You are here » Home » Companies » Company Overview » Newgen Software Technologies Ltd

Newgen Software Technologies Ltd.

BSE: 540900 Sector: IT
NSE: NEWGEN ISIN Code: INE619B01017
BSE 00:00 | 26 Oct 588.30 -7.95
(-1.33%)
OPEN

624.00

HIGH

624.00

LOW

585.10

NSE 00:00 | 26 Oct 588.70 -7.85
(-1.32%)
OPEN

616.00

HIGH

616.00

LOW

585.30

OPEN 624.00
PREVIOUS CLOSE 596.25
VOLUME 7837
52-Week high 754.70
52-Week low 236.40
P/E 30.05
Mkt Cap.(Rs cr) 4,117
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 624.00
CLOSE 596.25
VOLUME 7837
52-Week high 754.70
52-Week low 236.40
P/E 30.05
Mkt Cap.(Rs cr) 4,117
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Newgen Software Technologies Ltd. (NEWGEN) - Auditors Report

Company auditors report

To the Members of Newgen Software Technologies Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financialstatements of Newgen SoftwareTechnologies Limited ("the Company") which comprise the Standalone BalanceSheet as at 31 March 2021 and the Standalone Statement of Profit and Loss (includingother comprehensive income) Standalone Statement of Changes in Equity and StandaloneStatement of Cash Flows for the year then ended and notes to the standalone financialstatements including a summary of the significant accounting policies and otherexplanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financialstatements give theinformation required by the Companies Act 2013 ("Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31 March 2021and profit and other comprehensive income changes in equity and its cash flows for theyear ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the StandaloneFinancialStatements section of our report. We are independent of the Company in accordancewith the Code of Ethics issued by the Institute of Chartered Accountants of India togetherwith the ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

Description of Key Audit Matter

Revenue from operations (refer note 27 to the standalone financial statements)
The key audit matter How the matter was addressed in our audit
• Revenue relating to implementation services from fixed price contracts is recognised based on percentage of completion method which is estimated by the Company basis the completion of milestones and activities agreed with the customers. Due to complexity and volume of transactions significant judgements are required to estimate percentage of completion and determine timing and accuracy of recognition of revenue. In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
• Evaluated the design and implementation of internal controls and tested the operating effectiveness of internal controls relating to determination of percentage of completion and estimation of efforts required to complete the performance obligation;
• Involved specialists to assess the design implementation and operating effectiveness of key IT controls over the IT environment in which the business systems operate and to test information technology system controls used in recording revenue.
• Selected specific/statistical samples of existing and new contracts and performed the following procedures:
- Inspected key terms including price deliverables timetable and milestones set out in the contract for selected sample of contracts and identified the distinct performance obligations.
- Tested project management tool for budgeted efforts and related percentage completion milestones and establishing accuracy of milestones based on actualisation of efforts for delivered projects.
- Tested the details of activities completed with those stated in the customer contract details of activities completed as provided by the project head and confirmation/acceptance of completion of such activities by the customer.
Trade receivables (refer note 12 to the standalone financial statements)
The key audit matter How the matter was addressed in our audit
• Significant management judgement in determining the recoverable amount of trade receivables as estimating the recoverable amount involves inherent uncertainty. In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
- Obtained an understanding of and assessed the design and implementation of Company's key internal controls relating to debt collection and making provision for doubtful debts;
- Assessed on a sample basis that items in the receivables' ageing report were classified within the correct ageing bracket by comparing individual items in the report with underlying documentation which included sales invoices proof of delivery and customers sign offs;
- Assessed the assumptions and estimates made by the Company for the provision for doubtfuldebts with reference to our understanding of the debtors' financial condition the industry in which the debtors are operating the ageing of overdue balances and historical and post year-end cash receipts from the debtors and by performed a retrospective analysis of the historical accuracy of these estimates; and
- Tested the accuracy and completeness of underlying data for "expected credit loss model".

Other Information

The Company's management and Board of Directors are responsible for theother information. The other information comprises the information included in theCompany's annual report but does not include the standalone financial statements and ourauditors' report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

Management's and Board of Directors' Responsibility for the StandaloneFinancial Statements

The Company's Management and Board of Directors are responsible for thematters stated in section 134(5) of the Act with respect to the preparation of thesestandalone financial statements that give a true and fair view of the state of affairsprofit/loss and other comprehensive income (loss) changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in India

including the Indian Accounting Standards (Ind AS) specified undersection 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internalfinancialcontrols that were operating effectively for ensuring accuracyand completeness of the accounting records relevant to the preparation and presentationof the standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the standalone financialstatements the Management andBoard of Directors are responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless the Board of Directors either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso.

The Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud

or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3) (i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures in the standalone financialstatements made by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board ofDirectors use of the going concern basis of accounting and based on the audit evidenceobtained whether a material uncertainty exists related to events or conditions that maycast significant doubt on the Company's ability to continue as a going concern. If weconclude that a materialuncertainty exists we are required to draw attention in ourauditor's report to the related disclosures in the standalone financial statements or ifsuch disclosures are inadequate to modify our opinion. Our conclusions are based on theaudit evidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial

statements represent the underlying transactions and events in a mannerthat achieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancialstatements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016("the Order") issued by the Central Government in terms of section 143 (11) ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. (A) As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The Standalone Balance Sheet the Standalone Statement of Profit andLoss (including other comprehensive income) the Standalone Statement of Changes in Equityand the Standalone Statement of Cash Flows dealt with by this Report are in agreement withthe books of account.

d) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under section 133 of the Act.

e) On the basis of the written representations received from thedirectors as on 31 March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2021 from being appointed as a director in termsof Section 164(2) of the Act.

f) With respect to the adequacy of the internal financialcontrols withreference to standalone financialstatements of the Company and the operating effectivenessof such controls refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors'Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations as at 31March 2021 on its financial position in its standalone financialstatements - Refer Note 36to the standalone financial statements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.

iv. The disclosures in the standalone financial statements regardingholdings as well as dealings in specified bank notes during the period from 8 November2016 to 30 December 2016 have not been made in these standalone financial statements sincethey do not pertain to the financial year ended 31 March 2021.

(C) With respect to the matter to be included in the Auditors' Reportunder section 197(16):

In our opinion and according to the information and explanations givento us the remuneration paid by the company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.

For B S R & Associates LLP

Chartered Accountants Firm's Registration No.: 116231W / W-100024

Sandeep Batra
Partner
Place: Gurugram Membership No. 093320
Date: 25 May 2021 UDIN:21093320AAAAAS9805

ANNEXURE A

referred to in our Independent Auditors' Report to the members ofNewgen Software Technologies Limited on the standalone financial statements for the yearended 31 March 2021 we report that:

(i) (a) The Company has maintained proper records

showing fullparticulars including quantitative details and situationof fixed assets.

(b) The Company has a regular program of physical verification of itsfixed assets by which all fixed assets are verified in a phased manner over a period oftwo years. In accordance with this programme fixed assets at certain locations wereverified by the management during the year. In our opinion this periodicity of physicalverification is reasonable having regard to the size of the Company and the nature of itsassets. As informed to us no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds and leasedeeds of the immovable properties are held in the name of the Company.

(ii) The Company is a service company primarily engaged in thebusiness of software product development including designing and delivering end-to-endsoftware solutions covering the entire spectrum of software services from workflowautomation to document management to imaging. Accordingly it does not hold any physicalinventories at the end of the year. Thus paragraph 3(ii) of the Order is not applicable.

(iii) The Company has not granted any loans secured or unsecured toCompanies limited liability partnerships firms or other parties covered in the registerrequired under section 189 of the Companies Act 2013. Accordingly para 3(iii) of theOrder is not applicable.

(iv) According to the information and explanations given to us theCompany has not given any loan guarantee and security as specified under section 185 and186 of the Companies Act 2013. Further the investment made by the Company is incompliance with section 186 of the Companies Act 2013.

(v) As per the information and explanations given to us the Companyhas not accepted any deposits as mentioned in the directives issued by the Reserve Bank ofIndia and the provisions of section 73 to 76 or any other relevant provisions of the Actand the rules framed there under.

(vi) The CentralGovernment has not prescribed the maintenance of costrecords under sub section (1) of section 148 of the Companies Act 2013 for any of theactivities carried out by the Company.

(vii) (a) According to the information and explanation given to us andon the basis of our examination of the records of the Company amounts deducted/ accruedin the books of account in respect of undisputed statutory dues including Provident FundEmployees' State Insurance Income- tax Goods and Service tax Duty of customs Cess andother material statutory dues have been regularly deposited during the year by the Companywith the appropriate authorities. As explained to us the Company did not have any dues onaccount of Duty of excise Sales tax Service tax and Value added tax.

According to the information and explanations given to us noundisputed amounts payable in respect of Provident Fund Employees' State InsuranceIncome-tax Goods and Service tax Duty of customs Cess and other material statutory dueswere in arrears as at 31 March 2021 for a period of more than six months from the datethey became payable.

(b) According to the information and explanations given to us thereare no dues in respect of Income tax Goods and Service tax and Duty of customs which havenot been deposited with the appropriate authorities on account of any dispute. Asexplained above the Company did not have any dues on account of Duty of excise Salestax Service tax and Value added tax.

(viii) In our opinion and according to the information andexplanations given to us the Company has not defaulted in repayment of loans/borrowingsto banks. Further there were no dues payable to financial institutions government ordebenture holders during the year or outstanding as at 31 March 2021.

(ix) According to the information and explanations given to us theCompany did not raise any money by way of initial public offer or further public offer(including debt instrument) and did not have any term loans during the year. Accordinglyparagraph 3(ix) of the Order is not applicable to the Company.

(x) According to the information and explanations given to us no fraudby the Company or on the Company by its officers or employees has been noticed or reportedduring the year.

(xi) According to the information and explanations given to us and onthe basis of our examination of the records of the Company managerial remuneration hasbeen

paid/provided by the Company in accordance with provisions of section197 read with Schedule V of the Companies Act 2013.

(xii) According to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) According to the information and explanations given to us and onthe basis of our examination of the records of the Company there are no transactions withrelated parties which are not in compliance with Section 177 and 188 of the Companies Act2013 and the details have been disclosed in the standalone financial statements asrequired by the applicable accounting standards.

(xiv) According to the information and explanation given to us and onthe basis of our examination of the records of the Company the Company has not made anypreferentialallotment private placement of shares and fully or partly convertibledebentures during the year. Accordingly paragraph 3(xiv) of the Order is not applicable.

(xv) According to information and explanations given to us the Companyhas not entered into any non-cash transactions with directors or persons connected withthem. Accordingly paragraph 3(xv) of the Order is not applicable.

(xvi) According to the information and explanations given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

For B S R & Associates LLP

Chartered Accountants Firm's Registration No.: 116231W / W-100024

Sandeep Batra
Partner
Place: Gurugram Membership No. 093320
Date: 25 May 2021 UDIN:21093320AAAAAS9805

ANNEXURE B

to the Independent Auditors' report on the standalone financialstatements of Newgen Software Technologies Limited for the year ended 31 March 2021

Report on the internal financial controls with reference to theaforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143of the Companies Act 2013

(Referred to in paragraph 2(A)(f) under 'Report on Other Legal andRegulatory Requirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference tostandalone financialstatements of Newgen Software Technologies Limited ("theCompany") as of 31 March 2021 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.

In our opinion the Company has in all material respects adequateinternalfinancialcontrols with reference to standalone financial statements and suchinternal financial controls with reference to standalone financial statements wereoperating effectively as at 31 March 2021 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible forestablishing and maintaining internal financial controls based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013 (hereinafterreferred to as "the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternalfinancialcontrols with reference to standalone financial statements based on ouraudit. We conducted our audit in accordance with the Guidance Note and the Standards onAuditing prescribed under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls with reference to standalone financialstatements.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancialcontrols with reference to standalone financial statements were established andmaintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internalfinancial controls with reference to standalone financialstatements and their operating effectiveness. Our audit of internal financialcontrols withreference to standalone financial statements included obtaining an understanding of suchinternal financial controls assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the standalone financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols with reference to standalone financial statements.

Meaning of Internal Financial controls with Reference to StandaloneFinancial Statements

A company's internalfinancialcontrols with reference to standalonefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sinternal financial controls with reference to standalone financial statements includethose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial controls with Reference toStandalone Financial Statements

Because of the inherent limitations of internalfinancial controls withreference to standalone financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For B S R & Associates LLP

Chartered Accountants Firm's Registration No.: 116231W / W-100024

Sandeep Batra
Partner
Place: Gurugram Membership No. 093320
Date: 25 May 2021 UDIN:21093320AAAAAS9805

.