AFFLUENCE

1)

COMPANY’S AFFAIRS:

Newgen Software Technologies Limited (hereinafter referred to as the “Newgen”) is a leading global provider of Business Process Management (BPM), Enterprise Content Management (ECM), Customer Communication Management (CCM), Document Management System (DMS), Workflow and Process Automation. Newgen has been positioned in the Magic Quadrants for Intelligent Business Process Management (BPM), Enterprise Content Management (ECM), and Customer Communication Management. Newgen has been recognized by distinguished analyst firms including Gartner, Forrester, Frost and Sullivan, and IDC.

2)

FINANCIAL RESULTS:                                                                                                                            (In Lacs)

3)

COMPANY'S PERFORMANCE:

On Standalone basis, revenue from operations for FY 2015-16 is at Rs. 31280.57 Lakhs was higher by 11.70 % over previous corresponding Financial Year (Rs. 28,004.56 Lakhs in FY 2014-15). Earnings before interest, tax, depreciation and amortisation (EBITDA) is Rs. 4175.85 registering a decline of 33.89 % over EBITDA of Rs. 6,316.29 Lakhs in previous year 2014-15. Profit after Tax (PAT) for the year was Rs. 2856.2 Lakhs over the PAT of Rs 4,899.70 Lakhs for the previous financial year 2014-15.

On Consolidated basis, revenue from operations for FY 2015-16 is at Rs.34680.50 Lakhs was higher by 11.88 % over previous corresponding Financial Year (Rs.30999.20 Lakhs in FY 2014-15). An earnings before interest, tax, depreciation and amortisation (EBITDA) is Rs.4261.93 registering a decline of 36.58 % over EBITDA of Rs. 6719.70 Lakhs in previous year 2014-15. Profit after Tax (PAT) for the year was Rs. 2872.95 Lakhs over the PAT of Rs 5274.74 Lakhs for the previous financial year 2014-15, showing an decrease of around 45.53 %. This reduction in PAT is due to decrease in Revenue growth in EMEA and US region and increase in manpower and selling and marketing cost.

4)

MARKET DEVELOPMENT:

During the year under review the Domestic sales in 2015-16 is increased by 14.71 % to 11368.96 Lakhs as compared to 9910.66 Lakhs as achieved in 2014-15. During the year under review the International sales in 2015-16 is increased by 10.04 % to 19911.61 Lacs as compared to 18093.90 Lakhs as achieved in 2014-15.

5)

AMALGAMATION OF SUNDEEP IMPORT EXPORT PRIVATE LIMITED WITH THE COMPANY:

The Board of Directors had approved the amalgamation of its wholly owned subsidiary Sundeep Import Export Private Limited (“Transferor Companies”) with the Company in accordance with the provisions of Sections 391 to 394 of the Companies Act, 1956 with the Appointed date being 1 April 2015 subject to the sanction/approval of the High Court of Judicature at New Delhi (“The High Court”) and other appropriate regulatory authorities. The High Court had vide its order dated 30th May, 2016 approved the amalgamation and the Company had filed the copy of the certified true copy of the order with the Registrar of Companies, NCT of Delhi Haryana, on 20th June, 2016 being the effective date.

6)

CREDIT RATING AND LIQUIDITY:

ICRA has upgraded the Company's short-term rating from A2 to A2+. The Company's strong financial risk profile is driven by its sustained strong liquidity and conservative capital structure as well as its integrated operations, highly competitive cost position and high-grade reserves.

The Company follows a conservative investment policy and invests in high quality debt instruments. As on March 31, 2016, cash and cash equivalents were Rs.2009.95 Lakhs, 4501.66 Lacs was invested in mutual funds and 157.87 Lacs in fixed deposits which are due to mature after 12 months. The Company continues to be debt free in Financial Year 2015-16.

Cash Flows

                                                                                                                                          (Rs. in Lakh)

(*) Includes Cash and Cash Equivalents (refer Note 18 of the Audited Financial Statements) and Current Investments (refer Note 16 of the Audited Financial Statements).

(**) Earnings before Interest, Tax, Depreciation and Amortization expenses.

7)

DIVIDEND:

Your Directors are pleased to recommend a dividend @ 10% i.e. Rs. 1 per share (Equity Shares, Equity Shares with DVR and Preference Shares) for the Financial year ended 31st March, 2016 as compared to dividend declared in previous year @ 15 % i.e. Re. 1.5 per share. The total outgo for the current year amounts to Rs. 775.78 Lacs, including dividend distribution tax of Rs.131.84 Lacs as against Rs. 1163.11 Lacs including dividend distribution tax of Rs. 197.67  Lacs in the previous year.

In addition to the above, pursuant to the Articles of Association of the company read with the terms of Shareholders Agreementexecutedon 31st October, 2013 by and among M/s Newgen Software Technologies Limited, Unit Trust Of India Investment Advisory Services Limited, A/C Ascent India Fund III, (Investor), IDG Ventures India Fund II LLC, (Investor), SAP V (Mauritius), (Investor), Mr. Diwakar Nigam, Mr. T.s. Varadarajan, Mrs. Priyadarshini Nigam & Mrs. Usha Varadarajan (“promoter group”) and Newgen Employees Trust, and Share Purchase Cum Subscription Agreement executed on 31st October, 2013 by and amongstM/s Newgen Software Technologies Limited, Mr. Diwakar Nigam, Mr. T.S. Varadarajan, Mrs. Priyadarshini Nigam & Mrs. Usha Varadarajan, Unit Trust Of India Investment Advisory Services Limited, A/C Ascent India Fund III, (Investor), IDG Ventures India Fund II LLC, (Investor) and with the recommendation of the Board, there would be a payout of compulsory dividend @ 0.01% per annum on the Ascent Subscription Consideration and IDGVI Subscription Consideration, HAV 2 Sales shares and SAPV Investment Amount respectively, pro rata on a Fully Diluted Basis.

8)

RESERVES:

The Board proposes an amount of Rs. 285.62 Lacs to carry the same to reserves of the Company.

9)

CHANGE IN THE NATURE OF BUSINESS, IF ANY:

There is no change of nature of business of the Company during the Financial Year 2015-16.

10)

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE:

NIL

11)

NEWGEN QUALITY INITIATIVE:

Newgen has sustained its commitment to the highest levels of quality, robust information security management practices that have collectively helped in achieving significant milestone during the year. Newgen’s Quality and Information Security journey has been a steady and with full conviction starting from 1997. The same is evident from the implementation of industry standards like ISO9001:2008, ISO 27001:2013 and Process Improvement Models like CMMi Dev Level 3 and CMMi Svc Level 3.Emphasis on System-driven transparent process, which delivers exceptional Quality first time right with the required level of Security.

The Company has focused on continuous improvements in Customer engagements as well as internal operations leveraging best-in-class methodologies and information security practices. Cross-functional Teams monitors and optimises the processes & policies to meet the ever growing demands of Newgen’s engagements. 

The company’s commitment towards customer satisfaction and resilient systems/services has resulted into the adaptation of other industry standards/acts like PCI-DSS, HIPAA, and ISAE 3402 Type-2 (SoC-1) attestation. These standards provide assurance to the customers on the design and operating effectiveness of the security controls. The company also drive the process and product improvements based on Voice of Customer i.e. Customer Satisfaction Surveys (CSS). These surveys are conducted at the specific project mile stone as well as at the organizational level on an annual basis.

12)

SUBSIDIARY COMPANIES:

The Company has six wholly owned subsidiaries (WOS) including Sundeep Import Export Private Limited as on 31st March, 2016. There are no associate companies or joint venture  companies within the meaning of section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries.  Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014 the statement containing salient features of the financial statement of subsidiaries is enclosed in form AOC-1 as Annexure -1.

Name of wholly owned subsidiaries:Newgen Software Inc. USA,Newgen Software Technologies Pte. Ltd.,Newgen Software Technologies Canada Ltd.,Newgen Software Technologies (UK) Ltd.Newgen Computer Technologies LimitedSundeep Import Export Private Limited (Amalgamated as on date)

The audited financial statements, the Auditors Report thereon and the Board’s Report for the year ended March 31, 2016 for each of the Company’s subsidiaries are annexed separately with this report.

During the year under review, Newgen Software Technologies (UK) Ltd. was incorporated on 24th September, 2015 as a wholly owned subsidiary.

Sundeep Import Export Private Limited was amalgamated with the Company pursuant to the Order of the Hon'ble High Court of judicature at New Delhi. Consequently, the entire business, assets, liabilities and obligations of this subsidiary were transferred to and vested in the Company with effect from the appointed date i.e. 1st April, 2015.

13)

DEPOSITS:

During the period under review the Company has not accepted any fixed deposit within the meaning of Companies Act, 2013 and the rules made thereunder.

14)

STATUTORY AUDITORS:

The tenure of present Statutory Auditors of the Company M/s. B S R & Associates, LLP, Chartered Accountant, having Firm Registration number 116231W/W-100024 is going to be expired on conclusion of 24th Annual General Meeting. Whereas, M/s. B S R & Associates, LLP, Chartered Accountant has already furnished a certificate of their eligibility under section 139(1) of the Companies Act, 2013. The auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

In view of the above, M/s. B S R & Associates, LLP, Chartered Accountant, being eligible for re-appointment for its second term and based on the recommendation of the Audit Committee, the Board of Directors has, at its meeting held on 22nd July, 2016 proposed the re-appointment of M/s. B S R & Associates, LLP, Chartered Accountant as the statutory auditors of the Company upto a period of five years from the conclusion of this 24th AGM till the conclusion of the 29th AGM of the Company, subject to the ratification of their appointment at every AGM by the members.

15)

AUDITORS’ REPORT:

As regards Auditors Report & Observations, the relevant notes on accounts are self-explanatory.

16)

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s Aijaz & Associates, a firm of Company Secretaries in Practice, New Delhi, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report for the Financial Year ended 31st March, 2016 is annexed herewith as “Annexure 2”.

17)

SHARE CAPITAL:

During the Financial Year 2015-16, there is  no change in share capital of the Company, however, due to Amalgamation of Sundeep Import Export Private Limited with the Company, the Authorized Share Capital of the Company as on effective date has increased, hence, the details of authorized and paid up share capital of the company is as follow

The  Amalgamation Scheme as approved by the Hon'ble Delhi High Court provides that since the transferor company is a wholly owned subsidiary of the transferee Company, no consideration shall be payable by the transferee company pursuant to the amalgamation of transferor company with transferee company, and accordingly the entire investment in the transferor company held by the transferee company would stand cancelled. For more details kindly see the note no. 41 of financials.

18)

EMPLOYEE STOCK OPTIONS SCHEMES:

At present the company has three ESOP Schemes viz Newgen ESOP Scheme 1999, Newgen ESOP Scheme 2000 and Newgen ESOP Scheme 2014. All the shares in Newgen ESOP Scheme 2014 are in demat mode, an employee is having an option to buy the shares in demat mode through exercise of option. The information on Options granted, exercised and lapsed during the financial year 2015-16 and other particulars as provided in rule 12(9) of Companies (Share Capital and Debentures) Rules, 2014 with regard to Employees’ Stock Options is annexed herewith as “Annexure 3”.

19)

EXTRACT OF THE ANNUAL RETURN:

The extract of the annual return in Form No. MGT – 9 is enclosed with this Director Report as Annexure – 4.

20)

PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees’ particulars which is available for inspection by the

Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

The Details of employees under Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

(iii) If employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.

21)

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

A) Changes in Directors and Key Managerial Personnel:

At present the Board of Directors of the Company consists of Mr. Diwakar Nigam, Managing Director, Mr. T.S. Varadarajan, Whole-Time Director, Mrs. Priyadarshini Nigam, Whole-Time Director, Mr. Kaushik Dutta, Independent Director, Mr. Mohit Goyal, Independent Director, Mr. Sudhir Kumar Sethi, Nominee Director and Mr. Sunil Kumar Kolangara, Nominee Director. Whereas, pursuant to Shareholders Agreement executed on 31st October, 2013, designation of Mr. Sudhir Sethi and Mr. Sunil Kumar Kolangara has been changed from Director to Nominee Directors, pursuant to the requests received from respective Investors, in 175th Meeting of the Board of Directors held on 11th May, 2016.

With the recommendation of Nomination & Remuneration Committee, the Board of Directors in its 175th Meeting held on 11th May, 2016, subject to the approval of Members, re-appointed Mr. Diwakar Nigam as Managing Director, Mr. T. S. Varadarajan as Whole-time Director and Mrs. Priyadarshini Nigam as Whole-Time Director for a fresh period of three  years from 1st June, 2016 to 31st May, 2019 on a remuneration as decided. Therefore, the Board of Directors hereby proposed to approve the aforesaid re-appointment of Mr. Diwakar Nigam, Mr. T.S. Varadarajan and Mrs. Priyadarshini Nigam on a decided remuneration as explained in the notice of ensuing Annual General Meeting.

Furtherance to the above, pursuant to the provisions of Section 152 of the Companies Act, 2013, at least two-thirds of our Directors shall be subject to retirement by rotation and one third of these retiring Directors must retire from office at each Annual General Meeting of the shareholders of the Company, and shall be eligible for reappointment. Accordingly, Mr. Diwakar Nigam, being a Director is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offered themselves for re-appointment.

Details of KMP as on date.

1. Mr. Diwakar Nigam – Managing Director

2. Mr. T.S. Varadarajan – Whole-time Director

3. Mrs. Priyadarshini Nigam - Whole-time Director

4. Mr. Arun Kumar Gupta – Chief Financial Officer

5. Mr. Aman Mourya - Company Secretary

Mr. Arun Kumar Gupta, resigned from the post of Company Secretary with effect from 17th July, 2015 and Mr. Aman Mourya has been appointed as Company Secretary of the Company with effect from 17th July, 2015. Recently, Mr. Aman Mourya (earlier known as Aman at the time of appointment) has changed his name from Aman to Aman Mourya. The Board of Directors and Nomination & Remuneration Committee of the Board have already taken the notes on such name change in their meeting held on 11th May, 2016.

B) Declaration by an Independent Director(s) and re- appointment, if any:

Declarations by Mr. Kaushik Dutta and Mr. Mohit Goyal, Non-executive Independent Director(s) that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 are enclosed with this Board Report as Annexure - 5.

An independent director shall hold office for a term up to five consecutive years on the Board of a Company, but shall be eligible for reappointment for next five years on passing of a special resolution by the Company and disclosure of such appointment in the Board’s report.

C) Board Annual Evaluation:

Pursuant to the provisions of the Companies Act, 2013 the Board has carried out the annual performance evaluation of its own performance, Board Committee and Individual Director.

The performance of the Board was evaluated by the Board itself after seeking inputs from all the directors on the basis criteria such as structure & composition of Board Culture, effectiveness of Board processes, functioning, execution and performance of specific duties, obligations and governance etc.,

The performance of Committees  was evaluated by the Board after seeking inputs from respective committees members on the basis of the criteria such as composition of committees, effectiveness of committee meetings, and quality of recommendation to the Board etc.

The board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the chairman was also evaluated on the key aspects of his role. In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees and individual directors was also discussed. Performance evaluation.

The performance evaluation of the Independent Directors was carried out by the entire Board. All the Directors expressed their satisfaction with the evaluation process.

D) Remuneration Policy:

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Company’s Remuneration Policy for Directors, Key Managerial Personnel and other employees is annexed as Annexure - 6 to the Directors’ Report.

E) Meetings:

During the year under review, five Board Meetings, three Audit Committee Meetings, One Nomination and Remuneration Committee Meetings, One CSR Committee Meetings, Six Share Transfer Committee Meeting and Six Compensation Committee Meeting and One Finance Committee Meeting were convened and held. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

22)

NOMINATION & REMUNERATION COMMITTEE:

As on date of this Director Report the Nomination & Remuneration Committee of the Board of the Company is consisting of Mr. Mohit Goyal, Independent Director, Mr. Kaushik Dutta, Independent Director and Mr. Sudhir Kumar Sethi, Non-Executive Nominee Director.

23)

AUDIT COMMITTEE:

As on date of this Director Report Audit Committee of the Board of the Company is consisting of Mr. Kaushik Dutta, Independent Director, Mr. Mohit Goyal, Independent Director, and Mr. Sunil Kumar Kolangara, Non- Executive Nominee Director.

24)

VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES:

The Company has a vigil mechanism policy to deal with instance of fraud and mismanagement, if any. The details of the vigil mechanism policy is explained as follows and also posted on the website of the Company. The Company promotes ethical behavior in all its business activities and has put in place a mechanism for reporting illegal or unethical behavior. The Company in its Vigil mechanism under which the employees are free to report violations of applicable laws and regulations. The reportable matters may be disclosed to the Chairman of the Audit Committee. During the year under review, no employee was denied access to the Audit Committee. Vigil Mechanism policy can be accessed through the website of the Newgen.

25)

COMPOSITION OF CSR COMMITTEE:

As on date the CSR Committee of the Board of the Company is consisting of Mrs. Priyadarshini Nigam, Whole –Time Director, Mr. T.S. Varadarajan, Whole time Director and Mr. Kaushik Dutta, Independent Director.

CSR Initiative:

The brief outline of the corporate social responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure 7 of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

As part of its initiatives under “Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Education, Livelihood, personality development of the students, digital literacy. These projects are largely in accordance with Schedule VII of the Companies Act, 2013. For other details regarding Company's CSR activities and CSR Policy please visit the website of the Company.

26)

RISK MANAGEMENT POLICY:

The Company has already framed a Risk Management Policy, its framework and authorized Audit Committee to review the matter related with Business Risk. As per the Risk Management Policy,  the Audit Committee is responsible for reviewing the risk management plan and ensuring its effectiveness.

The Company has a robust Business Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company’s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level.

27)

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has aligned its current systems of internal financial control with the requirement of Companies Act 2013. The explanation of the term ‘Internal Financial Control’ has been provided only in the context of section 134(5)(e). It includes policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, thereby covering not only the controls pertaining to financial statements but also include strategic and operational controls pervasive across the entire business.

Newgen  internal controls are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorised use, executing transactions with proper authorisation and ensuring compliance of corporate policies. In view of the above, and for safeguarding the assets of the company, preventing and detecting fraud or other irregularities and maintaining proper books of account and to ensure adequate internal financial control, the Company is already pursuing various Standard Operating Procedures (SOPs), Vigil Mechanism, audit mechanism (through Internal Audit, Secretarial Audit and Statutory Audit). Newgen also undergoes periodic audit by specialised third party consultants and professional for business specific compliances such as quality management, Information Security Management, etc.

It has continued its efforts to align all its processes and controls with global best practices. Our management assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2016. The assessment involved self review, peer review and external audit. B S R & Associates, LLP, Chartered Accountant, the statutory auditors of Newgen has audited the financial statements included in this annual report and also reported on our internal control over financial reporting (as defined in section 143 of Companies Act 2013).

The audit committee reviews reports submitted by the management and audit reports submitted by internal auditors and statutory auditors. The audit committee also meets Newgen’s statutory auditors to ascertain, inter alia, their views on the adequacy of internal control systems and keeps the board of directors informed of its major observations periodically. Based on its evaluation (as defined in section 177 of Companies Act 2013), our audit committee has concluded that, as of March 31, 2016, our internal financial controls were adequate and operating effectively.

28)

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. The details of the investments made by company have been disclosed in the financial statements.

29)

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All related party transactions with the subsidiary Companies as were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.Information on transactions with related parties pursuant to section 134(3)(h) of Companies Act, 2013 read with rule 8(2) of Companies (Accounts) Rules, 2014 are given in Annexure 8 in form AOC-2.

30)

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars as prescribed under section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 are as follows:

a)      Details of Conservation of energy

The operations of your Company do not consume high levels of energy. Nevertheless adequate measures have been taken to conserve energy by using energy-efficient computers and related equipments with the latest technologies. Your Company is on a constant look out for newer and efficient energy conservation technologies and introduces them appropriately. As the cost of energy consumed by your Company forms a very small portion of the total costs, the impact of changes in energy cost on total costs is not significant.

b)     Research and Development:

Your Company is associated with leaders in Banking, Financial Services & Insurance (BFSI) vertical space, which propels the demand on continuous research and development in all pervasive areas of information technologies like Business Analysis, Development, Deployment and Upgrades. In order to achieve our goal, we continually invest in research and development of new products and services, designs, frameworks, processes and methodologies. This facilitates in creating a strong quality culture and enhances productivity and customer satisfaction.

c)      Technology Absorption, Adaptation and Innovation:

Your Company is fully aware of the importance of assimilation of technological knowledge, which will have favourable impact on productivity and result in optimum operational efficiency. Your Company realizes the importance of innovation and constant improvement in key areas of business. In order to create a conducive environment which propels adaptation of new ideas, skills and methodologies, your Company has instituted a culture of quality consciousness at the grass-root level. Innovation is encouraged, recognized and rewarded. This policy is not restricted to technology but includes innovation in non-IT processes and HRD.

d)     Industrial relations:

During the year under review, your Company enjoyed cordial relationship with employees at all levels.

Foreign exchange Earnings and Outgo:                              

      (Rs. In Lacs)

31)

DIRECTORS’ RESPONSIBILITY STATEMENT:

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:In the preparation of the annual accounts, the applicable accounting standards have been followed.The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.The directors have prepared the annual accounts on a going concern basis.The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the audit committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during FY 2015-16.

32)

NUMBER OF COMPLAINTS RELATING TO CHILD LABOUR, FORCED LABOUR, INVOLUNTARY LABOUR, SEXUAL HARASSMENT IN THE LAST FINANCIAL YEAR AND PENDING, AS ON THE END OF THE FINANCIAL YEAR:

Taking a step further, Newgen has formed an Internal Complaints Committee where employees can register their complaints against sexual harassment. This is supported by the Sexual Harassment Policy which ensures a free and fair enquiry process with clear timelines.

33)

ACKNOWLEDGEMENTS:

The Directors gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year.  The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.