes assessing whether the financial
above are measured at FVTPL. On initial asset contains a contractual term that could
recognition, the Company may irrevocably change the timing or amount of contractual
cash flows such that it would not meet this
designate a financial asset that otherwise
condition. In making this assessment, the
meets the requirements to be measured at
Company considers:
amortised cost or at FVOCI as at FVTPL if
doing so eliminates or significantly reduces • contingent events that would change
an accounting mismatch that would the amount or timing of cash flows;
otherwise arise.
• terms that may adjust the contractual
coupon rate, including variable interest
Financial assets: Business model
rate features;
assessment
The Company makes an assessment of the • prepayment and extension features;
objective of the business model in which and
a financial asset is held at a portfolio level
because this best reflects the way the Basis the above classification criteria,
Company’s investments are classified as
business is managed and information is
below:-
provided to management, for instance
the stated policies and objectives for the - Investments in government and other
portfolio, frequency, volume and timing bonds have been classified as FVOCI.
of sales of financial assets in prior periods,
- Investments in Mutual funds have been
the reasons for such sales and expectations
about future sales activity. classified as FVTPL.

Transfers of financial assets to third parties Financial assets: Subsequent measurement

in transactions that do not qualify for and gains and losses
derecognition are not considered sales for

100 Newgen Software Technologies Limited

CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Financial assets at FVTPL iii. Derecognition

These assets are subsequently measured at Financial assets
fair value. Net gains and losses, including any The Company derecognises a financial asset
interest or dividend income, are recognised when the contractual rights to the cash flows
in profit or loss. from the financial asset expire, or it transfers
the rights to receive the contractual cash
Financial assets at amortised cost flows in a transaction in which substantially
These assets are subsequently measured at all of the risks and rewards of ownership of
amortised cost using the effective interest the financial asset are transferred or in which
method. The amortised cost is reduced by the Company neither transfers nor retains
impairment losses. Interest income, foreign substantially all of the risks and rewards of
exchange gains and losses and impairment ownership and does not retain control of the
are recognised in profit or loss. Any gain or financial asset.
loss on derecognition is recognised in profit
or loss. If the Company enters into transactions
whereby it transfers assets recognised on
Debt investments at FVOCI its balance sheet, but retains either all or
These assets are subsequently measured at substantially all of the risks and rewards of
fair value. Interest income under the effective the transferred assets, the transferred assets
interest method, foreign exchange gains are not derecognised.
and losses and impairment are recognised
in profit or loss. Other net gains and losses Financial liabilities
are recognised in OCI. On derecognition,
The Company derecognises a financial
gains and losses accumulated in OCI are
liability when its contractual obligations are
reclassified to profit or loss.
discharged or cancelled, or expire.
Equity investments at FVOCI
The Company also derecognises a financial
These assets are subsequently measured liability when its terms are modified and
at fair value. Dividends are recognized as
the cash flows under the modified terms
income in profit or loss unless the dividend
are substantially different. In this case, a
clearly represents a recovery of part of the
new financial liability based on the modified
cost of the investment. Other net gains and
terms is recognised at fair value. The
losses are recognised in OCI and are not
difference between the carrying amount of
reclassified to profit or loss.
the financial liability extinguished and the
new financial liability with modified terms is
Financial liabilities: Classification,
recognised in profit or loss.
subsequent measurement and gains and
losses
iv. Offsetting
Financial liabilities are classified as
measured at amortised cost or FVTPL. A Financial assets and financial liabilities are
financial liability is classified as at FVTPL offset and the net amount presented in the
if it is classified as held-for-trading, or it is balance sheet when, and only when, the
a derivative or it is designated as such on Company currently has a legally enforceable
initial recognition. Financial liabilities at right to set off the amounts and it intends
FVTPL are measured at fair value and net either to settle them on a net basis or to
gains and losses, including any interest realise the asset and settle the liability
expense, are recognised in profit or loss. simultaneously.
Other financial liabilities are subsequently
measured at amortised cost using the v. Derivatives and Embedded derivatives
effective interest method. Interest expense Derivatives are initially measured at fair
and foreign exchange gains and losses are value. Subsequent to initial recognition,
recognised in profit or loss. Any gain or loss derivatives are measured at fair value, and
on derecognition is also recognised in profit changes therein are generally recognised in
or loss. profit or loss.

ANNUAL REPORT 2017-18 101

 Embedded derivatives are separated benefits associated with the expenditure will
from the host contract and accounted flow to the Company.
for separately if the host contract is not a
financial asset and certain criteria are met. iv. Depreciation
Depreciation is calculated on cost of items
c. Property, plant and equipment
of property, plant and equipment less
i. Recognition and measurement
their estimated residual values over their
Items of property, plant and equipment estimated useful lives using the straight-line
are measured at cost less accumulated method, and is generally recognised in the
depreciation and accumulated impairment statement of profit and loss. Assets acquired
losses, if any.
under finance leases are depreciated over
the shorter of the lease term and their useful
Cost of an item of property, plant and
lives unless it is reasonably certain that
equipment comprises its purchase
price, including import duties and non- the Company will obtain ownership by the
refundable purchase taxes, after deducting end of the lease term. Freehold land is not
trade discounts and rebates, any directly depreciated.
attributable cost of bringing the item to
its working condition for its intended use The estimated useful lives of items of
and estimated costs of dismantling and property, plant and equipment for the
removing the item and restoring the site on current and comparative periods are as
which it is located. follows:

The cost of a self-constructed item of

property, plant and equipment comprises
the cost of materials and direct labor, any Category of fixed Estimated useful
other costs directly attributable to bringing assets life (Years)
the item to working condition for its intended Building 60
use, and estimated costs of dismantling and
Plant and equipment 15
removing the item and restoring the site on
which it is located. Leasehold 3
Improvements*
If significant parts of an item of property, Office equipment** 10
plant and equipment have different useful
Furniture and Fixtures 10
lives, then they are accounted for as separate
items (major components) of property, plant Vehicles 8
and equipment. Computer hardware
-servers and networks 6
Any gain or loss on disposal of an item of
property, plant and equipment is recognised -Computers** 3-5
in profit or loss.
Depreciation method, useful lives and
residual values are reviewed at each financial
ii. Transition to Ind AS
year-end and adjusted if appropriate.
On transition to Ind AS, the Company has
elected to continue with the carrying value
Depreciation on addition (disposal) is
of all its property, plant and equipment
provided on a pro-rata basis i.e. from (upto)
recognized as at 1 April 2016, measured
the date on which asset is ready for use
as per the previous GAAP, and use that
carrying value as the deemed cost of such (disposed off).
property, plant and equipment.
*Leasehold improvements are depreciated
iii. Subsequent expenditure over the period of the lease term of the
respective property or 3 years whichever is
Subsequent expenditure is capitalised only
if it is probable that the future economic lower.

102 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Leasehold land is amortised over the lease e. Impairment

period of 90 years. i. Impairment of financial instruments
The Company recognises loss allowances
**Based on an internal technical assessment,
for expected credit losses on:
the management believes that the useful
lives as given above best represents the - financial assets measured at amortised
period over which management expects to cost; and
use its assets. Hence, the useful life of plant - financial assets measured at FVOCI-
and equipment is different from the useful debt investments.
life as prescribed under Part C of Schedule II
of Companies Act, 2013. At each reporting date, the Company
assesses whether financial assets carried at
d. Intangible assets amortised cost and debt securities at FVOCI
are credit-impaired. A financial asset is
Recognition and measurement ‘credit- impaired’ when one or more events
Intangible assets that are acquired by the that have a detrimental impact on the
Company are measured initially at cost. After estimated future cash flows of the financial
initial recognition, an intangible asset is carried asset have occurred.
at its cost less accumulated amortisation and
accumulated impairment loss, if any. The Company measures loss allowances at
an amount equal to lifetime expected credit
Subsequent expenditure losses.
Subsequent expenditure is capitalised only when
Loss allowances for trade receivables are
it increases the future economic benefits from
always measured at an amount equal to
the specific asset to which it relates.
lifetime expected credit losses. Lifetime
expected credit losses are the expected
Transition to Ind AS
credit losses that result from all possible
On transition to Ind AS, the Company has default events over the expected life of a
elected to continue with the carrying value of all financial instrument.
its intangible assets recognized as at 1 April 2016,
measured as per the previous GAAP, and use 12-month expected credit losses are the
that carrying value as the deemed cost of such portion of expected credit losses that result
intangible assets. from default events that are possible within
12 months after the reporting date (or a
Amortisation shorter period if the expected life of the
instrument is less than 12 months).
Intangible assets of the Company represents
computer software and are amortized using the
In all cases, the maximum period considered
straight-line method over the estimated useful
when estimating expected credit losses is
life (at present 3-4 years) or the tenure of the
the maximum contractual period over which
respective software license, whichever is lower.
the Company is exposed to credit risk.
The amortization period and the amortization
method are reviewed at least at each financial
The Company assumes that the credit risk on
year end. If the expected useful life of the asset a financial asset has increased significantly if
is significantly different from previous estimates, it is more than 30 days past due.
the amortization period is changed accordingly.
The Company considers a financial asset to
Gains or losses arising from derecognition be in default when:
of an intangible asset are measured as the
- the borrower is unlikely to pay its credit
difference between the net disposal proceeds
obligations to the Company in full,
and the carrying amount of the asset and are
without recourse by the Company to
recognized in the profit or loss when the asset is
actions such as realising security (if any
derecognized.
is held); or

ANNUAL REPORT 2017-18 103

 - the financial asset is 90 days or more with the Company’s procedures for recovery
past due. of amounts due.

The Company considers a debt security ii. Impairment of Non-financial assets

to have low credit risk when its credit risk The carrying amounts of assets are
rating is equivalent to ‘investment grade’ reviewed at each reporting date if there
e.g. BBB or higher as per renowned rating is any indication of impairment based on
agencies. internal/external factors. An impairment loss
is recognized wherever the carrying amount
Measurement of expected credit losses of an asset (or cash generating unit) exceeds
Expected credit losses are a probability- its recoverable amount. The recoverable
weighted estimate of credit losses. Credit amount is the greater of the asset’s (or cash
losses are measured as the present value of generating unit’s) net selling price and value
all cash shortfalls (i.e. the difference between in use. In assessing value in use, the estimated
the cash flows due to the Company in future cash flows are discounted to their
accordance with the contract and the cash present value using a pre-tax discount rate
flows that the Company expects to receive). that reflects current market assessments of
the time value of money and risks specific to
As a practical expedient, the Company uses the asset (or cash generating unit).
a provision matrix to determine impairment
loss allowance on portfolio of its trade An impairment loss is reversed if there
receivables. The provision matrix is based on has been a change in the estimates used
its historically observed default rates over to determine the recoverable amount. An
the expected life of the trade receivables and impairment loss is reversed only to the
is adjusted for forward‐looking estimates. At extent that the asset’s carrying amount does
every reporting date, the historical observed not exceed the carrying amount that would
default rates are updated and changes in the have been determined net of depreciation
forward‐looking estimates are analysed. or amortisation, if no impairment loss had
been recognised
Presentation of allowance for expected
f. Employee benefits
credit losses in the balance sheet
i. Short-term employee benefits
Loss allowances for financial assets Short-term employee benefit obligations are
measured at amortised cost are deducted measured on an undiscounted basis and are
from the gross carrying amount of the expensed as the related service is provided.
assets. A liability is recognised for the amount
expected to be paid, if the Company has a
For debt securities at FVOCI, the loss present legal or constructive obligation to
allowance is charged to profit or loss. pay this amount as a result of past service
provided by the employee, and the amount
Write-off of obligation can be estimated reliably.
The gross carrying amount of a financial
asset is written off (either partially or in ii. Share-based payment transactions
full) to the extent that there is no realistic The grant date fair value of equity
prospect of recovery. This is generally the settled share-based payment awards
case when the Company determines that granted to employees of the Company
the debtor does not have assets or sources and subsidiaries of the Company is
of income that could generate sufficient recognised as an employee expense and
cash flows to repay the amounts subject deemed investment, with a corresponding
to the write off. However, financial assets increase in equity, over the period that the
that are written off could still be subject to employees unconditionally become entitled
enforcement activities in order to comply to the awards. The amount recognised as

104 Newgen Software Technologies Limited

CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

expense/deemed investment is based on benefit plans, are based on the market

the estimate of the number of awards for yields on government securities as at the
which the related service and non-market balance sheet date, having maturity period
vesting conditions are expected to be met, approximating to the terms of related
such that the amount ultimately recognised obligations
as an expense/dement investment is based
on the number of awards that do meet the Remeasurement gains and losses arising
related service and non-market vesting from experience adjustments and changes
conditions at the vesting date. For share- in actuarial assumptions are recognized
based payment awards with non-vesting in the period in which they occur, directly
conditions, the grant date fair value of the in other comprehensive income and are
share-based payment is measured to reflect never reclassified to profit or loss. Changes
such conditions and there is no true-up for in the present value of the defined benefit
differences between expected and actual obligation resulting from plan amendments
outcomes. or curtailments are recognized immediately
in the profit or loss as past service cost.
iii. Defined contribution plans
A defined contribution plan is a post- v. Other long-term employee benefits
employment benefit plan under which The Company’s net obligation in respect
an entity pays fixed contributions into of long-term employee benefits other than
a separate entity and will have no legal post-employment benefits is the amount of
or constructive obligation to pay further future benefit that employees have earned
amounts. The Company makes specified in return for their service in the current and
monthly contributions towards Government prior periods; that benefit is discounted to
administered provident fund scheme. determine its present value, and the fair
Obligations for contributions to defined value of any related assets is deducted.
contribution plans are recognized as an
employee benefit expense in profit or loss in The employees can carry-forward a portion
the periods during which the related services of the unutilized accrued compensated
are rendered by employees. absences and utilize it in future service
periods or receive cash compensation
Prepaid contributions are recognised as an on termination of employment. Since the
asset to the extent that a cash refund or a compensated absences do not fall due
reduction in future payments is available. wholly within twelve months after the end
of the period in which the employees render
iv. Defined benefit plans the related service and are also not expected
A defined benefit plan is a post-employment to be utilized wholly within twelve months
benefit plan other than a defined contribution after the end of such period, the benefit is
plan. The Company’s gratuity scheme is a classified as a long-term employee benefit.
defined benefit plan. The present value of The Company records an obligation for
obligations under such defined benefit plans such compensated absences in the period
are determined based on actuarial valuation in which the employee renders the services
carried out by an independent actuary that increase this entitlement. The obligation
using the Projected Unit Credit Method, is measured on the basis of independent
which recognizes each period of service as actuarial valuation using the projected unit
giving rise to an additional unit of employee credit method. Re measurements as a result
benefit entitlement and measures each unit of experience adjustments and changes in
separately to build up the final obligation. actuarial assumptions are recognized in the
profit or loss
The obligation is measured at the present
value of estimated future cash flows. The g. Provisions (other than for employee benefits)
discount rates used for determining the A provision is recognised if, as a result of a
present value of obligation under defined past event, the Company has a present legal or

ANNUAL REPORT 2017-18 105

 constructive obligation that can be estimated i. Revenue
reliably, and it is probable that an outflow of Revenue is measured at the fair value of the
economic benefits will be required to settle consideration received or receivable and is
the obligation. Provisions are determined by recognized to the extent that it is probable that
discounting the expected future cash flows the economic benefits will flow to the Company
(representing the best estimate of the expenditure and the revenue can be reliably measured
required to settle the present obligation at the and specific criteria as per the respective
balance sheet date) at a pre-tax rate that reflects arrangements have been met.
current market assessments of the time value
of money and the risks specific to the liability. i. Sale of License
The unwinding of the discount is recognised as Revenue from sale of licenses for software
finance cost. Expected future operating losses products is recognised when the significant
are not provided for. Provisions are reviewed risks and rewards of ownership have been
by the management at each reporting date and transferred to the buyer which generally
adjusted to reflect the current best estimates. coincides with delivery of licenses to the
customers, recovery of the consideration is
Warranties probable, the associated costs and possible
A provision for warranties is recognised when return of software sold can be estimated
the underlying products or services are sold. reliably, there is no continuing effective
The provision is based on technical evaluation, control over, or managerial involvement
with the licenses transferred and the amount
historical warranty data and a weighting of
of revenue can be measured reliably.
all possible outcomes by their associated
probabilities.
ii. Rendering of services

Onerous contracts Revenue from services rendered is

recognised in profit or loss in proportion to
A contract is considered to be onerous when the
the stage of completion of the transaction at
expected economic benefits to be derived by
the reporting date.
the Company from the contract are lower than
the unavoidable cost of meeting its obligations Software Development Services
under the contract. The provision for an onerous
The revenue from such fixed price contracts
contract is measured at the present value of the
for software development is recognized
lower of the expected cost of terminating the
based on proportionate completion method
contract and the expected net cost of continuing based on hours expended, and foreseeable
with the contract. Before such a provision is losses on the completion of contract, if any
made, the Company recognises any impairment are recognized immediately.
loss on the assets associated with that contract.
The Company is also involved in time and
h. Contingent liabilities material contracts and recognizes revenue
A contingent liability is a possible obligation that on a man month basis.
arises from past events whose existence will be
confirmed by the occurrence or non-occurrence Digitization services
of one or more uncertain future events beyond Revenue from digitization services is
the control of the Company or a present recognized as services are rendered to the
obligation that is not recognised because it is customer.
not probable that an outflow of resources will
be required to settle the obligation, or a present Annual Technical services
obligation whose amount cannot be estimated Revenue from annual technical service and
reliably. The Company does not recognize a maintenance contracts is recognised on
contingent liability but discloses its existence in a pro rata basis over the period in which
the financial statements such product up gradation and services are
rendered.

106 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

iii. Sale of right to use software - the gross carrying amount of the financial
Software-as-a-service, that is, a right to use asset; or
software functionality in a cloud-based-
infrastructure provided by the Company. - the amortised cost of the financial liability.
Revenue is recognized monthly/periodically
based on the number of users right given to In calculating interest income and expense, the
customers. effective interest rate is applied to the gross
carrying amount of the asset (when the asset
Revenue is recognised, net of returns, trade is not credit-impaired) or to the amortised cost
discounts and volume rebates. This inter alia of the liability. However, for financial assets that
involves discounting of the consideration have become credit-impaired subsequent to
due to the present value if payment initial recognition, interest income is calculated
extends beyond normal credit terms. by applying the effective interest rate to the
Reimbursements of out-of-pocket expenses amortised cost of the financial asset. If the asset
received from customers have been netted is no longer credit-impaired, then the calculation
off with expense. of interest income reverts to the gross basis.

Amounts received or billed in advance of k. Sale of investments

services to be performed are recorded as Profit on sale of investments is recorded on
advance from customers/unearned revenue. transfer of title from the Company and is
Unbilled revenue represents amounts determined as the difference between the sales
recognized based on services performed price and the carrying value of the investment.
in advance of billing in accordance with
contract terms. l. Leases
i. Determining whether an arrangement
iv. Multiple deliverable arrangements
contains a lease
When two or more revenue generating
At inception of an arrangement, it is
activities or deliverables are provided under
determined whether the arrangement
a single arrangement, each deliverable
is or contains a lease. At inception or
that is considered to be a separate unit of
on reassessment of the arrangement
account is accounted for separately. The
that contains a lease, the payments and
allocation of consideration from a revenue
other consideration required by such an
arrangement to its separate units of account
is based on the relative fair value of each arrangement are separated into those for
unit. If the fair value of the delivered item the lease and those for other elements on
is not reliably measurable, then revenue is the basis of their relative fair values. If it
allocated based on the difference between is concluded for a finance lease that it is
the total arrangement consideration and the impracticable to separate the payments
fair value of the undelivered item. reliably, then an asset and a liability are
recognised at an amount equal to the fair
j. Recognition of dividend income, interest value of the underlying asset. The liability
income or expense is reduced as payments are made and
an imputed finance cost on the liability is
Dividend income is recognised in profit or loss on
recognised using the incremental borrowing
the date on which the Company’s right to receive
rate.
payment is established.

ii. Assets held under leases

Interest income or expense is recognised using
the effective interest method. Leases of property, plant and equipment
that transfer to the Company substantially
The ‘effective interest rate’ is the rate that exactly all the risks and rewards of ownership are
discounts estimated future cash payments or classified as finance leases. The leased
receipts through the expected life of the financial assets are measured initially at an amount
instrument to: equal to the lower of their fair value and

ANNUAL REPORT 2017-18 107

 the present value of the minimum lease Current tax assets and current tax liabilities
payments. Subsequent to initial recognition, are offset only if there is a legally enforceable
the assets are accounted for in accordance right to set off the recognised amounts, and
with the accounting policy applicable to it is intended to realise the asset and settle
similar owned assets. the liability on a net basis or simultaneously.

Assets held under leases that do not transfer ii. Deferred tax
to the Company substantially all the risks Deferred tax is recognised in respect of
and rewards of ownership (i.e. operating temporary differences between the carrying
leases) are not recognised in the Company’s amounts of assets and liabilities for financial
Balance Sheet. reporting purposes and the corresponding
amounts used for taxation purposes.
iii. Lease payments Deferred tax is also recognised in respect of
Payments made under operating leases are carried forward tax losses and tax credits.
generally recognised in profit or loss on Deferred tax is not recognised for:
a straight-line basis over the term of the
lease unless such payments are structured - temporary differences arising on the
to increase in line with expected general initial recognition of assets or liabilities
inflation to compensate for the lessor’s in a transaction that is not a business
expected inflationary cost increases. combination and that affects neither
accounting nor taxable profit or loss at
Lease incentives received are recognised as the time of the transaction;
an integral part of the total lease expense
over the term of the lease. Deferred tax assets are recognised to the
extent that it is probable that future taxable
Minimum lease payments made under profits will be available against which
finance leases are apportioned between they can be used. Deferred tax assets –
the finance charge and the reduction of the unrecognised or recognised, are reviewed
outstanding liability. The finance charge is at each reporting date and are recognised/
allocated to each period during the lease reduced to the extent that it is probable/ no
term so as to produce a constant periodic longer probable respectively that the related
rate of interest on the remaining balance of tax benefit will be realized.
the liability.
Deferred tax is measured at the tax rates
m. Income tax that are expected to apply to the period
Income tax comprises current and deferred tax. It when the asset is realised or the liability is
is recognised in profit or loss except to the extent settled, based on the laws that have been
that it relates to an item recognised directly in enacted or substantively enacted by the
equity or in other comprehensive income. reporting date.

i. Current tax The measurement of deferred tax reflects

the tax consequences that would follow
Current tax comprises the expected tax
from the manner in which the Company
payable or receivable on the taxable income
expects, at the reporting date, to recover or
or loss for the year and any adjustment to
settle the carrying amount of its assets and
the tax payable or receivable in respect of
liabilities.
previous years. The amount of current tax
reflects the best estimate of the tax amount
Deferred tax assets and liabilities are offset
expected to be paid or received after
if there is a legally enforceable right to offset
considering the uncertainty, if any, related to
current tax liabilities and assets, and they
income taxes. It is measured using tax rates
relate to income taxes levied by the same
(and tax laws) enacted or substantively
tax authority on the same taxable entity, or
enacted by the reporting date.
on different tax entities, but they intend to

108 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

settle current tax liabilities and assets on a fair value. The difference between the fair value
net basis or their tax assets and liabilities will of the combined CCPS instrument and the fair
be realised simultaneously. value of the embedded derivative liability has
been recorded as the value of the equity host
Minimum Alternative Tax (‘MAT’) under the contract. The embedded derivative has been
provisions of the Income-tax Act, 1961 is fair valued through profit or loss at each balance
recognised as current tax in the Statement sheet date.
of Profit and Loss. The credit available under
the Act in respect of MAT paid is recognised Upon conversion of CCPS into equity shares the
as an asset only when and to the extent there resultant gain/loss on the down-round derivative
is convincing evidence that the company is recognised in profit or loss. The original equity
will pay normal income tax during the period component remains as equity/is transferred
for which the MAT credit can be carried within equity.
forward for set-off against the normal tax
liability. MAT credit recognised as an asset Dividends
is reviewed at each balance sheet date and The final dividend on shares is recorded as
written down to the extent the aforesaid a liability on the date of approval by the
convincing evidence no longer exists. shareholders, and interim dividend are recorded
as a liability on the date of declaration by the
n. Cash and Cash Equivalents Company’s Board of Directors.
Cash and short-term deposits in the Balance
Sheet comprise cash at banks and cash in hand q. Segment
and short-term deposits with an original maturity Segment reporting
of three months or less, which are subject to
Operating segments are reported in a manner
insignificant risk of changes in value.
consistent with the internal reporting provided
to the chief operating decision maker (CODM).
o. Earnings per share (“EPS”)
Basic earnings per share is calculated by dividing Identification of segments:
the profit attributable to the owners of the
All operating segments’ results are reviewed
Company by the weighted average number of
regularly by the Board of Directors, who have
equity shares outstanding during the year.
been identified as the CODM, to allocate resources
to the segments and assess their performance.
Diluted earnings per share is computed using
Refer note 49 for segment information.
the net profit or loss for the year attributable to
equity shareholders and the weighted average
r. ESOP Trust
number of common and dilutive common
equivalent shares outstanding during the year but The ESOP trust has been treated as an extension
including share options, compulsory convertible of the Company and accordingly shares held by
preference shares except where the result would ESOP Trust are netted off from the total share
be anti-dilutive. capital. Consequently, all the assets, liabilities,
income and expenses of the trust are accounted
p. Share Capital for as assets and liabilities of the Company,
except for profit / loss on issue of shares to the
Equity Shares
employees and dividend received by trust which
Equity shares are classified as equity. Incremental are directly adjusted in the Newgen ESOP Trust
costs directly attributable to the issuance of new reserve.
equity shares are recognized as a deduction
from equity. s. Rounding of amounts
All amounts disclosed in the financial statements
Compulsorily convertible preference shares
and notes have been rounded off to the nearest
The embedded derivative liability on initial lakhs as per the requirement of Schedule III,
recognition has been separated from the unless otherwise stated.
underlying equity instrument and recorded at

ANNUAL REPORT 2017-18 109

110
Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated

4 Property, plant and equipment and Capital work in progress

Freehold Leasehold Buildings Plant and Leasehold Vehicles Office Furniture Computer Total Capital
land land* machinery improvements equipment and fixtures and servers work in
progress#
Cost (refer note 50)
Deemed cost as at 4.71 3,523.68 1,069.76 221.03 5.99 135.91 332.02 232.57 703.45 6,229.12 604.61
1 April 2016
Additions during the - - 33.98 18.93 - - 16.95 10.16 160.09 240.11 503.68
year
Less: Disposals during - - - 1.08 - - 0.12 - 5.74 6.94 -
the year
Balance as at 4.71 3,523.68 1,103.74 238.88 5.99 135.91 348.85 242.73 857.80 6,462.29 1,108.29
31 March 2017

Newgen Software Technologies Limited

Additions during the - - 602.25 69.86 - 14.58 85.56 74.91 295.89 1,143.05 685.80
year
Less: Disposals during - - - 9.77 - - 17.07 8.78 - 35.62 134.62
the year
Balance as at 4.71 3,523.68 1,705.99 298.97 5.99 150.49 417.34 308.86 1,153.69 7,569.72 1,659.47
31 March 2018
Accumulated
Depreciation (refer
note 50)
Balance as at - - - - - - - - - - -
1 April 2016
Charge for the year - 39.74 20.24 30.41 5.99 20.73 45.32 32.38 227.86 422.67 -
(refer note 30)
Less: Disposals during - - - 0.54 - - 0.12 - 3.87 4.53 -
the year
Balance as at - 39.74 20.24 29.87 5.99 20.73 45.20 32.38 223.99 418.14 -
31 March 2017
Charge for the year - 39.46 20.96 39.78 - 24.05 67.22 44.29 276.44 512.20 -
(refer note 30)
Less: Disposals during - - - 3.30 - - 16.75 5.46 - 25.51 -
the year
Balance as at - 79.20 41.20 66.35 5.99 44.78 95.67 71.21 500.43 904.83 -
31 March 2018
Carrying amount (net)
Balance as at 4.71 3,523.68 1,069.76 221.03 5.99 135.91 332.02 232.57 703.45 6,229.12 604.61
1 April 2016
Balance as at 4.71 3,483.94 1,083.49 209.01 - 115.18 303.65 210.35 633.81 6,044.15 1,108.29
31 March 2017
Balance as at 4.71 3,444.48 1,664.79 232.62 - 105.71 321.67 237.65 653.26 6,664.89 1,659.47
31 March 2018
As at 31 March 2018 properties with a carrying amount of INR 472.93 lakhs (31 March 2017: INR 483.20 lakhs, 1 April 2016: INR 493.59 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 construction of new office, cost incurred upto 31 March 2018 totaled to INR 1,659.47 lakhs.
 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

5 Intangibles

Computer software
Cost (refer note 50)
Deemed cost as at 1 April 2016 103.01
Additions during the year 26.62
Balance as at 31 March 2017 129.63

Additions during the year 74.61

Balance as at 31 March 2018 204.24

Accumulated Amortisation (refer note 50)

Balance as at 1 April 2016 -
Amortisation (refer note 30) 59.20
Balance as at 31 March 2017 59.20

Amortisation (refer note 30) 55.48

Balance as at 31 March 2018 114.68

Carrying amount (net)

Balance as at 1 April 2016 103.01
Balance as at 31 March 2017 70.43
Balance as at 31 March 2018 89.56

6 Investment in subsidiaries
As at As at As at
31 March 2018 31 March 2017 1 April 2016
Investments in equity instruments - at cost
(unquoted)
6,000 (31 March 2017: 6,000, 1 April 2016: 6,000) 522.52 515.35 509.82
common stock of USD 200 each, fully paid up of
Newgen Software Inc. USA.
1,000,000 (31 March 2017: 1,000,000, 1 April 2016: 56.40 55.86 55.00
1,000,000) common shares of CAD 0.10 each, fully
paid up of Newgen Software Technologies Canada,
Limited.
250,000 (31 March 2017: 250,000, 1 April 2016: 114.12 111.97 111.73
250,000) ordinary shares of SGD 1 each, fully paid
up of Newgen Software Technologies Pte. Limited.
210,000 (31 March 2017: 210,000, 1 April 2016: 46.50 46.50 46.50
210,000) equity shares of INR 10 each, fully paid up
of Newgen Computers Technologies Limited.
20,000,000 (31 March 2017: 20,000,000, 1 April 178.65 178.43 -
2016: Nil) common stock of GBP 0.01 each, fully
paid up of Newgen Software Technologies (UK) Ltd.
918.19 908.11 723.05
Aggregate book value of unquoted investments 918.19 908.11 723.05
Note: The Company has opted to measure its investment in subsidiary at deemed cost i.e. previous GAAP carrying amount in accordance with
Ind AS 101 “First-time Adoption of Indian Accounting Standard”. Also refer note 50.

ANNUAL REPORT 2017-18 111

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

7 Loans (unsecured, considered good, unless otherwise stated)

As at As at As at
31 March 2018 31 March 2017 1 April 2016

Security deposits 264.79 206.43 194.85

264.79 206.43 194.85

8 Non-current financial assets - others

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Bank deposits
- pledged with tax authorities 2.25 2.25 2.25
- held as margin money* 202.49 131.54 155.62
Interest accrued on deposits 107.19 21.44 -
Earnest money deposits
Unsecured, considered good 236.60 72.48 11.92
Unsecured, considered doubtful 123.21 123.21 123.46
Less: Loss allowance for doubtful deposits (123.21) (123.21) (123.46)
548.53 227.71 169.79
*Balances with bank held as margin money INR 202.49 lakhs (31 March 2017: INR 131.54 lakhs, 1 April 2016: INR 155.62 lakhs) represents the
margin money on account of guarantees issued to government customers.
Information about Company’s exposure to credit and market risks and fair value measurement is included in Note 47.

9 Income tax assets (net)

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Advance income tax (net of provision of INR 1,277.88 852.26 808.69
8,622.29 lakhs (31 March 2017: INR 7,010.66 lakhs, 1
April 2016: INR 5,430.15 lakhs)
1,277.88 852.26 808.69

10 Other non-current assets

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Prepaid expenses 120.50 105.39 46.07
Capital advances 235.73 - -
356.23 105.39 46.07

112 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

11 Investments
As at As at As at
31 March 2018 31 March 2017 1 April 2016
Investments in bonds (unquoted)
Bonds at FVOCI
Investment in government bonds 959.03 971.10 445.20
Investment in other bonds 726.46 711.69 -
1,685.49 1,682.79 445.20
Investments in mutual funds (unquoted)
Mutual Funds at FVTPL
Investment in arbitrage funds - - 2,367.13
Investment in debt mutual funds 3,336.58 3,183.25 1,703.81
3,336.58 3,183.25 4,070.94
5,022.07 4,866.04 4,516.14

Aggregate book value of unquoted investments 5,022.07 4,866.04 4,516.14

Aggregate market value of unquoted investments 5,022.07 4,866.04 4,516.14
Investments in bonds measured at FVOCI have stated interest rates of 7.35% to 10.40%. Information about Company’s exposure to credit and
market risks and fair value measurement is included in Note 47

12 Trade receivables

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Unsecured*
- Considered good 20,392.66 18,588.04 15,575.18
- Considered doubtful 4,000.87 5,976.64 5,566.26
24,393.53 24,564.68 21,141.44
Less: Loss allowance for trade receivables
- unsecured, considered doubtful (4,000.87) (5,976.64) (5,566.26)
20,392.66 18,588.04 15,575.18
*Includes balance receivables from related parties. For Details refer note 46
The Company’s exposure to credit and currency risks and loss allowances related to trade receivables are discussed in note 47.

13 Cash and cash equivalents

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Cash on hand 4.52 6.26 4.32
Balances with banks
- in current accounts*# 5,116.27 2,012.42 2,079.67
Balances with scheduled banks in deposit accounts 8,400.00 800.00 -
with original maturity of less than 3 months#
13,520.79 2,818.68 2,083.99
*Current account balances with banks include INR 112.24 lakhs (31 March 2017: INR 36.69 lakhs, 1 April 2016: INR 41.11 lakhs) held at a foreign
branch.
# Balance with banks and deposits includes INR 58.80 lakhs and INR 8,400 lakhs respectively as unutilized amounts of the IPO proceeds.

ANNUAL REPORT 2017-18 113

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

14 Current financial assets - Loans

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Loans to employees* 20.03 26.64 35.04
Security deposits 297.24 41.40 -
317.27 68.04 35.04
*These are interest bearing loans - repayable within one year given to employees, chargeable at the rate of 12% p.a.

15 Current financial assets - Others

As at As at As at
31 March 2018 31 March 2017 1 April 2016
(unsecured considered good, unless otherwise
stated)
Interest accrued on deposits 0.67 0.67 30.12
Interest accrued but not due on government bonds 84.53 39.18 32.13
Unbilled revenue*
- other than related parties 5,079.43 2,500.35 2,274.31
- related parties 12.56 68.63 68.63
Earnest money deposits - - 14.30
Receivable from employees for issue of shares - 0.56 -
5,177.19 2,609.39 2,419.49
*Unbilled revenue pertains to consideration receivable in respect of initial sale of software and services.

16 Other current assets

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Advances to vendors 11.04 17.90 8.88
Balances with government authorities* 137.47 191.92 152.80
Advance to employees 207.91 117.41 35.05
Prepaid expenses 284.81 283.80 244.64
641.23 611.03 441.37
*Balances with government authorities comprises of Goods and Service tax/ service tax / vat credit receivable.

114 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

17 Share capital
As at 31 March 2018 As at 31 March 2017 As at 1 April 2016
Number Amount Number Amount Number Amount
of shares of shares of shares
Authorised share
capital
Equity shares of INR 10 98,000,000 9,800.00 64,400,000 6,440.00 63,050,000 6,305.00
each
Equity share capital 200 0.02 200 0.02 200 0.02
with differential voting
rights of INR 10 each
0.01% Compulsory 11,999,800 1,199.98 11,999,800 1,199.98 11,999,800 1,199.98
convertible preference
shares of INR 10 each
110,000,000 11,000.00 76,400,000 7,640.00 75,050,000 7,505.00

As at 31 March 2018 As at 31 March 2017 As at 1 April 2016

Issued, subscribed and Number Amount Number Amount Number Amount
paid up of shares of shares of shares
Equity share capital of 69,235,701 6,923.57 64,308,030 6,430.80 54,013,800 5,401.38
INR 10 each, fully paid
up
Equity share capital - - 120 0.01 120 0.01
with differential voting
rights (DVR) of INR 10
each, fully paid up
0.01% Compulsory - - - - 10,294,230 1,029.42
convertible preference
shares of Rs. 10 each,
fully paid up
Balance 69,235,701 6,923.57 64,308,150 6,430.81 64,308,150 6,430.81
Less : Shares held by 1,351,584 135.16 1,995,064 199.51 2,223,735 222.37
Trust
Total Share capital 67,884,117 6,788.41 62,313,086 6,231.30 62,084,415 6,208.44
Reconciliation of shares outstanding at the beginning and at the end at the reporting year
As at 31 March 2018 As at 31 March 2017
Equity share capital of INR 10 each, Number Amount Number Amount
fully paid up of shares of shares
At the beginning of the year 64,308,030 6,430.80 54,013,800 5,401.38
Add: Shares issued on conversion of - - 10,294,230 1,029.42
preference shares
Add: Equity shares with differential 120 0.01 - -
voting rights reclassified to equity
shares during the year
Add: Equity shares issued during the 3,877,551 387.76 - -
year through initial public offer*
Add: Issued during the year to Newgen 1,050,000 105.00 - -
ESOP Trust
At the end of the year 69,235,701 6,923.57 64,308,030 6,430.80
Less: Shares held by trust 1,351,584 135.16 1,995,064 199.51
Total equity share capital 67,884,117 6,788.41 62,312,966 6,231.29

ANNUAL REPORT 2017-18 115

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

During the year ended 31 March 2018, the Company has completed the initial public offer (IPO), pursuant to which
17,331,483 equity shares of INR 10 each were allotted/allocated, at an issue price of INR 245 each, consisting of
fresh issue of 3,877,551 equity shares and an offer for sale of 13,453,932 equity shares by selling shareholders.
The equity shares of the Company were listed on National Stock Exchange of India Limited (NSE) via ID
NEWGEN and BSE Limited (BSE) via ID 540900 on 29 January 2018.”
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.

As at 31 March 2018 As at 31 March 2017

Equity share capital with differential Number Amount Number Amount

voting rights (DVR) of INR 10 each, of shares of shares
fully paid up
At the beginning of the year 120 0.01 120 0.01
Less: Re-classification to equity shares (120) (0.01) - -
during the year
At the end of the year - - 120 0.01
Equity shares with differential voting rights :
Each of the shareholder with differential voting rights shall, at all times up to the conversion of Compulsory
convertible preference shares into equity shares thereof, were entitled to a fixed preferential and cumulative
dividend of one-hundredth percent (0.01%) of the investment amount and resolved to be so distributed as
such dividend in respect of each financial year or other accounting period of the Company, in accordance with
applicable law. In addition, the Ascent DVR and the IDGVI DVR shall be entitled to participate in any distribution
of the profits of the Company (including, as regards any dividends declared) on a pro-rata share and as-if-
converted basis vis-à-vis the other shareholders.
Expiration of differential rights:
Pursuant to the shareholder subscription agreement dated 31 October 2013, each Ascent DVR
and an IDGVI DVR shall be compulsorily converted at no cost to the Investors, into equity shares
in the ratio of 1:1 at any time as may be determined by the investors in their sole discretion. Upon
conversion of the Ascent DVR and the IDGVI DVR , such differential voting and dividend rights,
as mentioned above, on the shares held by each of the investors have automatically expired.
During the year ended 31 March 2018 each equity share with DVR has been re-classified into equity shares.
As at 31 March 2018 As at 31 March 2017
0.01% Compulsory convertible Number Amount Number Amount
preference shares of INR 10 each, fully of shares of shares
paid up
At the beginning of the year - - 10,294,230 1,029.42
Less: Preference shares conversion to - - 10,294,230 1,029.42
equity shares during the year
At the end of the year - - - -

Terms/rights attached to preference shares

During the years ended 31 March 2008 and 31 March 2009, the Company had issued 1,014,785 compulsorily
convertible preference shares (hereinafter referred to as “CCPS”) of Rs. 10 each fully paid up to HAV2 (Mauritius)
Limited and 360,250 CCPS of INR 10 each fully paid up to SAPV (Mauritius). During the financial year 2013-
14, HAV2 (Mauritius) Limited, exited from the Company and two new investors namely Unit Trust of India
Investment Advisory Services Limited, A/C Ascent India Fund II (“Ascent”) and IDG Ventures India Fund II LLC
(“IDGVI”) made investment in the Company. During the year ended 31 March 2014, all the CCPS held by HAV2

116 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

(Mauritius) Limited, were acquired by Ascent (670,790 CCPS) and IDGVI (343,995 CCPS). Further, during the
year ended 2014-15, the Company has also allotted 225,192 number of CCPS to Ascent and 115,478 number of
CCPS to IDGVI.
Pursuant to Shareholders agreement executed on 31 October 2013, between Newgen Software Technologies
Ltd and Ascent, IDGVI, SAPV (Mauritius) (individually referred as investor and together referred to as investor
group), Newgen Employees Trust and Mr. Diwakar Nigam, Mr. T.S. Varadarajan, Mrs. Priyadarshini Nigam and
Mrs. Usha Varadarajan, and Share purchase cum Subscription agreement dated 31 October 2013, between
Newgen Software Technologies Ltd, Ascent, IDGVI, SAPV (Mauritius), Mr. Diwakar Nigam, Mr. T.S. Varadarajan,
Mrs. Priyadarshini Nigam and Mrs. Usha Varadarajan, the investor group were entitled to receive dividends in
preference to any dividends on the equity shares of the Company at the rate of 0.01% (Zero point Zero One
Per cent) per annum on the investors subscription consideration, pro rata on a fully diluted basis. However, all
the preferential dividend and differential voting rights have already been expired due to conversion of CCPS
into Equity.
During the year 2014-15, IDGVI transferred 606,540 shares (adjusted for bonus issue) to Pandara Trust Scheme - I
Each CCPS shall be compulsorily converted at no cost to the Investor, into Equity Shares in the ratio of 1:1 at any
time as may be determined by the Investor at their sole discretion. Subject to applicable Law, the conversion
of the Shares and the HAV2 (Mauritius) Limited Sale of Shares will take place within the maximum time period
prescribed under applicable Law for such conversion.
Conversion of Compulsory convertible preference shares into equity
Pursuant to the Shareholders Agreement, during the year ended 31 March 2017, all issued 10,294,230 CCPS
of Rs.10/- each have been converted into 10,294,230 equity shares of Rs.10/- each in the ratio of 1:1, at no cost
to the investors. Equity shares of the Company allotted upon conversion of the CCPS, rank pari passu in all
respects including as to dividend, voting rights, with the existing fully paid up equity shares of face value of Re.
10/- each of the Company.

17 A Details of shareholders holding more than 5% shares in the Company

Equity shares of INR10 each, fully paid up held by:

As at 31 March 2018 31 March 2017 1 April 2016

Number % Holding Number % Holding Number % Holding
- Mr. Diwakar Nigam 18,422,406 28.65% 18,422,406 28.65% 18,422,406 34.11%
- Mr. T.S. Varadarajan 15,009,306 23.34% 15,009,306 23.34% 15,009,306 27.79%
- Mrs. Priyadarshini 7,968,906 12.39% 7,968,906 12.39% 7,968,906 14.75%
Nigam
- Mrs. Usha Varadarajan 4,528,320 7.04% 4,528,320 7.04% 4,528,320 8.38%
- Unit Trust of India - - 7,464,510 11.61% - -
Investment Advisory
Services Limited, A/C
Ascent India Fund III
Equity shares with Differential voting Rights of INR 10 each, fully paid up held by:
As at 31 March 2018 31 March 2017 1 April 2016
Number % Holding Number % Holding Number % Holding
Unit Trust of India - - 60 50.00% 60 50.00%
Investment Advisory
Services Limited, A/C
Ascent India Fund III
IDG Ventures India - - 60 50.00% 60 50.00%
Fund II LLC

ANNUAL REPORT 2017-18 117

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

0.01% Compulsory
Convertible Preference
Shares of Rs.10 each,
fully paid up held by:
As at 31 March 2018 31 March 2017 1 April 2016
Number % Holding Number % Holding Number* % Holding
SAPV (Mauritius) - - - - 2,161,500 21.00%
Unit Trust of India - - - - 5,375,892 52.22%
Investment Advisory
Services Limited, A/C
Ascent India Fund III
IDG Ventures India - - - - 2,150,334 20.89%
Fund II LLC
Pandara Trust Scheme- - - - - 606,504 5.89%
1
*Adjusted for bonus issue, refer note 17 C

17 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.

1 7 C Aggregate number of shares issued for consideration other than cash during the period of five
years immediately preceding the reporting date.
A. Bonus shares have been issued for which no cash has been received. The bonus shares has been
issued out of security premium
For the For the For the For the For the
year ended year ended year ended year ended year ended
31 March 31 March 31 March 31 March 31 March
2018 2017 2016 2015 2014
Equity shares of INR 10 each - - - 43,974,000 -
Equity share capital with - - - 100 -
differential voting rights of INR
10 each
0.01% Compulsory convertible - - - 8,578,525 -
preference shares of INR 10
each
B. Equity shares have been issued under Employee stock options plans to trust for which only exercise
price has been received in cash.
For the For the For the For the For the
year ended year ended year ended year ended year ended
31 March 31 March 31 March 31 March 31 March
2018 2017 2016 2015 2014
Equity shares of INR 10 each 1,050,000 - - 1,245,000 -

17 D Securities premium
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.
Newgen ESOP Trust reserve
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.

118 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Share options outstanding reserve

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.

18 Non-current financial liabilities - Borrowings

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Non-current maturities of finance lease obligations 1,316.66 1,617.99 1,917.45
(secured)*
1,316.66 1,617.99 1,917.45
* Finance lease obligations
The company had obtained leasehold land from ‘Yamuna Expressway Industrial Development Authority
(YEIDA)’ during the year ended 31 March 2016. The lease term of leasehold land is 90 years with equated
monthly payment beginning from the month subsequent to the commencement of lease.
Finance lease obligations are payable as follows:
Particulars As at 1 April 2016
Future Interest Present value
minimum of minimum
lease lease
payments payments
Less than one year 315.25 240.16 555.40
Between one and five years 1,204.62 615.64 1,820.26
More than five years 712.83 4,973.29 5,686.12
Particulars As at 31 March 2017
Less than one year 302.25 205.49 507.74
Between one and five years 1,051.96 481.51 1,533.47
More than five years 566.03 4,901.93 5,467.97
Particulars As at 31 March 2018
Less than one year 302.25 170.37 472.62
Between one and five years 684.42 442.27 1,126.69
More than five years 566.40 4,832.93 5,399.33
Effective interest rate on above borrowings is 11.68%.

19 Derivative

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Derivative liability - - 136.00
- - 136.00

20 Non-current provisions

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Provision for employee benefits (refer note 28)
- provision for gratuity 1,266.07 1,113.20 865.24
- provision for compensated absences 387.30 329.77 256.35
1,653.37 1,442.97 1,121.59

ANNUAL REPORT 2017-18 119

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

21 Current financial liabilities - Borrowings

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Loans from banks
Pre-shipment loans (secured)* 4,946.27 5,226.18 5,883.19
4,946.27 5,226.18 5,883.19
*Pre-shipment loans carry interest rate @ LIBOR plus margin which varied from 2.13% to 4.45% 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 472.93 lakhs (31 March 2017: INR 483.20 lakhs, 1 April 2016: INR 493.59) and are repayable within 180 days from the date of
disbursement.

22 Trade payables

As at As at As at
31 March 2018 31 March 2017 1 April 2016
- Total outstanding dues to creditors other than 2,143.75 1,714.52 1,405.47
micro and small enterprises
2,143.75 1,714.52 1,405.47
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 46 for dues to related parties
c) The Company’s exposure to currency and liquidity risks related to trade payables is disclosed in
note 47

23 Current financial liabilities - Others

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Current maturities of finance lease obligations 302.25 302.25 315.25
Employee related payables 2,983.39 2,411.84 1,702.40
Payable in respect of retention money 47.92 28.10 11.64
Earnest money deposits 1.00 0.50 -
Payable for capital assets 241.35 126.67 17.47
3,575.91 2,869.36 2,046.76

24 Deferred income

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Advance billing 3,582.77 3,029.27 2,586.77
Advance from customers 25.22 9.39 7.51
3,607.99 3,038.66 2,594.28
Other current liabilities As at As at As at
31 March 2018 31 March 2017 1 April 2016
Statutory dues payable 1,313.63 526.97 410.42
Advance from employees for share options 6.76 0.77 1.35
1,320.39 527.74 411.77

120 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

25 Current provisions

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Provision for employee benefits (refer note 28)
- provision for gratuity 141.39 165.27 134.70
- provision for compensated absences 69.89 68.40 55.17
211.28 233.67 189.87

26 Revenue from operations

For the year For the year

ended ended
31 March 2018 31 March 2017
Sale of products - softwares 12,996.88 10,946.89
Sale of services
- Implementation 11,768.53 10,381.22
- Scanning 1,950.01 1,698.67
- AMC/ATS 7,934.91 7,060.67
- Support 10,268.75 8,026.60
- SaaS revenue 1,033.28 197.36
45,952.36 38,311.41

27 Other income

For the year For the year

ended ended
31 March 2018 31 March 2017
Interest income under the effective interest rate method:
- on security deposits at amortised cost 31.21 24.16
- government and other bonds at FVOCI 131.56 35.11
Interest income on fixed deposits 159.32 22.16
Other interest income 1.10 2.02
Profit on sale of mutual funds (net) at FVTPL 60.73 589.89
Dividend income from mutual funds at FVTPL 87.86 1.75
Fair value changes of financial assets at FVTPL 25.48 -
Provision no longer required written back 229.75 -
Reversal of derivative liability - 136.00
Miscellaneous income 31.18 15.52
758.19 826.61

28 Employee benefits expense

For the year For the year

ended ended
31 March 2018 31 March 2017
Salaries, wages and bonus 20,434.76 17,060.34
Contribution to provident and other funds (refer note i below) 672.31 609.44
Expenses related to compensated absences (refer note ii below) 244.17 228.20
Share based payment - equity settled 215.64 119.40
Expense related to defined benefit plan (refer note iii below) 272.39 242.81
Staff welfare expenses 446.59 373.00
22,285.86 18,633.19

ANNUAL REPORT 2017-18 121

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

(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 672.31 lakhs (31 March 2017: INR 609.44 lakhs).
(ii) Compensated absences:
The Principal assumptions used in determining the compensated absences benefit obligation are
as given below:
31 March 2018 31 March 2017 1 April 2016
Discounting rate (p.a.) 7.80% 7.35% 7.95%
Future salary increase ( p.a.) 7.00% 7.00% 7.00%
(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.
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
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation
for gratuity were carried out as at 31 March 2018. The present value of the defined benefit obligations
and the related current service cost and past service cost, were measured using the Projected Unit
Credit Method.
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

Defined benefit obligation

31 March 2018 31 March 2017 1 April 2016
Expense recognised in profit or loss
Opening balance 1278.47 999.93 679.45
Included in profit or loss:
Current service cost 178.42 163.31 138.60
Past service cost
Interest cost (income) 93.97 79.49 54.36
1,550.86 1,242.73 872.41
Remeasurements recognised directly in other
comprehensive income
Remeasurement loss (gain) arising from:
Demographic assumptions (6.31) - 64.56
Financial assumptions (44.89) 51.64 104.00
Experience adjustment (29.64) 31.24 (0.61)
(80.84) 82.88 167.95
Other
Contributions paid by the employer
Benefits paid (62.57) (47.15) (40.43)
Closing balance 1,407.45 1,278.46 999.93
Total 1,407.45 1,278.46 999.93

122 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Defined benefit obligation

31 March 2018 31 March 2017 1 April 2016

B. Defined benefit obligations

i. Actuarial assumptions
The following were the principal actuarial
assumptions at the reporting date (expressed as
weighted averages).
Discount rate 7.80 7.35 7.95
Salary escalation rate 7.00 7.00 7.00
Mortality rate 100% of IALM 100% of IALM 100% of IALM
(2006 - 08) (2006 - 08) (2006 - 08)

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.
31 March 2018 31 March 2017
Increase Decrease Increase Decrease
Discount rate (0.50% movement) (63.05) 68.33 43.70 46.77
Future salary growth (0.50% 68.53 (63.79) 46.70 44.04
movement)
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 & 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:
31 March 2018 31 March 2017 1 April 2016
Net defined benefit asset - -
Total employee benefit asset - - -
Net defined benefit liability
Liability for Gratuity 1407.46 1,278.47 999.93
Liability for Compensated absences 457.19 398.17 311.52
Total employee benefit liabilities 1,864.65 1,676.64 1,311.45
Non-current:
Gratuity 1,266.07 1,113.20 865.23
Compensated absences 387.30 329.77 256.35
Current:
Gratuity 141.39 165.27 134.70
Compensated absences 69.89 68.40 55.17

ANNUAL REPORT 2017-18 123

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

29 Finance costs

For the year For the year

ended ended
31 March 2018 31 March 2017
Finance cost on finance lease obligations 205.49 240.16
Interest expense on packing credit 160.88 156.81
Other finance costs 79.03 128.63
Net loss on foreign currency transactions and translation* 75.28 -
520.68 525.60
*To the extent considered as an adjustment to finance cost

30 Depreciation and amortization expense

For the year For the year

ended ended
31 March 2018 31 March 2017
Depreciation of property, plant and equipment (refer note 4) 1,514.62 1,204.80
Amortisation of intangible assets (refer note 5) 55.48 59.20
567.68 481.87

31 Other expenses
For the year For the year
ended ended
31 March 2018 31 March 2017
Rent 1,514.62 1,204.80
Repairs and maintenance 308.81 296.82
Rates and taxes 144.77 219.32
Travelling and conveyance 5,462.40 4,404.37
Legal and professional fees 1,846.20 1,378.72
Payment to auditors* 61.18 35.00
Electricity and water 329.93 307.78
Advertising and sales promotion 358.19 435.77
Membership and subscription fee 505.67 375.20
Brokerage and commission 605.53 483.41
Communication costs 365.95 324.12
Software and license maintenance 305.58 370.35
Expenditure on corporate social responsibility 107.31 105.09
Donation 32.00 28.20

Operation and maintenance 490.77 454.39

Printing and stationery 632.06 585.50
Loss on sale of property, plant and equipment 3.15 0.12
Property, plant and equipment written off - 0.59
Loss allowance on trade receivables 462.52 1,353.40
Loss allowance on other financial assets - 6.55
Security charges 200.79 156.24
Net foreign exchange fluctuation loss 1.95 189.47
Fair value changes of financial assets at FVTPL - 5.57
Miscellaneous expenses 503.77 451.22
14,243.15 13,172.00

124 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

For the year For the year

ended ended
31 March 2018 31 March 2017
*Payment to Auditors#
As auditor:
- Statutory audit fee 40.00 34.00
- Limited review fee 7.50 -
- Others 11.43 -
- Reimbursement of expenses 2.25 1.00
61.18 35.00
#Excludes fee paid to statutory auditor amounting to INR 82.67 Lakhs for IPO related services

32 Income Tax
For the year For the year
ended ended
31 March 2018 31 March 2017
A. The major components of income tax (expense) / income are
Recognised in profit or loss
Tax expense 1,549.01 1,540.62
MAT credit entitlement (86.97) -
Tax expense for earlier years 64.50 126.24
Deferred tax (credit) 503.55 (133.89)
Total 2,030.10 1,532.97
Recognised in Other comprehensive income
Tax impact on
- Re-measurement on defined benefit plan (43.73) 28.31
- Fair value of Debt instruments through other comprehensive income 0.16 (9.20)
Total (43.57) 19.12

B. Reconciliation of effective tax rate

31 March 2018 31 March 2017
Profit before tax 9,093.18 6,325.36
Tax using the Company’s tax rate 34.61% 3,049.64 34.61% 2,189.08
Effect of deduction under section -11.57% (1,052.22) -13.76% (870.20)
10AA of the Income tax Act, 1961
Effect of expenses permanently 0.19% 16.89 2.73% 172.45
disallowed under the Income Tax
Act, 1961
Effect of income exempt/ taxed -0.58% (53.04) -1.45% (91.41)
on lower rate
Others 0.04% 3.36 0.12% 7.88
Income tax recognised in 21.62% 1,965.59 22.24% 1,406.73
statement of profit and loss for
the current year

ANNUAL REPORT 2017-18 125

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

C. Deferred tax assets (net)

Deferred tax relates to the following: As at As at As at
31 March 2018 31 March 2017 1 April 2016
Deferred tax related to items
recognised in OCI:
Deferred tax assets (gross)
Investments at fair value through OCI - - 1.17
Remeasurement of defined benefit - 28.31 -
liability (asset)
(a) - 28.31 1.17
Deferred tax liabilities
Investments at fair value through OCI 7.87 8.03 -
Remeasurement of defined benefit 15.42 - -
liability (asset)
(b) 23.29 8.03 -
Deferred tax related to items
recognised in statement of profit and
loss:
Deferred tax liabilities (gross)
Property, plant and equipment 251.36 314.72 300.22
Others 11.11 -
(c) 262.47 314.72 300.22
Deferred tax assets (gross)
Others - 8.87 14.74
Loss allowance on other financial 42.63 42.64 42.73
assets
Loss allowance on trade receivables 1,384.62 2,068.39 1,926.37
Derivative - - 46.00
Provision for employee benefits 667.62 530.78 472.45
(d) 2,094.87 2,650.68 2,502.29
(e) = (d) 1,832.40 2,335.96 2,202.07
- (c)
Deferred tax assets (net) (a) + (e) 1,809.12 2,356.24 2,203.24
- (b)
MAT credit entitlement 86.97 - 89.02
Total Deferred tax assets (net) 1,896.09 2,356.24 2,292.26

D. Movement in temporary differences

31 March 2018
Particulars Balance as at Recognised in Recognised in Balance as at
1 April 2017 profit or loss OCI during 31 March 2018
during FY FY 2017-18
2017-18
Investments at fair value through (8.03) - (0.16) (7.87)
OCI
Remeasurement of defined 28.31 - 43.73 (15.42)
benefit liability (asset)
Property, plant and equipment (314.72) (63.36) - (251.36)
Loss allowance on other financial 42.64 0.01 - 42.63
assets
Loss allowance on trade 2,068.39 683.77 - 1,384.62
receivables
Provision for employee benefits 530.78 (136.84) - 667.62
Others 8.87 19.97 - (11.11)
Total 2,356.24 503.55 43.57 1,809.12

126 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

31 March 2017
Particulars Balance as at Recognised in Recognised in Balance as at
1 April 2016 profit or loss OCI during 31 March 2017
during FY FY 2016-17
2016-17
Investments at fair value through 1.17 - (9.20) (8.03)
OCI
Remeasurement of defined - - 28.31 28.31
benefit liability (asset)
Derivative 46.00 (46.00) -
Property, plant and equipment (300.22) (14.50) - (314.72)
Loss allowance on other financial 42.73 (0.09) - 42.64
assets
Loss allowance on trade 1,926.37 142.02 - 2,068.39
receivables
Provision for employee benefits 472.45 58.33 - 530.78
Others 14.74 (5.87) - 8.87
Total 2,203.24 133.89 19.11 2,356.24

33 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

31 March 2018 31 March 2017
INR INR
Profit attributable to equity holders of the company 7,063.09 4,792.39
Profit attributable to equity holders of the company for basic and 7,063.09 4,792.39
diluted earnings
ii. Weighted average number of ordinary shares
31 March 2018 31 March 2017
INR INR
Opening balance of equity’s shares 62,313,086 51,790,185
Conversion of convertible preference shares into equity shares - 10,294,230
Effect of equity shares issued through initial public offer 658,652 -
Effect of share options exercised 739,355 28,037
Weighted average number of shares for basic EPS 63,711,093 62,112,452
Effect of dilution:
Add: Equity shares held by Newgen ESOP Trust with respect to 1,633,736 1,337,237
options not exercised by employees but outstanding
Weighted average number of shares for diluted EPS 65,344,829 63,449,689

Basic and Diluted earnings per share

ANNUAL REPORT 2017-18 127

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

31 March 2018 31 March 2017

INR INR
Basic earnings per share 11.09 7.72

Diluted earnings per share 10.81 7.55

34 Share-based payment arrangements:

A. Description of share-based payment arrangements

i. Share option programmes (equity-settled)
The Company had established Employees Stock Option Plan-1999 (ESOP 1999) and Employees Stock
Option Plan-2000 (ESOP 2000) in the year 1999-00 and 2000-01 respectively, administered through
‘Newgen Employees Trust’ (ESOP Trust) set-up for this purpose, for a total grant of 293,160 and
600,000 options respectively, at an Exercise Price of INR80 and INR 40 per option respectively, to the
employees of the Company. Under the terms of the original plans, these options are vested on a graded
vesting basis over a maximum period of Four (4) years from the date of grant and are to be exercised
either in part(s) or full, within a maximum period of five and four years respectively from the date of
last vesting. During the year ended 31 March 2000, 586,320 equity shares were issued to ESOP Trust
as bonus shares in the ratio of 1:2. Further, 4,093,350 equity shares were also issued to ESOP Trust as
bonus shares in the ratio of 1:5 during the year ended 31 March 2015.

The Board of Directors of the Company time to time extended the maximum exercise period for ESOP
1999 and ESOP 2000. During the year 2014-15, the Board of Directors of the Company in their meeting
dated 24 December 2014 extended the maximum exercise period for ESOP 1999 and ESOP 2000 to
five years and four year respectively from the last vesting date or 31 December 2018, whichever is later.

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 grants
under this Scheme shall be limited to 3,783,800 option with underlying equity shares of the Company.
Pursuant to the scheme, during the year 2014-15, the Company has granted 3,653,525 options at an
exercise price of INR 63 per option, to the employees of the Company. 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. 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.

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.

128 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Following table represents general terms of the grants for the ESOP outstanding as on 31 March
2018, during the previous year 2016-17 there were no grants made.
ESOP schemes Grant Date No. of Exercise Weighted Vesting
Options Price average Period
Outstanding remaining
life
Newgen Employees Stock 1-Jan-2015 1,702,708 INR 63.00 5.76 4 years
Option Scheme 2014
(Newgen ESOP 2014)
Newgen Employees Stock 1-Jul-2017 335,025 INR 63.00 8.23 4 years
Option Scheme 2014
(Newgen ESOP 2014)
Newgen Employees Stock 1-Sep-2017 130,000 INR 63.00 8.43 4 years
Option Scheme 2014
(Newgen ESOP 2014)
Newgen Employees Stock 1-Oct-2017 75,750 INR 63.00 8.51 4 years
Option Scheme 2014
(Newgen ESOP 2014)

B. Measurement of fair values

i. Equity-settled share-based payment arrangements
The fair value of the employee share options has been measured using the Black-Scholes formula.
Service and non-market performance conditions attached to the arrangements were not taken into
account in measuring fair value.
The requirement that the employee has to remain in service in order to purchase shares under the share
purchase plan has been incorporated into the fair value at grant date by applying a discount to the
valuation obtained.
The fair value of options and the inputs used in the measurement of the grant date fair values of the
equity-settled share based payment plans are as follows:

Particulars Newgen Employees Stock Option

Scheme 2014 (Newgen ESOP
2014)
Grant II, III and IV
31 March 2018
Fair value of options at grant date 100.23
Share price at grant date 134.53
Exercise price 63.00
Expected volatility (weighted-average) 55.59%
Expected life (weighted-average) 9 years
Expected dividends 0.00%
Risk-free interest rate (based on government bonds) 6.78%

ANNUAL REPORT 2017-18 129

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

C. Reconciliation of outstanding share options

The number and weighted-average exercise prices of share options under the share option programmes
were as follows.

Employees Stock Option Number Weighted Number Weighted Number Weighted

Plan-1999 (ESOP 1999) of options average of options average of options average
exercise exercise exercise
price price price
31 March 31 March 31 March 31 March 1 April 1 April
2018 2018 2017 2017 2016 2016
Options outstanding as 52,600 INR 4.45 57,600 INR 4.45 57,600 INR 4.45
at the beginning of the
year
Add: Options granted - - - - - -
during the year
Less: Options lapsed - - - - - -
during the year
Less: Options exercised 52,600 INR 4.45 5,000 INR 4.45 - -
during the year
Options outstanding as - INR 4.45 52,600 INR 4.45 57,600 INR 4.45
at the year end
Exercisable as at year - 52,600 57,600
end
Weighted - average - 1.75 Years 2.75 Years
contractual life

Employees Stock Option Number Weighted Number Weighted Number Weighted

Plan-2000 (ESOP of options average of options average of options average
2000) exercise exercise exercise
price price price
31 March 31 March 31 March 31 March 1 April 1 April
2018 2018 2017 2017 2016 2016
Options outstanding as 386,700 INR 6.67 483,800 INR 6.67 678,180 INR 6.67
at the beginning of the
year
Add: Options granted - - - - - -
during the year
Less: Options lapsed - - 30,000 INR 6.67 9,600 INR 6.67
during the year
Less: Options exercised 386,700 INR 6.67 67,100 INR 6.67 184,780 INR 6.67
during the year
Options outstanding as - INR 6.67 386,700 INR 6.67 483,800 INR 6.67
at the year end
Exercisable as at year - 386,700 483,800
end
Weighted - average - 2.09 years 3.11 years
contractual life

130 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Newgen Employees Number Weighted Number Weighted Number Weighted

Stock Option Scheme of options average of options average of options average
2014 (Newgen ESOP exercise exercise exercise
2014) price price price
31 March 31 March 31 March 31 March 1 April 1 April
2018 2018 2017 2017 2016 2016
Options outstanding as 3,061,209 INR 63.00 3,384,305 INR 63.00 3,653,525 INR 63.00
at the beginning of the
year
Add: Options granted 562,550 INR 63.00 - - - -
during the year
Less: Options lapsed 126,096 INR 63.00 166,525 INR 63.00 213,175 INR 63.00
during the year
Less: Options exercised 1,254,180 INR 63.00 156,571 INR 63.00 56,045 INR 63.00
during the year
Options outstanding as 2,243,483 INR 63.00 3,061,209 INR 63.00 3,384,305 INR 63.00
at the year end
Exercisable as at year 445,616 777,170 288,188
end
Weighted - average 6.38 years 6.76 years 7.76 years
contractual life

C. Expense recognised in statement of profit and loss

For details on the employee benefits expense, refer note 28

35 Operating leases

A. Leases as lessee
a) The Company has taken various cancellable and non-cancellable leases for office premises and
residential accommodation for some of its employees. The amount recognised in prefit and loss and
future minimum lease payments and payment profile of non-cancellable operating leases are as under:

i. Future minimum lease payments

The future minimum lease payments under non-cancellable leases were receivable as follows.
31 March 2018 31 March 2017 1 April 2016
Less than one year 1,150.13 1,024.35 934.97
Between one and five years 1,732.52 2,113.83 2,236.27
More than five years - - -
2,882.65 3,138.17 3,171.24
ii. Amounts recognised in profit or loss
31 March 2018 31 March 2017
Lease expense 1,514.62 1,204.80
1,514.62 1,204.80

ANNUAL REPORT 2017-18 131

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

36 Contingent liabilities and commitments (to the extent not provided for)
31 March 2018 31 March 2017 1 April 2016
a. Estimated amount of contracts remaining to be 759.70 1,733.00 574.98
executed on capital account and not provided for
net of advances, tangible assets
1. For other commitments – Non-cancellable operating, and finance leases, refer Note 35 and 18
respectively
2. The Company is committed to operationally, technically and financially support the operations of its
certain subsidiary companies.

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 28 February
2018 and 31 March 2017 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. Dividends would attract corporate dividend tax when declared.

Particulars For the year For the year

ended ended
31 March 2018 31 March 2017
Final dividend of INR 2.00 per share (31 March 2017: INR 1.5/-) 1,384.71 964.62
Corporate dividend tax 283.94 196.37

39 Utilization of CSR expenses

As per Section 135 of the Companies Act 2013, the following is the detail of corporate social responsibility
expenses incurred by the Company: Gross amount to be spent by the Company during the year ended
31 March 2018 is INR 106.13 lakhs (previous year INR. 97.05 lakhs). Amount spent during the year ended
31 March 2018:

Particulars Paid Liability yet to Total

be paid
i) For purpose mentioned as under 104.31 3.00 107.31
The areas for CSR activities are promoting education, health care, sanitation, digital literacy and
livelihood enhancement and participation on SOS Children’s Village Projects in Faridabad. The funds
were primarily utilized through the year on the following activities which are specified in Schedule VII
of the Companies Act, 2013.

132 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

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. Accordingly, the management believes that there
has been no change in the nature of its international transactions with the associated enterprises during
the year ended 31 March 2018 and 31 March 2017. Further, 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 During the year ended 31 March 2018, the Company completed the initial public offer (IPO), pursuant to
which 17,331,483 equity shares of INR 10 each were allotted/allocated, at an issue price of INR 245 each,
consisting of fresh issue of 3,877,551 equity shares and an offer for sale of 13,453,932 equity shares by
selling shareholders. The equity shares of the Company were listed on National Stock Exchange of India
Limited (NSE) via ID NEWGEN and BSE Limited (BSE) via ID 540900 on 29 January 2018.

42 Expenses incurred by the Company aggregating to INR 2,627.44 Lakhs in connection with the IPO
have been partly adjusted towards the securities premium account and partly recovered from the
selling shareholders. The IPO expenses amounting to INR 1,646.71 (excluding certain expenses which are
directly attributable to the Company such as legal counsel cost, auditor fee, listing fee, advertisement
& marketing expenses and depository fees amounting to INR 980.73 Lakhs), have been allocated
between the Company and each of the selling shareholders in proportion to the equity shares allotted
to the public as fresh issue by the Company and under offer for sale by the existing shareholders and
the total amount charged in securities premium is INR 1,349.15 Lakhs.

43 During the year ended 31 March 2018, the Company has completed the Initial Public offer, pursuant to
which 17,331,483 equity shares having a face value of Rs. 10 each were allotted/allocated, at an issue
price of Rs. 245 per equity share, consisting of fresh issue of 3,877,551 equity shares and an offer for sale
of 13,453,932 equity shares by selling shareholders. The gross proceeds of fresh issue of equity shares
from IPO amounts to Rs. 9,500.00 lakhs. The Company’s share of fresh issue related expenses is Rs
1,349.15 lakhs, which has been adjusted against Securities Premium. As at 31 March 2018, the proceeds
are unutilised and have been temporarily invested/ deposited in cash and cash equivalents including
fixed deposits and bank account (Refer note 13).

44 Dividend remittances in foreign currency:

Particulars For the year For the year

ended ended
31 March 2018 31 March 2017
Year to which the dividend relates 2016-17 2015-16
Amount remitted during the year (INR in lakhs) 77.21 51.78
Number of non-resident shareholders 2 2
Number of shares on which dividend was due 5,147,340 5,147,340

ANNUAL REPORT 2017-18 133

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

45 Details of current Investments (refer note 11)

Particulars Number of Units as at Amount in Lakhs as at

31 March 31 March 1 April 31 March 31 March 1 April
2018 2017 2016 2018 2017 2016

Investment in debt
mutual funds
Reliance Short Term 634,842 - - 213.85 - -
Fund- Direct Growth
Plan
ICICI Prudential Short 860,077 - - 322.56 - -
Term Plan
IIFL Dynamic Bond 1,442,783 - - 200.83 - -
Fund
Franklin Templeton MF 11,122 - - 425.20 - -
Aditya BSL MF 3,202,906 - - 426.14 - -
ICICI Prudential MF 2,185,596 - - 425.63 - -
UTI Income 2,617,879 - - 442.00 - -
Opportunities Fund -
Direct Plan-Growth
Kotak Income 2,194,751 - - 440.56 - -
Opportunities Fund-
Monthly Growth
L&T Income 2,157,674 - - 439.81 - -
Opportunities Fund
Direct Plan-Growth
Tata Short Term Fund - 1,273,800 - - 401.05 -
Reliance Short Term - 634,842 - - 200.61 -
Fund
UTI Short Term Income - 1,974,451 - - 401.27 -
Fund
ICICI Prudential Short - 860,077 - - 301.29 -
Term Plan
UTI Income - 3,748,856 - - 420.28 -
Opportunities Fund
Kotak Income - 3,948,263 - - 419.36 -
Opportunities Fund
BNP Paribas Medium - 4,137,952 - - 413.80 -
Term Income Fund
L&T Income - 3,734,193 - - 419.20 -
Opportunities Fund
Direct Plan
IIFL Cash Opportunities - 1,817,389 - - 206.40 -
Fund
HSBC Income Fund - - - 784,326 - - 200.42
Short Term Plan
BNP Paribas Flexi Debt - - 770,208 - - 200.57
Fund

134 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Particulars Number of Units as at Amount in Lakhs as at

31 March 31 March 1 April 31 March 31 March 1 April
2018 2017 2016 2018 2017 2016
Birla Sun Life Dynamic - - 1,694,757 - - 450.55
Bond Fund
Reliance Regular - - 970,116 - - 200.33
Savings Fund
Kotak Bond Fund- - - 465,943 - - 200.46
Growth
UTI Bond Fund -Growth - - 441,319 - - 200.60
IDFC Dynamic Bond - - 1,366,352 - - 250.88
Fund
Investment in arbitrage
funds
HDFC Balanced Fund - - 413,056 - - 439.23
Tata Balanced Fund - - 259,035 - - 423.85
DSP BR Balanced Fund - - 413,307 - - 440.03
ICICI Prudential Equity - - 3,417,969 - - 355.13
Income Fund
ICICI Prudential - - 1,374,705 - - 352.47
Balanced Advantage
Fund
JPMorgan India Equity - - 3,285,737 - - 356.43
Income Fund
Investment in
government bonds
8.40% Indian Railway 40,000 40,000 40,000 466.42 468.74 445.20
Finance Corporation
Limited
7.35% NHAI 2031 (Int 45,000 45,000 492.61 502.36
Pyt date 1Apr)
Investment in Other
Bonds
IIFL SUB DEBT 9.25% 20 220.42
IIFL Perpetual Debt 200 204.95
Product
11% Bank of India 10 10 99.83 104.62
Perpetual Bond
10.40% Vijaya Bank 40 40 406.21 402.12
Perpetual Bond (int pyt
date 31Mar)
5,022.07 4,866.04 4,516.14

ANNUAL REPORT 2017-18 135

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

46 Related party transactions

A. List of subsidiaries
Set out below is the list of subsidiaries:
Name of the company Country of Ownership interest
incorporation 31 March 2018 31 March 2017 1 April 2016
Newgen Software Inc. United States 100% 100% 100%
of America
Newgen Software Technologies Singapore 100% 100% 100%
Pte Ltd.
Newgen Software Canada Ltd. Canada 100% 100% 100%
Newgen Software Technologies United 100% 100% -
(UK) Ltd. Kingdom
Newgen Computers India 100% 100% 100%
Technologies Limited
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 28)
Executive officers also participate in the Company’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 - Vice President (Customer Relations/Delivery)
Usha Varadarajan - Relative of Whole Time Director - T.S. Varadarajan
Shubhi Nigam - Relative of Managing Director

Key management personnel compensation

Transaction value Balance payable

For the year For the year 31 March 2018 31 March 2017 1 April 2016
ended 31 ended 31
March 2018 March 2017
Salaries, wages and 758.51 475.71 261.39 23.64 17.53
bonus*
Diwakar Nigam 160.35 85.37 8.24 5.02 6.07
T.S. Varadarajan 76.32 42.33 4.53 2.37 2.82
Priyadarshini Nigam 39.28 30.64 2.79 1.79 2.16
Arun Kumar Gupta 75.88 53.46 26.93 2.20 0.54
Virender Jeet 150.19 91.01 82.59 4.39 2.78
Surender Jeet Raj 134.22 85.84 70.59 4.14 3.09
Tarun Nandwani 121.41 74.59 65.72 3.73 0.07
Shubhi Nigam 0.87 12.47 - - -

136 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Transaction value Balance payable

For the year For the year 31 March 2018 31 March 2017 1 April 2016
ended 31 ended 31
March 2018 March 2017
Dividend paid 699.32 465.92 - - -
(excluding dividend
distribution tax)
Diwakar Nigam 276.34 184.22 - - -
T.S. Varadarajan 225.14 150.09 - - -
Priyadarshini Nigam 119.53 79.69 - - -
Arun Kumar Gupta 0.66 0.37 - - -
Virender Jeet 3.24 2.16 - - -
Surender Jeet Raj 3.16 2.00 - - -
Tarun Nandwani 3.33 2.11 - - -
Usha Varadarajan 67.92 45.28 - - -
Share-based 50.46 3.67 - - -
payments
Arun Kumar Gupta 7.51 1.43 - - -
Virender Jeet 16.33 - - - -
Surender Jeet Raj 14.82 - - - -
Tarun Nandwani 11.80 2.24 - - -
* excludes provision for gratuity and leave encashment, as these are determined on the basis of actuarial valuation for the Company
as a whole.

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 2018 and 31 March 2017, the Company has not recorded any impairment
of receivables relating to amounts owed by related parties. This assessment is undertaken at each
reporting period.

Transaction value Balance receivable

For the year For the year 31 March 2018 31 March 2017 1 April 2016
ended 31 ended 31
March 2018 March 2017
Sale of products
and services
Subsidiaries
Newgen Software 6,393.04 6,520.77 2,218.41 2,445.16 1,861.20
Inc., USA
Newgen Singapore 843.77 114.90 165.90 111.87 54.91
Newgen Software 597.99 562.28 424.85 368.20 249.88
Canada Ltd.
Newgen Software 52.09 243.14 53.15 236.76 -
Technologies (UK)
Ltd.
Rent expense
Subsidiary
Newgen Computers 7.20 6.00 0.54 - -
Technologies
Limited
Paid on behalf of

ANNUAL REPORT 2017-18 137

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Transaction value Balance receivable

For the year For the year 31 March 2018 31 March 2017 1 April 2016
ended 31 ended 31
March 2018 March 2017
Subsidiary
Newgen Computers 0.65 0.63 - - -
Technologies
Limited
Recovered from
Subsidiary
Newgen Computers 0.65 0.63 - - -
Technologies
Limited
Investment in
subsidiaries - share
based payment
Newgen Software 7.17 6.25 - - -
Inc., USA
Newgen Singapore 2.15 0.24 - - -
Newgen Software 0.54 0.86 - - -
Canada Ltd.
Newgen Software 0.23 0.36 - - -
Technologies (UK)
Ltd.

D. Investment in subsidiaries
Subsidiary Company 31 March 2018 31 March 2017 1 April 2016
Newgen Software Inc. USA 522.52 515.35 509.82
Newgen Software Technologies Canada, Ltd. 56.40 55.86 55.00
Newgen Software Technologies Pte. Ltd. 114.12 111.97 111.73
Newgen Computers Technologies Limited 46.50 46.50 46.50
Newgen Software Technologies (UK) Ltd. 178.65 178.43 -
918.19 908.11 723.05

47 Financial instruments – Fair values and risk management

i. 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.

31 March 2018 Note Carrying amount Fair value

FVTPL FVTOCI Amortised Total Level 1 Level 2 Level 3 Total
Cost
Financial assets
Financial assets measured at
fair value
Investments in debt mutual 11 3,336.58 - - 3,336.58 3,336.58 - - 3,336.58
funds
Investments in bonds 11 - 1,685.49 - 1,685.49 1,685.49 - - 1,685.49
Financial assets not
measured at fair value
Other non-current financial 8 - - 548.53 548.53 - - - -
asset
Trade receivables 12 - - 20,392.66 20,392.66 - - - -
Cash and cash equivalents 13 - - 13,520.79 13,520.79 - - - -
Loans 7 and - - 582.06 582.06 - - - -
14

138 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

31 March 2018 Note Carrying amount Fair value

FVTPL FVTOCI Amortised Total Level 1 Level 2 Level 3 Total
Cost
Other financial assets 15 - - 5,177.19 5,177.19 - - - -
3,336.58 1,685.49 40,221.23 45,243.30 5,022.07 - - 5,022.07
Financial liabilities
Financial laibilities not
measured at fair value
Long-term maturities of 19 - - 1,316.66 1,316.66 - 1,316.66 - 1,316.66
finance lease obligations
(secured)
Short term borrowings 21 - - 4,946.27 4,946.27 - 4,946.27 - 4,946.27
Trade payables 22 - - 2,143.75 2,143.75 - - - -
Other financial liabilities 23 - - 3,575.91 3,575.91 - 302.25 - 302.25
- - 11,982.59 11,982.59 - 6,565.18 - 6,565.18

Carrying amount Fair value

31 March 2017 Note FVTPL FVTOCI Amortised Total Level 1 Level 2 Level 3 Total
Cost
Financial assets
Financial assets
measured at fair
value
Investments in 11 3,183.25 - - 3,183.25 3,183.25 - - 3,183.25
debt mutual funds
Investments in 11 - 1,682.79 - 1,682.79 1,682.79 - - 1,682.79
bonds
Financial assets
not measured at
fair value
Other non-current 8 - - 227.71 227.71 - - - -
financial asset
Trade receivables 12 - - 18,588.04 18,588.04 - - - -
Cash and cash 13 - - 2,818.68 2,818.68 - - - -
equivalents
Loans 7 and - - 295.75 295.75 - - - -
14
Other financial 15 - - 2,609.39 2,609.39 - - - -
assets
3,183.25 1,682.79 24,539.57 29,405.61 4,866.04 - - 4,866.04

Carrying amount Fair value

31 March 2017 Note FVTPL FVTOCI Amotised Total Level 1 Level 2 Level 3 Total
Cost
Financial liabilities
Financial liabilities not - -
measured at fair value
Long-term maturities of finance 18 - - 1,617.99 1,617.99 - 1,617.99 1,617.99
lease obligations (secured)
Short term borrowings 21 - - 5,226.18 5,226.18 - 5,226.18 - 5,226.18
Trade payables 22 - - 1,714.52 1,714.52 - - - -
Other financial liabilities 23 - - 2,869.36 2,869.36 - 302.25 - 302.25
- - 11,428.05 11,428.05 - 7,146.42 - 7,146.42

ANNUAL REPORT 2017-18 139

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Carrying amount Fair value

1 April 2016 FVTPL FVTOCI Amortised Total Level 1 Level 2 Level 3 Total
Cost
Financial assets
Financial assets
measured at fair value
Investments in debt 11 1,703.81 - - 1,703.81 1,703.81 - - 1,703.81
mutual funds
Investments in 11 2,367.13 - - 2,367.13 2,367.13 - - 2,367.13
arbitrage funds
Investments in bonds 11 - 445.20 - 445.20 445.20 - - 445.20
Financial assets not
measured at fair value
Other Non-current 169.79 169.79 - - - -
financial asset
Trade receivables 12 - - 15,575.18 15,575.18 - - - -
Cash and cash 13 - - 2,083.99 2,083.99 - - - -
equivalent
Loans 7 and 14 - - 229.89 229.89 - - - -
Other financial assets 15 - - 2,419.49 2,419.49 - - - -
4,070.94 445.20 20,478.34 24,994.48 4,516.14 - - 4,516.14
Financial liabilities
Financial liabilities
measured at fair value
Derivative liability 19 136.00 - - 136.00 - - 136.00 136.00
Financial liabilities not
measured at fair value
Long-term maturities 18 - - 1,917.45 1,917.45 - 1,917.45 - 1,917.45
of finance lease
obligations (secured)
Short term borrowings 21 - - 5,883.19 5,883.19 - 5,883.19 - 5,883.19
Trade payables 22 - - 1,405.47 1,405.47 - - - -
Other financial 23 - - 2,046.76 2,046.76 - 315.25 - 315.25
liabilities
136.00 - 11,252.88 11,388.88 - 8,115.89 136.00 8,251.89

The fair value of trade receivables, cash and cash equivalents, other bank balances, 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.

ii) 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

140 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

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 Level 1 Market valuation technique: Not applicable Not applicable
debt mutual Investments traded in active
funds 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.
Investments in Level 1
arbitrage funds
Financial assets
measured at
FVTOCI
Investments in Level 1 Market valuation technique: Not applicable Not applicable
bonds The fair value of bonds is
based on direct and market
observable inputs.
Derivative
liability
measured at fair
value
Derivative Level 3 The fair valuation of - Forecast The estimated fiar
liability embedded anti dilution annual value would increase
derivative in CCPS as per revenue (decrease) if:
Binomial option pricing growth rate -:the annual revenue
model. The Binomial model - Forecast growth rate were
is an extension of the EBITDA higher (lower)
Black Scholes model and margin - the EBITDA margin
incorporates an optimal - Risk adjusted were higher (lower)
decision making framework discount rate - ther risk adjusted
by backward induction. discount rate were
lower (higher)
Financial
liabilities
measured at
Amortised cost
Long term Level 2 Discounted cash flow: Not applicable Not applicable
borrowings The valuation model
considers the present value
of expected payment,
discounted using a risk
adjusted discount rate
Short term Level 2
borrowings
There have been no transfers in either direction for the years ended 31 March 2018, 31 March 2017 & 31
March 2016.

ANNUAL REPORT 2017-18 141

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(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. Internal audit undertakes both regular and ad hoc reviews of risk management controls
and procedures, the results of which are reported to the audit committee.
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:

Particulars As at 31 As at 31 As at 31
March 2018 March 2017 March 2016
Trade receivables 20,392.66 18,588.04 15,575.18
Loans 582.06 274.47 229.89
Cash and cash equivalents 13,520.79 2,818.68 2,083.99
34,495.51 21,681.19 17,889.06
To cater to the credit risk for investments 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.

142 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

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.
The Company’s exposure to credit risk for trade receivables by geographic region is as follows

Carrying amount
31 March 2018 31 March 2017 1 April 2016
India 7,994.27 6,692.89 4,778.97
USA 2,643.93 2,760.89 2,114.40
EMEA 7,946.49 7,591.20 7,081.34
APAC 1,807.97 1,543.06 1,600.47
20,392.66 18,588.04 15,575.18

The following table provides information about the exposure to credit risk and expected credit loss for
trade receivables from individual customers:

As at 31 March 2018 Gross carrying Weighted- Loss credit-

amount average loss allowance impaired
rate
0-3 months past due 16,452.48 4.11% 676.50 No
3-6 months past due 3,053.35 12.90% 393.77 No
6-9 months past due 1,197.55 21.62% 258.95 No
9-12 months past due 381.15 34.90% 133.02 No
12-15 months past due 389.65 42.90% 167.15 No
15-18 months past due 328.23 47.89% 157.20 No
18-21 months past due 170.55 52.45% 89.45 No
21-24 months past due 269.15 61.10% 164.46 No
above 24 months past due 2,151.41 91.12% 1,960.37 No
24,393.53 4,000.87

As at 31 March 2017 Gross carrying Weighted- Loss Credit-

amount average loss allowance impaired
rate
0-3 months past due 15,545.40 3.74% 581.93 No
3-6 months past due 1,025.87 13.02% 133.55 No
6-9 months past due 864.78 22.11% 191.23 No
9-12 months past due 461.44 35.70% 164.75 No
12-15 months past due 1,720.62 45.82% 788.47 No
15-18 months past due 667.44 51.90% 346.40 No
18-21 months past due 229.94 56.46% 129.82 No
21-24 months past due 202.65 66.32% 134.40 No
above 24 months past due 3,846.55 91.15% 3,506.09 No
24,564.68 5,976.64

ANNUAL REPORT 2017-18 143

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

As at 1 April 2016 Gross carrying Weighted- Loss Credit-

amount average loss allowance impaired
rate
0-3 months past due 11,312 4.50% 509.16 No
3-6 months past due 2,961 14.17% 419.62 No
6-9 months past due 639 22.75% 145.46 No
9-12 months past due 314 34.99% 109.70 No
12-15 months past due 1,547 44.60% 689.97 No
15-18 months past due 289 52.22% 151.09 No
18-21 months past due 277 56.23% 155.99 No
21-24 months past due 231 64.71% 149.77 No
above 24 months past due 3,570.65 90.61% 3,235.49 No
21,141.44 5,566.26

Movement in allowance for impairment in respect of trade receivables

Impairment
in trade
receivables
Balance as at 1 April 2016 5,566.26
Impairment loss recognised 1,353.40
Amounts written off 943.02
Balance as at 31 March 2017 5,976.64
Impairment loss recognised 462.52
Amounts written off 2,438.29
Balance as at 31 March 2018 4,000.87

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 an only with
counterparties that have a credit rating AA- to AA+ 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

31 March 2018 31 March 2017 1 April 2016

India 5,022.07 4,866.04 2,149.01

Other Regions - - -
5,022.07 4,866.04 2,149.01

Basis experienced credit judgement, no risk of loss is indicative on Company’s investment in mutual funds and
government bonds.

144 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Cash and cash equivalents

The Company held cash and cash equivalents of INR 13,520.79 at 31 March 2018 (31 March 2017: INR 2,818.68
lakhs 1 April 2016: INR 2,083.99 lakhs). The cash and cash equivalents are held with bank and financial institution
counterparties, which are rated AA- to AA+, 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 2018, the Company had a working capital of Rs. 29,265.58
(31 March 2017: 15,951.06 and 31 March 2016: 12,523.87) including cash and cash equivalent of INR 13,520.79
(31 March 2017: 2,818.68 and 31 March 2016: 2,083.99) and current investments of INR 5,014.54 (31 March 2017:
4,862.67 and 31 March 2016: 4,516.14).
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

Particulars Total 2 months 2-12 1-2 years 2-5 years More

or less months than 5
years
As at 31 March 2018 2,041.27 2,041.27
As at 31 March 2017 1,773.82 1,773.82
As at 1 April 2016 116.81 116.81

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.

Contractual cash flows

31 March 2018 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 1,618.91 6,998.64 - 472.62 437.51 689.18 5,399.33
obligations (including
current maturities)
Employee related 2,983.39 2,983.39 2,983.39 - - - -
payables
Trade and other 2,143.75 2,143.75 2,143.75 - - - -
payables
Pre-shipment loans 4,946.27 4,946.27 - 4,946.27 - - -
(secured)
Payable in respect of 47.92 47.92 - 47.92 - - -
retention money
Earnest money 1.00 1.00 - 1.00 - - -
deposits

ANNUAL REPORT 2017-18 145

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Contractual cash flows

31 March 2018 Carrying Total 2 months 2-12 1-2 years 2-5 years More than
amount or less months 5 years
Payable for capital 241.35 241.35 - 241.35 - - -
assets
Total 11,982.58 17,362.31 5,127.14 5,709.16 437.51 689.18 5,399.33

Contractual cash flows

31 March 2017 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 1,920.24 7,509.18 - 507.74 472.62 1,060.84 5,467.97
obligations (including
current maturities)
Employee related 2,411.84 2,411.84 2,411.84 - - - -
payables
Trade and other 1,714.52 1,714.51 1,714.51 - - - -
payables
Pre-shipment loans 5,226.18 5,226.18 304.94 4,921.24 - - -
(secured)
Payable in respect of 28.10 28.10 - 28.10 - - -
retention money
Earnest money 0.50 0.50 - 0.50 - - -
deposits
Payable for capital 126.67 126.67 - 126.67 - - -
assets
11,428.05 17,016.98 4,431.29 5,584.25 472.62 1,060.84 5,467.97

Contractual cash flows

1 April 2016 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 2,232.70 8,061.79 12.54 542.86 507.74 1,312.52 5,686.12
obligations (including
current maturities)
Employee related 1,702.40 1,702.40 1,702.40 - - - -
payables
Trade and other 1,405.47 1,405.46 1,405.46 - - - -
payables
Pre-shipment loans 5,883.19 5,883.19 771.60 5,111.60 - - -
(secured)
Payable in respect of 11.64 11.64 - 11.64 - - -
retention money
Payable for capital 17.47 17.47 - 17.47 - - -
assets
11,252.87 17,081.95 3,892.00 5,683.57 507.74 1,312.52 5,686.12
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

146 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(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 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.
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, GBP, Canadian dolar, Abar Emirates Dhiram, Saudi Riyal,
Singapore dollar and Japanese Yen. 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 March 31, 2017, March 31, 2017 and April 1,
2016 are as below:

Particulars Currency 31 March 2018 31 March 2017 1 April 2016

Amount Amount Amount Amount Amount Amount
in foreign in local in foreign in local in foreign in local
currency currency currency currency currency currency
(lakhs) (lakhs) (lakhs) (lakhs) (lakhs) (lakhs)
Financial assets
Trade and other
receivables*
USD 207.57 13,500.77 219.19 14,210.08 204.70 13,578.21
AED 5.22 92.64 3.54 62.51 0.52 9.40
CAD 8.41 424.85 7.56 368.19 4.90 249.88
EUR 1.55 125.00 1.87 129.74 2.06 154.65
GBP 0.69 63.71 3.71 300.34 1.56 148.15
SAR 7.41 128.63 7.41 128.04 8.48 149.64
SGD 3.34 165.90 2.41 111.86 1.12 54.91
Bank balance-Dubai AED 6.28 111.39 2.07 36.69 2.28 41.11
Travelling Advance to USD 2.12 136.97 1.58 104.65 0.53 34.03
employees
AED 1.45 25.75 0.61 10.98 0.11 2.89
CAD 0.07 3.85 0.02 0.92 0.04 1.88
GBP 0.02 2.13 - - 0.01 0.74
SGD 0.07 3.38 - - 0.03 1.70
EURO 0.10 8.53 0.03 1.98 0.04 3.24
Financial liabilities
Trade and other
payables
USD (3.82) (246.02) (1.63) (107.66) (1.29) (86.93)
GBP - - (0.03) (2.45) -
EURO (0.01) (0.64) (0.03) (2.32) -
Short term borrowings USD (76.05) (4,946.27) (80.60) (5,226.18) (5,883.23)

* gross of loss allowance

ANNUAL REPORT 2017-18 147

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Sensitivity analysis
A reasonably possible strengthening (weakening) of the Indian Rupee against US dollar, Euro, GBP, Canadian
dolar, Abar Emirates Dhiram, Saudi Riyal, Singapore dollar and Japanese Yen 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.

For the year ended For the year ended

31 March 2018 31 March 2017
Effect in thousands of INR Strengthening Weakening Strengthening Weakening
1% movement
USD 84.43 (84.43) 89.82 (89.82)
EUR1 1.32 (1.32) 1.29 (1.29)
GBP1 0.66 (0.66) 2.98 (2.98)
CAD1 4.28 (4.28) 3.68 (3.68)
SGD1 1.69 (1.69) 1.12 (1.12)
AED1 1.37 (1.37) 1.10 (1.10)
SAR1 1.29 (1.29) 1.28 (1.28)
95.05 (95.05) 101.26 (101.26)

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:

Nominal amount in INR

31 March 2018 31 March 2017 1 April 2016
Fixed-rate instruments
Financial assets 10,607.50 2,684.62 638.11
Financial liabilities (1,618.91) (1,920.24) (2,232.70)
8,988.59 764.38 (1,594.59)
Variable-rate instruments `
Financial assets - - -
Financial liabilities (4,946.27) (5,226.18) (5,883.19)
(4,946.27) (5,226.18) (5,883.19)
Total 4,042.32 (4,461.79) (7,477.78)

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 12.27 lakhs after tax (31 March 2017: INR 17.53 lakhs)

148 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

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.

Profit or loss
100 bp 100 bp
increase decrease
31 March 2018
Variable-rate instruments (63.72) 63.72
Cash flow sensitivity (net) (63.72) 63.72
31 March 2017
Variable-rate instruments (52.26) 52.26
Cash flow sensitivity (net) (52.26) 52.26

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 0.32 lakhs after tax (31 March, 2017: INR
21.96 lakhs ). An equal change in the opposite direction would have decreased equity by INR 0.32 lakhs
after tax (31 March, 2017: INR (21.96) 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 65.26 after tax (31 March,
2017: INR 41.63 lakhs ). An equal change in the opposite direction would have decreased profit or loss by
INR 65.26 after tax (31 March, 2017: INR (41.63) lakhs)

48 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 ordinary 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 2018, 31 March 2017 and 1 April 2016.
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

ANNUAL REPORT 2017-18 149

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

The Company capital consists of equity attributable to equity holders that includes equity share capital,
retained earnings and long term borrowings.
As at As at As at
31 March 2018 31 March 2017 1 April 2016
Total liabilities 6,565.18 7,146.42 8,115.89
Less: Cash and cash equivalent 13,520.79 2,818.68 2,083.99
Adjusted net debt (a) (6,955.61) 4,327.74 6,031.90
Total equity (b) 39,971.22 24,769.14 20,536.28
Total equity and net debt (a+b) = c 33,015.61 29,096.87 26,568.18
Capital gearing ratio (a/c) -21.07% 14.87% 22.70%
As a part of its capital management policy the company ensures compliance with all covenants and other
capital requirements related to its contractual obligations.

49 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)

B. Information about reportable segments

Year ended 31 March 2018
Particulars Reportable segments
India EMEA APAC USA Total
Segment
Revenue
External revenue 18,071.33 16,598.70 4,104.62 7,177.71 45,952.36
Inter-segment revenue - - - - -
Total Segment Revenue 18,071.33 16,598.70 4,104.62 7,177.71 45,952.36
Segment profit before income tax 2,105.99 4,436.20 1,253.98 1,770.61 9,566.78
Segment assets 11,398.11 10,661.09 2,396.13 3,626.16 28,081.49
Segment liabilities 5,554.03 3,538.65 757.65 749.45 10,599.78
Capital expenditure during the year 1,217.66 - - - 1,217.66

150 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Year ended 31 March 2017

Particulars Reportable segments
India EMEA APAC USA Total
Segment
Revenue
External revenue 16,922.79 11,480.51 2,728.47 7,179.63 38,311.41
Inter-segment revenue - - - - -
Total Segment Revenue 16,922.79 11,480.51 2,728.47 7,179.63 38,311.41
Segment profit before income tax 3,026.45 1,877.39 416.51 1,367.68 6,688.02
Segment assets 8,337.96 9,044.35 1,903.52 3,650.74 22,936.57
Segment liabilities 4,330.14 3,102.91 553.87 854.80 8,841.72
Capital expenditure during the year 279.28 - - - 279.28

C. Reconciliations of information on reportable segments to Ind AS

Particulars Note For the year ended For the year ended
31 March 2018 31 March 2017
(a) Revenue
Total revenue for reportable segments 45,952.36 38,311.41
Elimination of inter-segment revenue -
Total revenue 45,952.36 38,311.41
(b) Profit / (loss) before tax
Total profit before tax for reportable 9,566.78 6,688.02
segments
Unallocated amounts:
- Unallocated income 758.20 826.63
- Other corporate expenses 1,231.79 1,189.28
Total profit before tax from operations 9,093.18 6,325.36
(c) Assets
Total assets for reportable segments 28,081.49 22,936.57
Other unallocated amounts 30,665.35 18,503.66
Total assets 58,746.84 41,440.23
(d) Liabilities
Total liabilities for reportable segments 10,599.78 8,841.72
Other unallocated amounts 8,175.84 7,829.37
Total liabilities 18,775.62 16,671.09
C. Information about major customers
No customer individually accounted for more than 10% of the revenues in the year ended 31 March 2018
and 31 March 2017.

50 First Time Adoption of Ind AS

These are the Company’s first financial statements prepared in accordance with Ind AS. The accounting
policies set out in note 3 have been applied in preparing the financial statements for the year ended 31
March 2018, the comparative information presented in these financial statements for the year ended 31
March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the company’s
date of transition).
In preparing its opening Ind AS balance sheet, the company has adjusted the amounts reported
previously in financial statements prepared in accordance with the accounting standards notified under
Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act
(‘previous GAAP’ or ‘Indian GAAP’).
An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial
position, financial performance and cash flows is set out in the following tables and notes.

ANNUAL REPORT 2017-18 151

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

A Exemptions Applied:-
Ind AS 101 First-Time Adoption of Indian Accounting Standards allows first-time adopters certain
exemptions from the retrospective application of certain Ind AS. The Company has applied the
following exemptions:
I Property, plant and equipment
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its
property, plant and equipment as recognised in the financial statements as at the date of transition
to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of
transition after making necessary adjustments for de-commissioning liabilities. This exemption can
also be used for intangible assets covered by Ind AS 38 Intangible Assets.
Accordingly, the company has elected to measure all of its property, plant and equipment and
intangible assets at their previous GAAP carrying value.
II Share- based payment transactions
Ind AS 101 gives an option to apply Ind AS 102 Share-based payment only on ESOP’s that are
unvested as on the transition date.
Accordingly, the Company has elected to apply Ind AS 102 i.e. fair value only those options that are
unvested as on the date of transition.
III Investment in subsidiaries
Under previous GAAP, investment in subsidiaries were being carried in the balance sheet at cost.
Ind AS 101 permits the Company to measure its investment in subsidiaries at its previous GAAP
carrying amount as at the date of transition as deemed costs.
Accordingly, the Company has opted to measure its investment in subsidiary at the previous GAAP
carrying amount as at the date of transition as deemed costs.
B The following mandatory exceptions have been applied:
I Estimates
An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with
estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any
difference in accounting policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in
conformity with previous GAAP. The Company has made estimates for impairment of financial
assets based on expected credit loss model in accordance with Ind AS at the date of transition and
determination of discounted value of financial instrument carried at amortised cost as these were
not required under previous GAAP.
II Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and
circumstances existing as on the date of transition. Further, the standard permits measurement of
financial assets accounted at amortised cost based on facts and circumstances existing at the date
of transition if retrospective application is impracticable.
Accordingly, the company has determined the classification of financial assets based on facts and
circumstances that exist on the date of transition. Measurement of the financial assets accounted
at amortised cost has been done retrospectively except where the same is impracticable.
III De-recognition of financial assets and liabilities
“As per Ind AS 101, an entity should apply the derecognition requirements in Ind AS 109, Financials
Instruments, prospectively for transactions occurring on or after the date of transition to Ind AS.
However, an entity may apply the derecognition requirements retrospectively from a date chosen by
it if the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised
as a result of past transactions was obtained at the time of initially accounting for those transactions .
The company has elected to apply dercognition principles of Ind AS 109 retrospectively as reliable
information was available at the time of initially accounting for these transactions.
C Reconciliation of total equity as at 31 March 2017 and 1 April 2016

152 Newgen Software Technologies Limited

 Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Particulars Notes to Share Retained Newgen Other Securities Capital Share options General Total
first time capital earnings ESOP comprehensive Premium redemption outstanding reserve
adoption reserve income reserve reserve
Balance as at 1 April 2016 as per 6,309.41 13,591.19 - - 489.79 87.95 16.48 1,731.39 22,226.21
CORPORATE REVIEW

previous GAAP
Derivative D.1 - (136.00) - - - - - - (136.00)
Expected credit loss D.2 - (3,863.17) - - - - - - (3,863.17)
Adjustment on account of D.3 (100.97) - 175.75 - (4.35) - - - 70.43
consolidation of trust
Employee stock compensation D.4 - (235.97) - - 8.63 - 242.59 - 15.25
expense
Gain/(loss) arising from fair D.5 - 17.84 - (3.37) - - - - 14.46
valuation of investments
Gain on discounting of long term D.6 - 92.36 - - - - - - 92.36
financial assets and liabilities, net
Measurement of security deposits D.7 - (7.63) - - - - - - (7.63)
STATUTORY REPORTS

at amortised costs
Adjustment for dividend D.8 - 775.78 - - - - - - 775.78
Deferred tax on above D.10 - 1,347.41 - 1.17 - - - - 1,348.58
adjustments
Balance as at 1 April 2016 as per 6,208.44 11,581.82 175.75 (2.21) 494.07 87.95 259.07 1,731.39 20,536.28
Ind AS
Balance as at 31 March 2017 as 6,338.31 18,391.14 - - 645.69 87.95 13.09 1,732.08 27,208.26
per previous GAAP
Expected credit loss D.2 - (3,938.27) - - - - - - (3,938.27)
Adjustment on account of D.3 (107.01) - 200.22 - (78.57) - - - 14.65
consolidation of trust
Employee stock compensation D.4 - (355.37) - - 32.75 - 346.27 (0.69) 22.97
expense
FINANCIAL STATEMENTS

Gain/(loss) arising from fair D.5 - 18.54 - 23.21 - - - - 41.75

valuation of investments
Gain on discounting of long term D.6 - 85.59 - - - - - - 85.59
financial assets and liabilities, net
Measurement of security deposits D.7 - (9.52) - - - - - - (9.52)
at amortised costs
Remeasurements of gain/(loss) on D.9 - 82.88 - (82.88) - - - - -
defined benefit obligations
Deferred tax on above adjustments D.10 - 1,323.44 - 20.28 - - - - 1,343.72
Balance as at 31 March 2018 as 6,231.30 15,598.43 200.22 (39.39) 599.87 87.95 359.37 1,731.39 24,769.14

ANNUAL REPORT 2017-18

per Ind AS

153
Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

D Notes to first time adoption

D.1 Measurement of financial liabilities at amortised cost
The Company had issued certain compulsory convertible preference shares. Under previous GAAP
these were being classified under Equity. Under Ind AS, the embedded derivative liability on initial
recognition has been separated from the underlying equity instrument and recorded at fair value.
The difference between the fair value of the combined CCPS instrument and the fair value of the
embedded derivative liability has been recorded as the value of the equity host contract. The
embedded derivative has been fair valued through profit or loss at each balance sheet date.
Upon conversion of CCPS into equity shares the resultant gain/loss on the down-round derivative is
recognised in profit or loss. The original equity component remains as equity. The impact arising from
the change is summarised below:
Standalone statement of profit and loss For the year
ended
31 March 2017
Reversal of derivative liability 136.00
Adjustment before income tax 136.00

Standalone balance sheet As at As at

31 March 2017 1 April 2016
Derivative liability - 136.00
Adjustment to retained earnings - 136.00

D.2 Expected credit loss

As per Ind AS 109, the Company is required to apply expected credit loss model for recognising the
allowance for doubtful debts. The impact arising from the change is summarised below:
Standalone statement of profit and loss For the year
ended
31 March 2017
Loss allowance on trade receivables 75.10
Adjustment before income tax 75.10

Standalone balance sheet As at As at

31 March 2017 1 April 2016
Trade receivables (3,938.27) (3,863.17)
Adjustment to retained earnings (3,938.27) (3,863.17)

D.3 Newgen ESOP Trust consolidation

In previous GAAP, the Newgen ESOP Trust has been considered as a separate legal entity and loan
given to trust has been disclosed as a reduction from share capital and securities premium. However
under Ind AS, the 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
and liabilities of the trust are accounted 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. The impact arising from the change is summarised below:

154 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Standalone balance sheet As at As at

31 March 2017 1 April 2016
Cash and cash equivalents 17.01 74.03
Loans (2.00) (2.00)
Current financial assets 0.56 -
Trade payables 0.17 0.25
Share capital (107.01) (100.97)
Newgen ESOP reserve 200.22 175.75
Securities premium (78.57) (4.36)
Other current liabilities 0.77 1.35
Adjustment to retained earnings - -

D.4 Share - based payments measurement

Under the previous GAAP, the cost of equity-settled employee share-based plan were recognised using
the intrinsic value method. Under Ind AS, the cost of equity settled share-based plan is recognised
based on the fair value of the options as at the grant date. The impact arising from the change is
summarised below:

Standalone statement of profit and loss For the year

ended
31 March 2017
Share based payment - equity settled 119.40
Adjustment before income tax 119.40

Standalone balance sheet As at As at

31 March 2017 1 April 2016
Share options outstanding reserve 346.27 242.59
Securities premium 32.75 8.63
General reserve (0.69) -
Investment in subsidiary 22.97 15.25
Adjustment to retained earnings 355.37 235.97

D.5 Fair valuation of investments

Under the previous GAAP, investments in government bonds and mutual funds were classified as
long-term investments or current investments based on the intended holding period and realisability.
Long-term investments were carried at cost less provision for other than temporary decline in
the value of such investments. Current investments were carried at lower of cost and fair value.
Under Ind AS, these investments are required to be measured at fair value. The resulting fair value
changes of these investments (other than equity instruments designated as at FVOCI) have been
recognised in retained earnings as at the date of transition and subsequently in the profit or loss for the
year ended 31 March 2017. The impact arising from the change is summarised below:

Standalone statement of profit and loss For the year

ended
31 March 2017
Fair value changes of financial assets at FVTPL - other expenses (0.71)
Adjustment before income tax (0.71)

ANNUAL REPORT 2017-18 155

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Standalone other comprehensive income For the year

ended
31 March 2017
Fair value changes of financial assets at FVOCI 26.59
Adjustment before income tax 26.59

Standalone balance sheet As at As at

31 March 2017 1 April 2016
Current investment 41.75 14.46
Adjustment to retained earnings 41.75 14.46

D.6 Finance lease

Under the previous GAAP, leasehold land is capitalized at the amount of upfront premium paid and
annual rentals paid are charged to profit or loss.
Under Ind AS, the finance lease obligations are required to be measured at amortised costs. Accordingly,
the Company has recorded its lease obligations (premium and rentals) at amortised costs. The impact
arising from the change is summarised below:

Standalone statement of profit and loss For the year

ended
31 March 2017
Interest expense 64.57
Depreciation on leasehold land 8.07
Rent expenses (65.85)
Adjustment before income tax 6.80

Standalone balance sheet As at As at

31 March 2017 1 April 2016
Leasehold liability 593.73 600.54
Leasehold land 679.61 700.14
Prepayments (32.92) (32.92)
Interest accrued but not due (32.69) (25.69)
Adjustment to retained earnings 85.59 92.36

D.7 Measurement of security deposits at amortised costs

Under the previous GAAP, interest free lease security deposits are recorded at their transaction value.
Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the Company
has fair valued these security deposits through amortised costs under Ind AS. Difference between the
fair value and transaction value of the security deposit has been recognised as prepaid rent. The impact
arising from the change is summarised below:

Standalone statement of profit and loss For the year

ended
31 March 2017
Interest income 24.16
Rent expenses 25.91
Adjustment before income tax (1.75)

156 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Standalone balance sheet As at As at

31 March 2017 1 April 2016
Loans (89.49) (69.71)
Prepayments 80.48 62.07
Adjustment to retained earnings (9.52) (7.63)

D.8 Proposed dividend

“Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date
but before the approval of the financial statements were considered as adjusting events. Accordingly,
provision for proposed dividend (along with related dividend distribution tax) was recognised as a liability.
Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the
general meeting. The impact arising from the change is summarised below: “

Standalone Balance sheet As at As at

31 March 2017 1 April 2016
Short term provision (775.78)
Adjustment to retained earnings 775.78

D.9 Remeasurements of post-employment benefit obligations

Under Ind AS, re-measurements i.e. actuarial gains and losses are directly recognized in equity through
other comprehensive income. Under the previous GAAP such gains and losses were recognized in profit
or loss. As a result of this change, the profit for the year ended 31 March 2017 has increased by INR 82.88
lakhs. There is no impact on the total equity.
Standalone statement of profit and loss For the year
ended
31 March 2017
Employee benefit expenses (82.88)
Adjustment before income tax (82.88)
Standalone Other Comprehensive Income For the year
ended
31 March 2017
Re-measurement gain/(loss) on defined benefit obligations 82.88
Adjustment before income tax 82.88

Standalone balance sheet As at As at

31 March 2017 1 April 2016
Other comprehensive income 82.88 -
Adjustment to retained earnings 82.88 -

D.10 Deferred tax adjustment

Previous GAAP requires deferred tax accounting using the income statement approach, which focuses
on differences between taxable profits and accounting profits for the period. Ind-AS 12 Income Taxes
requires entities to account for deferred taxes using the balance sheet approach, which focuses on
temporary differences between the carrying amount of an asset or liability in the balance sheet and its
tax base. The impact arising from the change is summarised below:

ANNUAL REPORT 2017-18 157

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Standalone statement of profit and loss For the year

ended
31 March 2017
Deferred tax charge 24.05
Adjustment before income tax 24.05
Standalone Other Comprehensive Income For the year
ended
31 March 2017
Tax impact (19.12)
Adjustment before income tax (19.12)

Standalone balance sheet As at As at

31 March 2017 1 April 2016
Deferred tax assets 1,343.72 1,348.58
Adjustment to retained earnings 1,343.72 1,348.58

Reconciliation of Equity as at 1 April 2016

Note As at Adjustment As at
31 March 2016 1 April 2016
(IGAAP) (IND AS)
ASSETS
Non-current assets
Property, plant and equipment D.6 5,528.98 700.14 6,229.12
Capital work-in-progress 604.61 - 604.61
Intangible assets 103.01 - 103.01
Investment in subsidiaries D.4 707.80 15.25 723.05
Financial assets
Loans D.7 & D.3 266.56 (71.71) 194.85
Other financial assets 169.79 - 169.79
Deferred tax assets (net) D.10 943.67 1,348.58 2,292.25
Income tax assets (net) 808.69 - 808.69
Other non-current assets D.7 - 46.07 46.07
Total non-current assets 9,133.11 2,038.33 11,171.45
Current assets
Financial assets
Investments D.5 4,501.68 14.46 4,516.14
Trade receivables D.2 19,438.35 (3,863.17) 15,575.18
Cash and cash equivalents D.3 2,009.96 74.03 2,083.99
Loans 35.04 - 35.04
Others 2,419.49 - 2,419.49
Other current assets D.6 & D.7 458.29 (16.92) 441.37
Total current assets 28,862.81 (3,791.59) 25,071.21
TOTAL ASSETS 37,995.92 (1,753.26) 36,242.66
EQUITY AND LIABILITIES
Equity
Equity share capital 50C 6,309.41 (100.97) 6,208.44
Other equity
Securities premium 50C 489.79 4.28 494.07
Retained earnings 50C 13,591.19 (2,009.37) 11,581.82

158 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Note As at Adjustment As at
31 March 2016 1 April 2016
(IGAAP) (IND AS)
Others (including items of other 50C 1,835.82 416.13 2,251.95
comprehensive income)
Total Equity attributable to the owners of 22,226.21 (1,689.93) 20,536.28
the Company
Non-current Liabilities
Financial liabilities
Borrowings D.6 1,316.91 600.54 1,917.45
Derivative D.1 - 136.00 136.00
Long-Term Provisions 1,121.59 - 1,121.59
Total non-current liabilities 2,438.50 736.54 3,175.04
Current liabilities
Financial liabilities
Borrowings 5,883.19 - 5,883.19
Trade payables D.3 1,405.22 0.25 1,405.47
Other financial liabilities D.6 2,072.45 (25.69) 2,046.76
Deferred Income 2,594.28 - 2,594.28
Other current liabilities D.3 410.42 1.35 411.77
Short term Provisions D.8 965.65 (775.78) 189.87
Total current liabilities 13,331.21 (799.87) 12,531.34
Total Liabilities 15,769.71 (63.33) 15,706.38
TOTAL EQUITY AND LIABILITIES 37,995.92 (1,753.26) 36,242.66

Reconciliation of Equity as at 31 March 2017

Note As at Adjustments As at
31 March 2017 31 March 2017
(IGAAP) (IND AS)

ASSETS
Non-current assets
Property, plant and equipment D.6 5,364.54 679.61 6,044.15
Capital work-in-progress 1,108.29 - 1,108.29
Intangible assets 70.43 - 70.43
Investment in subsidiaries D.4 885.14 22.97 908.11
Loans D.7 & D.3 322.64 (116.21) 206.43
Other financial assets 227.71 - 227.71
Deferred tax assets (net) D.10 1,012.52 1,343.72 2,356.24
Income tax assets (net) 852.26 - 852.26
Other non-current assets D.7 24.91 80.48 105.39
Total non-current assets 9,868.44 2,010.56 11,879.01
Current assets
Financial assets
Investments D.5 4,824.29 41.75 4,866.04
Trade receivables D.2 22,526.31 (3,938.27) 18,588.04

ANNUAL REPORT 2017-18 159

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Note As at Adjustments As at
31 March 2017 31 March 2017
(IGAAP) (IND AS)
Cash and cash equivalents D.3 2,801.67 17.01 2,818.68
Loans D.7 & D.3 43.32 24.72 68.04
Others 2,609.39 - 2,609.39
Other current assets D.6 643.96 (32.92) 611.03
Total current assets 33,448.94 (3,887.70) 29,561.22
TOTAL ASSETS 43,317.38 (1,877.14) 41,440.23
EQUITY AND LIABILITIES
Equity
Equity share capital 50C 6,338.31 (107.01) 6,231.30
Other equity
Securities premium 50C 645.69 (45.82) 599.87
Retained earnings 50C 18,391.14 (2,792.71) 15,598.43
Others (including items of other comprehensive 50C 1,833.12 506.42 2,339.54
income)
Total equity attributable to the owners of the 27,208.26 (2,439.12) 24,769.14
Company
Non-current Liabilities
Financial liabilities
Borrowings D.6 1,024.26 593.73 1,617.99
Provisions 1,442.97 - 1,442.97
Total non-current liabilities 2,467.23 593.73 3,060.96
Current liabilities
Financial liabilities
Borrowings 5,226.18 - 5,226.18
Trade payables D.3 1,714.35 0.17 1,714.52
Other financial liabilities D.6 2,902.05 (32.69) 2,869.36
Deferred Income 3,038.66 - 3,038.66
Other current liabilities D.3 526.97 0.77 527.74
Short term Provisions 233.67 - 233.67
Total current liabilities 13,641.88 (31.75) 13,610.13
Total Liabilities 16,109.11 561.98 16,671.09
TOTAL EQUITY AND LIABILITIES 43,317.38 (1,877.14) 41,440.23

160 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Reconciliation of Total Comprehensive Income for the year ended 31 March 2017
Particulars Note For the year Adjustment For the year
ended ended
31 March 2017 31 March 2017
(IGAAP) (IND AS)
Income
Revenue from operations 38,311.41 - 38,311.41
Other income D.7 & D.1 666.45 160.16 826.61
Total income 38,977.86 160.16 39,138.02
Expenses
Employee benefits expense D.4 & D.9 18,596.66 36.53 18,633.19
Finance costs D.6 461.02 64.58 525.60
Depreciation and amortisation D.6 473.80 8.07 481.87
expense
Other expenses D.2 D.5 D.6 D.7 13,137.50 34.50 13,172.00
Total expenses 32,668.99 143.68 32,812.66
Profit before tax 6,308.87 16.48 6,325.36
Tax expense
Current tax 1,540.62 - 1,540.62
Deferred tax D.10 (157.94) 24.05 (133.89)
Tax expense for earlier years 126.24 - 126.24
1,508.92 24.05 1,532.97
Profit for the year 4,799.95 (7.57) 4,792.39
Prior period item
Profit after tax and prior period item
Other comprehensive income
Items that will not be reclassified
subsequently to profit or loss
Remeasurement of defined benefit D.9 - (82.88) (82.88)
liability (asset)
Income tax relating to items that will D.10 - 28.31 28.31
not be reclassified to profit or loss
Items that will be reclassified
subsequently to profit or loss
Debt instruments through other D.9 - 26.59 26.59
comprehensive income - net change in
fair value
Income tax relating to items that will D.10 - (9.20) (9.20)
be reclassified to profit or loss
Other comprehensive income/(loss), - (37.18) (37.18)
net of tax
Total comprehensive income/(loss) 4,799.95 (44.76) 4,755.22
for the year
Profit attributable to:
Owners of the company 4,799.95 (7.57) 4,792.39
Profit for the year 4,799.95 (7.57) 4,792.39

ANNUAL REPORT 2017-18 161

Notes to the Standalone Financial Statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Particulars Note For the year Adjustment For the year

ended ended
31 March 2017 31 March 2017
(IGAAP) (IND AS)
Other comprehensive income
attributable to:
Owners of the company - (37.18) (37.18)
Other comprehensive income/(loss) - (37.18) (37.18)
for the year
Total comprehensive income
attributable to:
Owners of the company 4,799.95 (44.76) 4,755.21
Total comprehensive income/(loss) for 4,799.95 (44.76) 4,755.21
the year

51 Standards issued but not yet effective

A Amendment to Ind AS 21:

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On March 28, 2018,
MCA has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing
Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the
date of the transaction for the purpose of determining the exchange rate to use on initial recognition
of the related asset, expense or income, when an entity has received or paid advance consideration in a
foreign currency. This amendment will come into force from April 1, 2018. The Company has evaluated
the effect of this on the standalone financial statements and the impact is not material.
B Amendment to Ind AS 115:
Ind AS 115- Revenue from Contracts with Customers: On 28 March 2018, Ministry of Corporate Affairs
(“MCA”) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the
new standard is that an entity should recognise revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be
entitled in exchange for those goods or services.
Under Ind AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e.
when ‘control’ of the goods or services underlying the particular performance obligation is transferred
to the customer.
Moreover, the new standard requires enhanced disclosures about the nature, amount, timing and
uncertainty of revenue and cash flows arising from the entity’s contracts with customers. The standard
permits two possible methods of transition:
• Retrospective approach-Under this approach the standard will be applied retrospectively to each
prior reporting period presented in accordance with Ind AS 8-Accounting Policies, Changes in
Accounting Estimates and Errors
• Retrospectively with cumulative effect of initially applying the standard recognized at the date of
initial application (Cumulative catch - up approach)The effective date for adoption of Ind AS 115 is
financial periods beginning on or after April 1, 2018.
The Company will adopt the standard on April 1, 2018 by using the cumulative catch-up transition method and
accordingly comparatives for the year ending or ended March 31, 2018 will not be retrospectively adjusted.
While, the Company is in the process of implementing Ind AS 115 on financial statement, it is of the view
that the accounting policy for certain streams of revenue and related expenses may undergo a change
primarily on account of estimating and recognizing extended warranty and unspecified free upgrades
in certain contracts and adjusting cost of acquisition of customer.

162 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the Standalone Financial Statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

52 Disclosure on Specified Bank Notes

The disclosures regarding details of specified bank notes held and transacted during 8 November
2016 to 30 December 2016 has not been made since the requirement does not pertain to financial year
ended 31 March 2018. Corresponding amounts as appearing in the audited financial statements for the
year ended 31 March 2017 have been disclosed as given below;

Particulars Specified Other Total

Bank Notes* denomination
notes
Closing cash in hand as on 8 November 2016 3.96 1.25 5.21
Add: Withdrawal from bank account - 3.80 3.80
Add: Permitted receipts transactions - 1.24 1.24
Less: Permitted payments transactions - 3.60 3.60
Less: Amount deposited in banks accounts 3.96 - 3.96
Closing cash in hand as on 30 December 2016 - 2.69 2.69
For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided
in the notification of the Government of India, in the Ministry of Finance, Department of Economic
Affairs number S.O. 3407(E), dated 8th November 2016.

53 As at 31 March 2018, the Company has gross foreign currency receivables amounting to Rs. 15,310.75
lakhs (previous year Rs.14,344.84 lakhs). Out of these receivables, Rs.4,253.83 lakhs (previous year
Rs.3,754.91 lakhs) is outstanding for more than 9 months. As per Foreign Exchange Management
(Current Account) Rules, 2000 read with Master Circular No. 14/ 2014-15 dated 1 July 2014, receipt
for export goods should be realized within a period of 9 months from the date of export. In case of
receivables not being realised within 15 months from the date of export, prior approval from Reserve
Bank of India (RBI) is required. As per the requirements of Foreign Exchange Management Act, in one
calendar year, the Company is allowed to seek extension for an amount equivalent to 10% of the average
collection of the last 3 years only and pursuant to the same, the Company has filed the extension for
foreign currency receivables amounting to Rs. 1,414.58 lakhs during the year. For remaining receivables,
the Company is in the process of applying for approval to seek extension of time beyond 9 months
from export date. The management is of the view that the Company will be able to obtain approvals
from the authorities for realising 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 For and on behalf of the Board of Directors of
Chartered Accountants Newgen Software Technologies Limited
Firm Registration No.:
116231W / W-100024
Rakesh Dewan Diwakar Nigam T. S. Varadarajan Arun Kumar Gupta Aman Mourya
Partner Managing Director Whole Time Director Chief Financial Officer Company Secretary
Membership No.: 092212 DIN: 00263222 DIN: 00263115 Membership No: 27299

Place: Gurugram Place: New Delhi Place: New Delhi Place: New Delhi Place: New Delhi
Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018

ANNUAL REPORT 2017-18 163

Independent Auditor’s Report

To statements by the Directors of the Holding Company,

the Members of Newgen Software Technologies as aforesaid.
Limited
In preparing the consolidated financial statements,
Report on the Audit of Consolidated Ind AS Financial the respective Board of Directors of the companies
Statements included in the Group are responsible for assessing
We have audited the accompanying consolidated the ability of the Group to continue as a going
Ind AS financial statements of Newgen Software concern, disclosing, as applicable, matters related
Technologies Limited (hereinafter referred to as “the to going concern and using the going concern basis
Holding Company”) and its subsidiaries (the Holding of accounting unless management either intends to
Company and its subsidiaries together referred to liquidate the Group or to cease operations, or has no
as “the Group”), which comprise the Consolidated realistic alternative but to do so.
Balance Sheet as at 31 March 2018, the Consolidated
Statement of Profit and Loss (including other Auditor’s Responsibility
comprehensive income), Consolidated Statement of Our responsibility is to express an opinion on these
Changes in Equity and the Consolidated Cash Flow consolidated financial statements based on our
Statement, for the year then ended, including a audit. While conducting the audit, we have taken into
summary of significant accounting policies and other account the provisions of the Act, the accounting and
explanatory information (hereinafter referred to as auditing standards and matters which are required to
“the consolidated Ind AS financial statements”). be included in the audit report under the provisions of
the Act and the Rules made thereunder.
Management’s Responsibility for the Consolidated
Ind AS Financial Statements We conducted our audit in accordance with the
Standards on Auditing specified under Section 143
The Holding Company’s Board of Directors is
(10) of the Act. Those Standards require that we
responsible for the preparation of these consolidated
comply with ethical requirements and plan and
financial statements in terms of the requirements
perform the audit to obtain reasonable assurance
of the Companies Act, 2013 (hereinafter referred
about whether the consolidated financial statements
to as “the Act”) that give a true and fair view of
are free from material misstatement.
the consolidated state of affairs, consolidated
profit (including other comprehensive income),
An audit involves performing procedures to
consolidated statement of changes in equity and
obtain audit evidence about the amounts and the
consolidated cash flows of the Group in accordance
disclosures in the consolidated financial statements.
with the accounting principles generally accepted
The procedures selected depend on the auditor’s
in India, including the Indian Accounting Standards
judgment, including the assessment of the risks of
(Ind AS) specified under section 133 of the Act.
material misstatement of the consolidated financial
The respective Board of Directors of the companies
statements, whether due to fraud or error. In making
included in the Group are responsible for maintenance
those risk assessments, the auditor considers
of adequate accounting records in accordance with internal financial control relevant to the Holding
the provisions of the Act for safeguarding the assets Company’s preparation of the consolidated financial
of the Group and for preventing and detecting frauds statements that give a true and fair view in order to
and other irregularities; the selection and application design audit procedures that are appropriate in the
of appropriate accounting policies; making judgments circumstances. An audit also includes evaluating
and estimates that are reasonable and prudent; the appropriateness of the accounting policies used
and the design, implementation and maintenance and the reasonableness of the accounting estimates
of adequate internal financial controls that were made, as well as evaluating the overall presentation of
operating effectively for ensuring the accuracy and the consolidated financial statements.
completeness of the accounting records, relevant to
the preparation and presentation of the consolidated We are also responsible to conclude on the
financial statements that give a true and fair view appropriateness of management’s use of the going
and are free from material misstatement, whether concern basis of accounting and, based on the audit
due to fraud or error, which have been used for the evidence obtained, whether a material uncertainty
purpose of preparation of the consolidated financial exists related to events or conditions that may cast

164 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

significant doubt on the ability of Group to continue subsidiaries is based solely on the reports of
as a going concern. If we conclude that a material the other auditors.
uncertainty exists, we are required to draw attention
in the auditor’s report to the related disclosures Certain of these subsidiaries are located
in the consolidated financial statements or, if such outside India whose financial statements
disclosures are inadequate, to modify our opinion. Our have been prepared in accordance with
conclusions are based on the audit evidence obtained accounting principles generally accepted
up to the date of our auditor’s report. However, future in their respective countries and which
events or conditions may cause Group to cease to have been audited by other auditors under
continue as a going concern. generally accepted auditing standards
applicable in their respective countries. The
We believe that the audit evidence obtained by us Company’s management has converted the
and the audit evidence obtained by the other auditors financial statements of such subsidiaries
in terms of their reports referred to in sub-paragraph 1 located outside India from accounting
(a) of the Other Matters paragraph below, is sufficient principles generally accepted in their
and appropriate to provide a basis for our audit respective countries to accounting principles
opinion on the consolidated financial statements. generally accepted in India. We have audited
these conversion adjustments made by the
Opinion Company’s management. Our opinion in so
In our opinion and to the best of our information far as it relates to the balances and affairs
and according to the explanations given to us and of such subsidiaries located outside India is
based on the consideration of reports of other based on the report of other auditors and
auditors on separate financial statements and on the conversion adjustments prepared by the
the other financial information of the subsidiaries, management of the Company and audited
the aforesaid consolidated financial statements give by us.
the information required by the Act in the manner so
required and give a true and fair view in conformity Our opinion above on the consolidated
with the accounting principles generally accepted financial statements, and our report on
in India, of the consolidated state of affairs of the Other Legal and Regulatory Requirements
Group as at 31 March 2018, and their consolidated below, is not modified in respect of the
profit (including other comprehensive income), above matters with respect to our reliance
consolidated statement of changes in equity and on the work done and the reports of the
consolidated cash flows for the year ended on that other auditors.
date.
Report on Other Legal and Regulatory Requirements
Other Matters 1. As required by Section 143(3) of the Act, based
1. (a) We did not audit the financial statements of on our audit and on the consideration of report
five subsidiaries, whose financial statements of the other auditors on separate financial
reflect total assets of INR 1,520 lakhs and net statements of subsidiaries, as noted in the ‘Other
assets of Rs. 559.13 lakhs as at 31 March 2018, Matters’ paragraph, we report, to the extent
total revenues of INR 2,418 lakhs and net applicable, that:
cash inflows amounting to INR 300 lakhs for
a) We have sought and obtained all the
the year ended on that date, as considered in
information and explanations which to
the consolidated financial statements. These
the best of our knowledge and belief were
financial statements have been audited by
necessary for the purposes of our audit of the
other auditors whose reports have been
aforesaid consolidated financial statements.
furnished to us by the Management and
our opinion on the consolidated financial
b) In our opinion, proper books of account as
statements, in so far as it relates to the
required by law relating to preparation of the
amounts and disclosures included in respect
aforesaid consolidated financial statements
of these subsidiaries and our report in terms
have been kept so far as it appears from our
of sub-section (3) of Section 143 of the
examination of those books and the reports
Act, insofar as it relates to the aforesaid
of the other auditors.

ANNUAL REPORT 2017-18 165

 c) The Consolidated Balance Sheet, the us and based on the consideration of the
Consolidated Statement of Profit and Loss report of the other auditors on separate
(including other comprehensive income), financial statements of the subsidiaries, as
the Consolidated Cash Flow Statement noted in the ‘Other Matters’ paragraph:
and Consolidated Statement of Changes
in Equity dealt with by this Report are i. There were no pending litigations as at
in agreement with the relevant books of 31 March 2018 which would impact the
account maintained for the purpose of consolidated financial position of the
preparation of the consolidated financial Group;
statements.
ii. The Group did not have any material
d) In our opinion, the aforesaid consolidated foreseeable losses on long-term
financial statements comply with the Indian contracts including derivative contracts
Accounting Standards specified under during the year ended 31 March 2018;
section 133 of the Act.
iii. There are no amounts which are
e) On the basis of the written representations required to be transferred to the Investor
received from the directors of the Holding Education and Protection Fund by the
Company as on 31 March 2018 taken on Holding Company and its subsidiary
record by the Board of Directors of the company incorporated in India during
Holding Company and the reports of the the year ended 31 March 2018; and
statutory auditor of its subsidiary company
incorporated in India, none of the directors
iv. The disclosures in the consolidated
of the Group company incorporated in India
financial statements regarding holdings
is disqualified as on 31 March 2018 from
as well as dealings in specified bank notes
being appointed as a director in terms of
during the period from 8 November
Section 164(2) of the Act.
2016 to 30 December 2016 have not
been made since they do not pertain
f) With respect to the adequacy of the internal
to the financial year ended 31 March
financial controls with reference to financial
2018. However, amounts as appearing
statements of the Holding Company and its
in the audited consolidated financial
subsidiary company incorporated in India
statements for the period ended 31
and the operating effectiveness of such
March 2017 have been disclosed.
controls, refer to our separate Report in
“Annexure A”.
For B S R & Associates LLP
g) With respect to the other matters to Chartered Accountants
be included in the Auditor’s Report in Firm Registration No.:
accordance with Rule 11 of the Companies 116231W/ W-100024
(Audit and Auditor’s) Rules, 2014, in our
opinion and to the best of our information Rakesh Dewan
and according to the explanations given to Place: Gurugram Partner
Date: 17 May 2018 Membership No.: 092212

166 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Annexure A
Annexure A referred in paragraph 6(i)(f) of the Independent Auditor’s Report of even
date on the Consolidated Financial Statements of Newgen Software Technologies Limited
for the year ended 31 March 2018
Report on the Internal Financial Controls under with reference to financial statements was established
Clause (i) of Sub-section 3 of Section 143 of the and maintained and if such controls operated
Companies Act, 2013 (“the Act”) effectively in all material respects.
In conjunction with our audit of the consolidated
financial statements of the Group as of and for the Our audit involves performing procedures to obtain
year ending 31 March 2018, we have audited the audit evidence about the adequacy of the internal
internal financial controls with reference to financial financial controls system with reference to financial
statements of the Holding Company and its subsidiary statements and their operating effectiveness. Our audit
company incorporated in India as of that date. of internal financial controls with reference to financial
statements included obtaining an understanding of
Management’s Responsibility for Internal Financial internal financial controls with reference to financial
Controls statements, assessing the risk that a material weakness
The respective Board of Directors of the Holding exists, and testing and evaluating the design and
Company and its subsidiary company incorporated in operating effectiveness of internal control based on
India, are responsible for establishing and maintaining the assessed risk. The procedures selected depend on
internal financial controls based on the internal the auditor’s judgement, including the assessment of
control with reference to financial statements criteria the risks of material misstatement of the consolidated
established by the Holding Company and its subsidiary financial statements, whether due to fraud or error.
company considering the essential components of
internal control stated in the Guidance Note on Audit We believe that the audit evidence we have obtained
of Internal Financial Controls over Financial Reporting and audit evidence obtained by other auditor in terms
issued by the Institute of Chartered Accountants of their report referred to in Other Matters Paragraph
of India (‘ICAI’). These responsibilities include the below, is sufficient and appropriate to provide a basis
design, implementation and maintenance of adequate for our audit opinion on the Holding Company’s and
internal financial controls that were operating subsidiary company incorporated in India, internal
effectively for ensuring the orderly and efficient financial controls system with reference to financial
conduct of its business, including adherence to the statements.
respective Company’s policies, the safeguarding of
its assets, the prevention and detection of frauds Meaning of Internal Financial Controls with
and errors, the accuracy and completeness of the reference to financial statements
accounting records, and the timely preparation of A Company’s internal financial control with reference
reliable financial information, as required under the to financial statements is a process designed
Companies Act, 2013. to provide reasonable assurance regarding the
reliability of financial reporting and the preparation
Auditors’ Responsibility of consolidated financial statements for external
Our responsibility is to express an opinion on the purposes in accordance with generally accepted
Holding Company’s and its subsidiary company’s accounting principles. A Company’s internal financial
incorporated in India, internal financial controls with control with reference to financial statements includes
reference to financial statements based on our audit. those policies and procedures that (1) pertain to the
We conducted our audit in accordance with the maintenance of records that, in reasonable detail,
Guidance Note on Audit of Internal Financial Controls accurately and fairly reflect the transactions and
Over Financial Reporting (the “Guidance Note”) dispositions of the assets of the company; (2) provide
and the Standards on Auditing, issued by ICAI and reasonable assurance that transactions are recorded
deemed to be prescribed under section 143(10) of as necessary to permit preparation of consolidated
the Companies Act, 2013, to the extent applicable financial statements in accordance with generally
to an audit of internal financial controls, both issued accepted accounting principles, and that receipts and
by the Institute of Chartered Accountants of India. expenditures of the company are being made only in
Those Standards and the Guidance Note require that accordance with authorisations of management and
we comply with ethical requirements and plan and directors of the Company; and (3) provide reasonable
perform the audit to obtain reasonable assurance assurance regarding prevention or timely detection
about whether adequate internal financial controls of unauthorised acquisition, use, or disposition of the
company’s assets that could have a material effect on

ANNUAL REPORT 2017-18 167

the consolidated financial statements. at 31 March 2018, based on the internal control with
reference to financial statements criteria established
Inherent Limitations of Internal Financial Controls by the Holding Company considering the essential
with reference to financial statements components of internal control stated in the Guidance
Because of the inherent limitations of internal Note on Audit of Internal Financial Controls Over
financial controls with reference to financial Financial Reporting, issued by the ICAI.
statements, including the possibility of collusion or
improper management override of controls, material Other Matters
misstatements due to error or fraud may occur and not Our aforesaid report under Section 143(3)(i) of the
be detected. Also, projections of any evaluation of the Act on the adequacy and operating effectiveness
internal financial controls with reference to financial of the internal financial controls with reference to
statements to future periods are subject to the risk financial statements in so far as it relates to Newgen
that the internal financial control with reference Computer Technologies Limited (subsidiary company
to financial statements may become inadequate incorporated in India) is based on the corresponding
because of changes in conditions, or that the degree report of the auditor of the subsidiary.
of compliance with the policies or procedures may
deteriorate. For B S R & Associates LLP
Chartered Accountants
Opinion Firm Registration No.:
In our opinion, the Holding Company and its 116231W/ W-100024
subsidiary company incorporated in India, has in
all material respects, an adequate internal financial Rakesh Dewan
controls system with reference to financial statements Place: Gurugram Partner
and such internal financial controls with reference to Date: 17 May 2018 Membership No.: 092212
financial statements were operating effectively as

168 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Consolidated Balance Sheet

as at March 31, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Note As at As at As at
31 March 2018 31 March 2017 1 April 2016
ASSETS
Non-current assets
Property, plant and equipment 4 6,757.93 6,103.12 6,292.96
Capital work-in-progress 4 1,659.48 1,108.29 604.61
Intangible assets 5 89.56 70.43 103.01
Financial assets
Loans 6 295.70 226.68 210.99
Other financial assets 7 554.77 233.46 174.36
Deferred tax assets (net) 32 1,893.13 2,370.39 2,380.31
Income tax assets (net) 8 1,281.29 852.41 808.71
Other non-current assets 9 356.23 105.39 62.07
Total non-current assets 12,888.09 11,070.17 10,637.02
Current assets
Financial assets
Investments 10 5,022.07 4,866.04 4,516.14
Trade receivables 11 22,201.67 19,957.12 16,435.80
Cash and cash equivalents 12 14,548.34 3,491.88 2,431.78
Loans 13 317.27 72.70 81.31
Other financial assets 14 5,177.19 2,541.04 2,451.06
Other current assets 15 747.53 746.19 520.89
Total current assets 48,014.07 31,674.97 26,436.98
TOTAL ASSETS 60,902.16 42,745.14 37,074.00
EQUITY AND LIABILITIES
Equity
Share capital 16 6,788.41 6,231.30 6,208.44
Other equity
Securities premium 9,196.49 599.87 494.07
Retained earnings 22,055.71 15,928.02 11,570.79
Others (including items of other comprehensive income) 2,481.65 2,235.19 2,252.15
Total equity 40,522.26 24,994.38 20,525.45
Non-current Liabilities
Financial liabilities
Borrowings 17 1,316.66 1,617.99 1,917.45
Derivative 18 - - 136.00
Deferred tax liabilities 32 11.28 15.19 24.64
Provisions 19 1,653.37 1,442.97 1,121.58
Total non-current liabilities 2,981.31 3,076.15 3,199.67
Current liabilities
Financial liabilities
Borrowings 20 4,946.27 5,226.18 5,883.19
Trade payables 21 2,292.10 1,804.95 1,473.16
Other financial liabilities 22 3,624.48 2,903.21 2,058.16
Deferred income 23 4,943.04 3,865.50 3,271.60
Other current liabilities 24 1,372.04 546.00 414.53
Provisions 25 220.66 328.77 248.24
Total current liabilities 17,398.59 14,674.61 13,348.88
Total Liabilities 20,379.90 17,750.76 16,548.55
TOTAL EQUITY AND LIABILITIES 60,902.16 42,745.14 37,074.00
Summary of significant accounting policies 3
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 of behalf of the Board of Directors of
Chartered Accountants Newgen Software Technologies Limited
Firm Registration No.:
116231W / W-100024
Rakesh Dewan Diwakar Nigam T. S. Varadarajan Arun Kumar Gupta Aman Mourya
Partner Managing Director Whole Time Director Chief Financial Officer Company Secretary
Membership No.: 092212 DIN: 00263222 DIN: 00263115 Membership No: 27299

Place: Gurugram Place: New Delhi Place: New Delhi Place: New Delhi Place: New Delhi
Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018

ANNUAL REPORT 2017-18 169

Consolidated Statement of Profit and Loss
for the year ended March 31, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Note For the year ended For the year ended

31 March 2018 31 March 2017
Income
Revenue from operations 26 51,242.78 42,709.80
Other income 27 760.98 826.78
Total income 52,003.76 43,536.58
Expenses
Employee benefits expense 28 24,887.78 21,004.64
Finance costs 29 520.68 525.60
Depreciation and amortisation expense 30 580.67 491.82
Other expenses 31 16,601.38 14,682.49
Total expenses 42,590.51 36,704.55
Profit before tax 9,413.25 6,832.03
Tax expense 32
Current tax 1,630.40 1,641.82
Less: MAT entitlement (86.97) -
Tax expense for earlier years 64.50 126.63
Deferred tax (credit) 516.64 (69.43)
Income tax expense 2,124.57 1,699.02
Profit for the year 7,288.68 5,133.01
Other comprehensive income/(loss)
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit liability (asset) 126.35 (82.88)
Income tax relating to items that will not be reclassified to profit or (43.73) 28.31
loss
Net other comprehensive income/(loss) not to be reclassified 82.62 (54.57)
subsequently to profit or loss
Items that will be reclassified subsequently to profit or loss
Debt instruments through other comprehensive income - net change (0.47) 26.59
in fair value
Income tax relating to items that will be reclassified to profit or loss 0.16 (9.20)
Net other comprehensive (loss)/income to be reclassified (0.31) 17.39
subsequently to profit or loss
Other comprehensive income/(loss) for the year, net of income tax 82.31 (37.18)
Total comprehensive income for the year 7,370.99 5,095.83
Profit attributable to:
Owners of the company 7,288.68 5,133.01
Profit for the year 7,288.68 5,133.01
Other comprehensive income/(loss) attributable to:
Owners of the company 82.31 (37.18)
Other comprehensive income/(loss) for the year 82.31 (37.18)
Total comprehensive income attributable to:
Owners of the company 7,370.99 5,095.83
Total comprehensive income for the year 7,370.99 5,095.83
Earnings per equity share
Nominal value of share INR 10 (31 March 2017: INR 10, 1 April 2016: INR
10)
Basic earning per share 33 11.44 8.26
Diluted earning per share 33 11.15 8.09
Summary of significant accounting policies 3
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
Chartered Accountants Newgen Software Technologies Limited
Firm Registration No.:
116231W / W-100024
Rakesh Dewan Diwakar Nigam T. S. Varadarajan Arun Kumar Gupta Aman Mourya
Partner Managing Director Whole Time Director Chief Financial Officer Company Secretary
Membership No.: 092212 DIN: 00263222 DIN: 00263115 Membership No: 27299

Place: Gurugram Place: New Delhi Place: New Delhi Place: New Delhi Place: New Delhi
Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018

170 Newgen Software Technologies Limited

 Consolidated Statement of Changes in Equity
as at 31 March 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

a. Share capital
Equity share capital Equity share capital Preference share capital Total
CORPORATE REVIEW

with differential voting share

right capital
Particulars Number Amount Number Amount Number Amount Amount
Balance as at 31 March 2016 54,013,800 5,401.38 120 0.01 10,294,230 1029.42 6,430.81
Less: Shares held by trust 2,223,735 222.37 - - - - 222.37
Total Share capital as at 31 March 2016 51,790,065 5,179.01 120 0.01 10,294,230 1,029.42 6,208.44
Balance as at 1 April 2016 54,013,800 5,401.38 120 0.01 10,294,230 1,029.42 6,430.81
Changes in equity share capital during the year on 10,294,230 1,029.42 (10,294,230) (1,029.42) -
STATUTORY REPORTS

account of conversion of compulsory convertible

preference shares
Balance as at 31 March 2017 64,308,030 6,430.80 120 0.01 - - 6,430.81
Less: Shares held by trust 1,995,064 199.51 - - - - 199.51
Total Share capital as at 31 March 2017 62,312,966 6,231.29 120 0.01 - - 6,231.30
Balance as at 31 March 2017 64,308,030 6,430.80 120 0.01 - - 6,430.81
Add: Equity shares with differential voting rights 120 0.01 (120) (0.01) - - -
reclassified to equity shares during the year
Add: Fresh issue during the year 3,877,551 387.76 - - - - 387.76
FINANCIAL STATEMENTS

Add: Issued during the year to Newgen ESOP Trust 1,050,000 105.00 - - - - 105.00
Balance as at 31 March 2018 69,235,701 6,923.57 - - - - 6,923.57
Less: Shares held by trust 1,351,584 135.16 - - - - 135.16
Total Share capital as at 31 March 2018 67,884,117 6,788.41 - - - - 6,788.41

ANNUAL REPORT 2017-18

171
 b. Other equity

172
Particulars Securities Retained Others Items of Other Total
premium* earnings comprehensive income attributable
to owners
Capital General Capital Foreign Newgen Share Remeasurement Debt
of the
redemption reserve reserve currency ESOP options of defined instruments
Company
reserve translation Trust outstanding benefit liability through
reserve* reserve* reserve* OCI
Balance as at 31 March 2016 1,141.87 11,570.79 87.95 1,731.39 0.21 - 175.75 259.07 - (2.21) 14,964.82
Less: Securities premium on shares (647.80) (647.80)
held by trust
Total Balance as at 31 March 2016 494.07 11,570.79 87.95 1,731.39 0.21 - 175.75 259.07 - (2.21) 14,317.02
Balance as at 1 April 2016 1,141.87 11,570.79 87.95 1,731.39 0.21 - 175.75 259.07 - (2.21) 14,964.82
Total comprehensive income for the
year ended 31 March 2017
Profit for the year - 5,133.01 - - - - - - - - 5,133.01
Foreign currency translation reserve - - - - - (104.54) - - - - (104.54)

Newgen Software Technologies Limited

Other comprehensive income (net - - - - - - (54.57) 17.38 (37.19)
of tax)
Transactions with owners, recorded
directly in equity
Addition to Newgen ESOP Trust - - - - - - 24.47 - - - 24.47
reserve
Contributions by and distributions to
owners
Dividend on equity shares - (540.14) - - - - - - - - (540.14)
Dividend distribution tax on dividend - (110.59) - - - - - - - - (110.59)
on equity shares
Dividend on preference shares - (103.80) - - - - - - - - (103.80)
Dividend distribution tax on dividend - (21.25) - - - - - - - - (21.25)
on preference shares
Dividend received on equity shares - - - - - - - - - - -
held by trust
Employee stock compensation - - - - - - - 127.11 - - 127.11
expense
Transferred to securities premium 26.82 - - - - - - (26.82) - - -
account on exercise of stock options
Balance as at 31 March 2017 1,168.69 15,928.02 87.95 1,731.39 0.21 (104.54) 200.22 359.36 (54.57) 15.17 19,331.90
Less: Securities premium on shares (568.82) (568.82)
held by trust
Total Balance as at 31 March 2017 599.87 15,928.02 87.95 1,731.39 0.21 (104.54) 200.22 359.36 (54.57) 15.17 18,763.08
Balance as at 1 April 2017 1,168.69 15,928.02 87.95 1,731.39 0.21 (104.54) 200.22 359.36 (54.57) 15.17 19,331.90
Total comprehensive income for the
year ended 31 March 2018
Profit for the year - 7,288.68 - - - - - - - - 7,288.68
Foreign currency translation reserve - - - - - 100.20 - - - - 100.20
 Particulars Securities Retained Others Items of Other Total
premium* earnings comprehensive income attributable
to owners
Capital General Capital Foreign Newgen Share Remeasurement Debt
of the
redemption reserve reserve currency ESOP options of defined instruments
Company
reserve translation Trust outstanding benefit liability through
reserve* reserve* reserve* OCI
Other comprehensive income/(loss) - - - - - - - - 82.62 (0.31) 82.31
(net of tax)
Securities premium on issue of shares 556.50 - - - - - - - - - 556.50
CORPORATE REVIEW

to Newgen ESOP Trust

Securities premium on shares issued 9,112.24 - - - - - - - - - 9,112.24
through initial public offer
Utilized for share issue expenses (1,349.15) - - - - - - - - - (1,349.15)
Transactions with owners, recorded
directly in equity
Addition to Newgen ESOP Trust - - - - - - 31.43 - - - 31.43
reserve
Contributions by and distributions to
owners
Dividend on equity shares - (964.62) - - - - - - - - (964.62)
STATUTORY REPORTS

Dividend distribution tax on dividend - (196.37) - - - - - - - - (196.37)

on equity shares
Employee stock compensation - - - - - - - 225.73 - - 225.73
expense
Transferred to securities premium 193.21 - - - - - - (193.21) - - -
account on exercise of stock options
Balance as at 31 March 2018 9,681.50 22,055.70 87.95 1,731.39 0.21 (4.34) 231.65 391.88 28.05 14.86 34,218.85
Less: Securities premium on shares (485.00) - - - - - - (485.00)
held by trust
Balance as at 31 March 2018 9,196.49 22,055.71 87.95 1,731.39 0.21 (4.34) 231.65 391.88 28.05 14.86 33,733.85
* Refer Note 16 D
Summary of significant accounting Note 3
policies
FINANCIAL STATEMENTS

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
Chartered Accountants Newgen Software Technologies Limited
Firm Registration No.:
116231W / W-100024
Rakesh Dewan Diwakar Nigam T. S. Varadarajan Arun Kumar Gupta Aman Mourya
Partner Managing Director Whole Time Director Chief Financial Officer Company Secretary

ANNUAL REPORT 2017-18

Membership No.: 092212 DIN: 00263222 DIN: 00263115 Membership No: 27299

Place: Gurugram Place: New Delhi Place: New Delhi Place: New Delhi Place: New Delhi

173
Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018
Consolidated Statement of Cash Flows
for the year ended March 31, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated

For the year ended For the year ended

31 March 2018 31 March 2017
A. Cash flows from operating activities
Net profit before tax 9,413.25 6,832.03
Adjustments for:
Depreciation and amortisation 580.67 491.82
Loss on sale of property, plant and equipment 3.15 0.12
Property, plant and equipment written off - 0.59
Interest income on security deposits at amortised cost (31.21) (24.16)
Loss allowance on trade receivables 659.26 1,353.50
Loss allowance on other financial assets - 6.55
Provision no longer required write back (229.75) -
Fair value changes of financial assets at FVTPL (25.48) 5.57
Unrealised foreign exchange loss/(gain) (49.10) 95.01
Share based payment - equity settled 225.73 127.12
Reversal of derivative liability - (136.00)
Finance costs 520.68 525.60
Dividend income from mutual funds at FVTPL (87.86) (1.75)
Interest income from government and other bonds at FVOCI (131.56) (35.11)
Profit on sale of mutual funds (net) at FVTPL (60.73) (589.89)
Interest income from bank deposits and others (159.32) (24.62)
Operating cash flow before working capital changes 10,627.73 8,626.38
Increase in trade receivables (2,503.86) (6,130.91)
Increase in loans (278.74) (20.42)
Increase in other financial assets (2,627.21) (163.06)
Increase in other assets (33.32) (83.35)
Increase in provisions 314.36 282.31
Increase in other financial liabilities 1,616.27 1,179.03
Increase in other liabilities 844.50 180.88
Increase in trade payables 270.37 1,403.47
Cash generated from operations 8,230.10 5,274.33
Income taxes paid (net) (2,205.62) (1,683.38)
Net cash generated from operating activities (A) 6,024.48 3,590.95
B. Cash flows from investing activities
Purchase or construction of fixed assets (tangible and (1,914.11) (700.58)
intangible fixed assets and capital work-in-progress) and
capital advances
Proceeds from sale of fixed assets 6.96 (3.39)
Purchase of mutual funds and government bonds (1,683.12) (8,680.24)
Proceeds from sale of mutual funds 1,699.60 8,942.99
Interest income from government bonds 86.21 28.06
Interest received on Bank deposit 73.57 33.63
Investment in bank deposits (net) (70.95) 22.90
Net cash used in investing activities (B) (1,801.84) (356.63)

174 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Consolidated Cash Flow Statement

for the year ended March 31, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

For the year ended For the year ended

31 March 2018 31 March 2017
C. Cash flows from financing activities
Repayment of short-term borrowings (net) (259.79) (657.01)
(Repayment of)/proceeds of Finance Lease Obligation (301.33) (299.46)
Proceed from fresh issue of share 9,500.00 -
Expenses paid for Initial Public Offer (1,349.15) -
Proceeds from issue of equity shares under ESOP scheme 169.35 22.87
Securities premium on issue of shared under ESOP scheme 640.31 78.98
Dividend paid (including corporate dividend distribution tax) (1,140.21) (628.63)
- Equity
Dividend paid (including corporate dividend distribution tax) - (125.05)
- Preference
Finance cost (519.60) (469.82)
Gain on transfer of equity shares by Newgen ESOP trust 10.64 2.37
Net cash generated / (used in) from financing activities (C) 6,750.22 (2,075.75)
Net increase in cash and cash equivalents (A + B + C) 10,972.86 1,158.57
Cash and cash equivalents at the beginning of the year 3,491.88 2,431.78
Effect of exchange differences on translation of foreign currency 83.60 (98.47)
cash and cash equivalents
Cash and cash equivalents at the end of the year 14,548.34 3,491.88
Components of cash and cash equivalents:
Cash in hand 4.52 6.26
Cheques and drafts on hand
Balances with banks:
- in current accounts 6,143.82 2,685.62
- on deposit accounts with original maturity upto 3 months 8,400.00 800.00
14,548.34 3,491.88
Notes:
1. The cash flow statement has been prepared under the indirect method as set out in the Ind AS 7 “Statement
of Cash Flows”.
2. Effective 1 April 2017, the Group adopted the amendment to Ind AS7, which require the entities to provide
disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing
activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of
a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from
financing activities, to meet the disclosure requirement. The adoption of amendment did not have any
material impact on the financial statements.

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
Chartered Accountants Newgen Software Technologies Limited
Firm Registration No.:
116231W / W-100024

Rakesh Dewan Diwakar Nigam T. S. Varadarajan Arun Kumar Gupta Aman Mourya
Partner Managing Director Whole Time Director Chief Financial Company Secretary
Officer
Membership No.: 092212 DIN: 00263222 DIN: 00263115 Membership No: 27299

Place: Gurugram Place: New Delhi Place: New Delhi Place: New Delhi Place: New Delhi
Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018

ANNUAL REPORT 2017-18 175

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Note 1 Background as required by Ind AS 101, those adjustments were

recognized directly through retained earnings as
Newgen Software Technologies Limited (‘Newgen’ at 1 April 2016.
or ‘the Company’ or ‘the holding Company’) and
its subsidiaries (the Holding Company and its Refer note 50 for the effect of transition to
subsidiaries together referred to as ‘the Group’) is a Ind AS on the reported consolidated financial
public company domiciled and incorporated under position, consolidated financial performance and
the provisions of the Companies Act applicable in consolidated cash flows of the Group.
India. The registered office of the Company is situated
at A-6, Satsang Vihar Marg, Qutab Institutional Area, The consolidated financial statements were
New Delhi - 110067. The Company raised money by authorised for issue by the Company’s Board of
way of initial public offer during the year ended 31 Directors on 17 May 2018.
March 2018 and its shares are listed on the National
Stock Exchange (NSE) and Bombay Stock Exchange Details of the Group’s accounting policies are
(BSE) of India. included in Note 3.

The Company is a global software Company and B. Basis of Consolidation

is engaged in the business of software product
The consolidated financial statements have been
development including designing and delivering
prepared in accordance with Ind AS notified
end-to-end software solutions covering the entire
under the Companies (Indian Accounting
spectrum of software services from workflow
Standards) Rules, 2015 and Companies (Indian
automation to Document management to imaging.
Accounting Standards) Amendment Rules, 2016
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 Name of Subsidiaries Country of Effective
government departments to improve productivity Incorporation Shareholding
through better document management and workflow (%)
implementation. Newgen Software Inc. U.S.A 100
Newgen Software Canada 100
Technologies Canada
Note 2 Basis of Preparation
Limited
A. Statement of compliance Newgen Software Singapore 100
The consolidated financial statements have Technologies PTE
been prepared in accordance with Indian Limited
Accounting Standards (“Ind AS”) notified under Newgen Software United 100
the Companies (Indian Accounting Standards) Technologies (UK) Kingdom
Limited
Rules, 2015 and Companies (Indian Accounting
Standards) Amendment Rules, 2016. These Newgen Computer India 100
Technologies Limited
consolidated financial statements for the year
ended 31 March 2018 are the first consolidated
The consolidated financial statements have been
financial statements that the group has prepared
prepared on the following basis:
in accordance with Ind AS.

The financial statements of the Holding Company

Accordingly, the group has followed the
and its subsidiary companies are combined on a
provisions of Ind AS 101, ‘First Time Adoption
line-by-line basis by adding the book values of like
of Indian Accounting Standards’, in preparing
items of assets, liabilities, income and expenses after
its opening Ind AS Balance Sheet as of the
eliminating intra-group balances/transactions and
date of transition, i.e. 1 April 2016. Certain of the
unrealized profits in full in accordance with Ind AS 110
Group’s Ind AS accounting policies used in the
– “Consolidated Financial Statements”. The amounts
opening balance sheet differed from its Indian
shown in respect of reserves comprise the amount of
GAAP policies applied as at 31 March 2016, and
the relevant reserves as per the balance sheet of the
accordingly adjustments were made to restate
parent company and its share in the post-acquisition
the opening balances as per Ind AS. The resulting
increase/decrease in the reserves of the consolidated
adjustments arose from events and transactions
before the date of transition to Ind AS. Therefore, entities.

176 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

The excess/deficit of cost to the parent company E. Use of estimates and judgements
of its investment over its portion of net worth in the The preparation of financial statements in
consolidated entities at the respective dates on which conformity with Ind AS requires management
investment in such entities was made is recognized in to make judgments, estimates and assumptions
the consolidated financial statements as goodwill/capital that affect the application of accounting policies
reserve. The parent company’s portion of net worth in and the reported amounts of assets, liabilities,
such entities is determined on the basis of book values of income and expenses and the accompanying
assets and liabilities as per the financial statements of the disclosures. Uncertainty about the assumptions
entities as on the date of investment and if not available, and estimates could result in outcomes that may
the financial statements for the immediately preceding require material adjustment to the carrying value
period adjusted for the effects of significant changes. of assets or liabilities affected in future periods.

The financial statements of the foreign non integral Estimates and underlying assumptions are
subsidiaries (collectively referred to as the ‘foreign reviewed on an ongoing basis. Revisions to
non integral operations’) are translated into Indian accounting estimates are recognized in the
rupees as follows:- period in which the estimates are revised and in
i. Share capital and opening reserves and surplus any future periods affected.
are carried at historical cost.
Judgements
ii. All assets and liabilities, both monetary and Information about judgements made in applying
non-monetary, (excluding share capital, opening accounting policies that have the most significant
reserves and surplus) are translated using the effects on the amounts recognised in the financial
year-end rates. statements is included in the following notes:
iii. Profit and loss items are translated at the • Note 35 – lease classification: classification
respective weighted average rates or the of leases under finance lease or operating
exchange rate that approximates the actual lease;
exchange rate on date of specific transactions.
Assumptions and estimation uncertainties
iv. The resulting net exchange difference is credited
Information about assumptions and estimation
or debited to the foreign currency translation
uncertainties that have a significant risk of resulting
reserve.
in a material adjustment in the year ending 31 March
2018 is included in the following notes:
C. Functional and presentation currency
These financial statements are presented in • Note 3(c)(iii) –Estimation of Useful lives of
Indian Rupees (INR), which is also the Company’s intangible and depreciable assets
functional currency. All amounts have been
rounded-off to the nearest lakhs, unless otherwise • Note 28 – Measurement of defined benefit
indicated. obligations: key actuarial assumptions;

• Note 32 – Recognition of deferred tax assets:

D. Basis of measurement
availability of future taxable profit against
The financial statements have been prepared on which tax losses carried forward can be
the historical cost basis except for the following used;
items:
• Note 34 –Fair value of share based payments

• Note 41 – Impairment of trade receivables

Items Measurement basis
and financial assets.
Certain financial Fair value
assets and liabilities
F. Current and non-current classification
Net defined benefit Fair value of plan
(asset)/ liability assets less present The Group presents assets and liabilities in the
value of defined benefit balance sheet based on current / non-current
obligations classification.

ANNUAL REPORT 2017-18 177

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

An asset is classified as current when it satisfies financial assets and liabilities. The Group has
any of the following criteria: an established control framework with respect
to the measurement of fair values. The finance
- it is expected to be realized in, or is intended
team has overall responsibility for overseeing
for sale or consumption in, the Group’s
all significant fair value measurements,
normal operating cycle.
including Level 3 fair values, and reports
- it is held primarily for the purpose of being directly to the chief financial officer. The Group
traded; regularly reviews significant unobservable
inputs and valuation adjustments. If third
- it is expected to be realized within 12 months
party information, such as broker quotes
after the reporting date; or
or pricing services, is used to measure fair
- it is cash or cash equivalent unless it is values, then the Group assesses the evidence
restricted from being exchanged or used to obtained from the third parties to support
settle a liability for at least 12 months after the conclusion that these valuations meet the
the reporting date. requirements of Ind AS, including the level in
the fair value hierarchy in which the valuations
A liability is classified as current when it satisfies should be classified.
any of the following criteria:
- it is expected to be settled in the Group’s Significant valuation issues are reported to the
normal operating cycle; Company’s audit committee.

- it is held primarily for the purpose of being Fair values are categorised into different levels in
traded; a fair value hierarchy based on the inputs used in
- it is due to be settled within 12 months after the valuation techniques as follows.
the reporting date; or
• Level 1: quoted prices (unadjusted) in active
- the Group does not have an unconditional markets for identical assets or liabilities.
right to defer settlement of the liability for
at least 12 months after the reporting date. • Level 2: inputs other than quoted prices
Terms of a liability that could, at the option included in Level 1 that are observable for
of the counterparty, result in its settlement the asset or liability, either directly (i.e. as
by the issue of equity instruments do not prices) or indirectly (i.e. derived from prices).
affect its classification. • Level 3: inputs for the asset or liability that
are not based on observable market data
Current assets/liabilities include current portion (Unobservable inputs).
of non-current financial assets/liabilities
respectively. All other assets/ liabilities are When measuring the fair value of an asset or a
classified as non-current. Deferred tax assets and liability, the Group uses observable market data as
liabilities (if any) are classified as non-current far as possible. If the inputs used to measure the
assets and liabilities. fair value of an asset or a liability fall into different
levels of the fair value hierarchy, then the fair
Operating cycle value measurement is categorised in its entirety
Based on the nature of the operations and the time in the same level of the fair value hierarchy as the
between the acquisition of assets for processing lowest level input that is significant to the entire
and their realization in cash or cash equivalents, measurement.
the Group has ascertained its operating cycle as
twelve months for the purpose of current/non- The Group recognises transfers between levels of
current classification of assets and liabilities. the fair value hierarchy at the end of the reporting
period during which the change has occurred.
G. Measurement of fair values
A number of the Group’s accounting policies Further information about the assumptions
and disclosures require the measurement made in measuring fair values is included in the
of fair values, for both financial and non- following notes:

178 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Note 34 – Share-based payment arrangements; Financial assets:

and On initial recognition, a financial asset is
Note 41 – Financial instruments. classified as measured at
- Amortised cost;
Note 3 Significant Accounting Policies - Fair value through Other Comprehensive
a. Foreign currency Income (FVOCI) – debt investment;
i. Functional currency - Fair Value through Other Comprehensive
The Group’s financial statements are Income (FVOCI) – equity investment; or
presented in INR, which is also the Group’s - FVTPL
functional currency.
Financial assets are not reclassified
ii. Foreign currency transactions subsequent to their initial recognition, except
Transactions in foreign currencies are if and in the period the Group changes its
translated into INR, the functional business model for managing financial
currency of the Company, at the exchange assets.
rates at the dates of the transactions
or an average rate if the average rate A financial asset is measured at amortised
approximates the actual rate at the date cost if it meets both of the following
of the transaction. conditions and is not designated as FVTPL:

Monetary assets and liabilities denominated • the asset is held within a business model
in foreign currencies are translated into whose objective is to hold assets to
the functional currency at the exchange collect contractual cash flows; and
rate at the reporting date. Non-monetary
assets and liabilities that are measured • the contractual terms of the financial
at fair value in a foreign currency are asset give rise on specified dates to
translated into the functional currency cash flows that are solely payments of
at the exchange rate when the fair value principal and interest on the principal
was determined. Non-monetary assets amount outstanding.
and liabilities that are measured based on
A debt investment is measured at FVOCI if it
historical cost in a foreign currency are
meets both of the following conditions and
translated at the exchange rate at the date
is not designated as FVTPL:
of the transaction.
• the asset is held within a business model
b. Financial instruments
whose objective is achieved by both
i. Recognition and initial measurement collecting contractual cash flows and
Trade receivables and debt securities selling financial assets; and
issued are initially recognised when they
are originated. All other financial assets and • the contractual terms of the financial
financial liabilities are initially recognised asset give rise on specified dates to
when the Group becomes a party to the cash flows that are solely payments of
contractual provisions of the instrument. principal and interest on the principal
amount outstanding.
A financial asset or financial liability is
initially measured at fair value plus, for an All financial assets not classified as measured
item not at fair value through profit and loss at amortised cost or FVOCI as described
(FVTPL), transaction costs that are directly above are measured at FVTPL. On initial
attributable to its acquisition or issue. recognition, the Group may irrevocably
designate a financial asset that otherwise
ii. Classification and subsequent meets the requirements to be measured at
measurement amortised cost or at FVOCI as at FVTPL if

ANNUAL REPORT 2017-18 179

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

doing so eliminates or significantly reduces asset contains a contractual term that could
an accounting mismatch that would change the timing or amount of contractual
otherwise arise. cash flows such that it would not meet this
condition. In making this assessment, the
Financial assets: Business model Group considers:
assessment
• contingent events that would change
The Group makes an assessment of the
the amount or timing of cash flows;
objective of the business model in which
a financial asset is held at a portfolio level • terms that may adjust the contractual
because this best reflects the way the coupon rate, including variable interest
business is managed and information is rate features;
provided to management, for instance
• prepayment and extension features;
the stated policies and objectives for the
and
portfolio, frequency, volume and timing of
sales of financial assets in prior periods, the Basis the above classification criteria,
reasons for such sales and expectations Group’s investments are classified as
about future sales activity. below:-

Transfers of financial assets to third - Investments in government and other

bonds have been classified as FVOCI.
parties in transactions that do not qualify
for derecognition are not considered - Investments in Mutual funds have been
sales for this purpose, consistent with classified as FVTPL.
the Group’s continuing recognition of the
assets. Financial assets: Subsequent measurement
and gains and losses
Financial assets that are held for trading
or are managed and whose performance is Financial assets at FVTPL
evaluated on a fair value basis are measured These assets are subsequently measured at
at FVTPL. fair value. Net gains and losses, including any
interest or dividend income, are recognised
Financial assets: Assessment whether in profit or loss.
contractual cash flows are solely payments
of principal and Interest. Financial assets at amortised cost
These assets are subsequently measured at
For the purposes of this assessment, amortised cost using the effective interest
‘principal’ is defined as the fair value of method. The amortised cost is reduced by
the financial asset on initial recognition. impairment losses. Interest income, foreign
‘Interest’ is defined as consideration for exchange gains and losses and impairment
are recognised in profit or loss. Any gain or
the time value of money and for the
loss on derecognition is recognised in profit
credit risk associated with the principal
or loss.
amount outstanding during a particular
period of time and for other basic lending
Debt investments at FVOCI
risks and costs (e.g. liquidity risk and
These assets are subsequently measured
administrative costs), as well as a profit
at fair value. Interest income under
margin.
the effective interest method, foreign
exchange gains and losses and impairment
In assessing whether the contractual cash
are recognised in profit or loss. Other
flows are solely payments of principal net gains and losses are recognised in
and interest, the Group considers the OCI. On derecognition, gains and losses
contractual terms of the instrument. This accumulated in OCI are reclassified to
includes assessing whether the financial profit or loss.

180 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Equity investments at FVOCI The Group also derecognises a financial

These assets are subsequently measured liability when its terms are modified and
at fair value. Dividends are recognized as the cash flows under the modified terms
income in profit or loss unless the dividend are substantially different. In this case, a
clearly represents a recovery of part of the new financial liability based on the modified
cost of the investment. Other net gains and terms is recognised at fair value. The
losses are recognised in OCI and are not difference between the carrying amount of
reclassified to profit or loss. the financial liability extinguished and the
new financial liability with modified terms is
recognised in profit or loss.
Financial liabilities: Classification, subsequent
measurement and gains and losses
iv. Offsetting
Financial liabilities are classified as measured
at amortised cost or FVTPL. A financial liability Financial assets and financial liabilities are
is classified as at FVTPL if it is classified as offset and the net amount presented in the
held-for-trading, or it is a derivative or it is balance sheet when, and only when, the
designated as such on initial recognition. Group currently has a legally enforceable
Financial liabilities at FVTPL are measured at right to set off the amounts and it intends
fair value and net gains and losses, including either to settle them on a net basis or to
any interest expense, are recognised in realise the asset and settle the liability
profit or loss. Other financial liabilities are simultaneously.
subsequently measured at amortised cost
using the effective interest method. Interest v. Derivatives and Embedded derivatives
expense and foreign exchange gains and Derivatives are initially measured at fair
losses are recognised in profit or loss. Any gain value. Subsequent to initial recognition,
or loss on derecognition is also recognised in derivatives are measured at fair value, and
profit or loss. changes therein are generally recognised in
profit or loss.
iii. Derecognition
Financial assets Embedded derivatives are separated
The Group derecognises a financial asset from the host contract and accounted
for separately if the host contract is
when the contractual rights to the cash flows
not a financial asset and certain criteria
from the financial asset expire, or it transfers
are met.
the rights to receive the contractual cash
flows in a transaction in which substantially
all of the risks and rewards of ownership c. Property, plant and equipment
of the financial asset are transferred or i. Recognition and measurement
in which the Group neither transfers nor Items of property, plant and equipment
retains substantially all of the risks and are measured at cost less accumulated
rewards of ownership and does not retain depreciation and accumulated impairment
control of the financial asset. losses, if any.

If the Group enters into transactions Cost of an item of property, plant and
whereby it transfers assets recognised on equipment comprises its purchase
its balance sheet, but retains either all or price, including import duties and
substantially all of the risks and rewards non-refundable purchase taxes, after
of the transferred assets, the transferred deducting trade discounts and rebates,
assets are not derecognised. any directly attributable cost of bringing
the item to its working condition for
Financial liabilities its intended use and estimated costs
The Group derecognises a financial liability of dismantling and removing the item
when its contractual obligations are discharged and restoring the site on which it
or cancelled, or expire. is located.

ANNUAL REPORT 2017-18 181

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

The cost of a self-constructed item of

property, plant and equipment comprises
the cost of materials and direct labor, any Category of fixed Estimated useful
other costs directly attributable to bringing assets life (Years)
the item to working condition for its intended Building 60
use, and estimated costs of dismantling and Plant and equipment 15
removing the item and restoring the site on Leasehold 3
which it is located. Improvements*
Office equipment** 10
If significant parts of an item of property, Furniture and Fixtures 10
plant and equipment have different useful
Vehicles 8
lives, then they are accounted for as separate
Computer hardware
items (major components) of property, plant
and equipment. -servers and networks 6
-Computers** 3-5
Any gain or loss on disposal of an item of Depreciation method, useful lives and
property, plant and equipment is recognised residual values are reviewed at each financial
in profit or loss. year-end and adjusted if appropriate.

ii. Transition to Ind AS Depreciation on addition (disposal) is

On transition to Ind AS, the Group has provided on a pro-rata basis i.e. from (upto)
elected to continue with the carrying value the date on which asset is ready for use
of all its property, plant and equipment (disposed off).
recognized as at 1 April 2016, measured as
per the previous GAAP, and use that carrying *Leasehold improvements are depreciated
value as the deemed cost of such property, over the period of the lease term of the
plant and equipment. respective property or 3 years whichever is
lower.
iii. Subsequent expenditure
Subsequent expenditure is capitalised only Leasehold land is amortised over the lease
if it is probable that the future economic period of 90 years.
benefits associated with the expenditure will
flow to the Group. **Based on an internal technical assessment,
the management believes that the useful
iv. Depreciation lives as given above best represents the
period over which management expects to
Depreciation is calculated on cost of items
use its assets. Hence, the useful life of plant
of property, plant and equipment less
and equipment is different from the useful
their estimated residual values over their
life as prescribed under Part C of Schedule II
estimated useful lives using the straight-line
of Companies Act, 2013.
method, and is generally recognised in the
statement of profit and loss. Assets acquired
d. Intangible assets
under finance leases are depreciated over
the shorter of the lease term and their Recognition and measurement
useful lives unless it is reasonably certain Intangible assets that are acquired by the
that the Group will obtain ownership by the Group are measured initially at cost. After
end of the lease term. Freehold land is not initial recognition, an intangible asset is carried
depreciated. at its cost less accumulated amortisation and
accumulated impairment loss, if any.
The estimated useful lives of items of
property, plant and equipment for the Subsequent expenditure
current and comparative periods are as Subsequent expenditure is capitalised only when
follows: it increases the future economic benefits from

182 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

the specific asset to which it relates. always measured at an amount equal to

lifetime expected credit losses. Lifetime
Transition to Ind AS expected credit losses are the expected
On transition to Ind AS, the Group has elected credit losses that result from all possible
to continue with the carrying value of all its default events over the expected life of a
intangible assets recognized as at 1 April 2016, financial instrument.
measured as per the previous GAAP, and use
that carrying value as the deemed cost of such 12-month expected credit losses are the
intangible assets. portion of expected credit losses that result
from default events that are possible within
Amortisation 12 months after the reporting date (or a
shorter period if the expected life of the
Intangible assets of the Group represents
instrument is less than 12 months).
computer software and are amortized using the
straight-line method over the estimated useful
In all cases, the maximum period considered
life (at present 3-4 years) or the tenure of the
when estimating expected credit losses is
respective software license, whichever is lower.
the maximum contractual period over which
The amortization period and the amortization
the Group is exposed to credit risk.
method are reviewed at least at each financial
year end. If the expected useful life of the asset
The Group assumes that the credit risk on a
is significantly different from previous estimates,
financial asset has increased significantly if it
the amortization period is changed accordingly.
is more than 30 days past due.
Gains or losses arising from derecognition
The Group considers a financial asset to be
of an intangible asset are measured as the
in default when:
difference between the net disposal proceeds
and the carrying amount of the asset and are - the borrower is unlikely to pay its credit
recognized in the profit or loss when the asset is obligations to the Group in full, without
derecognized. recourse by the Group to actions such
as realising security (if any is held); or
e. Impairment
- the financial asset is 90 days or more
i. Impairment of financial instruments past due.
The Group recognises loss allowances for
expected credit losses on: The Group considers a debt security to have
low credit risk when its credit risk rating is
- financial assets measured at amortised
equivalent to ‘investment grade’ e.g. BBB or
cost; and
higher as per renowned rating agencies.
- financial assets measured at FVOCI-
debt investments. Measurement of expected credit losses
At each reporting date, the Group assesses Expected credit losses are a probability-
whether financial assets carried at amortised weighted estimate of credit losses. Credit
cost and debt securities at FVOCI are losses are measured as the present value
credit-impaired. A financial asset is ‘credit- of all cash shortfalls (i.e. the difference
impaired’ when one or more events that between the cash flows due to the Group in
have a detrimental impact on the estimated accordance with the contract and the cash
future cash flows of the financial asset have flows that the Group expects to receive).
occurred.
As a practical expedient, the Group uses a
The Group measures loss allowances at an provision matrix to determine impairment
amount equal to lifetime expected credit loss allowance on portfolio of its trade
losses. receivables. The provision matrix is based on
its historically observed default rates over
Loss allowances for trade receivables are the expected life of the trade receivables and

ANNUAL REPORT 2017-18 183

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

is adjusted for forward‐looking estimates. At amortisation, if no impairment loss had been

every reporting date, the historical observed recognised
default rates are updated and changes in the
forward‐looking estimates are analysed. f. Employee benefits
i. Short-term employee benefits
Presentation of allowance for expected
Short-term employee benefit obligations are
credit losses in the balance sheet
measured on an undiscounted basis and are
expensed as the related service is provided.
Loss allowances for financial assets measured
A liability is recognised for the amount
at amortised cost are deducted from the
expected to be paid, if the Group has a
gross carrying amount of the assets.
present legal or constructive obligation to
pay this amount as a result of past service
For debt securities at FVOCI, the loss
provided by the employee, and the amount
allowance is charged to profit or loss.
of obligation can be estimated reliably.

Write-off
ii. Share-based payment transactions
The gross carrying amount of a financial asset
The grant date fair value of equity settled
is written off (either partially or in full) to the
share-based payment awards granted to
extent that there is no realistic prospect of
employees of the Group is recognised as an
recovery. This is generally the case when the
employee expense, with a corresponding
Group determines that the debtor does not
increase in equity, over the period that the
have assets or sources of income that could
employees unconditionally become entitled
generate sufficient cash flows to repay the
to the awards. The amount recognised as
amounts subject to the write off. However,
expense is based on the estimate of the
financial assets that are written off could still
number of awards for which the related
be subject to enforcement activities in order
service and non-market vesting conditions
to comply with the Group’s procedures for
are expected to be met, such that the
recovery of amounts due.
amount ultimately recognised as an expense
is based on the number of awards that do
ii. Impairment of Non-financial assets
meet the related service and non-market
The carrying amounts of assets are reviewed vesting conditions at the vesting date. For
at each reporting date if there is any share-based payment awards with non-
indication of impairment based on internal/ vesting conditions, the grant date fair value
external factors. An impairment loss is of the share-based payment is measured to
recognized wherever the carrying amount of reflect such conditions and there is no true-
an asset (or cash generating unit) exceeds up for differences between expected and
its recoverable amount. The recoverable actual outcomes.
amount is the greater of the asset’s (or cash
generating unit’s) net selling price and value iii. Defined contribution plans
in use. In assessing value in use, the estimated
A defined contribution plan is a post-
future cash flows are discounted to their
employment benefit plan under which an
present value using a pre-tax discount rate
entity pays fixed contributions into a separate
that reflects current market assessments of
entity and will have no legal or constructive
the time value of money and risks specific to
obligation to pay further amounts. The Group
the asset (or cash generating unit).
makes specified monthly contributions
towards Government administered provident
An impairment loss is reversed if there
fund scheme. Obligations for contributions
has been a change in the estimates used
to defined contribution plans are recognized
to determine the recoverable amount. An
as an employee benefit expense in profit or
impairment loss is reversed only to the
loss in the periods during which the related
extent that the asset’s carrying amount does
services are rendered by employees.
not exceed the carrying amount that would
have been determined net of depreciation or
Prepaid contributions are recognised as an

184 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

asset to the extent that a cash refund or a compensated absences do not fall due
reduction in future payments is available. wholly within twelve months after the end
of the period in which the employees render
iv. Defined benefit plans the related service and are also not expected
A defined benefit plan is a post-employment to be utilized wholly within twelve months
benefit plan other than a defined contribution after the end of such period, the benefit is
plan. The Group’s gratuity scheme is a classified as a long-term employee benefit.
defined benefit plan. The present value of The Group records an obligation for such
compensated absences in the period in
obligations under such defined benefit plans
which the employee renders the services
are determined based on actuarial valuation
that increase this entitlement. The obligation
carried out by an independent actuary
is measured on the basis of independent
using the Projected Unit Credit Method,
actuarial valuation using the projected unit
which recognizes each period of service as
credit method. Re measurements as a result
giving rise to an additional unit of employee
of experience adjustments and changes in
benefit entitlement and measures each unit
actuarial assumptions are recognized in the
separately to build up the final obligation.
profit or loss

The obligation is measured at the present

g. Provisions (other than for employee benefits)
value of estimated future cash flows. The
A provision is recognised if, as a result of a past
discount rates used for determining the
event, the Group has a present legal or constructive
present value of obligation under defined
obligation that can be estimated reliably, and it is
benefit plans, are based on the market
probable that an outflow of economic benefits
yields on government securities as at the
will be required to settle the obligation. Provisions
balance sheet date, having maturity period
are determined by discounting the expected
approximating to the terms of related
future cash flows (representing the best estimate
obligations
of the expenditure required to settle the present
obligation at the balance sheet date) at a pre-tax
Remeasurement gains and losses arising rate that reflects current market assessments of
from experience adjustments and changes the time value of money and the risks specific
in actuarial assumptions are recognized to the liability. The unwinding of the discount
in the period in which they occur, directly is recognised as finance cost. Expected future
in other comprehensive income and are operating losses are not provided for. Provisions
never reclassified to profit or loss. Changes are reviewed by the management at each
in the present value of the defined benefit reporting date and adjusted to reflect the current
obligation resulting from plan amendments best estimates.
or curtailments are recognized immediately
in the profit or loss as past service cost. Warranties
A provision for warranties is recognised when
v. Other long-term employee benefits the underlying products or services are sold.
The Group’s net obligation in respect of The provision is based on technical evaluation,
long-term employee benefits other than historical warranty data and a weighting of
post-employment benefits is the amount of all possible outcomes by their associated
future benefit that employees have earned probabilities.
in return for their service in the current and
prior periods; that benefit is discounted to Onerous contracts
determine its present value, and the fair A contract is considered to be onerous when
value of any related assets is deducted. the expected economic benefits to be derived
by the Group from the contract are lower than
The employees can carry-forward a portion the unavoidable cost of meeting its obligations
of the unutilized accrued compensated under the contract. The provision for an onerous
absences and utilize it in future service contract is measured at the present value of the
periods or receive cash compensation lower of the expected cost of terminating the
on termination of employment. Since the contract and the expected net cost of continuing

ANNUAL REPORT 2017-18 185

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

with the contract. Before such a provision is based on proportionate completion method
made, the Group recognises any impairment loss based on hours expended, and foreseeable
on the assets associated with that contract. losses on the completion of contract, if any
are recognized immediately.
h. Contingent liabilities
A contingent liability is a possible obligation that The Group is also involved in time and
arises from past events whose existence will be material contracts and recognizes revenue
confirmed by the occurrence or non-occurrence on a man month basis.
of one or more uncertain future events beyond
the control of the Group or a present obligation Digitization services
that is not recognised because it is not probable Revenue from digitization services is
that an outflow of resources will be required recognized as services are rendered to the
to settle the obligation, or a present obligation customer.
whose amount cannot be estimated reliably.
The Group does not recognize a contingent Annual Technical services
liability but discloses its existence in the financial Revenue from annual technical service and
statements maintenance contracts is recognised on
a pro rata basis over the period in which
i. Revenue such product up gradation and services are
rendered.
Revenue is measured at the fair value of the
consideration received or receivable and is
iii. Sale of right to use software
recognized to the extent that it is probable that
the economic benefits will flow to the Group and Software-as-a-service, that is, a right to use
software functionality in a cloud-based-
the revenue can be reliably measured and specific
infrastructure provided by the Group.
criteria as per the respective arrangements have
Revenue is recognized monthly/periodically
been met.
based on the number of users right given to
customers.
i. Sale of License
Revenue from sale of licenses for software Revenue is recognised, net of returns, trade
products is recognised when the significant discounts and volume rebates. This inter alia
risks and rewards of ownership have been involves discounting of the consideration
transferred to the buyer which generally due to the present value if payment
coincides with delivery of licenses to the extends beyond normal credit terms.
customers, recovery of the consideration is Reimbursements of out-of-pocket expenses
probable, the associated costs and possible received from customers have been netted
return of software sold can be estimated off with expense.
reliably, there is no continuing effective
control over, or managerial involvement with Amounts received or billed in advance of
the licenses transferred and the amount of services to be performed are recorded as
revenue can be measured reliably. advance from customers/unearned revenue.
Unbilled revenue represents amounts
ii. Rendering of services recognized based on services performed
in advance of billing in accordance with
Revenue from services rendered is
contract terms.
recognised in profit or loss in proportion to
the stage of completion of the transaction at iv. Multiple deliverable arrangements
the reporting date.
When two or more revenue generating
activities or deliverables are provided under
Software Development Services
a single arrangement, each deliverable
The revenue from such fixed price contracts that is considered to be a separate unit of
for software development is recognized account is accounted for separately. The

186 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

allocation of consideration from a revenue on reassessment of the arrangement

arrangement to its separate units of account that contains a lease, the payments and
is based on the relative fair value of each other consideration required by such an
unit. If the fair value of the delivered item arrangement are separated into those for
is not reliably measurable, then revenue is the lease and those for other elements on
allocated based on the difference between the basis of their relative fair values. If it
the total arrangement consideration and the is concluded for a finance lease that it is
fair value of the undelivered item. impracticable to separate the payments
reliably, then an asset and a liability are
j. Recognition of dividend income, interest recognised at an amount equal to the fair
income or expense value of the underlying asset. The liability
Dividend income is recognised in profit or loss is reduced as payments are made and
on the date on which the Group’s right to receive an imputed finance cost on the liability is
payment is established. recognised using the incremental borrowing
rate.
Interest income or expense is recognised using
the effective interest method. ii. Assets held under leases
Leases of property, plant and equipment
The ‘effective interest rate’ is the rate that exactly that transfer to the Group substantially
discounts estimated future cash payments or all the risks and rewards of ownership are
receipts through the expected life of the financial classified as finance leases. The leased
instrument to: assets are measured initially at an amount
equal to the lower of their fair value and
- the gross carrying amount of the financial the present value of the minimum lease
asset; or payments. Subsequent to initial recognition,
the assets are accounted for in accordance
- the amortised cost of the financial liability. with the accounting policy applicable to
similar owned assets.
In calculating interest income and expense, the
effective interest rate is applied to the gross Assets held under leases that do not transfer
carrying amount of the asset (when the asset to the Group substantially all the risks and
is not credit-impaired) or to the amortised cost rewards of ownership (i.e. operating leases)
of the liability. However, for financial assets that are not recognised in the Group’s Balance
have become credit-impaired subsequent to Sheet.
initial recognition, interest income is calculated
by applying the effective interest rate to the iii. Lease payments
amortised cost of the financial asset. If the asset
Payments made under operating leases
is no longer credit-impaired, then the calculation
are generally recognised in profit or loss
of interest income reverts to the gross basis.
on a straight-line basis over the term of the
lease unless such payments are structured
k. Sale of investments
to increase in line with expected general
Profit on sale of investments is recorded on inflation to compensate for the lessor’s
transfer of title from the Group and is determined expected inflationary cost increases.
as the difference between the sales price and the
carrying value of the investment. Lease incentives received are recognised as
an integral part of the total lease expense
l. Leases over the term of the lease.
i. Determining whether an arrangement
contains a lease Minimum lease payments made under finance
At inception of an arrangement, it is leases are apportioned between the finance
determined whether the arrangement charge and the reduction of the outstanding
is or contains a lease. At inception or liability. The finance charge is allocated to
each period during the lease term so as to

ANNUAL REPORT 2017-18 187

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

produce a constant periodic rate of interest longer probable respectively that the related
on the remaining balance of the liability. tax benefit will be realized.

m. Income tax Deferred tax is measured at the tax rates that

Income tax comprises current and deferred tax. It are expected to apply to the period when
is recognised in profit or loss except to the extent the asset is realised or the liability is settled,
that it relates to an item recognised directly in based on the laws that have been enacted or
equity or in other comprehensive income. substantively enacted by the reporting date.

i. Current tax The measurement of deferred tax reflects

Current tax comprises the expected tax the tax consequences that would follow from
payable or receivable on the taxable income the manner in which the Group expects, at
or loss for the year and any adjustment to the reporting date, to recover or settle the
the tax payable or receivable in respect of carrying amount of its assets and liabilities.
previous years. The amount of current tax
Deferred tax assets and liabilities are offset
reflects the best estimate of the tax amount
if there is a legally enforceable right to offset
expected to be paid or received after
current tax liabilities and assets, and they
considering the uncertainty, if any, related
relate to income taxes levied by the same
to income taxes. It is measured using tax
tax authority on the same taxable entity, or
rates (and tax laws) enacted or substantively
on different tax entities, but they intend to
enacted by the reporting date.
settle current tax liabilities and assets on a
Current tax assets and current tax liabilities net basis or their tax assets and liabilities will
are offset only if there is a legally enforceable be realised simultaneously.
right to set off the recognised amounts, and
Minimum Alternative Tax (‘MAT’) under the
it is intended to realise the asset and settle
provisions of the Income-tax Act, 1961 is
the liability on a net basis or simultaneously.
recognised as current tax in the Statement
ii. Deferred tax of Profit and Loss. The credit available under
the Act in respect of MAT paid is recognised
Deferred tax is recognised in respect of
as an asset only when and to the extent there
temporary differences between the carrying
is convincing evidence that the company will
amounts of assets and liabilities for financial
pay normal income tax during the period
reporting purposes and the corresponding
for which the MAT credit can be carried
amounts used for taxation purposes.
forward for set-off against the normal tax
Deferred tax is also recognised in respect of
liability. MAT credit recognised as an asset
carried forward tax losses and tax credits.
is reviewed at each balance sheet date and
Deferred tax is not recognised for:
written down to the extent the aforesaid
convincing evidence no longer exists.
- temporary differences arising on the
initial recognition of assets or liabilities
n. Cash and Cash Equivalents
in a transaction that is not a business
combination and that affects neither Cash and short-term deposits in the Balance
accounting nor taxable profit or loss at Sheet comprise cash at banks and cash in hand
the time of the transaction; and short-term deposits with an original maturity
of three months or less, which are subject to
Deferred tax assets are recognised to the insignificant risk of changes in value.
extent that it is probable that future taxable
profits will be available against which o. Earnings per share (“EPS”)
they can be used. Deferred tax assets – Basic earnings per share is calculated by dividing
unrecognised or recognised, are reviewed the profit attributable to the owners of the Group
at each reporting date and are recognised/ by the weighted average number of equity shares
reduced to the extent that it is probable/ no outstanding during the year.

188 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Diluted earnings per share is computed using shareholders, and interim dividend are recorded
the net profit or loss for the year attributable to as a liability on the date of declaration by the
equity shareholders and the weighted average Company’s Board of Directors.
number of common and dilutive common
equivalent shares outstanding during the year but q. Segment
including share options, compulsory convertible Segment reporting
preference shares except where the result would Operating segments are reported in a
be anti-dilutive. manner consistent with the internal reporting
provided to the chief operating decision
p. Share Capital maker (CODM).
Equity Shares
Equity shares are classified as equity. Incremental Identification of segments:
costs directly attributable to the issuance of new All operating segments’ results are reviewed
equity shares are recognized as a deduction regularly by the Board of Directors, who have
from equity. been identified as the CODM, to allocate
resources to the segments and assess their
Compulsorily convertible preference shares performance. Refer note 49 for segment
The embedded derivative liability on initial information.
recognition has been separated from the
underlying equity instrument and recorded at r. ESOP Trust
fair value. The difference between the fair value The ESOP trust has been treated as an
of the combined CCPS instrument and the fair extension of the Company and accordingly
value of the embedded derivative liability has shares held by ESOP Trust are netted off from
been recorded as the value of the equity host the total share capital. Consequently, all the
contract. The embedded derivative has been assets, liabilities, income and expenses of the
fair valued through profit or loss at each balance trust are accounted for as assets, liabilities,
sheet date. income and expenses of the Company, except
for profit / loss on issue of shares to the
Upon conversion of CCPS into equity shares the employees and dividend received by trust
resultant gain/loss on the down-round derivative which are directly adjusted in the Newgen
is recognised in profit or loss. The original equity ESOP Trust reserve.
component remains as equity/is transferred
within equity. s. Rounding of amounts
All amounts disclosed in the financial statements
Dividends and notes have been rounded off to the nearest
The final dividend on shares is recorded as lakhs as per the requirement of Schedule III,
a liability on the date of approval by the unless otherwise stated.

ANNUAL REPORT 2017-18 189

190
Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated

4 Property, plant and equipment and Capital work in progress

Freehold Leasehold Buildings Plant and Leasehold Vehicles Office Furniture Computer Total Capital
land land* machinery improvements equipment and fixtures and servers work in
progress#
Cost (refer note 50)
Deemed cost as at 1 4.71 3,523.68 1,091.73 233.60 5.99 135.91 332.02 248.23 717.09 6,292.96 604.61
April 2016
Additions during the - - 33.98 18.93 - - 16.95 10.16 165.24 245.26 503.68
year
Less: Disposals during - - - 0.53 - - 0.10 - 5.74 6.37 -
the year
Balance as at 31 March 4.71 3,523.68 1,125.71 252.00 5.99 135.91 348.87 258.39 876.59 6,531.85 1,108.29
2017

Newgen Software Technologies Limited

Additions during the - - 602.25 69.86 - 14.58 85.97 113.48 302.61 1,188.75 685.80
year
Less: Disposals during - - - 9.77 - - 17.07 8.78 - 35.62 134.61
the year
Balance as at 31 March 4.71 3,523.68 1,727.96 312.09 5.99 150.49 417.77 363.09 1,179.20 7,684.98 1,659.48
2018
Accumulated
Depreciation (refer
note 50)
Balance as at 1 April - - - - - - - - - - -
2016
Charge for the year - 39.74 20.98 30.41 5.98 20.73 45.32 35.74 233.70 432.61 -
(refer note 30)
Less: Disposals during - - - - - - - - 3.87 3.87 -
the year
Balance as at 31 March - 39.74 20.98 30.41 5.98 20.73 45.32 35.74 229.83 428.74 -
2017
Charge for the year - 39.46 21.70 39.78 - 24.05 67.25 48.39 283.20 523.83
(refer note 30)
Less: Disposals during - - - 3.30 - - 16.75 5.46 - 25.51
the year
Balance as at 31 March - 79.20 42.68 66.89 5.98 44.78 95.82 78.67 513.03 927.06 -
2018
Carrying amount (net)
Balance as at 1 April 4.71 3,523.68 1,091.73 233.60 5.99 135.91 332.02 248.23 717.09 6,292.96 604.61
2016
Balance as at 31 March 4.71 3,483.94 1,104.73 221.59 0.01 115.18 303.55 222.65 646.76 6,103.12 1,108.29
2017
Balance as at 31 March 4.71 3,444.48 1,685.28 245.20 0.01 105.71 321.95 284.42 666.17 6,757.93 1,659.48
2018
As at 31 March 2018 properties with a carrying amount of INR 472.93 lakhs (31 March 2017: INR 483.20 lakhs, 1 April 2016: INR 493.59 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 construction of new office, cost incurred upto 31 March 2018 totaled to INR 1,659.48 Lakhs
 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

5 Intangibles

Computer software
Cost (refer note 50)
Deemed cost as at 1 April 2016 103.01
Additions during the year 26.62
Balance as at 31 March 2017 129.63

Additions during the year 74.61

Balance as at 31 March 2018 204.24

Accumulated Amortissation
Balance as at 1 April 2016 -
Amortisation (refer note 30) 59.20
Balance as at 31 March 2017 59.20

Amortisation (refer note 30) 55.48

Balance as at 31 March 2018 114.68

Carrying amount (net)

Balance as at 1 April 2016 103.01
Balance as at 31 March 2017 70.43
Balance as at 31 March 2018 89.56

6 Loans (unsecured, considered good, unless otherwise stated)

As at As at As at
31 March 2018 31 March 2017 1 April 2016

Security deposits 295.70 226.68 210.99

295.70 226.68 210.99

7 Non-current financial assets - others

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Bank deposits
- pledged with tax authorities 2.25 2.25 2.25
- held as margin money* 208.24 137.29 160.19
Interest accrued on deposits 107.68 21.44 -
Earnest money deposits
Unsecured, considered good 236.60 72.48 11.92
Unsecured, considered doubtful 123.21 123.21 123.46
Less: Loss allowance for deposits (123.21) (123.21) (123.46)
554.77 233.46 174.36
*Balances with bank held as margin money INR 202.49 lakhs (31 March 2017: INR 131.54 lakhs, 1 April 2016: INR 155.62 lakhs) represents the
margin money on account of guarantees issued to government customers.
Information about Group’s exposure to credit and market risks and fair value measurement is included in Note 47.

ANNUAL REPORT 2017-18 191

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

8 Income tax assets

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Advance income tax 1,281.29 852.41 808.71
1,281.29 852.41 808.71

9 Other non-current assets

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Prepaid expenses 120.50 105.39 62.07
Capital advances 235.73 - -
356.23 105.39 62.07

10 Investments
As at As at As at
31 March 2018 31 March 2017 1 April 2016
Investments in bonds (unquoted)
Bonds at FVOCI
Investment in government bonds 959.03 971.10 445.20
Investment in other bonds 726.46 711.69 -
1,685.49 1,682.79 445.20
Investments in mutual funds (unquoted)
Mutual Funds at FVTPL
Investment in arbitrage funds - - 2,367.13
Investment in debt mutual funds 3,336.58 3,183.25 1,703.81
3,336.58 3,183.25 4,070.94
5,022.07 4,866.04 4,516.14

Aggregate book value of unquoted investments 5,022.07 4,866.04 4,516.14

Aggregate market value of unquoted investments 5,022.07 4,866.04 4,516.14
Investments in bonds measured at FVOCI have stated interest rates of 7.35% to 10.40%. Information about Group’s exposure to credit and
market risks and fair value measurement is included in Note 47

11 Trade receivables

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Unsecured
- Considered good 22,201.67 19,957.12 16,435.80
- Considered doubtful 4,139.83 6,325.98 5,933.12
26,341.50 26,283.10 22,368.92
Less: Loss allowance for trade receivables
- unsecured, considered doubtful (4,139.83) (6,325.98) (5,933.12)
22,201.67 19,957.12 16,435.80

192 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

The Group’s exposure to credit and currency risks and loss allowances related to trade receivables are discussed in note 47.

12 Cash and cash equivalents

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Cash on hand 4.52 6.26 13.66
Balances with banks
- in current accounts*# 6,143.82 2,685.62 2,418.12
Balances with scheduled banks in deposit accounts 8,400.00 800.00 -
with original maturity of less than 3 months#
14,548.34 3,491.88 2,431.78
*Current account balances with banks include INR 112.24 lakhs (31 March 2017: INR 36.69 lakhs, 1 April 2016: INR 41.11 lakhs) held at a foreign
branch.
# Balance with banks and deposits includes INR 58.80 lakhs and INR 8,400 lakhs respectively as unutilized amounts of the IPO proceeds.

13 Current financial assets - Loans

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Loans to employees* 20.03 26.64 35.04
Security deposits 297.24 46.06 46.27
317.27 72.70 81.31
*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

As at As at As at
31 March 2018 31 March 2017 1 April 2016
(unsecured considered good, unless otherwise
stated)
Interest accrued on deposits 0.67 0.95 31.18
Interest accrued but not due on government bonds 84.53 39.18 32.13
Unbilled revenue* -
- other than related parties 5,079.43 2,500.35 2,373.45
- related parties 12.56 0.00 0.00
Earnest money deposits - - 14.30
Receivable from employees for issue of shares - 0.56 -
5,177.19 2,541.04 2,451.06
*Unbilled revenue pertains to consideration receivable in respect of initial sale of software and services.

15 Other current assets

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Advances to vendors 41.14 40.80 20.47
Balances with government authorities* 153.05 226.08 180.13
Advance to employees 221.39 137.51 38.27
Prepaid expenses 331.95 341.80 282.02
747.53 746.19 520.89
*Balances with government authorities comprises of Goods and Service tax/ service tax / vat credit receivable.

ANNUAL REPORT 2017-18 193

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

16 Share capital
As at 31 March 2018 As at 31 March 2017 As at 1 April 2016
Number Amount Number Amount Number Amount
of shares of shares of shares
Authorised share
capital
Equity shares of INR 10 98,000,000 9,800.00 64,400,000 6,440.00 63,050,000 6,305.00
each
Equity share capital 200 0.02 200 0.02 200 0.02
with differential voting
rights of INR 10 each
0.01% Compulsory 11,999,800 1,199.98 11,999,800 1,199.98 11,999,800 1,199.98
convertible preference
shares of INR 10 each
110,000,000 11,000.00 76,400,000 7,640.00 75,050,000 7,505

As at 31 March 2018 As at 31 March 2017 As at 1 April 2016

Issued, subscribed and Number Amount Number Amount Number Amount
paid up of shares of shares of shares
Equity share capital of 67,884,117 6,788.41 62,312,966 6,231.29 51,790,065 5,179.01
INR 10 each, fully paid
up
Equity share capital - - 120 0.01 120 0.01
with differential voting
rights (DVR) of INR 10
each, fully paid up
0.01% Compulsory - - - - 10,294,230 1,029.42
convertible preference
shares of Rs. 10 each,
fully paid up
Total Share capital 67,884,117 6,788.41 62,313,086 6,231.30 62,084,415 6,208.44
Reconciliation of shares outstanding at the beginning and at the end at the reporting year
As at 31 March 2018 As at 31 March 2017
Equity share capital of INR 10 each, Number Amount Number Amount
fully paid up of shares of shares
At the beginning of the year 64,308,030 6,430.80 54,013,800 5,401.38
Add: Shares issued on conversion of - - 10,294,230 1,029.42
preference shares
Add: Equity shares with differential 120 0.01 120 0.01
voting rights reclassified to equity
shares during the year
Add: Equity shares issued during the 3,877,551 387.76 - -
year through initial public offer
Add: Issued during the year to Newgen 1,050,000 105.00 - -
ESOP Trust
At the end of the year 69,235,701 6,923.57 64,308,150 6,430.81
Less: Shares held by trust 1,351,584 135.16 1,995,064 199.51
Total equity share capital 67,884,117 6,788.41 62,313,086 6,231.30
During the year ended 31 March 2018, the Company has completed the initial public offer (IPO), pursuant to which
17,331,483 equity shares of INR 10 each were allotted/allocated, at an issue price of INR 245 each, consisting of
fresh issue of 3,877,551 equity shares and an offer for sale of 13,453,932 equity shares by selling shareholders.
The equity shares of the Company were listed on National Stock Exchange of India Limited (NSE) via ID

194 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

NEWGEN and BSE Limited (BSE) via ID 540900 on 29 January 2018.

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. shareholding.
As at 31 March 2018 As at 31 March 2017

Equity share capital with differential Number Amount Number Amount

voting rights (DVR) of INR 10 each, of shares of shares
fully paid up
At the beginning of the year 120 0.01 120 0.01
Less: Reclassification to equity shares (120) (0.01) - -
during the year
At the end of the year - - 120 0.01

Equity shares with differential voting rights :

Each of the shareholder with differential voting rights shall, at all times up to the conversion of Compulsory
convertible preference shares into equity shares thereof, were entitled to a fixed preferential and cumulative
dividend of one-hundredth percent (0.01%) of the investment amount and resolved to be so distributed as
such dividend in respect of each financial year or other accounting period of the Company, in accordance with
applicable law. In addition, the Ascent DVR and the IDGVI DVR shall be entitled to participate in any distribution
of the profits of the Company (including, as regards any dividends declared) on a pro-rata share and as-if-
converted basis vis-à-vis the other shareholders.

Expiration of differential rights:

Pursuant to the shareholder subscription agreement dated 31 October 2013, each Ascent DVR
and an IDGVI DVR shall be compulsorily converted at no cost to the Investors, into equity shares
in the ratio of 1:1 at any time as may be determined by the investors in their sole discretion. Upon
conversion of the Ascent DVR and the IDGVI DVR , such differential voting and dividend rights,
as mentioned above, on the shares held by each of the investors have automatically expired.
During the year ended 31 March 2018 each equity share with DVR has been re-classified into equity shares.
As at 31 March 2018 As at 31 March 2017

0.01% Compulsory convertible Number Amount Number Amount

preference shares of Rs. 10 each, fully of shares of shares
paid up
At the beginning of the year - - 10,294,230 1,029.42
Less: Preference shares conversion to - - 10,294,230 1,029.42
equity shares during the year
At the end of the year - - - -

Terms/rights attached to preference shares

During the years ended 31 March 2008 and 31 March 2009, the Company had issued 1,014,785 compulsorily
convertible preference shares (hereinafter referred to as “CCPS”) of Rs. 10 each fully paid up to HAV2 (Mauritius)
Limited and 360,250 CCPS of Rs. 10 each fully paid up to SAPV (Mauritius). During the financial year 2013-
14, HAV2 (Mauritius) Limited, exited from the Company and two new investors namely Unit Trust of India
Investment Advisory Services Limited, A/C Ascent India Fund II (“Ascent”) and IDG Ventures India Fund II LLC
(“IDGVI”) made investment in the Company. During the year ended 31 March 2014, all the CCPS held by HAV2
(Mauritius) Limited, were acquired by Ascent (670,790 CCPS) and IDGVI (343,995 CCPS). Further, during the

ANNUAL REPORT 2017-18 195

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

year ended 2014-15, the Company has also allotted 225,192 number of CCPS to Ascent and 115,478 number of
CCPS to IDGVI.
Pursuant to Shareholders agreement executed on 31 October 2013, between Newgen Software Technologies
Ltd and Ascent, IDGVI, SAPV (Mauritius) (individually referred as investor and together referred to as investor
group), Newgen Employees Trust and Mr. Diwakar Nigam, Mr. T.S. Varadarajan, Mrs. Priyadarshini Nigam and
Mrs. Usha Varadarajan, and Share purchase cum Subscription agreement dated 31 October 2013, between
Newgen Software Technologies Ltd, Ascent, IDGVI, SAPV (Mauritius), Mr. Diwakar Nigam, Mr. T.S. Varadarajan,
Mrs. Priyadarshini Nigam and Mrs. Usha Varadarajan, the investor group were entitled to receive dividends in
preference to any dividends on the equity shares of the Company at the rate of 0.01% (Zero point Zero One Per
cent) per annum on the investors subscription consideration, pro rata on a fully diluted basis. However, all the
preferential dividend and differential voting rights have already been expired due to conversion of CCPS into
Equity.
During the year 2014-15, IDGVI transferred 606,540 shares (adjusted for bonus issue) to Pandara Trust Scheme - I
Each CCPS shall be compulsorily converted at no cost to the Investor, into Equity Shares in the ratio of 1:1 at any time
as may be determined by the Investor at their sole discretion. Subject to applicable Law, the conversion of the Shares
and the HAV2 (Mauritius) Limited Sale of Shares will take place within the maximum time period prescribed under
applicable Law for such conversion.

Conversion of Compulsory convertible preference shares into equity

Pursuant to the Shareholders Agreement, during the year ended 31 March 2017, all issued 10,294,230 CCPS of
Rs.10/- each have been converted into 10,294,230 equity shares of Rs.10/- each in the ratio of 1:1, at no cost
to the investors. Equity shares of the Company allotted upon conversion of the CCPS, rank pari passu in all
respects including as to dividend, voting rights, with the existing fully paid up equity shares of face value of Re.
10/- each of the Company.

16 A Details of shareholders holding more than 5% shares in the Company

Equity shares of INR10 each, fully paid up held by:

As at 31 March 2018 31 March 2017 1 April 2016

Number % Holding Number % Holding Number % Holding

- Mr. Diwakar Nigam 18,422,406 28.65% 18,422,406 28.65% 18,422,406 34.11%
- Mr. T.S. Varadarajan 15,009,306 23.34% 15,009,306 23.34% 15,009,306 27.79%
- Mrs. Priyadarshini 7,968,906 12.39% 7,968,906 12.39% 7,968,906 14.75%
Nigam
- Mrs. Usha Varadarajan 4,528,320 7.04% 4,528,320 7.04% 4,528,320 8.38%
- Unit Trust of India - - 7,464,510 11.61% - -
Investment Advisory
Services Limited, A/C
Ascent India Fund III

Equity shares with Differential voting Rights of INR 10 each, fully paid up held by:
As at 31 March 2018 31 March 2017 1 April 2016
Number % Holding Number % Holding Number % Holding
Unit Trust of India - - 60 50.00% 60 50.00%
Investment Advisory
Services Limited, A/C
Ascent India Fund III
IDG Ventures India - - 60 50.00% 60 50.00%
Fund II LLC

196 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

0.01% Compulsory Convertible Preference Shares of Rs.10 each, fully paid up held by:
As at 31 March 2018 31 March 2017 1 April 2016
Number % Holding Number % Holding Number* % Holding
SAPV (Mauritius) - - - - 2,161,500 21.00%
Unit Trust of India - - - - 5,375,892 52.22%
Investment Advisory
Services Limited, A/C
Ascent India Fund III
IDG Ventures India - - - - 2,150,334 20.89%
Fund II LLC
Pandara Trust Scheme- 1 - - - - 606,504 5.89%

*Adjusted for bonus issue, refer note 17 C

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.

1 6 C Aggregate number of shares issued for consideration other than cash during the period of five
years immediately preceding the reporting date.
A. Bonus shares have been issued for which no cash has been received. The bonus shares has been
issued out of security premium
For the For the For the For the For the
year ended year ended year ended year ended year ended
31 March 31 March 31 March 31 March 31 March
2018 2017 2016 2015 2014
Equity shares of INR 10 each - - - 439,74,000 -
Equity share capital with - - - -
differential voting rights of INR 100
10 each
0.01% Compulsory convertible - - - -
preference shares of INR 10 each 85,78,525

B. Equity shares have been issued under Employee stock options plans to trust for which only exercise
price has been received in cash.
For the For the For the For the For the
year ended year ended year ended year ended year ended
31 March 31 March 31 March 31 March 31 March
2018 2017 2016 2015 2014
Equity shares of INR 10 each 1,050,000 - - 1,245,000 -

16 D Securities premium
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.
Foreign currency translation reserve
These comprises of all exchange differences arising from translation of financial information of foreign
subsidiaries into presentation currency.

ANNUAL REPORT 2017-18 197

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Newgen ESOP Trust reserve

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 by 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.
Share options outstanding reserve
The Group has established various equity-settled share-based payment plans for certain employees of
the Group. Refer to note 34 for further details on these plans.

17 Non-current financial liabilities - Borrowings

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Non-current maturities of finance lease obligations 1,316.66 1,617.99 1,917.45
(secured)*
1,316.66 1,617.99 1,917.45
* Finance lease obligations
This Group had obtained leasehold land from ‘Yamuna Expressway Industrial Development Authority
(YEIDA)’ during the year ended 31 March 2016. The lease term of leasehold land is 90 years with equated
monthly payment beginning from the month subsequent to the commencement of lease.

Finance lease obligations are payable as follows:

Particulars As at 1 April 2016
Future Interest Present value
minimum of minimum
lease lease
payments payments
Less than one year 315.25 240.16 555.40
Between one and five years 1,204.62 615.64 1,820.26
More than five years 712.83 4,973.29 5,686.12

Particulars As at 31 March 2017

Less than one year 302.25 205.49 507.74
Between one and five years 1,051.96 481.51 1,533.47
More than five years 566.03 4,901.93 5,467.97

Particulars As at 31 March 2018

Less than one year 302.25 170.37 472.62
Between one and five years 684.42 442.27 1,126.69
More than five years 566.40 4,832.93 5,399.33
Effective interest rate on above borrowings is 11.68%.

18 Derivative

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Derivative liability - - 136.00
- - 136.00

198 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

19 Non-current provisions

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Provision for employee benefits (refer note 27)
- provision for gratuity 1,266.07 1,113.20 865.23
- provision for compensated absences 387.30 329.77 256.35
1,653.37 1,442.97 1,121.58

20 Current financial liabilities - Borrowings

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Loans from banks
Pre-shipment loans (secured)* 4,946.27 5,226.18 5,883.19
4,946.27 5,226.18 5,883.19
*Pre-shipment loans carry interest rate @ LIBOR plus margin which varied from 2.13% to 4.45% 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 472.93 lakhs (31 March 2017: INR 483.20 lakhs, 1 April 2016: INR 493.59) and are repayable within 180 days from the date of
disbursement.

21 Trade payables

As at As at As at
31 March 2018 31 March 2017 1 April 2016
- Total outstanding dues to creditors other than 2,292.10 1,804.95 1,473.16
micro and small enterprises
2,292.10 1,804.95 1,473.16
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) The Group's exposure to currency and liquidity risks related to trade payables is disclosed in note 47

22 Current financial liabilities - Others

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Current maturities of finance lease obligations 302.25 302.25 315.25
Employee related payables 3,031.96 2,445.69 1,713.80
Payable in respect of retention money 47.92 28.10 11.64
Earnest money deposits 1.00 0.50 -
Payable for capital assets 241.35 126.67 17.47
3,624.48 2,903.21 2,058.16

23 Deferred income

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Advance billing 4,917.82 3,856.11 3,264.09
Advance from customers 25.22 9.39 7.51
4,943.04 3,865.50 3,271.60

ANNUAL REPORT 2017-18 199

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

24 Other current liabilities

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Statutory dues payable 1,365.28 545.23 413.18
Advance from employees for share options 6.76 0.77 1.35
1,372.04 546.00 414.53

25 Current provisions

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Provision for employee benefits (refer note 28)
- provision for gratuity 141.39 165.27 134.70
- provision for compensated absences 69.89 68.40 55.17
Other provisions
Income taxes payable 9.38 95.10 58.37
220.66 328.77 248.24

26 Revenue from operations

For the year For the year

ended ended
31 March 2018 31 March 2017
Sale of products - softwares 13,695.06 11,681.54
Sale of services
- Implementation 13,504.14 12,259.06
- Scanning 1,950.01 1,698.67
- AMC/ATS 8,471.52 7,369.03
- Support 12,486.87 9,417.13
- SaaS revenue 1,135.18 284.37
51,242.78 42,709.80

27 Other income

For the year For the year

ended ended
31 March 2018 31 March 2017
Interest income under the effective interest rate method:
- on security deposits at amortised cost 31.21 24.16
- government and other bonds at FVOCI 131.56 35.11
Interest income on fixed deposits 159.32 22.16
Other interest income 1.10 2.46
Profit on sale of mutual funds (net) at FVTPL 60.73 589.89
Dividend income from mutual funds at FVTPL 87.86 1.75
Fair value changes of financial assets at FVTPL 25.48 -
Provision no longer required write back 229.75 -
Reversal of derivative liability - 136.00
Miscellaneous income 33.97 15.25
760.98 826.78

200 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

28 Employee benefits expense

For the year For the year

ended ended
31 March 2018 31 March 2017
Salaries, wages and bonus 23,026.60 19274.47
Contribution to provident and other funds (refer note i below) 672.31 759.04
Expenses related to compensated absences (refer note ii below) 244.17 228.20
Share based payment - equity settled 225.72 127.12
Expense related to post employment defined benefit plan 272.39 242.81
(refer note iii below)
Staff welfare expenses 446.59 373.00
24,887.78 21,004.64

(i) Defined contribution plans:

The Group 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 672.31 lakhs (31 March 2017: INR 609.44 lakhs).
(ii) Compensated absences:
The Principal assumptions used in determining the compensated absences benefit obligation are as
given below:
31 March 2018 31 March 2017 1 April 2016
Discounting rate (p.a.) 7.80% 7.35% 7.95%
Future salary increase ( p.a.) 7.00% 7.00% 7.00%
(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.
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. The most recent
actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity
were carried out as at 31 March 2018. The present value of the defined benefit obligations and the related
current service cost and past service cost, were measured using the Projected Unit Credit Method.
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

Defined benefit obligation

31 March 2018 31 March 2017 1 April 2016

Expense recognised in profit or loss

Opening balance 1278.47 999.93 679.45
Included in profit or loss:
Current service cost 178.42 163.31 138.60
Past service cost
Interest cost (income) 93.97 79.49 54.36
1,550.86 1,242.73 872.41
Remeasurements recognised directly in other
comprehensive income

ANNUAL REPORT 2017-18 201

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Defined benefit obligation

31 March 2018 31 March 2017 1 April 2016
Remeasurement loss (gain) arising from:
Demographic assumptions (6.31) - 64.56
Financial assumptions (44.89) 51.64 104.00
Experience adjustment (29.64) 31.24 (0.61)
(80.84) 82.88 167.95
Other
Contributions paid by the employer
Benefits paid (62.57) (47.15) (40.43)
Closing balance 1,407.44 1,278.47 999.93
Total 1,407.44 1,278.47 999.93
B. Defined benefit obligations
i. Actuarial assumptions
The following were the principal actuarial
assumptions at the reporting date (expressed as
weighted averages).
Discount rate 7.80 7.35 7.95
Salary escalation rate 7.00 7.00 7.00
Mortality rate 100% of IALM "100% of IALM 100% of IALM
(2006 - 08) (2006 - 08)" (2006 - 08)

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.
31 March 2018 31 March 2017
Increase Decrease Increase Decrease
Discount rate (0.50% movement) (63.05) 68.33 43.70 46.77
Future salary growth (0.50% 68.53 (63.79) 46.70 44.04
movement)
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 & 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 Comapany’s financial statements as at balance sheet date:
31 March 2018 31 March 2017 1 April 2016
Net defined benefit asset - -
Total employee benefit asset - - -
Net defined benefit liability
Liability for Gratuity 1407.46 1,278.47 999.93
Liability for Compensated absences 457.19 398.17 311.52
Total employee benefit liabilities 1,864.65 1,676.64 1,311.45
Non-current:
Gratuity 1,266.07 1,113.20 865.23
Compensated absences 387.30 329.77 256.35
Current:
Gratuity 141.39 165.27 134.70
Compensated absences 69.89 68.40 55.17

202 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

29 Finance costs

For the year For the year

ended ended
31 March 2018 31 March 2017
Finance cost on finance lease obligations 205.49 240.16
Interest expense on packing credit 160.88 156.81
Other finance costs 79.03 128.63
Net loss on foreign currency transactions and translation* 75.28 -
520.68 525.60
*To the extent considered as an adjustment to finance cost

30 Depreciation and amortization expense

For the year For the year

ended ended
31 March 2018 31 March 2017
Depreciation of property, plant and equipment (refer note 4) 525.19 432.62
Amortisation of intangible assets (refer note 5) 55.48 59.20
580.67 491.82

31 Other expenses
For the year For the year
ended ended
31 March 2018 31 March 2017
Rent 1,704.41 1,386.32
Repairs and maintenance 313.59 296.82
Rates and taxes 195.94 266.88
Travelling and conveyance 5,960.98 4,774.77
Legal and professional fees 2,261.20 1,589.48
Payment to auditors* 98.15 43.27
Electricity and water 329.93 307.78
Advertising and sales promotion 520.68 470.63
Membership and subscription fee 619.72 585.66
Brokerage and commission 749.68 495.87
Communication costs 456.81 402.57
Software and license maintenance 305.58 370.35
Expenditure on corporate social responsibility 107.31 105.09
Donation 32.00 28.20
Operation and maintenance 490.77 454.39
Printing and stationery 671.05 627.35
Loss on sale of property, plant and equipment 3.15 0.12
Property, plant and equipment written off - 0.59
Loss allowance on trade receivables 659.26 1,353.50
Loss allowance on other financial assets - 6.55
Security charges 200.79 156.24
Net foreign exchange fluctuation loss 35.81 199.35
Fair value changes of financial assets at FVTPL - 5.57

ANNUAL REPORT 2017-18 203

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

For the year For the year

ended ended
31 March 2018 31 March 2017
Miscellaneous expenses 884.57 755.14
16,601.38 14,682.49
*Payment to Auditors#
As auditor:
- Statutory audit fee 40.00 34.00
- Limited review fee 7.50 -
- Others 11.43 -
- Reimbursement of expenses 2.25 1.00
61.18 35.00
#Excludes fee paid to statutory auditor amounting to INR 82.67 Lakhs for IPO related services

32 Income Tax
For the year For the year
ended ended
31 March 2018 31 March 2017
A. The major components of income tax (expense) / income are
Recognised in profit or loss
Tax expense 1,630.40 1,641.82
MAT credit entitlement (86.97) -
Tax expense for earlier years 64.50 126.63
Deferred tax (credit) 516.64 (69.43)
Total 2,124.57 1,699.02
Recognised in Other comprehensive income
Tax impact on
- Re-measurement on defined benefit plan (43.73) 28.31
- Fair value of Debt instruments through other comprehensive income 0.16 (9.20)
Total (43.57) 19.11

B. Reconciliation of effective tax rate

31 March 2018 31 March 2017
Profit before tax 9,413.25 6,832.03
Tax using the Company's tax rate 34.61% 3,257.74 34.61% 2,364.43
Impact of different rate in each -1.20% (112.66) -0.16% (10.76)
jurisdiction
Effect of deduction under section -11.18% (1,052.22) -12.74% (870.20)
10A of the Income tax Act, 1961
Effect of expenses permanently 0.18% 16.89 2.52% 172.45
disallowed under the Income Tax
Act, 1961
Effect of income exempt/ taxed -0.56% (53.04) -1.34% (91.41)
on lower rate
Others 0.04% 3.36 0.12% 7.88

204 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Income tax recognised in 21.88% 2,060.06 23.01% 1,572.39

statement of profit and loss

C. Deferred tax assets (net)

Deferred tax relates to the following: As at As at As at

31 March 2018 31 March 2017 1 April 2016
Deferred tax related to items
recognised in OCI:
Deferred tax assets (gross)
Investments at fair value through OCI - - 1.17
Remeasurement of defined benefit - 28.31 -
liability (asset)
(a) - 28.31 1.17
Deferred tax liabilities
Investments at fair value through OCI 7.87 8.03 -
Remeasurement of defined benefit 15.42 - -
liability (asset)
(b) 23.29 8.03 -
Deferred tax related to items
recognised in statement of profit and
loss:
Deferred tax liabilities (gross)
Property, plant and equipment 251.36 314.72 300.22
Others 11.11 - -
(c) 262.47 314.72 300.22
Deferred tax assets (gross)
Others - 8.87 14.74
Loss allowance on other financial 42.64 42.64 42.73
assets
Loss allowance on trade receivables 1,381.66 2,082.54 2,014.44
Derivative - - 46.00
Provision for employee benefits 667.62 530.78 472.45
(d) 2,091.92 2,664.83 2,590.36
(e) = (d) 1,829.45 2,350.11 2,290.14
- (c)
Deferred tax assets (net) (a) - (b) 1,806.16 2,370.39 2,291.29
+ (e)
MAT credit entitlement 86.97 - 89.02
Total Deferred tax assets (net) 1,893.13 2,370.39 2,380.31

ANNUAL REPORT 2017-18 205

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

D. Deferred tax liability (net)

Deferred tax relates to the following: As at As at As at
31 March 2018 31 March 2017 1 April 2016
Deferred tax liabilities (gross)
Property, plant and equipment 11.28 15.19 24.64
Total Deferred tax liability (net) 11.28 15.19 24.64

E. Movement in temporary differences

31 March 2018
Particulars Balance as at Recognised Recognised in Balance as at
1 April 2017 in profit or OCI during 31 March 2018
loss during FY FY 2017-18
2017-18
Deferred tax liabilities (net)
Property, plant and equipment (15.19) 3.91 - (11.28)
Total (15.19) 3.91 - (11.28)

Deferred tax assets (net)

Investments at fair value through (8.03) - 0.16 (7.87)
OCI
Remeasurement of defined 28.31 - (43.73) (15.42)
benefit liability (asset)
Property, plant and equipment (314.72) 63.36 - (251.36)
Loss allowance on other financial 42.64 - - 42.64
assets
Loss allowance on trade 2,082.54 (700.87) - 1,381.66
receivables
Provision for employee benefits 530.78 136.84 - 667.62
Others 8.87 (19.88) - (11.11)
Total 2,340.01 (512.72) (43.57) 1,783.60

31 March 2017
Particulars Balance as at Recognised Recognised in Balance as at
1 April 2016 in profit or OCI during 31 March 2017
loss during FY FY 2016-17
2016-17
Deferred tax liabilities (net)
Property, plant and equipment (24.64) 9.45 - (15.19)
Total (24.64) 9.45 - (15.19)
Deferred tax assets (net)
Investments at fair value through 1.17 - (9.20) (8.03)
OCI
Remeasurement of defined - - 28.31 28.31
benefit liability (asset)
Property, plant and equipment (300.22) (14.50) - (314.72)
Derivative liability 46.00 (46.00) - -

206 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Loss allowance on other financial 42.73 (0.09) - 42.64

assets
Loss allowance on trade 2,014.44 68.10 - 2,082.54
receivables
Provision for employee benefits 472.45 58.34 - 530.78
Others 14.74 (5.87) - 8.87
Total 2,266.66 69.44 19.11 2,355.19

33 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
(after adjusting for interest on the convertible instruments) 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
31 March 2018 31 March 2017
INR INR
Profit attributable to equity holders of the Group 7,288.68 5,133.01
Profit attributable to equity holders of the Group for basic 7,288.68 5,133.01
earnings
ii. Weighted average number of ordinary shares
31 March 2018 31 March 2017
INR INR
Opening balance of equity shares 62,313,086 51,790,185
Conversion of convertible preference shares into equity shares - 10,294,230
Effect of equity shares issued through initial public offer 658,652 -
Effect of share options exercised 739,355 28,037
Weighted average number of shares for basic EPS 63,711,093 62,112,452
Effect of dilution:
Add: Equity shares held by ESOP Trust with respect to options not 1,633,736 1,337,237
exercised by employees but outstanding
Weighted average number of shares for diluted EPS 65,344,829 63,449,689
Basic and Diluted earnings per share
31 March 2018 31 March 2017

INR INR
Basic earnings per share 11.44 8.26

Diluted earnings per share 11.15 8.09

34 Share-based payment arrangements:

A. Description of share-based payment arrangements

i. Share option programmes (equity-settled)

ANNUAL REPORT 2017-18 207

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

The Group had established Employees Stock Option Plan-1999 (ESOP 1999) and Employees Stock
Option Plan-2000 (ESOP 2000) in the year 1999-00 and 2000-01 respectively, administered through
‘Newgen Employees Trust’ (ESOP Trust) set-up for this purpose, for a total grant of 293,160 and 600,000
options respectively, at an Exercise Price of INR80 and INR 40 per option respectively, to the employees
of the Group. Under the terms of the original plans, these options are vested on a graded vesting basis
over a maximum period of Four (4) years from the date of grant and are to be exercised either in part(s)
or full, within a maximum period of five and four years respectively from the date of last vesting. During
the year ended 31 March 2000, 586,320 equity shares were issued to ESOP Trust as bonus shares in the
ratio of 1:2. Further, 4,093,350 equity shares were also issued to ESOP Trust as bonus shares in the ratio
of 1:5 during the year ended 31 March 2015.

The Board of Directors of the Company time to time extended the maximum exercise period for ESOP
1999 and ESOP 2000. During the year 2014-15, the Board of Directors of the Company in their meeting
dated 24 December 2014 extended the maximum exercise period for ESOP 1999 and ESOP 2000 to
five years and four year respectively from the last vesting date or 31 December 2018, whichever is later.

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 grants
under this Scheme shall be limited to 3,783,800 option with underlying equity shares of the Company.
Pursuant to the scheme, during the year 2014-15, the Company has granted 3,653,525 options at an
exercise price of Rs. 63 per option, to the employees of the Group. 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. 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.

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.

Following table represents general terms of the grants for the ESOP outstanding as on 31 March
2018, during the previous year 2016-17 there were no grants made
ESOP schemes Grant Date No. of Exercise Weighted Vesting
Options Price average Period
Outstanding remaining
life
Newgen Employees Stock 1-Jan-2015 1,702,708 63.00 5.76 4 years
Option Scheme 2014
(Newgen ESOP 2014)
Newgen Employees Stock 1-Jul-2017 335,025 63.00 8.23 4 years
Option Scheme 2014
(Newgen ESOP 2014)
Newgen Employees Stock 1-Sep-2017 130,000 63.00 8.43 4 years
Option Scheme 2014
(Newgen ESOP 2014)
Newgen Employees Stock 1-Oct-2017 75,750 63.00 8.51 4 years
Option Scheme 2014
(Newgen ESOP 2014)

208 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

B. Measurement of fair values

i. Equity-settled share-based payment arrangements
The fair value of the employee share options has been measured using the Black-Scholes formula. Service
and non-market performance conditions attached to the arrangements were not taken into account in
measuring fair value.
The requirement that the employee has to remain in service in order to purchase shares under the share
purchase plan has been incorporated into the fair value at grant date by applying a discount to the
valuation obtained.
The fair value of options and the inputs used in the measurement of the grant date fair values of the
equity-settled share based payment plans are as follows:

Particulars Newgen Employees Stock Option

Scheme 2014 (Newgen ESOP
2014)
Grant II, III and IV
31 March 2018
Fair value of options at grant date 100.23
Share price at grant date 134.53
Exercise price 63.00
Expected volatility (weighted-average) 55.59%
Expected life (weighted-average) 9 years
Expected dividends 0.00%
Risk-free interest rate (based on government bonds) 6.78%

C. Reconciliation of outstanding share options

The number and weighted-average exercise prices of share options under the share option programmes
were as follows.

Employees Stock Option Number Weighted Number Weighted Number Weighted

Plan-1999 (ESOP 1999) of options average of options average of options average
exercise exercise exercise
price price price
31 March 31 March 31 March 31 March 1 April 1 April
2018 2018 2017 2017 2016 2016
Options outstanding as 52,600 INR 4.45 57,600 INR 4.45 57,600 INR 4.45
at the beginning of the
year
Add: Options granted - - - - - -
during the year
Less: Options lapsed - - - - - -
during the year
Less: Options exercised 52,600 INR 4.45 5,000 INR 4.45 - INR 4.45
during the year
Options outstanding as - INR 4.45 52,600 INR 4.45 57,600 INR 4.45
at the year end
Exercisable as at year - 52,600 57,600
end
Weighted - average - 1.75 Years 2.75 Years
contractual life

ANNUAL REPORT 2017-18 209

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Employees Stock Option Number Weighted Number Weighted Number Weighted

Plan-2000 (ESOP of options average of options average of options average
2000) exercise exercise exercise
price price price
31 March 31 March 31 March 31 March 1 April 1 April
2018 2018 2017 2017 2016 2016
Options outstanding as 386,700 INR 6.67 483,800 INR 6.67 678,180 INR 6.67
at the beginning of the
year
Add: Options granted - - - - - -
during the year
Less: Options lapsed - - 30,000 INR 6.67 9,600 INR 6.67
during the year
Less: Options exercised 386,700 INR 6.67 67,100 INR 6.67 184,780 INR 6.67
during the year
Options outstanding as - INR 6.67 386,700 INR 6.67 483,800 INR 6.67
at the year end
Exercisable as at year - 386,700 483,800
end
Weighted - average - 2.09 years 3.11 years
contractual life

Newgen Employees Number of Weighted Number of Weighted Number of Weighted

Stock Option Scheme options average options average options average
2014 (Newgen ESOP exercise exercise exercise
2014) price price price
31 March 31 March 31 March 31 March 1 April 1 April
2018 2018 2017 2017 2016 2016
Options outstanding as 3,061,209 INR 63.00 3,384,305 INR 63.00 3,653,525 INR 63.00
at the beginning of the
year
Add: Options granted 562,550 INR 63.00 - - - -
during the year
Less: Options lapsed 126,096 INR 63.00 166,525 INR 63.00 213,175 INR 63.00
during the year
Less: Options exercised 1,254,180 INR 63.00 156,571 INR 63.00 56,045 INR 63.00
during the year
Options outstanding as 2,243,483 INR 63.00 3,061,209 INR 63.00 3,384,305 INR 63.00
at the year end
Exercisable as at year 445,616 777,170 288,188
end
Weighted - average 6.38 years 6.76 years 7.76 years
contractual life

C. Expense recognised in statement of profit and loss

For details on the employee benefits expense, refer note 28

210 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

35 Operating leases

A. Leases as lessee
a) The Group has taken various cancellable and non-cancellable leases for office premises and residential
accommodation for some of its employees. The amount recognised in profit and loss and future minimum
lease payments and payment profile of non-cancellable operating leases are as under:

i. Future minimum lease payments

At 31 March 2018, the future minimum lease payments under non-cancellable leases were receivable as
follows.
31 March 2018 31 March 2017 1 April 2016
Less than one year 1,334.90 1,024.35 934.97
Between one and five years 2,152.94 2,113.83 2,236.27
More than five years - - -
3,487.84 3,138.18 3,171.24
ii. Amounts recognised in profit or loss
31 March 2018 31 March 2017
Lease expense 1,704.41 1,386.32
1,704.41 1,386.32

36 Contingent liabilities and commitments (to the extent not provided for)

31 March 2018 31 March 2017 1 April 2016

a. Estimated amount of contracts remaining to be 759.70 1,733.00 574.98
executed on capital account and not provided for
net of advances, tangible assets

1. For other commitments – Non-cancellable operating, and finance leases, refer Note 35 and 17
respectively

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 28 February
2018 and 31 March 2017 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. Dividends would attract corporate dividend tax when declared.

Particulars For the year For the year

ended ended
31 March 2018 31 March 2017
Final dividend of INR 2.00 per share (31 March 2017: INR 1.5/-) 1,384.71 964.62
Corporate dividend tax 283.94 196.37

ANNUAL REPORT 2017-18 211

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

39 Utilization of CSR expenses

As per Section 135 of the Companies Act 2013, the following is the detail of Corporate social responsibility
expenses incurred by the Company: Gross amount to be spent by the Company during the year ended
31 March 2018 is INR 106.13 lakhs (previous year INR. 97.05 lakhs). Amount spent during the year ended
31 March 2018:

Particulars Paid Liability yet to Total

be paid
i) For purpose mentioned as under 104.31 3.00 107.31
The areas for CSR activities are promoting education, health care, sanitation, digital literacy and
livelihood enhancement and participation on SOS Children’s Village Projects in Faridabad. The funds
were primarily utilized through the year on the following activities which are specified in Schedule VII of
the Companies Act, 2013.

40 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
Company has got the updated documentation for the international transactions entered into with the
associated enterprises during the financial year. Accordingly, the management believes that there has
been no change in the nature of its international transactions with the associated enterprises during
the year ended 31 March 2018 and 31 March 2017. Further, 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 During the year ended 31 March 2018, the Company completed the initial public offer (IPO), pursuant to
which 17,331,483 equity shares of INR 10 each were allotted/allocated, at an issue price of INR 245 each,
consisting of fresh issue of 3,877,551 equity shares and an offer for sale of 13,453,932 equity shares by
selling shareholders. The equity shares of the Company were listed on National Stock Exchange of India
Limited (NSE) via ID NEWGEN and BSE Limited (BSE) via ID 540900 on 29 January 2018.

42 Expenses incurred by the Company aggregating to INR 2,627.44 Lakhs in connection with the IPO
have been partly adjusted towards the securities premium account and partly recovered from the
selling shareholders. The IPO expenses amounting to INR 1,646.71 (excluding certain expenses which are
directly attributable to the Company such as legal counsel cost, auditor fee, listing fee, advertisement &
marketing expenses and depository fees amounting to INR 980.73 Lakhs), have been allocated between
the Company and each of the selling shareholders in proportion to the equity shares allotted to the
public as fresh issue by the Company and under offer for sale by the existing shareholders and the total
amount charged in securities premium is INR 1,349.15 Lakhs.

43 During the year ended 31 March 2018, the Company has completed the Initial Public offer, pursuant to
which 17,331,483 equity shares having a face value of Rs. 10 each were allotted/allocated, at an issue
price of Rs. 245 per equity share, consisting of fresh issue of 3,877,551 equity shares and an offer for sale
of 13,453,932 equity shares by selling shareholders. The gross proceeds of fresh issue of equity shares
from IPO amounts to Rs. 9,500.00 lakhs. The Company’s share of fresh issue related expenses is Rs
1,349.15 lakhs, which has been adjusted against Securities Premium. As at 31 March 2018, the proceeds
are unutilised and have been temporarily invested/ deposited in cash and cash equivalents including
fixed deposits and bank account (Refer note 12).

212 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

44 Dividend remittances in foreign currency:

Particulars For the year For the year

ended ended
31 March 2018 31 March 2017
Year to which the dividend relates 2016-17 2015-16
Amount remitted during the year (INR in lakhs) 77.21 51.78
Number of non-resident shareholders 2 2
Number of shares on which dividend was due 5,147,340 5,147,340

45 Details of current Investments (refer note 10)

Particulars Number of Units as at Amount in Lakhs as at

31 March 31 March 1 April 31 March 31 March 1 April
2018 2017 2016 2018 2017 2016
Investment in debt
mutual funds
Reliance Short Term 634,842 - - 213.85 - -
Fund- Direct Growth
Plan
ICICI Prudential Short 860,077 - - 322.56 - -
Term Plan
IIFL Dynamic Bond 1,442,783 - - 200.83 - -
Fund
Franklin Templeton MF 11,122 - - 425.20 - -
Aditya BSL MF 3,202,906 - - 426.14 - -
ICICI Prudential MF 2,185,596 - - 425.63 - -
UTI Income 2,617,879 - - 442.00 - -
Opportunities Fund -
Direct Plan-Growth
Kotak Income 2,194,751 - - 440.56 - -
Opportunities Fund-
Monthly Growth
L&T Income 2,157,674 - - 439.81 - -
Opportunities Fund
Direct Plan-Growth
Tata Short Term Fund - 1,273,800 - - 401.05 -
Reliance Short Term - 634,842 - - 200.61 -
Fund
UTI Short Term Income - 1,974,451 - - 401.27 -
Fund
ICICI Prudential Short - 860,077 - - 301.29 -
Term Plan
UTI Income - 3,748,856 - - 420.28 -
Opportunities Fund
Kotak Income - 3,948,263 - - 419.36 -
Opportunities Fund
BNP Paribas Medium - 4,137,952 - - 413.80 -
Term Income Fund

ANNUAL REPORT 2017-18 213

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Particulars Number of Units as at Amount in Lakhs as at

31 March 31 March 1 April 31 March 31 March 1 April
2018 2017 2016 2018 2017 2016
L&T Income - 3,734,193 - - 419.20 -
Opportunities Fund
Direct Plan
IIFL Cash Opportunities - 1,817,389 - - 206.40 -
Fund
HSBC Income Fund - - - 784,326 - - 200.42
Short Term Plan
BNP Paribas Flexi Debt - - 770,208 - - 200.57
Fund
Birla Sun Life Dynamic - - 1,694,757 - - 450.55
Bond Fund
Reliance Regular - - 970,116 - - 200.33
Savings Fund
Kotak Bond Fund- Growth - - 465,943 - - 200.46
UTI Bond Fund -Growth - - 441,319 - - 200.60
IDFC Dynamic Bond - - 1,366,352 - - 250.88
Fund
Investment in arbitrage
funds
HDFC Balanced Fund - - 413,056 - - 439.23
Tata Balanced Fund - - 259,035 - - 423.85
DSP BR Balanced Fund - - 413,307 - - 440.03
ICICI Prudential Equity - - 3,417,969 - - 355.13
Income Fund
ICICI Prudential - - 1,374,705 - - 352.47
Balanced Advantage
Fund
JPMorgan India Equity - - 3,285,737 - - 356.43
Income Fund
Investment in
government bonds
8.40% Indian Railway 40,000 40,000 40,000 466.42 468.74 445.20
Finance Corporation
Limited
7.35% NHAI 2031 (Int 45,000 45,000 492.61 502.36
Pyt date 1Apr)
Investment in Other
Bonds
IIFL SUB DEBT 9.25% 20 220.42
IIFL Perpetual Debt 200 204.95
Product
11% Bank of India 10 10 99.83 104.62
Perpetual Bond
10.40% Vijaya Bank 40 40 406.21 402.12
Perpetual Bond (int pyt
date 31Mar)
5,022.07 4,866.05 4,516.15

214 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

46 Related party transactions

A. 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 27)
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 - Vice President (Customer Relations/Delivery)
Usha Varadarajan - Relative of Whole Time Director - T.S. Varadarajan
Shubhi Nigam - Relative of Managing Director

Key management personnel compensation

Transaction value Balance payable

For the year For the year 31 March 31 March 1 April 2016
ended 31 ended 31 2018 2017
March 2018 March 2017
Salaries, wages and 885.28 565.74 42.50 11.38 11.59
bonus*
Diwakar Nigam 160.35 85.37 8.24 5.02 6.07
T.S. Varadarajan 76.32 42.33 4.53 2.37 2.82
Priyadarshini Nigam 39.28 30.64 2.79 1.79 2.16
Arun Kumar Gupta 75.88 53.46 26.93 2.20 0.54
Virender Jeet 150.19 91.01 82.59 4.39 2.78
Surender Jeet Raj 134.22 85.84 70.59 4.14 3.09
Tarun Nandwani 121.41 74.59 65.72 3.73 0.07
Shubhi Nigam 59.38 12.47 - - -
Sonali Nigam 68.26 90.02 - - -
Dividend paid 699.32 465.92 - - -
(excluding dividend
distribution tax)
Diwakar Nigam 276.34 184.22 - - -
T.S. Varadarajan 225.14 150.09 - - -
Priyadarshini Nigam 119.53 79.69 - - -
Arun Kumar Gupta 0.66 0.37 - - -
Virender Jeet 3.24 2.16 - - -
Surender Jeet Raj 3.16 2.00 - - -
Tarun Nandwani 3.33 2.11 - - -
Usha Varadarajan 67.92 45.28 - - -
Share-based payments 50.46 3.67 - - -
Arun Kumar Gupta 7.51 1.43 - - -
Virender Jeet 16.33 - - - -
Surender Jeet Raj 14.82 - - - -
Tarun Nandwani 11.80 2.24 - - -
* excludes provision for gratuity and leave encashment, as these are determined on the basis of actuarial valuation for the Group as
a whole.

ANNUAL REPORT 2017-18 215

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

47 Financial instruments – Fair values and risk management

i. 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 hierarchy.

31 March 2018 Note Carrying amount Fair value

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 3,336.58 - - 3,336.58 3,336.58 - - 3,336.58
funds
Investments in bonds 10 - 1,685.49 - 1,685.49 1,685.49 - - 1,685.49
Financial assets not
measured at fair value
Other non-current financial 7 - - 554.77 554.77 - - - -
asset
Trade receivables 11 - - 22,201.67 22,201.67 - - - -
Cash and cash equivalents 12 - - 14,548.34 14,548.34 - - - -
Loans 6 - - 612.97 612.97 - - - -
and
13
Other financial assets 14 - - 5,177.19 5,177.19 - - - -
3,336.58 1,685.49 43,094.94 48,117.00 5,022.07 - - 5,022.07
Financial liabilities `
Long-term maturities of 17 - - 1,316.66 1,316.66 - 1,316.66 - 1,316.66
finance lease obligations
(secured)
Short term borrowings 20 - - 4,946.27 4,946.27 - 4,946.27 - 4,946.27
Trade and other payables 21 - - 2,292.10 2,292.10 - - - -
Other financial liabilities 22 - - 3,624.48 3,624.48 - 302.25 - 302.25
- - 12,179.51 12,179.51 - 6,565.18 - 6,565.18

Carrying amount Fair value

31 March 2017 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 3,183.25 - - 3,183.25 3,183.25 - - 3,183.25
funds
Investments in bonds 10 - 1,682.79 - 1,682.79 1,682.79 - - 1,682.79
Financial assets not
measured at fair value
Other non-current financial 7 - - 233.46 233.46 - - - -
asset
Trade receivables 11 - - 19,957.12 19,957.12 - - - -
Cash and cash equivalents 12 - - 3,491.88 3,491.88 - - - -
Loans 6 and - - 299.38 299.38 - - - -
13
Other financial assets 14 - - 2,541.04 2,541.04 - - - -
3,183.25 1,682.79 26,522.88 31,388.92 4,866.04 - - 4,866.04

216 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Carrying amount Fair value

31 March 2017 Note FVTPL FVTOCI Amortised Total Level 1 Level 2 Level 3 Total
Cost
Financial liabilities
Financial liabilities not -
measured at fair value
Long-term maturities of 17 - - 1,617.99 1,617.99 - 1,617.99 - 1,617.99
finance lease obligations
(secured)
Short term borrowings 20 - - 5,226.18 5,226.18 - 5,226.18 - 5,226.18
Trade and other payables 21 - - 1,804.95 1,804.95 - - - -
Other financial liabilities 22 - - 2,903.21 2,903.21 - 302.25 - 302.25
- - 11,552.33 11,552.33 - 7,146.42 - 7,146.42

Carrying amount Fair value

1 April 2016 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 1,703.81 - - 1,703.81 1,703.81 - - 1,703.81
funds
Investments in arbitrage 10 2,367.13 - - 2,367.13 2,367.13 - - 2,367.13
funds
Investments in bonds 10 - 445.20 445.20 445.20 - - 445.20
Financial assets not
measured at fair value
Other Non-current financial 7 - - 174.36 174.36 -
asset
Trade receivables 11 - - 16,435.80 16,435.80 - - - -
Cash and cash equivalent 12 - - 2,431.78 2,431.78 - - - -
Loans 6 and - - 255.67 255.67 - - - -
13
Other financial assets 14 - - 2,451.06 2,451.06 - - - -
4,070.94 445.20 21,748.68 26,264.82 4,516.14 - - 4,516.14
Financial liabilities
Financial liabilities
measured at fair value
Derivative liability 19 136.00 - - 136.00 - - 136.00 136.00
Financial liabilities
Financial liabilities not
measured at fair value
Long-term maturities of 17 - - 1,917.45 1,917.45 - 1,917.45 - 1,917.45
finance lease obligations
(secured)
Short term borrowings 20 - - 5,883.19 5,883.19 - 5,883.19 - 5,883.19
Trade and other payables 21 - - 1,473.16 1,473.16 - - - -
Other financial liabilities 22 - - 2,058.16 2,058.16 - 315.25 - 315.25
- - 11,331.96 11,331.96 - 8,115.89 - 8,115.89
The fair value of trade receivables, cash and cash equivalents, other bank balances, 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.

ANNUAL REPORT 2017-18 217

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

ii) 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

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 Level 1 Market valuation technique: Not applicable Not applicable
debt mutual Investments traded in active
funds 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.
Investments in Level 1
arbitrage funds
Financial assets
measured at
FVTOCI
Investments in Level 1 Market valuation technique: Not applicable Not applicable
bonds The fair value of bonds is
based on direct and market
observable inputs.
Derivative
liability
measured at fair
value
Derivative Level 3 The fair valuation of - Forecast The estimated fair
liability embedded anti dilution annual value would increase
derivative in CCPS as per revenue (decrease) if:
Binomial option pricing growth rate -:the annual revenue
model. The Binomial model - Forecast growth rate were
is an extension of the EBITDA higher (lower)
Black Scholes model and margin - the EBITDA margin
incorporates an optimal - Risk adjusted were higher (lower)
decision making framework discount rate - the risk adjusted
by backward induction. discount rate were
lower (higher)

218 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Particulars Fair value Valuation technique Significant Inter-relationship

hierarchy unobservable between unobservable
inputs inputs and fair vale
measurement
Financial
liabilities
measured at
Amortised cost
Long term Level 2 Discounted cash flow: The Not applicable Not applicable
borrowings valuation model considers
the present value of expected
payment, discounted using a
risk adjusted discount rate.
Short term Level 2
borrowings
There have been no valuation under Level 2. Further, there have been no transfers in either direction for
the years ended 31 March 2018, 31 March 2017 & 31 March 2016.
The Group’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the
end of the reporting period.

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 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 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 Group. The audit committee is assisted in its oversight role by internal
audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and
procedures, the results of which are reported to the audit committee.
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 Company’s
receivables from customers, loan 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:

Particulars As at 31 As at 31 As at 31
March 2018 March 2017 March 2016
Trade receivables 22,201.67 19,957.12 16,435.80
Loans 612.97 299.38 292.29
Cash and cash equivalents 14,548.34 3,491.88 2,431.78
37,362.98 23,748.38 19,159.87

ANNUAL REPORT 2017-18 219

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

To cater to the credit risk for investments 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 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 Group 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 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.
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

Carrying amount
31 March 2018 31 March 2017 1 April 2016
India 7,994.27 6,692.89 4,778.97
USA 4,219.37 3,994.73 2,844.12
EMEA 7,967.17 7,626.81 7,081.34
APAC 2,020.86 1,642.69 1,731.37
22,201.67 19,957.12 16,435.80

The following table provides information about the exposure to credit risk and expected credit loss for
trade receivables from individual customers:

As at 31 March 2018 Gross carrying Weighted- Loss credit-

amount average loss allowance impaired
rate
0-3 months past due 17,111.83 4.03% 690.01 No
3-6 months past due 3,555.53 11.37% 404.32 No
6-9 months past due 1,300.53 20.34% 264.53 No
9-12 months past due 444.07 31.38% 139.34 No
12-15 months past due 534.59 35.89% 191.85 No
15-18 months past due 427.32 41.70% 178.19 No
18-21 months past due 238.08 44.49% 105.93 No
21-24 months past due 306.07 57.04% 174.59 No
above 24 months past due 2,423.47 82.16% 1,991.07 No
26,341.49 4,139.83

220 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

As at 31 March 2017 Gross carrying Weighted- Loss Credit-

amount average loss allowance impaired
rate
0-3 months past due 15,600.31 3.81% 593.93 No
3-6 months past due 1,554.49 9.49% 147.50 No
6-9 months past due 1,058.60 19.30% 204.30 No
9-12 months past due 518.92 33.56% 174.13 No
12-15 months past due 1,822.43 45.42% 827.82 No
15-18 months past due 683.62 51.18% 349.87 No
18-21 months past due 240.07 55.12% 132.32 No
21-24 months past due 319.04 67.09% 214.04 No
above 24 months past due 4,485.61 82.09% 3,682.07 No
26,283.09 6,325.98

As at 1 April 2016 Gross carrying Weighted- Loss Credit-

amount average loss allowance impaired
rate
0-3 months past due 11,310.79 4.79% 542.23 No
3-6 months past due 3,326.87 13.13% 436.95 No
6-9 months past due 789.72 19.42% 153.34 No
9-12 months past due 498.58 24.93% 124.29 No
12-15 months past due 1,647.64 42.55% 701.01 No
15-18 months past due 289.34 52.22% 151.09 No
18-21 months past due 315.48 51.76% 163.29 No
21-24 months past due 242.69 62.71% 152.20 No
above 24 months past due 3,947.83 88.88% 3,508.73 No
22,368.94 5,933.13

Movement in allowance for impairment in respect of trade receivables

Impairment
in trade
receivables
Balance as at 1 April 2016 5,933.12
Impairment loss recognised 1,353.50
Amounts written off 960.64
Balance as at 31 March 2017 6,325.98
Impairment loss recognised 659.26
Amounts written off 2,845.41
Balance as at 31 March 2018 4,139.83

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 Company’s past history, existing market conditions
as well as forward looking estimates at the end of each reporting period.

ANNUAL REPORT 2017-18 221

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Debt securities
The Group limits its exposure to credit risk by investing only in liquid debt securities an only with counterparties
that have a credit rating AA- to AA+ 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

31 March 2018 31 March 2017 1 April 2016

India 5,022.07 4,866.04 2,149.01

Other Regions - - -
5,022.07 4,866.04 2,149.01

Basis experienced credit judgement, no risk of loss is indicative on Group’s investment in mutual funds and
government bonds.

Cash and cash equivalents

The Group held cash and cash equivalents of INR 14,548.34 at 31 March 2018 (31 March 2017: INR 3,491.88 lakhs
1 April 2016: INR 2,431.78 lakhs). The cash and cash equivalents are held with bank and financial institution
counterparties, which are rated AA- to AA+, 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 2018, the Group had a working capital of Rs. 30,615.47 (31 March 2017:
17,000.36 and 31 March 2016: 13,088.09) including cash and cash equivalent of INR 14,548.34 (31 March 2017: 3,491.88 and
31 March 2016: 2,431.78) and current investments of INR 5,022.07 (31 March 2017: 4,866.04 and 31 March 2016: 4,516.14).
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

Particulars Total 2 2-12 1-2 2-5 More

months months years years than 5
or less years
As at 31 March 2018 2,041.27 2,041.27 - - -
As at 31 March 2017 1,773.82 1,773.82 - - -
As at 1 April 2016 116.81 116.81 - - -

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.

222 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Contractual cash flows

31 March 2018 Carrying Total 2 months 2-12 1-2 2-5 More than
amount or less months years years 5 years
Non-derivative financial `
liabilities
Finance lease obligations 1,618.91 6,998.64 - 472.62 437.51 689.18 5,399.33
(including current maturities)
Employee related payables 3,020.61 3,020.61 3,020.61 - - - -
Trade and other payables 2,292.10 2,292.10 2,292.10 - - - -
Pre-shipment loans (secured) 4,946.27 4,946.27 - 4,946.27 - - -
Payable in respect of 47.92 47.92 - 47.92 - - -
retention money
Earnest money deposits 1.00 1.00 - 1.00 - - -
Payable for capital assets 241.35 241.35 - 241.35 - - -
Total 12,168.16 17,547.89 5,312.71 5,709.16 437.51 689.18 5,399.33

Contractual cash flows

31 March 2017 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 obligations 1,920.24 7,506.39 - 507.74 472.62 1,060.84 5,465.18
(including current maturities)
Employee related payables 2,445.69 2,411.84 2,411.84 - - - -
Trade and other payables 1,804.95 1,714.51 1,714.51 - - - -
Pre-shipment loans (secured) 5,226.18 5,226.18 304.94 4,921.24 - - -
Payable in respect of 28.10 28.10 - 28.10 - - -
retention money
Earnest money deposits 0.50 0.50 - 0.50 - - -
Payable for capital assets 126.67 126.67 - 126.67 - - -
11,552.33 17,014.19 4,431.29 5,584.25 472.62 1,060.84 5,465.18

Contractual cash flows

1 April 2016 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 obligations 2,232.70 8,061.79 12.54 542.86 507.74 1,312.52 5,686.12
(including current maturities)
Employee related payables 1,713.80 1,702.40 1,702.40 - - - -
Trade and other payables 1,473.16 1,405.46 1,405.46 - - - -
Pre-shipment loans (secured) 5,883.19 5,883.19 771.60 5,111.60 - - -
Payable in respect of 11.64 11.64 - 11.64 - - -
retention money
Payable for capital assets 17.47 17.47 - 17.47 - - -
11,331.96 17,081.95 3,892.00 5,683.57 507.74 1,312.52 5,686.12
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

ANNUAL REPORT 2017-18 223

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(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.
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 Group 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, GBP, Canadian dolar, Abar Emirates Dhiram, Saudi Riyal,
Singapore dollar and Japanese Yen. 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 March 31, 2017, March 31, 2017 and April 1,
2016 are as below:

Particulars Currency 31 March 2018 31 March 2017 1 April 2016

Amount Amount Amount Amount Amount Amount
in foreign in local in foreign in local in foreign in local
currency currency currency currency currency currency
(lakhs) (lakhs) (lakhs) (lakhs) (lakhs) (lakhs)
Financial assets
Trade and other
receivables*
USD 207.57 13,500.77 219.19 14,210.08 204.70 13,578.21
AED 5.22 92.64 3.54 62.51 0.52 9.40
CAD 8.41 424.85 7.56 368.19 4.90 249.88
EUR 1.55 125.00 1.87 129.74 2.06 154.65
GBP 0.69 63.71 3.71 300.34 1.56 148.15
SAR 7.41 128.63 7.41 128.04 8.48 149.64
SGD 3.34 165.90 2.41 111.86 1.12 54.91
Bank balance-Dubai AED 6.28 111.39 2.07 36.69 2.28 41.11
Travelling Advance to USD 2.12 136.97 1.58 104.65 0.53 34.03
employees
AED 1.45 25.75 0.61 10.98 0.11 2.89
CAD 0.07 3.85 0.02 0.92 0.04 1.88
GBP 0.02 2.13 - - 0.01 0.74
SGD 0.07 3.38 - - 0.03 1.70
EURO 0.10 8.53 0.03 1.98 0.04 3.24
Financial liabilities
Trade and other
payables
USD (3.82) (246.02) (1.63) (107.66) (1.29) (86.93)
GBP - - (0.03) (2.45) -
EURO (0.01) (0.64) (0.03) (2.32) -
Short term borrowings USD (76.05) (4,946.27) (80.60) (5,226.18) (5,883.23)

224 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

* gross of loss allowance

Sensitivity analysis
A reasonably possible strengthening (weakening) of the Indian Rupee against US dollar, Euro, GBP, Canadian
dolar, Abar Emirates Dhiram, Saudi Riyal, Singapore dollar and Japanese Yen 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.

For the year ended For the year ended

31 March 2018 31 March 2017
Effect in thousands of INR Strengthening Weakening Strengthening Weakening
1% movement
USD 84.43 (84.43) 89.82 (89.82)
EUR1 1.32 (1.32) 1.29 (1.29)
GBP1 0.66 (0.66) 2.98 (2.98)
CAD1 4.28 (4.28) 3.68 (3.68)
SGD1 1.69 (1.69) 1.12 (1.12)
AED1 1.37 (1.37) 1.10 (1.10)
SAR1 1.29 (1.29) 1.28 (1.28)
95.05 (95.05) 101.26 (101.26)

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 Group 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 Group’s interest-bearing financial instruments is as follows:

Nominal amount in INR

31 March 2018 31 March 2017 1 April 2016
Fixed-rate instruments
Financial assets 10,613.25 2,695.03 688.95
Financial liabilities (1,618.91) (1,920.24) (2,232.70)
8,994.34 774.79 (1,543.75)
Variable-rate instruments `
Financial assets - - -
Financial liabilities (4,946.27) (5,226.18) (5,883.19)
(4,946.27) (5,226.18) (5,883.19)
Total 4,048.07 (4,451.39) (7,426.94)

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.

ANNUAL REPORT 2017-18 225

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased
(decreased) equity by INR 12.27 lakhs after tax (31 March 2017: INR 17.53 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.

Profit or loss
100 bp 100 bp
increase decrease
31 March 2018
Variable-rate instruments (63.72) 63.72
Cash flow sensitivity (net) (63.72) 63.72
31 March 2017
Variable-rate instruments (52.26) 52.26
Cash flow sensitivity (net) (52.26) 52.26

Market price risk

a) Exposure
The Group’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 Group.

b) Sensitivity analysis
The group is having investment in mutual funds, government bonds and other bonds
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 0.32 lakhs after tax (31 March, 2017: INR
21.96 lakhs ). An equal change in the opposite direction would have decreased equity by INR 0.32 lakhs
after tax (31 March, 2017: INR (21.96) 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 65.26 after tax (31 March,
2017: INR 41.63 lakhs ). An equal change in the opposite direction would have decreased profit or loss by
INR 65.26 after tax (31 March, 2017: INR (41.63) lakhs )

48 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 ordinary shareholders.
The Group 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 2018, 31 March 2017 and 1 April 2016.
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

226 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

As at As at As at
31 March 2018 31 March 2017 1 April 2016
Total liabilities 6,565.18 7,146.42 8,115.89
Less: Cash and cash equivalent 14,548.34 3,491.88 2,431.78
Adjusted net debt (a) (7,983.16) 3,654.54 5,684.11
Total equity (b) 40,522.26 24,994.38 20,525.45
Total equity and net debt (a+b) = c 32,539.10 28,648.92 26,209.55
Capital gearing ratio (a/c) -24.53% 12.76% 21.69%
As a part of its capital management policy the Group ensures compliance with all covenants and other
capital requirements related to its contractual obligations.

49 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 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 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)

B. Information about reportable segments

Year ended 31 March 2018
Particulars Reportable segments
India EMEA APAC USA Total
Segment
Revenue
External revenue 18,071.33 16,840.19 4,431.09 11,900.17 51,242.78
Inter-segment revenue - - - - -
Total Segment Revenue 18,071.33 16,840.19 4,431.09 11,900.17 51,242.78
Segment profit / (loss) before income tax 2,104.27 4,430.81 1,259.56 2,089.39 9,884.03
Segment assets 11,411.31 10,690.11 2,697.44 5,437.93 30,236.79
Segment liabilities 5,555.87 3,674.85 945.07 2,027.94 12,203.73
Capital expenditure during the year 1,217.66 - - 44.97 1,262.63

Year ended 31 March 2017

Particulars Reportable segments
India EMEA APAC USA Total
Segment
Revenue
External revenue 16,922.79 11,651.41 3,007.50 11,128.10 42,709.80
Inter-segment revenue - - - - -
Total Segment Revenue 16,922.79 11,651.41 3,007.50 11,128.10 42,709.80
Segment profit / (loss) before income tax 3,024.73 1,901.69 438.72 1,830.87 7,196.01
Segment assets 8,346.85 9,010.01 2,049.85 4,834.77 24,241.48
Segment liabilities 4,331.83 3,129.52 644.95 1,813.54 9,919.84
Capital expenditure during the year 279.28 1.33 0.78 3.03 284.42

ANNUAL REPORT 2017-18 227

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

C. Reconciliations of information on reportable segments to Ind AS

Particulars Note For the year ended For the year ended
31 March 2018 31 March 2017
(a) Revenue
Total revenue for reportable segments 51,242.78 42,709.80
Elimination of inter-segment revenue -
Total revenue 51,242.78 42,709.80
(b) Profit / (loss) before tax
Total profit before tax for reportable segments 9,884.03 7,196.01
Unallocated amounts:
- Unallocated income 760.98 826.78
- Other corporate expenses 1,231.76 1,190.76
Total profit before tax from operations 9,413.25 6,832.03
(c) Assets
Total assets for reportable segments 30,236.79 24,241.48
Other unallocated amounts 30,665.37 18,503.66
Total assets 60,902.16 42,745.14
(d) Liabilities
Total liabilities for reportable segments 12,203.73 9,919.84
Other unallocated amounts 8,176.17 7,830.92
Total liabilities 20,379.90 17,750.76
C. Information about major customers
No customer individually accounted for more than 10% of the revenues in the year ended 31 March 2018
and 31 March 2017.

50 First Time Adoption of Ind AS

These are the group’s first consolidated statements prepared in accordance with Ind AS. The accounting
policies set out in note 3 have been applied in preparing the financial statements for the year ended 31
March 2018, the comparative information presented in these financial statements for the year ended 31
March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the company’s
date of transition).
In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported
previously in financial statements prepared in accordance with the accounting standards notified under
Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act
(‘previous GAAP’ or ‘Indian GAAP’).
An explanation of how the transition from previous GAAP to Ind AS has affected the Group’s financial
position, financial performance and cash flows is set out in the following tables and notes.
A Exemptions Applied:-
IInd AS 101 First-Time Adoption of Indian Accounting Standards allows first-time adopters certain
exemptions from the retrospective application of certain Ind AS. The Group has applied the following
exemptions:
I Property, plant and equipment
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its
property, plant and equipment as recognised in the financial statements as at the date of transition
to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of
transition after making necessary adjustments for de-commissioning liabilities
This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.
Accordingly, the Group has elected to measure all of its property, plant and equipment and intangible
assets at their previous GAAP carrying value.”

228 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

II Share- based payment transactions

Ind AS 101 gives an option to apply Ind AS 102 Share-based payment only on ESOP’s that are
unvested as on the transition date.
Accordingly, the Group has elected to apply Ind AS 102 i.e. fair value only those options that are
unvested as on the date of transition.
III Cumulative translation differences
As per Ind AS 101, an entity may deem that the cumulative translation differences for all foreign operations
to be zero as at the date of transition by transferring any such cumulative differences to retained earnings.
Accordingly, the group has opted to avail the above exemption.
B The following mandatory exceptions have been applied:
I Estimates
An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with
estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any
difference in accounting policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in
conformity with previous GAAP. The Group made estimates for impairment of financial assets based
on expected credit loss model in accordance with Ind AS at the date of transition and determination
of discounted value of financial instrument carried at amortised cost as these were not required
under previous GAAP.
II Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and
circumstances existing as on the date of transition. Further, the standard permits measurement of
financial assets accounted at amortised cost based on facts and circumstances existing at the date
of transition if retrospective application is impracticable.
Accordingly, the Group has determined the classification of financial assets based on facts and
circumstances that exist on the date of transition. Measurement of the financial assets accounted at
amortised cost has been done retrospectively except where the same is impracticable.
III De-recognition of financial assets and liabilities
Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS
109 prospectively for transactions occurring on or after the date of transition to Ind AS.
However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in
Ind AS 109 retrospectively from a date of the entity’s choosing, provided that the information
needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result
of past transactions was obtained at the time of initially accounting for those transactions.
The Group has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the
date of transition to Ind AS.

ANNUAL REPORT 2017-18 229

230
Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

C Reconciliation of total equity as at 31 March 2017 and 1 April 2016

Particulars Notes to Share Retained Foreign Newgen Newgen Other Securities Capital Share General Total
first time capital earnings currency ESOP ESOP comprehensive Premium redemption options reserve
adoption translation reserve trust income reserve outstanding
reserve reserve reserve
Balance as at 1 April 2016 as per 6,309.41 13,411.45 327.34 0.21 - - 489.79 87.95 16.48 1,731.39 22,374.02
previous GAAP
Derivative D.1 - (136.00) - - - - - - - - (136.00)
Expected Credit loss D.2 - (4,114.79) - - - - - - - - (4,114.79)
Adjustment on account of consolidation D.3 (100.97) - - - 175.75 - (4.35) - - - 70.43
of trust

Newgen Software Technologies Limited

Employee stock compensation expense D.4 - (251.22) - - - - 8.63 - 242.59 - -
Gain/(loss) arising from fair valuation of D.5 - 17.84 - - - (3.37) - - - - 14.46
investments
Gain on discounting of long term D.6 - 92.36 - - - - - - - - 92.36
financial assets and liabilities, net
Measurement of security deposits at D.7 - (7.63) - - - - - - - - (7.63)
amortised costs
Adjustment for dividend D.8 - 775.78 - - - - - - - - 775.78
Lease equalisation reserve D.10 - 19.25 - - - - - - - - 19.25
Reclassification of currency translation D.11 - 327.34 (327.34) - - - - - - - -
differences
Deferred tax on above adjustments D.12 - 1,436.41 - - - 1.17 - - - - 1,437.58
Balance as at 1 April 2016 as per Ind AS 6,208.44 11,570.79 - 0.21 175.75 (2.21) 494.07 87.95 259.07 1,731.39 20,525.45
Balance as at 31 March 2017 as per 6,338.31 18,432.15 222.80 0.21 - - 645.69 87.95 13.09 1,732.08 27,472.28
previous GAAP
Expected Credit loss D.2 - (3,978.71) - - - - - - - - (3,978.71)
Adjustment on account of consolidation D.3 (107.01) - - - 200.22 - (78.57) - - - 14.65
of trust
Employee stock compensation expense D.4 - (377.64) - - - - 32.75 - 346.27 (0.69) 0.69
Gain/(loss) arising from fair valuation of D.5 - 18.55 - - - 23.21 - - - - 41.76
investments
Gain on discounting of long term financial D.6 - 85.59 - - - - - - - - 85.59
assets and liabilities, net
Measurement of security deposits at D.7 - (9.52) - - - - - - - - (9.52)
amortised costs
Remeasurements of post-employment D.9 - 82.88 - - - (82.88) - - - - -
benefit obligations
Lease equalisation reserve D.10 - 10.39 - - - - - - - - 10.39
Reclassification of currency translation D.11 - 327.34 (327.34) - - - - - - - -
differences
Deferred tax on above adjustments D.12 - 1,336.97 - - - 20.28 - - - - 1,357.25
Balance as at 31 March 2018 as per Ind AS 6,231.30 15,928.02 (104.54) 0.21 200.22 (39.40) 599.87 87.95 359.36 1,731.39 24,994.38
 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

D Notes to first time adoption

D.1 Measurement of financial liabilities at amortised cost
The Company had issued certain compulsory convertible preference shares. Under previous GAAP
these were being classified under Equity. Under Ind AS, The embedded derivative liability on
initial recognition has been separated from the underlying equity instrument and recorded at fair
value. The difference between the fair value of the combined CCPS instrument and the fair value
of the embedded derivative liability has been recorded as the value of the equity host contract.
The embedded derivative has been fair valued through profit or loss at each balance sheet date.
Upon conversion of CCPS into equity shares the resultant gain/loss on the down-round derivative is
recognised in profit or loss. The original equity component remains as equity. The impact arising from
the change is summarised below:
Consolidated statement of profit and loss For the year
ended
31 March 2017
Reversal of derivative liability 136.00
Adjustment before income tax 136.00

Consolidated Balance sheet As at As at

31 March 2017 1 April 2016
Derivative liability - 136.00
Adjustment to retained earnings - 136.00

D.2 Expected credit loss

As per Ind AS 109, the Group is required to apply expected credit loss model for recognising the
allowance for doubtful debts. The impact arising from the change is summarised below:
Consolidated balance sheet For the year
ended
31 March 2017
Loss allowance on trade receivables (136.08)
Adjustment before income tax (136.08)

Consolidated balance sheet As at As at

31 March 2017 1 April 2016
Trade receivables (3,978.71) (4,114.79)
Adjustment to retained earnings (3,978.71) (4,114.79)

D.3 ESOP Trust consolidation

In previous GAAP, the ESOP Trust has been considered as a separate legal entity and loan given to trust
has been disclosed as a reduction from share capital and securities premium. However under Ind AS, 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, liabilities, income and expenses of the Company, except for
profit / loss on issue of shares to the employees and dividend received by trust on shares held which are
directly adjusted in the ESOP Trust reserve. The impact arising from the change is summarised below:

ANNUAL REPORT 2017-18 231

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Consolidated balance sheet As at As at

31 March 2017 1 April 2016
Cash and cash equivalents 17.01 74.03
Loans - financial assets (2.00) (2.00)
Current financial assets - Others 0.56 -
Trade payables 0.17 0.25
Share capital (107.00) (100.97)
Capital reserve 200.22 175.75
Securities premium (78.57) (4.35)
Other current liabilities 0.77 1.35
Adjustment to retained earnings - -

D.4 Fair valuation of ESOP’s

Under the previous GAAP, the cost of equity-settled employee share-based plan were recognised using
the intrinsic value method. Under Ind AS, the cost of equity settled share-based plan is recognised based
on the fair value of the options as at the grant date. The impact arising from the change is summarised
below:

Consolidated statement of profit and loss For the year

ended
31 March 2017
Share based payment - equity settled 127.05
Adjustment before income tax 127.05

Consolidated balance sheet As at As at

31 March 2017 1 April 2016
Share options outstanding reserve 346.27 242.59
Securities Premium 32.75 8.63
General reserve (0.69) -
Adjustment to retained earnings 377.64 251.22

D.5 Fair valuation of Investments

Under the previous GAAP, investments in government bonds and mutual funds were classified as
long-term investments or current investments based on the intended holding period and realisability.
Long-term investments were carried at cost less provision for other than temporary decline
in the value of such investments. Current investments were carried at lower of cost and fair value.
Under Ind AS, these investments are required to be measured at fair value. The resulting fair value
changes of these investments (other than equity instruments designated as at FVOCI) have been
recognised in retained earnings as at the date of transition and subsequently in the profit or loss for the
year ended 31 March 2017. The impact arising from the change is summarised below:

Consolidated statement of profit and loss For the year

ended
31 March 2017
Fair value changes of financial assets at FVTPL - other expenses (0.71)
Adjustment before income tax (0.71)

232 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Consolidated Other Comprehensive Income For the year

ended
31 March 2017
Fair value changes of financial assets at FVOCI 26.59
Adjustment before income tax 26.59

Consolidated balance sheet As at As at

31 March 2017 1 April 2016
Current investment 41.76 14.46
Adjustment to retained earnings 41.76 14.46

D.6 Finance lease

Under the previous GAAP, leasehold land is capitalized at the amount of upfront premium paid and
annual rentals paid are charged to profit or loss.
Under Ind AS the finance lease obligations are required to be measured at amortised costs. Accordingly,
the Group has recorded its lease obligations (premium and rentals) at amortised costs. The impact
arising from the change is summarised below:

Consolidated statement of profit and loss For the year

ended
31 March 2017
Interest expense 64.57
Depreciation on leasehold land 8.07
Rent expenses (65.85)
Adjustment before income tax 6.80

Consolidated balance sheet As at As at

31 March 2017 1 April 2016
Leasehold liability 593.73 600.54
Leasehold land 679.61 700.14
Prepayments (32.92) (32.92)
Interest accrued but not due (32.69) (25.69)
Adjustment to retained earnings 85.57 92.36

D.7 Measurement of security deposits at amortised costs

Under the previous GAAP, interest free lease security deposits are recorded at their transaction value.
Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the Group
has fair valued these security deposits under Ind AS. Difference between the fair value and transaction
value of the security deposit has been recognised as prepaid rent. The impact arising from the change
is summarised below:

Consolidated statement of profit and loss For the year

ended
31 March 2017
Interest income 24.16
Rent expenses 25.91
Adjustment before income tax (1.75)

ANNUAL REPORT 2017-18 233

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Consolidated balance sheet As at As at

31 March 2017 1 April 2016
Loans (89.49) (69.71)
Prepayments 80.48 62.07
Adjustment to retained earnings (9.52) (7.63)

D.8 Proposed dividend

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date
but before the approval of the financial statements were considered as adjusting events. Accordingly,
provision for proposed dividend (along with related dividend distribution tax) was recognised as a liability.
Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the
general meeting. The impact arising from the change is summarised below:

Consolidated balance sheet As at As at

31 March 2017 1 April 2016
Short term provision (775.78)
Adjustment to retained earnings 775.78

D.9 Remeasurements of post-employment benefit obligations

Under Ind AS, re-measurements i.e. actuarial gains and losses are directly recognized in equity through other
comprehensive income. Under the previous GAAP such gains and losses were recognized in profit or loss.
The impact arising from the change is summarised below:
Consolidated statement of profit and loss For the year
ended
31 March 2017
Employee benefit expenses (82.88)
Adjustment before income tax (82.88)

Consolidated Other Comprehensive Income For the year

ended
31 March 2017
Re-measurement gain/(loss) on defined benefit obligations 82.88
Adjustment before income tax 82.88

Consolidated balance sheet As at As at

31 March 2017 1 April 2016
Other comprehensive income 82.88 -
Adjustment to retained earnings 82.88 -

D.10 Lease equalisation reserve

Under previous GAAP the Group equalise the escalation impact over the lease term. However under Ind AS,
if the escalation on lease rentals is line with inflation the straight lining of escalation impact is not required.
The impact arising from the change is summarised below:

Consolidated statement of profit and loss For the year

ended
31 March 2017
Rent expenses 8.88
Adjustment before income tax 8.88

234 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Consolidated balance sheet As at As at

31 March 2017 1 April 2016
Other current liabilities (10.39) (19.25)
Adjustment to retained earnings (10.39) (19.25)

D.11 Currency translation differences

As per Ind AS 101, an entity may deem that the cumulative translation differences for all foreign operations
to be zero as at the date of transition by transferring any such cumulative differences to retained earnings.
Accordingly, the group has opted to avail the above exemption. The impact arising from the change is
summarised below:

Consolidated balance sheet As at As at

31 March 2017 1 April 2016
Foreign currency translation reserve - (327.34)
Adjustment to retained earnings - 327.34

D.12 Deferred tax adjustment

Previous GAAP requires deferred tax accounting using the income statement approach, which focuses
on differences between taxable profits and accounting profits for the period. Ind-AS 12 Income Taxes
requires entities to account for deferred taxes using the balance sheet approach, which focuses on
temporary differences between the carrying amount of an asset or liability in the balance sheet and its
tax base. The impact arising from the change is summarised below:
Consolidated statement of profit and loss For the year
ended
31 March 2017
Deferred tax expense 98.94
Adjustment before income tax 98.94

Consolidated other comprehensive income For the year

ended
31 March 2017
Tax impact (19.11)
Adjustment before income tax (19.11)

Consolidated balance sheet As at As at

31 March 2017 1 April 2016
Deferred tax assets 1,357.25 1,437.58
Adjustment to retained earnings 1,357.25 1,437.58

Reconciliation of Equity as at 1 April 2016

Note As at Adjustment As at
31 March 2016 1 April 2016
(IGAAP) (IND AS)
ASSETS
Non-current assets
Property, plant and equipment D.6 5,592.82 700.14 6,292.96
Capital work-in-progress 604.61 - 604.61
Intangible assets 103.01 - 103.01
Financial assets
Loans D.7 & D.3 282.68 (71.71) 210.99

ANNUAL REPORT 2017-18 235

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Note As at Adjustment As at
31 March 2016 1 April 2016
(IGAAP) (IND AS)
Other financial assets 174.36 - 174.36
Deferred tax assets (net) D.12 942.73 1,437.58 2,380.31
Income tax assets (net) 808.71 - 808.71
Other non-current assets D.7 16.00 46.07 62.07
Total non-current assets 8,524.92 2,112.08 10,637.02
Current assets
Financial assets
Investments D.5 4,501.68 14.46 4,516.14
Trade receivables D.2 20,550.59 (4,114.79) 16,435.80
Cash and cash equivalents D.3 2,357.75 74.03 2,431.78
Loans 81.31 - 81.31
Others 2,451.06 - 2,451.06
Other current assets D.6 & D.7 537.81 (16.92) 520.89
Total current assets 30,480.20 (4,043.22) 26,436.98
TOTAL ASSETS 39,005.12 (1,931.15) 37,074.00
EQUITY AND LIABILITIES
Equity
Equity share capital 50C 6,309.41 (100.97) 6,208.44
Other equity
Securities premium 50C 489.80 4.28 494.07
Retained earnings 50C 13,411.41 (1,840.62) 11,570.79
Others (including items of other 50C 2,163.41 88.74 2,252.15
comprehensive income)
Total Equity attributable to the 22,374.03 (1,848.57) 20,525.45
owners of the Company
Non-current Liabilities
Financial liabilities
Borrowings D.6 1,316.91 600.54 1,917.45
Derivative D.1 - 136.00 136.00
Deferred tax liabilities (net) 24.64 - 24.64
Long-Term Provisions 1,121.58 - 1,121.58
Total non-current liabilities 2,463.13 736.54 3,199.67
Current liabilities
Financial liabilities
Borrowings 5,883.19 - 5,883.19
Trade payables D.3 1,472.91 0.25 1,473.16
Other financial liabilities D.6 & 2,103.06 (44.94) 2,058.16
D.10
Deferred Income 3,271.60 - 3,271.60
Other current liabilities D.3 413.18 1.35 414.53
Short term Provisions D.8 1,024.02 (775.78) 248.24
Total current liabilities 14,167.96 (819.12) 13,348.88
Total Liabilities 16,631.09 (82.58) 16,548.55
TOTAL EQUITY AND LIABILITIES 39,005.12 (1,931.15) 37,074.00

236 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Reconciliation of Equity as at 31 March 2017

Note As at Adjustments As at
31 March 2017 31 March 2017
(IGAAP) (IND AS)
ASSETS
Non-current assets
Property, plant and equipment D.6 5,423.52 679.61 6,103.12
Capital work-in-progress 1,108.29 - 1,108.29
Intangible assets 70.43 - 70.43
Financial assets
Loans D.7 & D.3 342.90 (116.21) 226.68
Other financial assets 233.46 - 233.46
Deferred tax assets (net) D.12 1,013.15 1,357.25 2,370.39
Income tax assets (net) 852.41 - 852.41
Other non-current assets D.7 24.91 80.48 105.39
Total non-current assets 9,069.07 2,001.12 11,070.17
Current assets
Financial assets
Investments D.5 4,824.28 41.76 4,866.04
Trade receivables D.2 23,935.82 (3,978.71) 19,957.12
Cash and cash equivalents D.3 3,474.87 17.01 3,491.88
Loans 47.98 24.72 72.70
Others 2,541.04 - 2,541.04
Other current assets D.6 & D.7 778.56 (32.36) 746.19
Total current assets 35,602.55 (3,927.58) 31,674.97
TOTAL ASSETS 44,671.62 (1,926.46) 42,745.14
EQUITY AND LIABILITIES
Equity
Equity share capital 50C 6,338.31 (107.01) 6,231.30
Other equity
Securities premium 50C 645.70 (45.82) 599.87
Retained earnings 50C 18,432.16 (2,504.14) 15,928.02
Others (including items of other comprehensive 50C 2,056.12 179.07 2,235.19
income)
Total equity attributable to the owners of the 27,472.29 (2,477.90) 24,994.38
Company
Non-current Liabilities
Financial liabilities
Borrowings D.6 1,024.26 593.73 1,617.99
Deferred tax liabilities (net) 15.19 - 15.19
Provisions 1,442.97 - 1,442.97
Total non-current liabilities 2,482.42 593.73 3,076.15
Current liabilities
Financial liabilities
Borrowings 5,226.18 - 5,226.18
Trade payables D.3 1,804.78 0.17 1,804.95
Other current financial liabilities D.6 & 2,946.45 (43.22) 2,903.21
D.10
Deferred Income 3,865.50 - 3,865.50
Other current liabilities D.3 545.23 0.77 546.00
Short term Provisions 328.77 - 328.77
Total current liabilities 14,716.90 (42.28) 14,674.61
Total Liabilities 17,199.33 551.45 17,750.76
TOTAL EQUITY AND LIABILITIES 44,671.62 (1,926.45) 42,745.14

ANNUAL REPORT 2017-18 237

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Reconciliation of Total Comprehensive Income for the year ended 31 March 2017
Particulars Note For the year Adjustment For the year
ended ended
31 March 2017 31 March 2017
(IGAAP) (IND AS)
Income
Revenue from operations 42,709.80 - 42,709.80
Other income D.7 & D.1 666.62 160.16 826.78
Total income 43,376.42 160.16 43,536.58
Expenses
Employee benefits expense D.4 & D.9 20,960.47 44.17 21,004.64
Finance costs D.6 461.03 64.57 525.60
Depreciation and amortisation expense D.6 483.75 8.07 491.82
Other expenses D.2 D.5 D.6 D.7 14,849.35 (167.85) 14,682.49
& D.10
Total expenses 36,754.60 (51.04) 36,704.55
Profit before tax 6,621.82 211.20 6,832.03
Tax expense
Current tax 1,641.82 - 1,641.82
Tax expense for earlier years D.12 126.63 - 126.63
Deferred tax (167.37) 98.94 (69.43)
1,601.08 98.94 1,699.02
Profit for the year 5,020.74 112.26 5,133.01
Prior period item
Profit after tax and prior period item
Other comprehensive income/(loss)
Items that will not be reclassified
subsequently to profit or loss
Remeasurement of defined benefit D.9 - (82.88) (82.88)
liability (asset)
Income tax relating to items that will D.12 - 28.31 28.31
not be reclassified to profit or loss
Items that will be reclassified
subsequently to profit or loss
Debt instruments through other D.9 - 26.59 26.59
comprehensive income - net change in
fair value
Income tax relating to items that will D.12 - (9.20) (9.20)
be reclassified to profit or loss
Other comprehensive income/(loss), - 17.39 17.39
net of tax
Total comprehensive income/(loss) 5,020.74 75.08 5,095.83
for the year
Profit attributable to:
Owners of the company 5,020.74 112.26 5,133.01
Profit for the year 5,020.74 112.26 5,133.01

238 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

Particulars Note For the year Adjustment For the year

ended ended
31 March 2017 31 March 2017
(IGAAP) (IND AS)
Other comprehensive income/(loss)
attributable to:
Owners of the company - 17.39 17.39
Other comprehensive income/(loss) - 17.39 17.39
for the year
Total comprehensive income
attributable to:
Owners of the company 5,020.74 75.08 5,095.83
Total comprehensive income for the 5,020.74 75.08 5,095.83
year

51 Standards issued but not yet effective

A Amendment to Ind AS 21:

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On March 28, 2018,
MCA has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing
Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the
date of the transaction for the purpose of determining the exchange rate to use on initial recognition
of the related asset, expense or income, when an entity has received or paid advance consideration in
a foreign currency. This amendment will come into force from April 1, 2018. The Group has valuated the
effect of this on the consolidated financial statements and the impact is not material.
B Amendment to Ind AS 115:
“Ind AS 115- Revenue from Contracts with Customers: On 28 March 2018, Ministry of Corporate Affairs
(“”MCA””) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the
new standard is that an entity should recognise revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be
entitled in exchange for those goods or services.
Under Ind AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e.
when ‘control’ of the goods or services underlying the particular performance obligation is transferred
to the customer.
Moreover, the new standard requires enhanced disclosures about the nature, amount, timing and
uncertainty of revenue and cash flows arising from the entity’s contracts with customers. The standard
permits two possible methods of transition:
• Retrospective approach-Under this approach the standard will be applied retrospectively to each
prior reporting period presented in accordance with Ind AS 8-Accounting Policies, Changes in
Accounting Estimates and Errors
• Retrospectively with cumulative effect of initially applying the standard recognized at the date of
initial application (Cumulative catch - up approach)The effective date for adoption of Ind AS 115 is
financial periods beginning on or after April 1, 2018.
The Group will adopt the standard on April 1, 2018 by using the cumulative catch-up transition method and
accordingly comparatives for the year ending or ended March 31, 2018 will not be retrospectively adjusted.
While, the Group is in the process of implementing Ind AS 115 on financial statement, it is of the view
that the accounting policy for certain streams of revenue and related expenses may undergo a change
primarily on account of estimating and recognizing extended warranty and unspecified free upgrades
in certain contracts and adjusting cost of acquisition of customer.

ANNUAL REPORT 2017-18 239

Notes to the consolidated financial statements
for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

52 Disclosure on Specified Bank Notes

The disclosures regarding details of specified bank notes held and transacted during 8 November 2016
to 30 December 2016 has not been made since the requirement does not pertain to financial year ended
31 March 2018. Corresponding amounts as appearing in the audited financial statements for the year
ended 31 March 2017 have been disclosed as given below;

Particulars Specified Other Total

Bank Notes* denomination
notes
Closing cash in hand as on 8 November 2016 3.96 1.25 5.21
Add: Withdrawal from bank account - 3.80 3.80
Add: Permitted receipts transactions - 1.24 1.24
Less: Permitted payments transactions - 3.60 3.60
Less: Amount deposited in banks accounts 3.96 - 3.96
Closing cash in hand as on 30 December 2016 - 2.69 2.69

For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided
in the notification of the Government of India, in the Ministry of Finance, Department of Economic
Affairs number S.O. 3407(E), dated 8th November 2016.

53 As at 31 March 2018, the Company has gross foreign currency receivables amounting to Rs. 15,310.75 lakhs
(previous year Rs.14,344.84 lakhs). Out of these receivables, Rs.4,253.83 lakhs (previous year Rs.3,754.91
lakhs) is outstanding for more than 9 months. As per Foreign Exchange Management (Current Account)
Rules, 2000 read with Master Circular No. 14/ 2014-15 dated 1 July 2014, receipt for export goods should
be realized within a period of 9 months from the date of export. In case of receivables not being realised
within 15 months from the date of export, prior approval from Reserve Bank of India (RBI) is required.
As per the requirements of Foreign Exchange Management Act, in one calendar year, the Company is
allowed to seek extension for an amount equivalent to 10% of the average collection of the last 3 years
only and pursuant to the same, the Company has filed the extension for foreign currency receivables
amounting to Rs. 1,414.58 lakhs during the year. For remaining receivables, the Company is in the process
of applying for approval to seek extension of time beyond 9 months from export date. The management
is of the view that the Company will be able to obtain approvals from the authorities for realising such
funds beyond the stipulated timeline without levy of any penalties as it had bonafide reasons that caused
the delays in realization.

54 Additional information pursuant to Para 2 of general instruction for the preparation of

consolidated financial statement

31 March 2018 31 March 2017 31 March 2016

As % of Amount As % of Amount As % of Amount
consolidated consolidated consolidated
net assets net assets net assets
Parent
Newgen Software 98.64% 39,971.22 99.10% 24,769.14 100.05% 20,536.28
Technologies Limited
Indian Subsidiary
Newgen Computers 0.14% 57.91 0.21% 53.68 0.24% 50.27
Technologies Limited

240 Newgen Software Technologies Limited

 CORPORATE REVIEW STATUTORY REPORTS FINANCIAL STATEMENTS

Notes to the consolidated financial statements

for the year ended 31st March, 2018
(All amounts are in lakhs of Indian Rupees, unless otherwise stated)

31 March 2018 31 March 2017 31 March 2016

As % of Amount As % of Amount As % of Amount
consolidated consolidated consolidated
net assets net assets net assets
Foreign Subsidiaries
Newgen Software 2.11% 856.68 2.69% 671.20 1.65% 338.93
Inc. USA.
Newgen Software 0.48% 192.69 0.68% 170.48 - -
Technologies UK Ltd.
Newgen Software 0.25% 103.13 0.32% 80.41 0.42% 86.15
Technologies Canada
Ltd.
Newgen Software 0.51% 205.41 0.67% 167.24 0.72% 147.51
technologies PTE Ltd
Adjustment arising -2.13% (864.77) -3.67% (917.78) -3.09% (633.70)
out of consolidation
Total 100% 40,522.26 100% 24,994.38 100% 20,525.45

Name of the enterprise Share in profit and loss after tax

31 March 2018 31 March 2017
As % of Amount As % of Amount
consolidated consolidated
profit and profit and
loss loss
Parent
Newgen Software Technologies Limited 98.03% 7,145.40 94.04% 4,755.21
Indian Subsidiary
Newgen Computers Technologies Limited 0.06% 4.22 0.07% 3.41
Foreign Subsidiaries
Newgen Software Inc. USA. 2.09% 151.98 2.24% 113.11
Newgen Software Technologies UK Ltd. -0.07% (4.99) 0.19% 9.83
Newgen Software Technologies Canada 0.24% 17.13 0.30% 15.16
Ltd.
Newgen Software technologies PTE Ltd 0.06% 4.50 0.39% 19.83
Adjustment arising out of consolidation -0.41% (29.57) 2.77% 140.22
Total 100% 7,288.68 100% 5,056.76

As per our report of even date attached

For B S R & Associates LLP For and on behalf of the Board of Directors of
Chartered Accountants Newgen Software Technologies Limited
Firm Registration No.:
116231W / W-100024
Rakesh Dewan Diwakar Nigam T. S. Varadarajan Arun Kumar Gupta Aman Mourya
Partner Managing Director Whole Time Director Chief Financial Officer Company Secretary
Membership No.: 092212 DIN: 00263222 DIN: 00263115 Membership No: 27299

Place: Gurugram Place: New Delhi Place: New Delhi Place: New Delhi Place: New Delhi
Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018 Date: 17 May 2018

ANNUAL REPORT 2017-18 241

Notes
Notes
Notes
 Reinvent Your Workplace

2017-18
Newgen Software Technologies Limited Annual Report
https://newgensoft.com Newgen Software Technologies Limited