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Newgen Software Technologies Ltd.

BSE: 540900 Sector: IT
NSE: NEWGEN ISIN Code: INE619B01017
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OPEN 421.40
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VOLUME 3167
52-Week high 605.55
52-Week low 320.85
P/E 19.76
Mkt Cap.(Rs cr) 2,957
Buy Price 423.45
Buy Qty 6.00
Sell Price 423.95
Sell Qty 9.00
OPEN 421.40
CLOSE 425.80
VOLUME 3167
52-Week high 605.55
52-Week low 320.85
P/E 19.76
Mkt Cap.(Rs cr) 2,957
Buy Price 423.45
Buy Qty 6.00
Sell Price 423.95
Sell Qty 9.00

Newgen Software Technologies Ltd. (NEWGEN) - Director Report

Company director report

Dear Members

The Board of Directors are pleased to present 30th AnnualReport on Business and Operations of your Company Newgen Software Technologies Limited("the Company" or "Newgen") along with the audited Standalone andConsolidated Financial Statements for the financial year ended 31st March 2022.

1. Company's Affairs and Financial Performance:

Newgen Software Technologies Limited is an enterprise software Companyoffering innovative cloud-based content services and low code process automationtechnologies- changing the way enterprises service their customers enable theiremployees and collaborate with their partners. The three core products of Newgen DigitalAutomation Platform are Contextual Content Services (ECM) Low Code Process Automation(BPM) and Omnichannel Customer Engagement (CCM). During the year the Company also made animportant acquisition to strengthen its platform with AI/ML modelling and data analyticscapabilities. It acquired Number Theory

Software Private Limited an AI/ML data science platform company.Number Theory's platform AI Studio brings intuitive AI/ML to enterprises while unifyingthe entire lifecycle of data engineering from data preparation to model development andmonitoring. Number Theory is expected to bring domain expertise along with a powerfulengine to extract actionable insights in real time. It lets fusion teams build deployand collaborate on the entire modelling lifecycle in low code and on cloud. For moredetails kindly refer the Management Discussion and Analysis Report highlighting theimportant aspects of the business of the Company as annexed with this Report.

Key highlights of the Financial Results of the Company prepared as perthe Indian Accounting Standards (Ind-AS) for the financial year ended 31stMarch 2022 are as under. Wherever applicable the Consolidated Financial Statement is alsobeing presented in addition to the Standalone Financial Statement of the Company.

(Rs in Lakh)

Particulars

Standalone

Consolidated

Financial Year 2021-22 Financial Year 2020-21 Financial Year 2021-22 Financial Year 2020-21
Revenue from Operations 71078.57 61039.47 77896.15 67262.44
Other Income 2993.38 1430.95 2991.20 1503.74
Total Income 74071.95 62470.42 80887.35 68766.18
Operating Expenditure 52966.60 43114.97 58429.80 48071.93
Profit/ loss before Depreciation Finance Costs 21105.35 19355.45 22457.55 20694.26
Exceptional items and Tax Expense
Less: Depreciation/ Amortisation/ Impairment 1532.43 1851.48 1763.03 2014.97
Less: Finance Costs 317.79 534.84 349.16 562.58
Profit /loss before Exceptional items and Tax Expenses 19255.13 16969.13 20345.36 18116.70
Add/(less): Exceptional items - - - -
Profit /loss before Tax Expense 19255.13 16969.13 20345.36 18116.70
Less: Provision for Current Tax 3090.56 4921.12 3369.64 5266.28
Less: Provision for deferred tax (credit)/charge 565.32 288.58 554.25 202.19
Profit after Tax (A) 15599.25 11759.43 16421.47 12648.23
Total Comprehensive Income/Loss (B) (268.34) 115.78 (72.13) 233.47
Total (A+B) 15330.91 11875.21 16349.34 12881.70
Balance of profit /loss for earlier years 43647.14 33286.82 46362.60 35113.48
Less: Dividend paid on Equity Shares during the year for the previous financial year 2448.45 1399.11 2448.45 1399.11
Add: Adjustment of deferred tax - - 6.55 -
Profit available for Appropriation 56797.94 43647.14 60342.17 46362.60
Balance carried to Balance Sheet 56797.94 43647.14 60342.17 46362.60

• On a consolidated basis the Company's revenue from operationsstood at Rs 77896.15 lakh reflecting an increase of 16% in the financial year 2021-22 asagainst Rs 67262.44 lakh in the financial year 2020-21.

• The Company reported the EBITDA (adjusted for other income) ofRs 19466.35 lakh in the financial year 2021-22 stable as against Rs 19190.51 lakh inthe financial year 2020-21.

• Consolidated Profit after Tax for the year stood at Rs 16349.34lakh compared to Rs 12648.23 Lakh reflecting an increase of 30% in the financial year2021-22.

2. Material Changes if any Affecting the Company:

There have been no material changes and commitments which affect thefinancial position of the Company which has occurred between the end of the financial yearto which the financial statements relate and the date of this Report. There is no changeof nature of business of the Company during the financial year 2021-22.

3. Impact of Covid-19 Pandemic:

The ongoing Covid-19 pandemic has drastically changed the globaleconomies and businesses. Newgen has also kept pace with the changing requirements of theindustry customers employees and other stakeholders to fully support them in theuncertain environment. Newgen has a resilient business model in place with large annuityrevenue streams i.e. recurring business from existing customers as well as diversificationacross verticals clients and geographies. The Company continues to provide uninterruptedsupport to its customers at locations and remotely. Understanding the changingrequirements of the workforce and the need to provide a safe work environment the Companyhas chosen a hybrid work model supported by the Company's preemptive measures businesscontinuity processes and robust IT infrastructure. During the past one year we haveremained focused on providing the necessary assistance guidance and support to Newgeniteand their families. For more details kindly refer the Management Discussion and AnalysisReport as annexed with this Report.

4. Industry Overview:

For details on Industry overview important changes in the industrybusiness outlook and economic outlook kindly refer the Management Discussion and AnalysisReport as annexed with this Report.

5. Transfer to General Reserve:

Your directors have decided not to transfer any amount to the generalreserve during the financial year 2021-22.

6. Dividend:

Considering the Company's financial performance your Board ofDirectorshas recommended a payment of dividend at a rate of Rs 4.5/- per equity share (i.e. 45% onthe paid-up capital of the Company) for the financial year ended 31st March2022 (dividend declared in previous year was Rs 3.5 per equity share

i.e. 35%) payable to shareholders whose names appear in the Registerof Member as on Record Date subject to the approval of the Members at the ensuing 30thAnnual General Meeting ("AGM") of the Company. The total outgo for such dividendwill amount to Rs 3148.01 Lakh.

The Company has formulated a Dividend Distribution Policy whichincludes the circumstances under which the member may/ may not expect dividend thefinancial parameters internal and external factors utilization of retained earningsparameters with regard to different classes of shares. The provisions of this Policy arein line with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("SEBI Listing Regulations") and the Policy is available onthe website of the Company at https://newgensoft.com/.

The Details of unpaid and unclaimed amounts related with earlieryears lying with the Company is uploaded on Company's website https://newgensoft.com/ andIEPF Authority website http://www.iepf.gov.in/

Pursuant to the provisions of Section 124 of the Act those dividendamounts which have remained unpaid or unclaimed for a period of seven consecutive yearsare required to be transferred to the Investor Education and Protection Fund (‘IEPF')established pursuant to Section 125 of the Act. As on 31st March 2022 no suchunpaid or unclaimed dividend amount is required to be transferred to IEPF. The contactdetails of the Nodal Officer Mr. Aman Mourya Company Secretary of the Company asrequired under the provisions of IEPF rules are available on the website of the Companyhttps://newgensoft.com/

7. Subsidiary Companies:

As on 31st March 2022 the Company has seven wholly - ownedsubsidiaries as below. There has been no material change in the nature of the business ofthese subsidiaries.

1. Newgen Software Inc. USA. (Incorporated in USA)

2. Newgen Software Technologies Pte. Ltd.

(Incorporated in Singapore)

3. Newgen Software Technologies Canada Ltd.

(Incorporated in Canada)

4. Newgen Software Technologies (UK) Limited.

(Incorporated in UK)

5. Newgen Software Technologies Pty Ltd.

(Incorporated in Australia)

6. Newgen Computers Technologies Limited.

(Incorporated in India).

7. Number Theory Software Private Limited.

(Incorporated in India).

During the year the Company acquired Number Theory Software PrivateLimited on 28th January 2022. There are no associate companies or joint venturecompanies within the meaning of Section 2(6) of the Companies Act 2013 ("Act").There are no such other companies that have become or ceased to be the subsidiaryassociate or joint venture of the Company during the financial year 2021-22.

The Consolidated Financial Statements of the Company for the financialyear ended 31st March 2022 are prepared in compliance with the applicableprovisions of the Act including Indian Accounting Standards specified under Section 133of the Act. The audited Consolidated Financial Statements together with the Auditors'Report thereon forms part of this Report. The statement containing salient features of thefinancial statement of subsidiaries is enclosed herewith in form AOC-1 as "Annexure-1" to this Report.

Financial statements of the aforesaid subsidiary companies are keptopen for inspection by the Members at the Registered Office of the Company during businesshours on all days except Saturday & Sunday up to the date of the AGM as required underSection 136 of the Act. Any Member desirous of obtaining a copy of the said financialstatements may write to the Company at its Registered Office or to the Compliance Officerof the Company. The financial statements of the subsidiaries including the ConsolidatedFinancial Statements and all other documents required by law to be attached thereto havealso been uploaded on the website of the Company at https://newgensoft.com.

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

8. Capital Structure:

During the financial year 2021-22 the Authorised Share Capital of theCompany remains unchanged. During the financial year the Company has not issued anyshares or convertible securities. The issued subscribed and paid-up equity share capitalof the Company continue to stand at Rs 699557010 divided into 69955701 equity sharesof Rs 10/- each as on 31st March 2022.

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

9. Employee Share Based Scheme:

As on 31st March 2022 the Company has in place followingSchemes: -

a) Newgen Employees Stock Option Scheme-2014

("Newgen ESOP 2014"). Newgen ESOP 2014 is administered by theNomination & Remuneration Committee of the Board through Newgen ESOP Trust. Thedetails on Options granted exercised vested and lapsed during the financial year

2021-22 and other particulars as required under the Act read with itsrules and SEBI (Share Based Employee Benefits & Sweat Equity) Regulations 2021 inrespect to this Scheme are enclosed herewith as "Annexure - 2" to this Report.

b) Newgen Software Technologies Restricted Stock Units Scheme - 2021("Newgen RSU - 2021"). Newgen RSU - 2021 is also operated and administered bythe Nomination & Remuneration Committee of the Board through Newgen RSU Trust.Particulars required under the Act read with its rules and SEBI (Share Based EmployeeBenefits & Sweat Equity) Regulations 2021 in respect to this scheme is enclosedherewith as "Annexure - 2A" to this Report.

10. Credit Rating and Liquidity:

As the Company has not issued any debt instruments or accepted anyfixed deposits the Company was not required to obtain credit ratings in respect of thesame. The credit rating from CRISIL Limited during the financial year 2021-22 for bankfacilities is CRISIL A2+ for the short term.

Our principal sources of liquidity are cash and cash equivalents andthe cash flow that we generate from our operations. The Company follows a conservativeinvestment policy and invests in high-quality debt instruments and bonds. As on 31stMarch 2022 on a standalone basis cash and cash equivalents were Rs 5379.36 Lakh and inaddition to that Rs 9237.76 Lakh was invested in mutual funds & bonds and Rs27675.32 Lakh in current and non-current fixed deposits with Banks and NBFC.

As of 31st March 2022 on a consolidated basis cash andcash equivalents were Rs 10363.99 Lakh and in addition to that Rs 9237.76 Lakh wasinvested in mutual funds & bonds and 27675.32 Lakh in current and non-current fixeddeposits with Banks and NBFC.

11. Directors and Key Managerial Personnel:

The Company has a professional Board with an optimum combination ofexecutive and nonexecutive directors who bring to the table the right mix of knowledgeskills and expertise. The Board provides strategic guidance and direction to the Companyin achieving its business objectives and protecting the interest of stakeholders.

In accordance with Section 152 of the Act Mr. Diwakar Nigam(DIN:00263222) who has been longest in the office since inception is liable to retire byrotation at the ensuing 30th Annual General Meeting and being eligible seeksre-appointment. The Board recommends his appointment for the approval of the members ofthe Company in the ensuing 30th AGM.

Mr. Saurabh Srivastava has been appointed as an Independent Directorwith effect from 30th August 2017 for a first term of 5 (five) years andaccordingly his first term as an Independent Director will be ended on 29thAugust 2022.

Mr. Subramaniam Ramnath Iyer has been appointed as an IndependentDirector of the Company with effect from for a first term of 5 (five) years andaccordingly his first term as an Independent Director will be ended on 21stNovember 2022.

The Nomination and Remuneration Committee on the basis of theperformance evaluation of Mr. Saurabh Srivastava and Mr. Subramaniam Ramnath Iyer hasrecommended to the Board that the continued association of Mr. Saurabh Srivastava and Mr.Subramaniam Ramnath Iyer as Independent Directors would be beneficial to the Company.Based on the above and their performance evaluation the Board recommends there-appointment of Mr. Saurabh Srivastava and Mr. Subramaniam Ramnath Iyer as anIndependent Directors for a second term of 5 (five) consecutive years commencing from 30thAugust 2022 to 29th August 2027 and 22nd November 2022 to 21stNovember 2027 respectively.

During the financial year 2021-22 The Board of Directors with therecommendation of the Nomination & Remuneration Committee has promoted and designatedMr. Virender Jeet as Chief Executive Officer ("CEO") and Mr. Tarun Nandwani asChief Operating Officer ("COO") of the Company with effect from 1stSeptember 2021.

The details required pursuant to sub-section 12 of Section 197 of theAct read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and SEBI Listing Regulations in respect of employees of theCompany is enclosed herewith as "Annexure - 3" to this Report.

Declaration of Independence by Independent Directors

During the year under review all Independent Directors have givendeclarations that they meet the criteria of independence as laid down under Section 149(6)of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations. The IndependentDirectors have also given declaration of compliance with Rules 6(1) and 6(2) of theCompanies (Appointment and Qualification of Directors) Rules 2014 with respect to theirname appearing in the data bank of Independent Directors maintained by the IndianInstitute of Corporate Affairs. In the opinion of the Board of Directors all theIndependent Directors have relevant integrity skills expertise experience andproficiency.

Board and Committee Meetings

The number and dates ofmeetings of the Board and its Committees are setout in the Corporate Governance Report which forms the part of this Report. Theintervening gap between Board Meetings was within the period prescribed under theprovisions of Section 173 of the Act and SEBI Listing Regulations.

The Composition of Audit Committee and other statutory committeesconstituted by the Board under the provisions of the Act & SEBI Listing Regulationsalong with number and dates of meetings of such committees are set out in the CorporateGovernance Report which forms the part of this Report.

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

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

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

a) Formulating the criteria for determining qualifications positiveattributes and independence of a Director and recommend to the Board a policy/ frameworkrelating to the remuneration of Directors Key Managerial Personnel and Senior ManagementPersonnel and other employees.

b) To provide guidance to the Board and the Committee in relation toappointment/ removal of Directors Key Managerial Personnel and Senior ManagementPersonnel.

c) Formulating the criteria for evaluation of performance ofChairperson Independent Directors non-Independent Directors and the Board of Directorsas a whole.

d) To devise a policy on diversity of Board of Directors and to build aSuccession Plan for appointment to the Board of Directors KMPs and Senior ManagementPersonnel.

e) To retain motivate and promote talent and to ensure long termsustainability of talented managerial persons and create competitive advantage.

Company's Policy on directors' appointment and remuneration includingcriteria for determining qualification positive attributes independence of a directorand other matters provided under section 178(3) of the Act is available on the website ofthe Company at https://newgensoft.com.

Board effectiveness

a) Familiarization program for Independent Directors

Over the years the Company has developed a familiarization process forthe newly appointed Directors with respect to their roles and responsibilities way aheadof the prescription of the regulatory provisions. The process has been aligned with therequirements under the Act and other related regulations. This process inter alia includesproviding an overview of the Company's business model Industry the risks andopportunities the new products Innovations Sustainability measures etc.

b) Annual evaluation of the performance of the Board its committeesand of individual directors

The Board carries out annual performance evaluation of its ownperformance the Directors individually as well as the evaluation of the working of itsvarious Committees as mandated under the Act and the SEBI Listing Regulations.

The details of training and familiarisation programmes and annualevaluation process for directors Board and its Committees are set out in the CorporateGovernance Report which forms the part of this Report.

12. Internal Control Systems and their Adequacy:

Based on the framework of internal financial controls and compliancesystems established and maintained by the Company the work performed by the internalstatutory and secretarial auditors and external consultants including the audit ofinternal financial controls over financial reporting by the statutory auditors and thereviews performed by management and the relevant Board Committees including the AuditCommittee the Board is of the opinion that the Company's internal financial controls wereadequate and effective during the financial year 2021-22. For more description kindlyrefer the Management Discussion and Analysis Report as annexed with this Report.

13. Quality Systems & Information Security Initiative:

Newgen has sustained its commitment to the highest levels of qualityrobust information security and privacy management practices that have collectively helpedin achieving a significant milestone during the financial year 2021-22. Newgen's Qualityand Information Security system has been a steady journey starting from 1997. The same isevident from implementing and third-party certification against the best of industrystandards namely ISO 9001 ISO 27001 ISO 27017 ISO 27018 and CMMI Dev with processimprovement and resulting Customer/ Employee benefits as the core objective. Emphasis hasbeen on System driven transparent process which delivers exceptional quality first timeright with the required level of security.

14. Audit Reports And Auditors:

Secretarial Auditor and its Report

The Board of Directors of your Company re-appointed M/s Aijaz &Associates Company Secretaries in Practice as Secretarial Auditors of the Company toconduct Secretarial Audit for the financial year 202122. The Secretarial Audit Report forthe financial year ended 31st March 2022 is enclosed herewith as"Annexure-4" to this Report. The Secretarial Audit Report for the financialyear2021-22 does not contain any qualification reservation or adverse remarks.

Statutory Auditors and its Report

M/s Walker Chandiok & Co LLP Chartered Accountants (FirmRegistration No 001076N/ N500013) have been appointed at the 29th AnnualGeneral Meeting to hold office as statutory auditors till the conclusion of the 34thAGM of the Company. There are no qualifications reservation or adverse remarks ordisclaimer in the Auditor's Report for the financial year ended 31st March2022.

Cost Auditors.

In terms of Section 148 of the Act and the Companies (Cost Records andAudit) Rules 2014 Cost Audit is not applicable to the Company for the financial yearended 31st March 2022.

15. Reporting of Frauds by Auditors:

During the financial year 2021-22 neither the statutory auditors northe secretarial auditors have reported to the Audit Committee under sub-section (12) ofsection 143 of the Act any instances of fraud committed against the Company by itsofficers or employees.

16. Deposits:

During the financial year 2021-22 the Company has not accepted anyfixed deposit within the meaning of Section 73 of the Act and the rules made thereunder.

17. Particulars of Loans Guarantees or Investments Under Section 186of the Act:

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

18. Particulars of Contracts or Arrangements with Related Parties:

There were no contracts or arrangements or transactions entered withrelated parties during the financialyear 2021-22 which were not at arm's length basis.There are no material related party transactions made by the Company with PromotersDirectors Key Managerial Personnel's or others which may have a potential conflict withthe interest of the Company at large. None of the Directors and KMPs has any materialpecuniary relationships or transactions visa-vis the Company except remuneration as perterms of their respective appointments. A statement giving details of all related partytransactions is placed before the Audit Committee and the Board of Directors on aquarterly basis. The disclosure of related party transactions as required under Section134(3)(h) of the Act in Form AOC-2 is enclosed herewith as "Annexure-5" to thisReport.

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

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

19. Details of CSR Policy and Initiative Taken During the FinancialYear 2021-22:

Company's CSR Policy is established by the Board of Directors with therecommendation of the CSR Committee. Corporate social responsibility (CSR) for Newgengoes beyond charity and volunteering. CSR is an integral part of our Company culturerooted in our values as an organization. Newgen is committed to make efforts for thenation's social economic and environmental good. Objective of the CSR Policy is to makeCSR a key business process for the sustainable development of whole communities. We aim toactively contribute to the holistic development of underprivileged children specifically.Our efforts are concentrated on raising thehuman development index in India by enhancingchildren's quality of education and life. The CSR policy lays down the principles/ processon identification selection implementation of CSR activities & programmes keeping inmind the Company's CSR vision. It also provides the framework to monitor & evaluatethe CSR activities & programmes in accordance with the provisions of the Act. Furtherbrief outline on the initiatives undertaken by the Company on CSR activities during thefinancial year 2021-22 is enclosed herewith as "Annexure-6" Other detailsregarding Company's CSR activities and CSR Policy are available on the website of theCompany at: https://newgensoft.com.

20. Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo:

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

a. Details of Conservation of energy.

The Company is committed to conserve the environment by adopting the"Go Green Initiatives" and being responsible for energy and water management inits area of operations and perform energy efficiency by consuming energy and water in anefficient economical and environment friendly manner throughout all its premises. Theoperations of your Company do not consume high levels of energy. As the cost of energyconsumed by your Company forms a very small portion of the total costs the impact ofchanges in energy cost on total costs is not significant. Your Company is on a constantlook out for newer and efficient energy conservation technologies and introduces themappropriately. Following initiatives have been taken by the Company time to time.

• Adequate measures have been taken to conserve energy by usingenergy-efficient computers LED lightings and related equipment's with the latesttechnologies.

• Installation of PNG Genset capacity of 125 KVA for emergencyefficiency.

• Installation of Solar panel for renewable energy.

• Installed a PNG Gas pipeline in the office kitchen/ cafeteria.

• Wastewater from the RO plant is being recycled to conservewater.

• Aontinuous monitoring of floor areas after normal working hoursand switching off lights and air-conditioning.

• Installation of chillers graded with VFD in HVAC plant to reduceenergy consumption immensely has been and is being done.

• Installation of auto controls over running hours of some ACequipment's in areas like Hub Rooms UPS Rooms Cafeteria Audi etc has been done.

Capital Investment on Energy conservation equipment during the year:Due to the COVID-19 Pandemic and work from home the Company's energy consumption during2021-22 was minimal. Hence the Company did not make any further capital investment onenergy conservation during this financial year.

b. Technology Absorption Adaptation and Innovation.

The Company realises the importance of innovation and constantimprovement in key areas of business. We are focused on driving innovation and adoptingsolutions in line with rapidly evolving technological trends. Our inherent culture ofinnovation has enabled us to develop a track record of product innovation expand therange of our offerings and improve the delivery of our products and services. We have adedicated team of skilled individuals with technical background and domain expertise ineach of our industry verticals with a focus on evolving technologies. These teams follow astructured innovation and solutions development process and work with delivery functionsto identify the key concerns of our customers and generate solutions ideas and conceptsto address such concerns.

Newgen continually invests in research and development related to thetechnologies that power digital transformation for organisations. This year we have grownour patent portfolio across key content services technologies having obtained 5 patentstaking the total to 23. Newgen with its integrated robust and scalable digitalautomation platform continues to enable its customers by helping them deliver process andcontent applications—ranging from simple and wide to deep and complex. The platformwith low code development capability leverages our industry-recognized products - lowcode process automation (BPM) contextual content services (ECM) and omnichannel customerengagement (CCM)—to manage enterprisewide processes content and communications.Newgen focuses on advanced application design and development capabilities to strengthenits offering while also continuously enhancing its deployment technology stack enablingcompliance security and scalability for enterprise needs. In line with changing marketrequirements we continually develop new business capabilities/modules/products to caterfor the ever-changing businesses.

The Company acquired an AI/ML data science platform company NumberTheory Software

Private Limited in the financial year 202122. With this acquisitionNewgen will further enhance its low code digital transformation platform NewgenONEmaking it well-positioned to deliver cloud-native AI/ML capabilities to every enterprise

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

c. Research and Development.

The Company has made and will continue to make significant investmentsin software product research and development and related product opportunities. Forfiscals 2021 2020 2019 and 2018 the Company spent 12.79% 10.74% 9.23% and 8.67% (as aproportion of our total expenditure) respectively on research and development. For fiscal2022 under review the Company had spent 13.14% (as a proportion of the total expenditure)on research and development. We believe that the industry in which we compete witnessesrapid technological advances in software development due to constantly evolving customerpreferences and requirements. The Company believes that emphasis on R&D has enabled usto remain up-to-date with the technological developments as well as to cater to theevolving needs of our customers.

d. Foreign Exchange Earnings and Outgo

(Rs in Lakh)

Particulars 31st March 2022 31st March 2021
Foreign Exchange 49768.08 41348.22
Earnings
Foreign Exchange 9886.33 7865.10
Outgo

21. Risk Management:

The Board of Directors of the Company have constituted a RiskManagement Committee to inter- alia assist the Board in overseeing the responsibilitieswith regard to identification evaluation and mitigation of operational strategic andexternal environmental risks. The details of Risk Management Committee are included in theCorporate Governance Report which forms the part of this report.

The Company has also laid down a Risk Management Policy defining Riskprofiles involving Strategic Technological Operational Financial OrganizationalLegal and Regulatory risks within a well-defined framework. The Risk Management Policyacts as an enabler of growth for the Company by helping

its businesses to identify the inherent risks assess evaluate andmonitor these risks continuously and undertake effective steps to manage these risks. Moredetails on Risk Management including identification of risks and their mitigation arecovered in the Management Discussion & Analysis Report which forms part of thisreport.

Risk Management policy is available on the website of the Company at:https://newgensoft.com.

22. Whistle Blower Policy/ Vigil Mechanism for Directors and Employees:

The Company has adopted a Whistle Blower Policy and Vigil Mechanismthat provides a mechanism to report violations any unethical behaviour suspected oractual fraud violation of the Code of Conduct including providing adequate safeguardsagainst victimisation. During the financial year 2021-22 no case was reported underWhistle Blower Policy of the Company.

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

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

23. Details of Significant and Material Orders Passed by the Regulatorsor Courts or Tribunals Impacting the Going Concern Status and Company's Operations inFuture:

Nil

24. Web Address for Annual Return:

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

25. Business Responsibility Report:

At a time and age when enterprises are increasingly seen as criticalcomponents of the social system they are accountable not merely to their shareholdersfrom a revenue and profitability perspective but also to the larger society which is alsoits stakeholder. Business responsibility report describing the initiatives taken by theCompany from an environmental social and governance perspective in the format asspecified by SEBI is enclosed herewith as "Annexure - 7" to this Report.

26. Corporate Governance:

The report on Corporate Governance as stipulated under the SEBI ListingRegulations forms an integral part of this Report and the same is enclosed herewith as"Annexure - 8" to this Report. The requisite compliance certificate fromSecretarial Auditor confirming compliance of conditions of Corporate Governance is alsoattached with the Corporate Governance Report.

27. Management Discussion and Analysis:

The Management Discussion and Analysis Report highlighting theimportant aspects of the business of the Company is enclosed herewith as "Annexure9" to this Report.

28. Other Disclosures:

a) Your Company has complied with the provisions including relating tothe Constitution of Internal Complaints Committee of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013. The details related with theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013is set out in the Corporate Governance Report which forms the part of this report.

b) No application was made or any proceeding pending under theInsolvency and Bankruptcy Code 2016 (31 of 2016) during the financialyear 2021-22.

c) the details of difference between amount of the valuation done atthe time of one-time settlement and the valuation done while taking loan from the Banks orFinancial Institutions along with the reasons thereof. - Not Applicable

d) No case/ complaint was reported under Child labour/ forced labour/involuntary labour and Discriminatory employment related matters in the financial year2021-22.

e) The Company complies with all applicable mandatory secretarialstandards issued by the Institute of Company Secretaries of India.

29. Directors' Responsibility Statement:

In terms of Section 134(5) of the Act the Directors would like tostate that:

I. In the preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departuresif any.

II. The Directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that were reasonable and prudent so asto give a true and

fair view of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company for the year under review.

III. The Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.

IV. The Directors had prepared the annual accounts on a going concernbasis.

V. The Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively.

VI. The Directors had devised proper system to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

30. Cautionary Statements:

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

31. Appreciation:

Your directors take this opportunity to thank all the memberscustomers vendors investors bankers and other stakeholders for their confidence andcontinued support during the financial year 2021-22. Directors place on record theirappreciation of the contribution made by employees at all levels which has continued tobe the major strength of the Company.

For and on behalf of Board of Directors
Diwakar Nigam
Date: 03.05.2022 Chairman & Managing Director
Place: New Delhi DIN: 00263222

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