Newgen Software Technologies Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2021

1. The above financial results for the quarter and year ended 31 March 2021 were reviewed by the Audit Committee in their meeting held on 24 May 2021 and approved by the Board of Directors in their meeting held on 25 May 2021. Standalone and Consolidated financial results of the Company for the quarter and year ended 31 March 2021 are prepared in accordance with Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013 and relevant rules thereunder.

2. The auditors have carried out audit of Standalone and Consolidated results of the Company for the year ended 31 March 2021. There are no qualifications in the Auditor's report on these financial results.The figures of the last quarter are the balancing figures between audited figures in respect of the full financial year up to 31 March 2021 and the unaudited published year-to-date figures up to 31 December 2020 being the date of the end of the third quarter of the financial year which were subjected to a limited review.

3. During the year ended 31 March 2021, the Company has filed an application under ‘Direct Tax Vivad Se Vishwas Act, 2020’ in respect of assessment orders pertaining to financial years 2015-16 and 2016-17, against which appeals were pending with Commissioner of Income Tax (Appeal). The application for both the years was accepted by the department. Accordingly an amount of Rs. 463.50 lakhs has been recorded as tax expense during the current year. The dispute primarily involved partial disallowances made by the assessing officer with respect to foreign withholding tax credit claimed as a set off. . The Company has likewise claimed foreign withholding tax credit in the subsequent financial years. Based on management evaluation, the effect of similar disallowances has been recognised in respect of subsequent assessment years, without prejudice to any rights, and additional tax expense of Rs. 847.07 lakhs relating to financial years 2017-18 to 2019-20 and Rs. 231.80 lakhs in respect of year ended 31 March 2021 has been recorded in the current year.

4.The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

5.In view of pandemic relating to COVID-19, the Company has considered internal and external information and has performed analysis based on current estimates in assessing the recoverability of trade receivables, unbilled receivables and other financial assets, for possible impact on the Standalone and Consolidated financials results. The Company has also assessed the impact of this whole situation on its capital and financial resources, profitability, liquidity position, internal financial reporting controls etc. and is of the view that based on its present assessment this situation does not materially impact these Standalone and Consolidated financial results. However, the actual impact of COVID-19 on the Company's Standalone and Consolidated results may differ from that estimated and the Company will continue to closely monitor any material changes to future economic conditions.