g. Provisions (other than for employee benefits)
A provision is recognised if, as a result of a past event,
the Company has a present legal or constructive
obligation that can be estimated reliably, and it is
probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are
determined by discounting the expected future
cash flows (representing the best estimate of the
expenditure required to settle the present obligation
at the balance sheet date) at a pre-tax rate that
reflects current market assessments of the time
value of money and the risks specific to the liability.
The unwinding of the discount is recognised as
finance cost. Expected future operating losses are
not provided for. Provisions are reviewed by the
management at each reporting date and adjusted
to reflect the current best estimates.
Onerous contracts
A contract is considered to be onerous when the
expected economic benefits to be derived by the
Company from the contract are lower than the
unavoidable cost of meeting its obligations under
the contract. The provision for an onerous contract
is measured at the present value of the lower of the
expected cost of terminating the contract and the
expected net cost of continuing with the contract.
Before such a provision is made, the Company
recognises any impairment loss on the assets
associated with that contract.
h. Contingent liabilities
A contingent liability is a possible obligation that
arises from past events whose existence will be
confirmed by the occurrence or non-occurrence
of one or more uncertain future events beyond the
control of the Company or a present obligation that
is not recognised because it is not probable that an
outflow of resources will be required to settle the
obligation, or a present obligation whose amount
cannot be estimated reliably. The Company does
not recognize a contingent liability but discloses its
existence in the financial statements.
i. Revenue
Revenues from customer's contracts are
considered for recognition and measurement
when the contract has been approved by the
parties, in writing, to the contract, the parties
to contract are committed to perform their
respective obligations under the contract, and
the contract is legally enforceable. Revenue is
recognized upon transfer of control of promised
products or services ("performance obligations”)
to customers in an amount that reflects the
consideration the Company has received
or expects to receive in exchange for these
products or services ("transaction price”). When
there is uncertainty as to collectability, revenue
recognition is postponed until such uncertainty
is resolved. Based on the assessment of
contractual arrangements, there are no
discounts, rebates, incentives, or other forms of
variable consideration applicable to the revenue
recognized during the reporting period.
i. Sale of License
Revenue from sale of licenses for
software products is recognised when the
significant risks and rewards of ownership
have been transferred to the buyer which
generally coincides with delivery of
licenses to the customers, recovery of the
consideration is probable, the associated
costs and possible return of software
sold can be estimated reliably, there is
no continuing effective control over, or
managerial involvement with the licenses
transferred and the amount of revenue can
be measured reliably.
ii. Rendering of services
Revenue from services rendered is
recognized in proportion to the stage
of completion of the transaction at
the reporting date. Efforts or costs
expended have been used to measure
progress towards completion as there
is a direct relationship between input
and productivity.
Software Implementation Services
The revenue from fixed price contracts for
software implementation is recognized
based on proportionate completion
method based on hours expended, and
foreseeable losses on the completion of
contract, if any are recognized immediately.
Efforts or costs expended have been used
to determine progress towards completion
as there is a direct relationship between
input and productivity. Progress towards
completion is measured as the ratio of costs
or efforts incurred to date (representing
work performed) to the estimated total
costs or efforts. Estimates of transaction
price and total costs or efforts are
continuously monitored over the lives of
the contracts and are recognized in profit
or loss in the period when these estimates
change or when the estimates are revised.
Revenues and the estimated total costs or
efforts are subject to revision as the contract
progresses. Provisions for estimated losses,
if any, on uncompleted contracts are
recorded in the period in which such losses
become probable based on the estimated
efforts or costs to complete the contract.
The Company is also involved in time and
material contracts and recognizes revenue
as the services are performed.
Annual Technical services
Revenue from annual technical service
and maintenance contracts is recognised
ratably over the term of the underlying
maintenance arrangement.
iii. Sale of right to use software
Software-as-a-service, that is, a right to
access software functionality in a cloud-
based-infrastructure provided by the
Company. Revenue from arrangements
where the customer obtains a "right to
access” is recognized over the access period.
Revenue from client training, support and
other services arising due to the sale of
license is recognized as the performance
obligations are satisfied.
Reimbursements of out-of-pocket
expenses received from customers have
been netted off with expense.
Amounts received or billed in advance
of services to be performed are recorded
as advance from customers/unearned
revenue. Unbilled revenue represents
amounts recognized based on services
performed in advance of billing in
accordance with contract terms.
iv. Multiple deliverable arrangements
When two or more revenue generating
activities or deliverables are provided under
a single arrangement, the Company has
applied the guidance in Ind AS 115, Revenue
from contract with customer, by applying
the revenue recognition criteria for each
distinct performance obligation. The
arrangements with customers generally
meet the criteria for considering license
for software products and related services
as distinct performance obligations.
For allocating the transaction price, the
Company has measured the revenue in
respect of each performance obligation of
a contract at its relative standalone selling
price. The price that is regularly charged for
an item when sold separately is the best
evidence of its standalone selling price.
In cases where the company is unable to
determine the standalone selling price,
the company uses the expected cost
plus margin approach in estimating the
standalone selling price.
Arrangements to deliver software products
generally have three elements license,
implementation and Annual Technical
Services (ATS). The company has applied
the principles under Ind AS 115 to account
for revenues from these performance
obligations. When implementation
services are provided in conjunction
with the licensing arrangement and the
license and implementation have been
identified as two separate performance
obligations, the transaction price for
such contracts are allocated to each
performance obligation of the contract
based on their relative standalone selling
prices. In the absence of standalone selling
price for implementation, the performance
obligation is estimated using the expected
cost plus margin approach.
Deferred contract costs are incremental
costs of obtaining a contract which are
recognized as assets and amortized over
the term of the contract.
Revenue from subsidiaries is recognised
based on transaction price which is
at arm's length.
Contract assets are recognised when there
is excess of revenue earned over billings on
contracts. A contract asset arises when the
company has performed under a contract
but has not yet met the conditions
required to bill the customer. The right to
receive cash is conditional upon further
performance obligations.
Unearned and deferred revenue ("contract
liability”) is recognised when there is
billings in excess of revenues.
Trade Receivables
Trade receivables are amounts due from
customers for sale of license or rendering of
services in the ordinary course of business.
They are generally due for settlement within
one year and therefore are all classified as
current. Where the settlement is due after
one year, they are classified as non-current.
Trade receivables are disclosed in Note 11.
Impairment
An impairment is recognised to the extent
that the carrying amount of receivable or
asset relating to contracts with customers
(a) the remaining amount of consideration
that the Company expects to receive in
exchange for sale of license or rendering
of services to which such asset relates;
less (b) the costs that relate directly to
providing those sale of license or rendering
of services and that have not been
recognised as expenses.
j. Recognition of dividend income, interest
income or expense
Dividend income is recognised in Statement of profit
or loss on the date on which the Company's right to
receive payment is established.
Interest income or expense is recognised using the
effective interest method.
The 'effective interest rate' is the rate that exactly
discounts estimated future cash payments
or receipts through the expected life of the
financial instrument to:
• the gross carrying amount of the
financial asset; or
• the amortised cost of the financial liability.
In calculating interest income and expense, the
effective interest rate is applied to the gross carrying
amount of the asset (when the asset is not credit-
impaired) or to the amortised cost of the liability.
However, for financial assets that have become credit-
impaired subsequent to initial recognition, interest
income is calculated by applying the effective interest
rate to the amortised cost of the financial asset. If the
asset is no longer credit-impaired, then the calculation
of interest income reverts to the gross basis.
k. Sale of investments
Profit on sale of investments is recorded on transfer
of title from the Company and is determined as the
difference between the sales price and the carrying
value of the investment
l. Leases
The Company as a lessee
The Company's lease asset classes primarily consist of
leases for land and buildings. The Company assesses
whether a contract contains a lease, at inception of
a contract. A contract is, or contains, a lease if the
contract conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys
the right to control the use of an identified asset, the
Company assesses whether: (1) the contract involves
the use of an identified asset (2) the Company has
substantially all of the economic benefits from use of
the asset through the period of the lease and (3) the
Company has the right to direct the use of the asset.
At the date of commencement of the lease, the
Company recognizes a right-of-use asset ("ROU”)
and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for
leases with a term of twelve months or less (short¬
term leases) and low value leases. For these short¬
term and low value leases, the Company recognizes
the lease payments as an operating expense on a
straight-line basis over the term of the lease.
Certain lease arrangements includes the options
to extend or terminate the lease before the end
of the lease term. ROU assets and lease liabilities
includes these options when it is reasonably certain
that they will be exercised. In assessing whether the
Company is reasonably certain to exercise an option
to extend a lease, or not to exercise an option to
terminate a lease, it considers all relevant facts and
circumstances that create an economic incentive for
the Company to exercise the option to extend the
lease, or not to exercise the option to terminate the
lease. The Company revises the lease term if there is
a change in the non-cancellable period of a lease.
The right-of-use assets are initially recognized at
cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or
prior to the commencement date of the lease plus
any initial direct costs less any lease incentives. They
are subsequently measured at cost less accumulated
depreciation and impairment losses.
Right-of-use assets are depreciated from the
commencement date on a straight-line basis over
the shorter of the lease term and useful life of the
underlying asset.
Right of use assets are evaluated for recoverability
whenever events or changes in circumstances
indicate that their carrying amounts may not be
recoverable. For the purpose of impairment testing,
the recoverable amount (i.e. the higher of the
fair value less cost to sell and the value-in-use) is
determined on an individual asset basis unless the
asset does not generate cash flows that are largely
independent of those from other assets. In such cases,
the recoverable amount is determined for the Cash
Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized
cost at the present value of the future lease
payments. The lease payments are discounted using
the interest rate implicit in the lease or, if not readily
determinable, using the incremental borrowing
rates in the country of domicile of these leases. Lease
liabilities are remeasured with a corresponding
adjustment to the related right of use asset if the
Company changes its assessment if whether it will
exercise an extension or a termination option. The
discount rate is generally based on the incremental
borrowing rate specific to the lease being evaluated
or for a portfolio of leases with similar characteristics.
Lease liability and ROU asset have been separately
presented in the Balance Sheet and lease payments
have been classified as financing cash flows.
m. Income tax
Income tax comprises current and deferred tax. It is
recognised in profit or loss except to the extent that
it relates to an item recognised directly in equity or in
other comprehensive income.
i. Current tax
Current tax comprises the expected tax payable
or receivable on the taxable income or loss for
the year and any adjustment to the tax payable
or receivable in respect of previous years. The
amount of current tax reflects the best estimate
of the tax amount expected to be paid or
received after considering the uncertainty, if any,
related to income taxes. It is measured using tax
rates (and tax laws) enacted or substantively
enacted by the reporting date.
Current tax assets and current tax liabilities
are offset only if there is a legally enforceable
right to set off the recognised amounts, and it
is intended to realise the asset and settle the
liability on a net basis or simultaneously.
ii. Deferred tax
Deferred tax is recognised in respect of
temporary differences between the carrying
amounts of assets and liabilities for financial
reporting purposes and the corresponding
amounts used for taxation purposes. Deferred
tax is also recognised in respect of carried
forward tax losses and tax credits. Deferred tax
is not recognised for:
• temporary differences arising on the
initial recognition of assets or liabilities
in a transaction that is not a business
combination and that affects neither
accounting nor taxable profit or loss at the
time of the transaction;
Deferred tax assets are recognised to the extent
that it is probable that future taxable profits
will be available against which they can be
used. Deferred tax assets - unrecognised or
recognised, are reviewed at each reporting date
and are recognised/ reduced to the extent that
it is probable/ no longer probable respectively
that the related tax benefit will be realized.
Deferred tax is measured at the tax rates that are
expected to apply to the period when the asset
is realised or the liability is settled, based on the
laws that have been enacted or substantively
enacted by the reporting date.
The measurement of deferred tax reflects the
tax consequences that would follow from the
manner in which the Company expects, at the
reporting date, to recover or settle the carrying
amount of its assets and liabilities.
Deferred tax assets and liabilities are offset if
there is a legally enforceable right to offset tax
liabilities and assets, and they relate to income
taxes levied by the same tax authority on the
same taxable entity, or on different tax entities,
but they intend to settle current tax liabilities
and assets on a net basis or their tax assets and
liabilities will be realised simultaneously.
Minimum Alternative Tax ('MAT') under the
provisions of the Income-tax Act, 1961 is
recognised as tax in the Statement of Profit
and Loss. The credit available under the Act in
respect of MAT paid is recognised as an asset
only when and to the extent there is convincing
evidence that the company will pay normal
income tax during the period for which the MAT
credit can be carried forward for set-off against
the normal tax liability. MAT credit recognised as
an asset is reviewed at each balance sheet date
and written down to the extent the aforesaid
convincing evidence no longer exists.
n. Cash and cash equivalents
Cash and short-term deposits in the Balance Sheet
comprise cash at banks and cash in hand and short¬
term deposits with an original maturity of three
months or less, which are subject to insignificant risk
of changes in value.
o. Earnings per share (“EPS”)
Basic earnings per share is calculated by dividing
the profit attributable to the owners of the Company
by the weighted average number of equity shares
outstanding during the year.
Diluted earnings per share is computed using the
net profit or loss for the year attributable to equity
shareholders and the weighted average number of
common and dilutive common equivalent shares
outstanding during the year but including share
options, compulsory convertible preference shares
except where the result would be anti-dilutive.
p. Share Capital
Equity Shares
Equity shares are classified as equity. Incremental
costs directly attributable to the issuance ofnew equity
shares are recognized as a deduction from equity.
Dividends
The final dividend on shares is recorded as a liability
on the date of approval by the shareholders, and
interim dividend are recorded as a liability on the date
of declaration by the Company's Board of Directors.
q. Basis of segmentation
Segment reporting
Operating segments are reported in a manner
consistent with the internal reporting provided to
the chief operating decision maker (CODM).
Identification of segments:
All operating segments' results are reviewed
regularly by the Board of Directors, who have been
identified as the CODM, to allocate resources to the
segments and assess their performance. Refer note
45 for segment information.
r. ESOP Trust
The ESOP trust has been treated as an extension of
the Company and accordingly shares held by ESOP
Trust are netted off from the total share capital.
Consequently, all the assets, liabilities, income and
expenses of the trust are accounted for as assets
and liabilities of the Company, except for profit / loss
on issue of shares to the employees and dividend
received by trust which are directly adjusted in the
Newgen ESOP Trust reserve.
s. Statement of Cash flows
Cash flows are reported using the indirect method,
whereby profit for the period is adjusted for the
effects of transactions of a non-cash nature, any
deferrals or accruals of past or future operating
cash receipts or payments and item of income or
expenses associated with investing or financing
cash flows. The cash from operating, investing and
financing activities of the company are segregated.
t. Rounding of amounts
All amounts disclosed in the financial statements
and notes have been rounded off to the nearest
lakhs as per the requirement of Schedule III, unless
otherwise stated.
Trade receivables also includes balance receivables from related parties. For details refer note 42
No trade or other receivables are due from directors or other officers of the Company either severally or jointly with
any other person. Nor any trade or other receivables are due from firms or private companies respectively in which
any director is a partner, director or a member.
Trade receivables are non-interest bearing and are generally on terms of 15-90 days.
The Company's exposure to credit and currency risks and loss allowances related to trade receivables are discussed
in note 43C (ii) & 43C (v).
(i) Securities premium is used to record the premium received on issue of shares. It will be utilised in accordance
with the provisions of the Companies Act, 2013.
(ii) Retained earnings represents accumulated balances of profits over the years after appropriations for general
reserves and adjustments of dividend.
(iii) Newgen ESOP Trust has been treated as an extension of the Company and accordingly shares held by
Newgen ESOP Trust are netted off from the total share capital. Consequently, all the assets, liabilities, income
and expenses of the trust are accounted for as assets and liabilities of the Company, except for profit / loss on
issue of shares to the employees and dividend received by trust which are directly adjusted in the Newgen
ESOP Trust reserve.
(iv) The Company has established various equity-settled share-based payment plans for certain employees of the
Company. Refer to note 35 for further details on these plans.
(v) Refer Statement of Changes in Equity for analysis of other comprehensive income, net of tax.
(vi) Capital reserve created on account of merger of Number Theory Software Private Limited ("Number Theory")
(i) Performance obligations and remaining performance obligations
The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet
to be recognised as at the end of the reporting period and an explanation as to when the Company expects
to recognise these amounts in revenue. Applying the practical expedient as given in Ind AS 115, the Company
has not disclosed the remaining performance obligation related disclosures for contracts where :
(i) The performance obligation is part of a contract that has an original expected duration of one year or less.
(ii) The revenue recognised corresponds directly with the value to the customer of the entity's performance
completed to date, typically those contracts where invoicing is on time and material basis.
Remaining performance obligation estimates are subject to change and are affected by several factors,
including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that
has not materialised and adjustments for currency.
The aggregate value of performance obligations that are completely or partially unsatisfied as at 31 March
2025, other than those meeting the exclusion criteria mentioned above is INR Nil ( 31 March 2024 INR Nil).
35. Share-based payment arrangements:
A. Description of share-based payment arrangements
i. Share option programmes (equity-settled)
The company established Newgen Employees Stock Option Scheme 2014 (Newgen ESOP 2014) in the
year 2014-15, administered through a new Trust 'Newgen ESOP Trust'. The maximum numbers of shares
to be issued under this Scheme shall be limited to 3,907,023 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. Further, during the year 2017-18 grant of options
353,000, 130,000, and 79,250 through grant II, III and IV on 1 Jul 2017, 1 Sep 2017 and 1 Oct 2017 respectively
under the same scheme and with same vesting conditions was made. During the year 2020-21, the
company has granted 2,33,000 options through grant V under Newgen ESOP 2014 on 25 March 2021.
During the year 2022-23, the company has granted 20,000 options through grant VI under Newgen ESOP
2014 on 17 January 2023. During the year 2023-24, the company has granted 5,000 options through grant
VII under Newgen ESOP 2014 on 2 May 2023. 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 years from the date of last vesting. Consequent to
bonus issue in the ratio of 1:1 during the financial year ended 31 March 2024, all the outstanding options
and excercise price before the record date of 12 January 2024 have been adjusted to consider the bonus
issue impact. During the year 2024-25, the company has granted 43,000 options through grant VIII under
Newgen ESOP 2014 on 18 July 2024.
During the year 2020-21, the company has established Newgen Software Technologies Restricted Stock
Units Scheme - 2021 (Newgen RSU - 2021), administered through a new trust "Newgen RSU Trust" The
maximum numbers of shares to be issued under this Scheme shall be limited to 2,800,000 equity shares
of the company. During the year 2021-22, the company has granted 12,11,500 and 1,73,500 options through
grant I and II respectively under this scheme at an exercise price of INR 10 per option, to the employees of
the company. During the year 2022-23, the company has granted 35,000 options through grant III under
this scheme at an exercise price of INR 10 per option, to the employees of the company. During the year
2023-24, the company has granted 10,000 and 20,000 options through grant IV and V respectively under
this scheme at an exercise price of INR 10 per option, to the employees of the company.Under the terms
of the scheme, these options are vested on a graded vesting basis over a maximum period of five years
from the date of grant and are to be exercised either in part(s) or full, within a maximum period of five
years from the date of last vesting.Consequent to bonus issue in the ratio of 1:1 during the financial year
ended 31 March 2024, all the outstanding options before the record date of 12 January 2024 have been
adjusted to consider the bonus issue impact.
During the year 2022-23, the company has established Newgen Employee Stock Option Scheme - 2022
(Newgen ESOP - 2022), administered through a trust "Newgen ESOP Trust" The maximum numbers of
shares to be issued under this Scheme shall be limited to 42,00,000 equity shares of the company. During
the year 2022-23, the company has granted 9,41,800 options through grant I under this scheme at an
exercise price of INR 364.20 per option, to the employees of the company. During the year 2023-24, the
company has granted 1,58,750, 68,150 and 3,86,500 options through grant II, III and IV on 2 May 2023, 19 July
2023 and 20 March 2024 under this scheme at an excercise price of INR 452, INR 615 and INR 640.10 per
option, to the employees of the company. Under the terms of the scheme, 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 years from the date of vesting. Consequent to
bonus issue in the ratio of 1:1 during the financial year ended 31 March 2024, all the outstanding options
and excercise prices before the record date of 12 January 2024 have been adjusted to consider the bonus
issue impact. During the year 2024-25, the company has granted 1,91,400, 40,850, 5,30,100 and 73,050
options through grant V, VI, VII and VIII on 30 April 2024, 18 July 2024, 15 October 2024 and 20 January
2025 under this scheme at an excercise price of INR 780, INR 944.15, INR 1,216 and INR 14,27.50 per option
respectively to the employees of the company.
•Consequent to the adjustment related to the Bonus issue in the ratio of 1:1, as approved by the shareholders
of the company on 2 January 2024, the pool of the Scheme was increased by 1,23,223 ESOPs convertible
into the equal number of equity shares.
••Consequent to the adjustment related to the Bonus issue in the ratio of 1:1, as approved by the
shareholders of the company on 2 January 2024, the pool of the Scheme was increased from 14,00,000 to
28.00. 000 RSUs convertible into the equal number of equity shares.
•••Consequent to the adjustment related to the Bonus issue in the ratio of 1:1, as approved by the
shareholders of the company on 2 January 2024, the pool of the Scheme was increased from 14,00,000
to 28,00,000 ESOPs convertible into the equal number of equity shares. The company further added
14.00. 000 shares in the Scheme with the approval of shareholders on 25 July 2024.
Newgen ESOP trust has been treated as an extension of the company and accordingly shares held by
Newgen ESOP Trust are netted off from the total share capital. Consequently, all the assets, liabilities,
income and expenses of the trust are accounted for as assets and liabilities of the company, except for
profit / loss on issue of shares to the employees and dividend received by trust which are directly adjusted
in the Newgen ESOP Trust reserve.
which has been adjusted in current financial year against shortfall of INR 5.92 lakhs. There is no unspent balance in
respect of ongoing projects for which information is required to be disclosed.
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. 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.
C. Financial risk management
The Company's activities expose it to a variety of financial risks: market risk (including foreign exchange risk and
interest rate risk), credit risk and liquidity risk.
i. Risk management framework
The Company's board of directors has framed a Risk Management Policy and plan for enabling the Company
to identify elements of risk as contemplated by the provisions of the Section 134 of the Companies Act
2013. The Company's risk management policies are established to identify and analyse the risks faced by
the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and the
Company's activities. The Company, through its training and management standards and procedures, aims
to maintain a disciplined and constructive control environment in which all employees understand their roles
and obligations.
The Company's audit committee oversees how management monitors compliance with the Company's risk
management policies and procedures, and reviews the adequacy of the risk management framework in
relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit.
ii. Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument
fails to meet its contractual obligations and arises partially from the Company's receivables from customers,
loans and investment in debt securities. The carrying amount of financial assets represent the maximum
credit risk exposure. The Company has credit policies in place and the exposures to these credit risks are
monitored on an ongoing basis.
To cater to the credit risk for investments in mutual funds and bonds, only high rated mutual funds/
bonds are accepted.
The Company has given security deposits to vendors for rental deposits for office properties, securing services
from them, government departments. The Company does not expect any default from these parties and
accordingly the risk of default is negligible or nil.
Trade receivables and contract assets 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.
The Company establishes an allowance for impairment that represents its expected credit losses in respect of
trade receivables. The management uses a simplified approach for the purpose of computation of expected
credit loss for trade receivables. In monitoring customer credit risk, customers are grouped according to
their credit characteristics, including whether they are an individual or legal entity, industry and existence of
previous financial difficulties, if any.
Trade and other receivables
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However, management also considers the factors that may influence the credit risk of its customer base,
including the default risk of the industry and country in which customers operate.
The Company establishes an allowance for impairment that represents its expected credit losses in respect
of trade and other receivables. The management establishes an allowance for impairment that represents its
estimate of expected losses in respect of trade and other receivables. An impairment analysis is performed at
each reporting date.
For movement of loss allowance on contract assets refer note 16A
The impairment provisions for financial assets disclosed above are based on assumptions about risk of default
and expected loss rates. The Company uses judgement in making these assumptions and selecting the
inputs to the impairment calculation, based on the Company's past history, existing market conditions as well
as forward looking estimates at the end of each reporting period.
Debt securities
The Company limits its exposure to credit risk by investing only in liquid debt securities and only with
counterparties that have a credit rating AA to AAA from renowned rating agencies.
The Company monitors changes in credit risk by tracking published external credit ratings. For its investment
in bonds, Company also reviews changes in government bond yields together with available press and
regulatory information about issuers
Basis experienced credit judgement, no risk of loss is indicative on Company's investment in mutual funds
and government bonds.
Cash and cash equivalents and bank balances other than cash and cash equivalents
The Company held cash and cash equivalents of INR 4,504.64 lakhs at 31 March 2025 (31 March 2024: INR
4,990.98 lakhs) and bank balances other than cash and cash equivalents of INR 20,139.43 lakhs as at 31 March
2025 (31 March 2024: INR 20,022.60 lakhs). The cash and cash equivalents are held with bank and financial
institution counterparties, which are rated AA- to AAA, based on renowned rating agencies.
iii. Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to
managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when
they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the company's reputation.
The Company's primary sources of liquidity include cash and bank balances, deposits, undrawn borrowings
and cash flow from operating activities. As at 31 March 2025, the Company had a working capital of INR
108,931.68 lakhs (31 March 2024: INR 82,748.05 lakhs) including cash and cash equivalent of INR 4,504.64 lakhs
(31 March 2024: INR 4,990.98 lakhs), bank balances other than cash and cash equivalents of INR 20,139.43
lakhs ( 31 March 2024: 20,022.60 lakhs) and current investments of INR 50,839.62 lakhs (31 March 2024: INR
36,498.89 lakhs).
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.
v. Currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign exchange rates. The Company is exposed to currency risk on account of its receivables and
other payables in foreign currency. The functional currency of the Company is Indian Rupee. The Management
endeavours to minimize economic and transactional exposures arising from currency movements against the
US Dollar, Euro, Great Britain Pound, Canadian dollar, United Arab Emirates Dhiram, Saudi Riyal, Singapore
dollar, Australian dollar and Malaysian Ringgit making all the US dollar payments through EEFC account for
avoiding exchange risk. 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.
The Company has entered into foreign exchange forward contracts to mitigate the risks involved in foreign
exchange transactions and has booked forward contracts for USD 39.00 million during the year from April
2024 to March 2025.The hedging loss of INR 278.13 lakhs is on account of mark to market loss (realised loss
is INR 97.23 lakhs, unrealised loss is INR 112.43 lakhs and loss of INR 68.47 lakhs on account of reversal of last
year mark to market loss ) on foreign exchange forward contracts which do not qualify for hedge accounting
as per Ind As-109, have been recognized in the profit and loss account in the financial statement for the year
ended 31 March 2025.
A reasonably possible strengthening (weakening) of the Indian Rupee against US Dollar, Euro, Great Britain
Pound, Canadian dollar, United Arab Emirates Dhiram, Saudi Riyal, Singapore Dollar, Australian Dollar
and Malaysian Ringgit 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.
II. 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.
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 42.41 lakhs after tax (31 March 2024: INR 39.81 lakhs) and PBT by INR 65.19 lakhs (31
March 2024: INR 61.19 lakhs).
There is no variable rate linked instrument and therefore, there is no cash flow sensitivity.
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 accordance 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 84.82 lakhs after tax (31 March, 2024:
INR 79.62 lakhs ) and PBT by INR 130.38 lakhs (31 March, 2024: INR 122.38 lakhs). An equal change in the
opposite direction would have decreased equity by INR 84.82 lakhs after tax (31 March, 2024: INR 79.62
lakhs ) and PBT by INR 130.38 lakhs (31 March, 2024: INR 122.38 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 576.70 lakhs after
tax (31 March, 2024: INR 391.78 lakhs ) and PBT by INR 886.41 lakhs (31 March, 2024: INR 602.18 lakhs) . An
equal change in the opposite direction would have decreased profit or loss by INR 576.70 lakhs after tax
(31 March, 2024: INR 391.78 lakhs ) and PBT by INR 886.41 lakhs (31 March, 2024: INR 602.18 lakhs)
44. Capital Management
The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. Management monitors the return on capital as well as the level
of dividends to equity shareholders.
The Company manages its capital structure and makes adjustments to it as and when required. To maintain or
adjust the capital structure, the company may pay dividend or repay debts, raise new debt or issue new shares. No
major changes were made in the objectives, policies or processes for managing capital during the year ended 31
March 2025 and 31 March 2024.
The Company monitors capital using a ratio of 'adjusted net debt' to 'adjusted equity'. For this purpose, adjusted
net debt is defined as total liabilities comprising interest bearing loans and borrowings and obligations under
finance leases, less cash and cash equivalents. Adjusted equity comprises all components of equity
The Company capital consists of equity attributable to equity holders that includes equity share capital and
retained earnings.
45. Segment reporting
A. Basis for segmentation
An operating segment is a component of the Company that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the
Company's other components, and for which discrete financial information is available.
The Company's board of directors have been identified as the Chief Operating Decision Makers (CODM) since they
are responsible for all major decisions in respect of allocation of resources and assessment of the performance on
the basis of the internal reports/ information provided by functional heads. The board examines the performance of
the Company based on such internal reports which are based on operations in various geographies and accordingly,
have identified the following reportable segments:
5. Earnings before interest and taxes = profit before tax finance cost - other income
6. Capital Employed = Average tangible net worth Total debt Deferred tax.
7. Average is calculated on the basis of opening and closing balances.
Schedule III require explanation where the change in the ratio is more than 25% as compared to the preceding
year. Since there are no instances where the change is more than 25% , hence no explanation is given.
47. As at 31 March 2025, the Company has gross foreign currency receivables amounting to INR 24,509.73 lakhs
(previous year INR 20,027.40 lakhs). Out of these receivables, INR 5,108.22 lakhs (previous year INR 1,955.12 lakhs) is
outstanding for more than 9 months. As per FED Master Direction No. 16/2015-16, receipt for export goods should
be realized within a period of 9 months from the date of export. The Company must file extension with AD Bank &
as per the requirements, in one calendar year, the Company is allowed to seek extension for an amount equivalent
to USD one million or 10% of the average export collection of the last 3 years only, whichever is higher and pursuant
to the same, the company has applied for an extension of all the foreign currency receivables outstanding for
more than 6 months. The management is of the view that the Company will be able to obtain approvals from the
authorities for realizing such funds beyond the stipulated timeline without levy of any penalties as it had Bonafide
reasons that caused the delays in realization.
48. Other statutory informations
i. The Company do not have any Benami property, where any proceeding has been initiated or pending against
the Group for holding any Benami property.
ii The Company do not have any transactions with companies struck off.
iii The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.
iv The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
v The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including
foreign entities (Intermediaries) with the understanding that the Intermediary shall
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
vi The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding
Party) with the understanding (whether recorded in writing or otherwise) that the Company shall
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
vii The Company have not any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961
(such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
viii The company has sanctioned working capital amounts from banks on the basis of security of Trade
Receivables and Fixed Deposits. The quarterly returns being filed by company with banks are in line with the
books of accounts.
ix All title deeds of Immovable Property are held in the name of the Company.
x The Company has not defaulted on any of the loan taken from banks, financial institutions or other lender.
xi The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible
assets or both during the current or previous year.
xii The Company has complied with the number of layers prescribed under Companies Act, 2013.
49. Previous period's figures have been regrouped/reclassified wherever necessary to correspond with the current
period's classification/disclosure, which are not considered material to these financial statements.
As per our report of even date attached
For Walker Chandiok & Co LLP
Chartered Accountants For and on behalf of the Board of Directors of
Firm Registration No.: 001076N/N500013 Newgen Software Technologies Limited
Ankit Mehra Diwakar Nigam T.S.Varadarajan Virender Jeet
Partner Chairman & Whole Time Director Chief Executive Officer
Managing Director
Membership No.: 507429 DIN: 00263222 DIN: 00263115 PAN: AAOPJ2433N
Place: Gurugram Place: Delhi Place: Delhi Place: Delhi
Date: 02-May-2025 Date: 02-May-2025 Date: 02-May-2025 Date: 02-May-2025
Arun Kumar Gupta Aman Mourya
Chief Financial Officer Company Secretary
Membership No: 056859 Membership No: F9975
Place: Delhi Place: Delhi
Date: 02-May-2025 Date: 02-May-2025
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