Majesco Inc. Annual Report 2018

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FY2018 Annual Report · Majesco Inc.

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Digital Insurance 2.0:
Accelerating Growth and Innovation

2018 ANNUAL REPORT

www.majesco.com

A Message from
the CEO of Majesco

Ketan Mehta
Co-Founder and CEO
of Majesco

Dear Fellow Shareholders,

Fiscal 2018 was a transformative year for Majesco. While the
insurance industry has not embraced digital transformation
as quickly as other industries like Retail, Banking, Travel and
Hospitality, it is changing rapidly. Last year, we saw growing
momentum towards digital transformation across Property
& Casualty, Life & Annuity and Group & Voluntary Benefits
carriers. As a result, demand for our cloud based platform
solutions increased. Majesco experienced accelerating
business momentum and we increased quarterly revenue
and adjusted EBITDA sequentially during the last three
quarters of fiscal 2018. We ended the year with record quar-
terly revenues, a strong 12-month executable backlog, and
improving profitability. I am specifically pleased that we have
made good progress in transitioning our business model
towards the cloud. Cloud business as portion of our revenue
increased from 20% to 30% during fiscal 2018. As our financial
results show, we have significantly improved our business
execution and enhanced our competitive advantage, while
the market dynamics for our platform solutions and services
remained strong.

The disruption taking place in the insurance industry is
creating significant opportunities for Majesco. The insur-
ance industry is in the early stages of what we call Digital
Insurance 2.0 that is underpinned to meet new customer
expectations as well as new products and services to meet
their unique needs. Carriers across the industry are creating
innovative new business models, products and services that
leverage broad ecosystems and technology innovations such
as cloud computing, artificial intelligence, machine learning
and new data sources. As a result of these changes, insurers
are focusing on “speed to value” and looking for platform
solutions that will enable them to quickly develop, “test and
learn” and launch new products.

MAJESCO 2018 ANNUAL REPORT

Majesco is at the forefront of the shift to Digital Insurance
2.0, and during the year we announced several new initia-
tives further strengthening our position as a leading platform
company in the insurance industry.

We announced and released significant updates for both
the Majesco P&C Core Suite and Majesco L&A and Group
Core Suite providing further platform and out-of-the box
digital capabilities. Moreover, we announced Majesco
Digital1st Insurance, a ground-breaking digital and micros-
ervices based cloud-only platform solution set designed to
enable the next era of new business models, new products
and customer engagement. One important component is
Majesco Digital1st EcoExchange, the next generation mar-
ketplace and partner ecosystem hub for easy integration and
a true “plug and play” with traditional and InsurTech partner
apps that are easy to access and use. The new microservices
platform and marketplace of partners off er cutting-edge
capabilities designed to rapidly develop and deploy inno-
vative digital solutions in days rather than months or years.
Insurance carriers across all tiers as well as incumbent
insurer greenfields and InsurTech startups throughout the
P&C and L&A and Group markets are recognizing Majesco
for our leading solutions that enable growth and innovation
strategies by consistently delivering “speed to value.”

During the year, I am proud to report 19 clients success-
fully went into production with Majesco’s solutions, many
using our enhanced delivery playbook focused on quality
and “speed to value.” This was demonstrated further by the
year-over-year increase in Majesco’s net promoter scores
(NPS) from our customers. It is a privilege to contribute to
our customers’ success by providing soft ware and services
that support their tactical and strategic plans for growth,
innovation and market expansion.

Delivering and delighting our customers today is the foun-
dation for continued growth and success. It requires a fully
engaged, highly energized, and knowledgeable staff. I’d like
to thank our employees for their customer focus, teamwork
and support.

On behalf of everyone at Majesco, we sincerely thank our
customers for their confidence and trust. We will continue
to direct our energy, investment and innovation toward
proving that their confidence was well placed.

I am enthused with our progress and excited to support our
customers’ transition to Digital Insurance 2.0. This transition
will continue to drive opportunities to grow our business in
fiscal 2019 and beyond.

Ketan Mehta

Co-Founder and CEO of Majesco

We are pleased with the progress of our IBM partnership.
Months ago, we signed one of the largest cloud deals in the
industry with MetLife for digital transformation, and the joint
IBM and Majesco team is working together to execute this
program. Our IBM partnership continues to gain momentum
with a growing pipeline, and we are actively pursuing several
opportunities to Tier 1 and Tier 2 insurance carriers in the
Life, Annuity, Group, Property and Casualty markets.

Just like our clients, Majesco has been experiencing a signif-
icant transformation in our business model to meet these
new industry demands – led by our platform strategy and its
meaningful increase in cloud-based revenues. In fact, seven
of Majesco’s last nine IP deals in North America during FY18
have been on the cloud and four of these nine deals have
been for incumbent greenfields and InsurTech start-ups.
Since the first quarter of fiscal 2017, total cloud-based
revenues have grown from 18.4% of total revenues to nearly
32.0% of revenues for the fourth quarter of fiscal 2018. This
includes an 89.1% improvement in our cloud subscription
revenue over last year. We expect these trends will continue
as a result of the market dynamics and our leading cloud-
based product offerings. During fiscal 2018, Adjusted EBITDA
as a percent of revenues increased from a negative 1.5% in
the first quarter to positive 8.8% for the fourth quarter. The
improvement in profitability reflects the positive mix shift as
a result of growing cloud-based revenues, and the benefits
of Majesco’s financial model that is positioned to leverage
fixed operating expenses.

We ended the year with a 12-month executable order backlog
of $90.6 million, which represents a 42.0% increase over the
same period a year ago.

MAJESCO 2018 ANNUAL REPORT

“Each business is a victim of Digital Darwinism, the evolution of consumer
behavior when society and technology evolve faster than the ability to
exploit it. Digital Darwinism does not discriminate.”

“Engage or Die!” Now it’s clear that businesses
must also “Adapt or Die!”

– Brian Solis

Brian Solis, a digital analyst and anthropologist, studies the effects of disruptive technology on business and society,
calling it “digital Darwinism.” Darwinism, as noted in the Merriam Webster dictionary is “a theory that inherent dynamic
forces allow only the fittest persons or organizations to prosper in a competitive environment or situation.” Solis borrowed
Darwinism to describe how organizations adapt to changing customer behavior and rapidly changing technology through
digital transformation, noting that the effect of digital Darwinism on business is real, and it is demonstrated through
evolutionary changes in people in their views, expectations, and decision making.

And we are seeing it rapidly unfold in the insurance industry...

• The $7 trillion insurance industry is two decades late for its date with the disruption that has rocked Banking, Retail,

Travel, Hospitality, Music and other industries.

• Digital companies like Amazon, Uber, Netflix, Apple and others are resetting the bar for customer engagement, resulting
in Insurance facing permanent changes in customer behavior, expectations, new digital technology and a shifting of
boundaries.

• The insurance industry is an opportunity so compelling that recent institutional and strategic investment exceeds $19

billion into over 1,500 InsurTech start-up companies.

• The InsurTech companies are developing innovative business models and products that are leading the way to Digital

Insurance 2.0.1

• Insurance companies investing more in technology are performing 6% better than their peers and growing twice as fast.2

The cumulative impact of the current state of insurance disruption is pressuring insurers to rapidly adapt and innovate
by shifting from a decades-old business model, Insurance 1.0, to a new business model, Digital Insurance 2.0, an exem-
plification of “digital Darwinism.”

1 “Venture Scanner Insurance Technology Startup Highlights — Q4 2017,” Venture Scanner via Medium,

https://medium.com/insurtech-vc/venture-scanner-insurance-technology-startup-highlights-q4-2017-4707ee42a09c,

January 17, 2018

2 Macquarie

MAJESCO 2018 ANNUAL REPORT

The Shift to Digital Insurance 2.0

Nearly every insurance company, from the largest to the smallest, is talking about transforming their business for the Digital Age,
recognizing that every entity and part of the insurance value chain is being challenged for its existence. Digitalization is a top priority
for insurers globally. It is reshaping the business of insurance. New customer expectations, new innovations and new competition
are powering a focus on growth and innovation underpinned by speed to value. This is echoed by leading industry analysts who
agree that the top insurance initiatives include speed to market, customer experience, digital insurer, data and analytics, innovation
and core modernization as top priorities.

Reinforcing this further, Majesco’s 2018 Strategic Priorities research found that insurers who reported higher levels of growth in
the past year were also much more likely to focus on strategic initiatives aimed at innovation, including developing new business
models, introducing new products, and expanding channels to meet new customer expectations and a new generation of insurance
buyers, all foundational areas of Digital Insurance 2.0.

A Widening Generation Gap Between Current and
Future Buyers Based on New Attributes

It’s a whole new game in insurance. Digital technologies, new competitors (with vastly different business models, products and
economics) and customers are rapidly embracing digital engagement approaches. They are open to new, innovative products
and services, and they will disrupt, disaggregate and dislocate the insurance industry’s traditional Insurance 1.0 business model.

MAJESCO 2018 ANNUAL REPORTThe Shift to Growth and Innovation

In a “winner take all” digital world, rethinking outdated
business assumptions and traditional business models is
mandatory. Optimizing and digitizing the existing business
will only get you so far. Attempting to overlay innovative
new products, channels or other capabilities on an existing
Insurance 1.0 business model built over the last 30+ years
would be like “paving the cow path.” Legacy systems prevent
incumbents from successfully delivering on Digital Insurance
2.0 thanks to their long release cycles, batch processing, dif-
ficult upgrades and increasing costs that reduce speed to
value. Compounding this dilemma, many companies are
hesitant to embark on a full business transformation because
of the high risk due to multi-year time commitments and tens
of millions of dollars in cost.

Insurers must become digital insurgents, with a Digital
Insurance 2.0 business model that leverages and innovates
on a new insurance business platform to find the next growth
wave and winning strategy in the new game of insurance.
This is represented by overlaying the classic S-Curve on
Majesco’s Disruption Model, which reflects the industry dis-
ruption and shift to innovation as a means for growth. Both
InsurTech startups and incumbent insurers are seeking the
next S-Curve in insurance to stay relevant, survive and grow.

MAJESCO 2018 ANNUAL REPORT

Survival and winning will require architecting and building
a Digital Insurance 2.0 business model focused on growth
and innovation. It will make today’s model obsolete. As
traditional industry assumptions fall away, the future of
insurance will be influenced by a new architecture for insur-
ance systems: platforms and ecosystems. Getting out ahead
of the curve is more important than ever, before the divide
between Insurance 1.0 and Digital Insurance 2.0 is too large
to overcome.

Source: Dave Power, “Innovation Strategy: 4 Key Tactics of Top Growth
Companies,” Harvard Extension School,
https://www.extension.harvard.edu/professional-development/blog/innovation-
strategy-4-key-tactics-top-growth-companies

Shifting to Platforms and EcoSystems

Since the beginning of automation, the insurance industry
has seen fundamental design, architecture and technology
shifts in insurance core software solutions. First, we had
the monolithic solutions running on the mainframe from
the 1960’s to early 2000’s. This was followed with the best
of breed components in the early 2000’s for policy, billing
and claims based on J2EE and service oriented architecture,
but with each system still using different business, data and
technology architectures. Next, in the early 2010’s, came
the loosely coupled “suites,” inclusive of the policy, billing
and claims components but with a consistent and common
business, data and technology architecture.

Yet, through these transitions, the industry maintained a
product-focused business architecture view, emphasizing
policy, billing and claims capabilities and with implementa-
tion primarily on-premise or in a private hosted environment,
often a “pseudo cloud environment.”

Today’s digital shift requires cloud-based platforms which
provide the great promise to address new challenges and
opportunities that enable insurers to disrupt their markets
before they are disrupted. This requires a new thinking of
industry solutions, one that transitions from products to
platforms underpinned by three key attributes: ecosys-
tem-friendly, centered on customer experience, and enabled
by cloud computing.

Recognizing that large transformation projects were waning
and a platform approach would appeal to Boards as they
consider the best route to deploy capital to enable change,
build flexibility and mitigate risk, Majesco realigned its
business strategy to provide a leading Insurance Industry
Platform enabling insurance carriers to outperform with
innovative, on demand digital capabilities.

Subsequently we aligned our product strategy with over
$200M in R&D investment in products, processes, people and
partnerships to bring together powerful insurance platforms
and ecosystems for Digital Insurance 2.0.

Majesco’s portfolio of platforms is the future because plat-
forms are the core of revolutionized business models. They
combine sought-after technologies. They fit an industry that
has been trying to become consumer-centric. And they are
increasingly proven with over 100 customers using our next
generation core systems (37 of whom are cloud customers),
over 25 partners in the ecosystem, and ever-growing interest
in the digital platforms.

These platforms run key business applications and services
in order to match the reality and requirements of the current
business environment that is characterized by constant dis-
ruption, heavy competition and growing market demands,
including untapped markets with under- or unmet needs.

Incumbents with outdated technologies are at a huge dis-
advantage because they are unable to respond with the
flexibility, agility and speed that has become the hallmark
of Digital Insurance 2.0 companies.

Fundamentally, to succeed in the digital age, an insurer’s
strategy must focus on the following attributes:

• Customer experience and engagement is priority #1
• Business innovation is mandatory
• Ecosystems extend value
• Speed to value is the differentiator

MAJESCO 2018 ANNUAL REPORT

The path to Digital Insurance 2.0 will enable insurers to:

Accelerate digital
transformation to
become digital era
market leaders

Optimize the
customer journey
with deeper,
personalized
engagement

Accelerate
innovation with
new business
models and
products

Accelerate
ecosystem
opportunities
and value

Avert disruption or
extinction by new
competition within
and outside the
industry

Majesco’s platform strategy brings together powerful platforms to
create your path to Digital Insurance 2.0

Majesco: Enabling our
Customers Path to
Digital Insurance 2.0

Each insurer’s path to cloud-based Digital Insurance
2.0 platforms will evolve differently, whether they be
incumbents, startups or greenfields. Being open to oper-
ationalize around the cloud platform’s promise as a new
business model paradigm acknowledges the role inno-
vation will continue to play as insurers encounter future
insurance ecosystems.

While the soft ware platform solutions are critical, the
implementation is equally important, with a focus on
speed to value. Majesco’s enhanced Delivery Playbook
incorporated emerging best practices and approaches that
enabled acceleration of implementations, while ensuring
quality, changing the paradigm to achieve speed to value
in months versus years.

Majesco platforms, processes, people and ecosystem
are at the forefront of this shift , providing growth,
innovation and value to our customers, including:

• Realization of a digital operating business model
• Optimization of the customer journey with deeper, per-

sonalized engagement

• Acceleration of innovation with new business models

and products

• Leveraging “test and learn” platform capabilities to

rapidly evaluate new ideas

Homesite Insurance – Novarica Impact Award for Digital Initiative
Homesite was selected for a 2017 Novarica Impact Award for the Digital
Initiative category. Homesite Insurance launched a sales portal with
Majesco CloudInsurer using Majesco Policy for P&C and Majesco Billing
core systems. The initiative was completed in a little over a year,
enabled product bundling, delivered up to 40% premium cost savings
to customers, and facilitated expansion for other lines of business to
support their growth strategy. Selection for this recognition was made
by members of the Novarica Insurance Technology Research Council, a
knowledge-sharing group of hundreds of insurer CIOs.

“We are honored to be recognized for the Novarica Impact Award for Digital
Initiative. Providing innovative, best-in-class digital customer engagement
is crucial in today’s small business marketplace. Our continued expansion
to a multi-line business on the Majesco CloudInsurer platform has been
key to our growth strategy, helping us keep pace with customer demands,
launch of innovative products and services and operational excellence.
We look forward to continuing our partnership with Majesco to continue
to deliver on this strategy.”

• Extending business value with ecosystem capabilities

- Dustin Hubbard, Vice President, Commercial IT for Homesite

and opportunities

MAJESCO 2018 ANNUAL REPORT

Many of Majesco customers — incumbents, startups and greenfields — are on the
path to Digital Insurance 2.0 by implementing our platform solutions, achieving
speed to value and recognition in the industry for their efforts along the way.

Chul Park, President at KBIC US Branch on selecting Majesco P&C Core Suite and Majesco CloudInsurer:

“KBIC US Branch is focused on offering top class insurance to mainstream small businesses operating in large
urban areas. With our close customer relationships, we focus on designing products based on the unique, diverse
needs of our customers from a multicultural and multilingual perspective. The Majesco CloudInsurer platform
offers us the ability to innovate our products, capture new market opportunities and agility to meet the unique
and diverse needs of our customers, which together provide strategic business value. We are looking forward
to a successful, long-term partnership with Majesco.”

Steve Wagner, AmCap Insurance’s President & Chief Operating Office on selection and implementation of
Majesco P&C Core Suite in 6 months:

“Our commitment to our customers for a personalized, best-in-class experience at the right price during a time
of market disruption and opportunity will be greatly enhanced with implementation of the Majesco platform.
From the beginning, Majesco’s commitment to a rapid and quality delivery was pivotal to this successful
implementation.”

Erin M. Cummings, CIO of Norfolk and Dedham Group® on implementation of Majesco Policy for P&C on
Majesco CloudInsurer™ in 6 months:

“The rapid launch following our selection of Majesco to support our commercial package policy for our new
products exceeded our expectations. The ready to use content and testing services facilitated our ability to
launch our products in multiple states, supporting our growth objectives.”

Yvette Gonzales, Senior Vice President & Chief Information Officer of CopperPoint Insurance Companies on
implementation of umbrella insurance:

“This was a high priority request from CopperPoint’s agents, and approved by their Board of Directors. Through
our efforts, we were able to help them make it. Copperpoint sees the implementation of Umbrella as key to
finishing out their Commercial Offerings and is essential to their plan for growth. They expressed their THANKS
to Majesco and how pleased they are with our partnership.”

MAJESCO 2018 ANNUAL REPORTLeading the Way for Growth and Innovation

We are in uncharted waters. The rise of Digital Insurance 2.0 is simultaneously one of the greatest opportunities, chal-
lenges and threats to insurers operating in Insurance 1.0. It requires insurers to be “the architects of the future, not its
victims,” as famously said by R. Buckminster Fuller. Survival and winning will require architecting and building a Digital
Insurance 2.0 business model and a platform that will make the current model obsolete.

The time for plans, preparation, and execution is now — recognizing that the gap is widening and the timeframe to respond
is closing. Insurers cannot avoid this phenomenon: as traditional industry models fall away, the future of insurance
stands to be greatly influenced by the first wave, Digital Insurance 2.0, leading to a new wave in the future, Insurance 3.0.

In a rapidly changing insurance market, new competitors do not play by the traditional rules of the past. Insurers need to
be a part of rewriting the rules for the future, because there is less risk when you write the new rules. Majesco is actively
working with the industry and our customers to rewrite the rules.

MAJESCO 2018 ANNUAL REPORT

“Nearly every insurer is embarked on several digital
journeys to engage more eff ectively and directly
with their policyholders, distribution partners, and
broader ecosystem. Majesco Digital1st Insurance
is a portfolio of solutions designed to enable those
journeys. It includes an innovative microservices
platform to support products and business models
in an on-demand world.”

“Our insurance clients are facing the pressure to mod-
ernize their business models in order to keep pace
with the explosion of data, transactions, regulatory
requirements, and new expectations for the experi-
ence of individuals. Our partnership with Majesco will
accelerate digital transformation for insurance orga-
nizations and allow them to discover new insights in
the data flowing through their existing processes.”

Donald Light, Director in Celent’s North America
Property/Casualty Practice

Bridget van Kralingen, Senior Vice President,
Global Industries, Platforms and Blockchain, IBM

Majesco EcoSystem Partners

Gregory Bailey, Denim CEO and co-founder as a partner on Majesco EcoExchange:
“Enabling the insurance industry to shift more rapidly to the digital age is at the core of both the
Majesco Digital1st EcoExchange and the Denim platform. Integrating the two solutions will enable
insurers to embrace innovation through streamlined access to the Denim platform.”

Tara Kelly President & CEO as a partner on Majesco EcoExchange:
“Majesco’s EcoExchange provides an exciting opportunity for carriers to truly participate in the
API economy, in a simple, safe and powerful way. As a partner we are pleased to participate as it
allows Majesco’s customers and prospects to try a fully functional cloud integration to our Dialog
Suite ®™ and demonstrates the tangible value of digital transformation.”

MAJESCO 2018 ANNUAL REPORT

About Majesco

WHO WE ARE?

Majesco is a global provider of core insurance platform soft ware and
consulting services for insurance business transformation. Insurance
business transformation is a journey of change and revitalization, a
renaissance of insurance.

Majesco believes the Digital Insurance 2.0 business model shift requires
digitally enabled, multi-channel and customer demographic specific
products and services underpinned with new technology, data and
analytics, as well as partner ecosystems. In support of that, Majesco’s
vision is to be a leading platform for the Insurance industry. We aim to
enable change in the next five years by helping insurers successfully shift
to Digital Insurance 2.0.

People, Product, Process, and Partners are our chief diff erentiators, and
are enabled by these key attributes:

• Speed to Value - Speed to Implementation, Speed to Market, and

Speed to Revenue; Ready to Use Content; Partner Ecosystem

• Low Investment Risk Model - Pay as you Grow Pricing; Low Upfront
Costs; No CAPEX; Fees tied to Usage; and Lower Total Cost of Program
Implementation

• All Lines of Business - P&C - Personal, Commercial, Specialty and
Workers Comp; L&A - Individual, Group, Voluntary Benefits and
Worksite

• Speed to Upgrades - Seamless Monthly Policy Upgrades of Soft ware

and Content

• Client Centric Model - Single point of accountability; Relationship
Driven Client Engagements; Focus on Delivery Excellence; Full
program ownership and support

• Thought Leadership and InsurTech Leadership - Shaping the
Industry Discussion and Strategies; InsurTech Influence and
Engagement

“Organizations preparing for the future
increasingly rely on modern core systems like
Majesco P&C Suite that allow them to connect
the back, middle and front–off ice to deliver
speed to value.”

Karlyn Carnahan, Head, The Americas,
Property Casualty, Celent

WHAT DO WE DO?

Majesco serves just one industry – Insurance. We are at the “core” of
the insurance ecosystem. We provide core insurance platform solutions
for both the P&C and L&A and Group markets. We are recognized as a
leader in both segments of the industry for our core solutions, Cloud
implementations, thought leadership and InsurTech leadership.

Our platform soft ware and consulting services provide the industry
with market leading solutions. Our soft ware solutions are aligned to
our Platform Strategy. We help create innovative new business models
that leverage broad ecosystems and technology innovations including
cloud computing, artificial intelligence, machine learning, and new data
sources to create greatly enhanced customer experiences. Successful
companies leverage technologies such as mobile, social and cloud to
make better decisions, automate processes, strengthen the connection
with customers, partners, channels, and pursue innovation, all at an
increasingly rapid pace, positioning them as “digital first” companies.

MAJESCO 2018 ANNUAL REPORT

“Celent is seeing increased activity in back-off ice
transformations. This release of Majesco’s suite
off ers a single platform for both individual and group/
voluntary, which can simplify an insurer’s environ-
ment. Their continued growth in digital capabilities
enhances the value proposition.”

Tom Scales, Head, America’s Life and Annuity,
Celent

Insurance Platforms for Digital Insurance 2.0

Next Generation Core Systems
Majesco P&C Core Suite
Majesco L&A and Group Core Suite

Cloud Computing
Majesco CloudInsurer™
IBM Industry Platforms

Digital Platforms
Majesco Digital1st Insurance™

EcoSystem
Majesco Digital1st EcoExchange™

A Digital Insurance 2.0 platform is built on next generation core
capabilities, digital and artificial intelligence (AI) capabilities,
cloud computing and a partner ecosystem. Today’s business
drivers in the market include speed to value; customer engage-
ment and loyalty; new world products and services; test and learn
platforms; and TCO optimizations.

Majesco’s platform strategy brings together powerful capabilities
for the digital era. The path to Digital Insurance 2.0 will evolve
diff erently for each insurer. But those who make the transition
will be able to do critical activities that give them a powerful com-
petitive edge in a constantly changing marketplace:
• Accelerate digital transformation to become digital era market

leaders

• Optimize the customer journey with deeper, personalized

engagement

• Accelerate innovation with new business models and products
• Maximize ecosystem opportunities and value
• Avert disruption or extinction by new competition within and

outside the industry

WHY MAJESCO?

Insurers clearly recognize that the insurance industry is changing
and that they need to focus on growth and innovation to remain
competitive. In this new landscape, modernizing legacy systems
provides the “table stakes” foundation to enable innovation and
speed to market for new products, channels, and processes, in
response to fast changing customer expectations, needs and
risk profiles. Today’s new market paradigm requires a modern
platform solution and ecosystem as the foundation as they shift
to Digital Insurance 2.0.

Majesco is well positioned to help the industry and our cus-
tomers make the shift to Digital Insurance 2.0 with our portfolio of
products and digital solutions, our head start on the transition to
cloud, our IBM partnership, a unique growing ecosystem and our
strong customer base. With a focus on client centricity through
a single point of accountability, we build long-term relationships
with our customers, helping them make the shift to a new future
of insurance.

Products
• Strong & proven P&C, L&A and Group

core solutions

• Consistently rated among top 3-4

by analysts

• Diff erentiate for Speed of
Implementation and TCO

• Attach capabilities for Data and

Digital products

IBM Partnership &
EcoSystem
• Majesco is a foundation partner in
IBM’s Industry Platform strategy
for Insurance

• Diverse Partners covering Data,

AI, Digital

• Establishing Digital1st EcoExchange
for scaling partner ecosystems

Digital
• Cloud-Native Digital1st Platform

with industry’s first micro-services
architecture

• SaaS off erings for new world products
& improving customer experience

Transition Cloud Model
• Cloud Model share increased

from 18% to 32% over last 8 quarters

• Head start in Cloud
• 37 cloud customers
•

IBM & Azure partnership

Experienced Leadership
• Track record of 5 successful
acquisitions and integrations

• Young, experienced &
energetic leadership

• Strong domain knowledge &

technical skills

• Team across North America,

UK and Asia

Customer Base
• 160 global customers across all tiers
• Significant opportunity to increase

share of wallet

• Deep relationships through client

partner model

MAJESCO 2018 ANNUAL REPORT

Leadership Team

Ketan Mehta
Ketan Mehta has served as President and Chief Executive Officer of Majesco, as well as a member of Majesco’s Board of Directors,
since 2000. Ketan co-founded Mastek Limited (“Mastek”) in 1982 and has served as a member of Mastek’s board of directors since
the same year. During his tenure of over 32 years with Mastek, Majesco and its affiliates, Ketan has handled multiple functions
including sales, delivery and general management. Ketan envisioned and executed an insurance focus for Majesco including
acquisition and integration of four insurance technology companies over the last 9 years. Prior to that, Ketan also spearheaded

Mastek’s Joint Venture with Deloitte Consulting. Ketan holds a Management Degree from the Indian Institute of Management, Ahmedabad.

Ed Ossie
Ed Ossie serves as the Chief Operating Officer at Majesco since January 2015. Ed has over 30 years of international experience
leading and serving high-growth technology companies. Prior to joining Majesco, Ed was Vice President and Director at Corum
Group, a Global M&A Advisory firm focused on the Technology segment. Before Corum Group, Ed served in a variety of roles
at Innovation Group PLC from 2001-2010, including President, Executive Director and Chief Operating Officer. Prior to 2001,
along with his investment partner, the Halifax Capital Group, he led the sale of MTW Corporation to Innovation Group as MTW
CEO. Earlier in his career he spent several years at Texas Instruments and was Vice President for the Software Group, which grew from start-up to
1,300 people in 5 years. Ed graduated with a Bachelor of Science degree from Missouri State University.

Farid Kazani
Farid Kazani serves as Managing Director, Majesco Limited and CFO & Treasurer, Majesco US. He brings critical finance and
organization skills to Majesco with over 27 years of experience in the field of Corporate Finance and core competencies in
strategic business planning, treasury and fund management, forex, mergers and acquisitions and divestments. Prior to joining
Majesco, Farid was the Group CFO & Finance Director of Mastek Ltd. He has been the architect of carrying out the process of
demerger of the Insurance Business into Majesco which was completed in June 2015. He was responsible for reorganizing
the legal entity structure and creating the Insurance business group under Majesco US, completing the two acquisitions and paving the way to
list Majesco on the NYSE-MKT and the parent company, Majesco Limited on the Indian Stock Exchanges. Prior to Mastek Limited, he worked with
Firstsource Solutions Ltd as CFO and also organizations such as RPG Enterprises, BPL Mobile, Marico Industries Ltd and NOCIL. He has successfully
handled an IPO of $100 million and an FCCB issue of $275 million for Firstsource Solutions Ltd, besides independently managing brand takeovers
of ‘Mediker’ and ‘Oil of Malabar’ for Marico Industries Ltd.

Prateek Kumar
Prateek Kumar is Executive Vice President & P&C Industry Leader at Majesco. He is responsible for the P&C business at Majesco.
In addition, he is also responsible for acquiring new customers and deepening relationships with customers across both L&A
and P&C lines of business. He has held various positions in pre-sales, sales and account management at Majesco since 2003.
From 2000-2002, he worked as an IT consultant with the Exeter Group in the areas of IT strategy, planning and program man-
agement. He holds an MBA from Virginia Polytechnic Institute and State University.

Manish Shah
Manish Shah is Executive Vice President and leads the global software product division at Majesco. In this role, he is respon-
sible for management and development of innovative software products for the global insurance business and he works on
strategic directions for the company as a member of the leadership team. Prior to the merger of Cover-All and Majesco, Manish
was President and CEO of Cover-All and served on its Board of Directors. Before being named CEO in July 2013, Manish was
Cover-All’s Chief Technology Officer and also responsible for sales and operations, including strategic planning, customer
relationships and product management. Prior to joining Cover-All, Manish held several technology management positions independently and
with Tata Consultancy Services for over a decade, serving a wide variety of industries including P&C Insurance. Manish earned an M.B.A. from
Columbia University, and a Bachelor of Science degree in Computer Science from MS University of Baroda, India.

MAJESCO 2018 ANNUAL REPORT

Denise Garth
Denise Garth is Senior Vice President Strategic Marketing responsible for leading marketing, industry relations and innovation
in support of Majesco’s client centric strategy, working closely with Majesco customers, partners and the industry. She is a
recognized Top 50 InsurTech Influencer and industry leader with both P&C and L&A insurance experience as a CIO and business
executive with deep international ties in Asia and Europe through her ACORD leadership role. Denise is an acknowledged
strategic thinker, innovation leader, international speaker, and author of thought leadership and articles regarding the key
issues and opportunities facing the industry today to prepare for the future. Prior to joining Majesco, Denise held business and technology senior
executive roles with leading insurance companies, including Mutual of Omaha, CUNA Mutual and Century Cos. of America. At ACORD, she was
vice president, standards and membership driving ACORD’s international expansion and market presence. While at Innovation Group, she was
EVP, strategic marketing and global head of market strategy where she re-established the company’s position through market-driven strategy
and solutions. Most recently she was Partner and Chief Digital Officer with Strategy Meets Action, leading the Innovation Practice evaluating
emerging technologies, outside industry trends, and innovation and their implications and opportunities for the industry. Denise is a Cum Laude
graduate, with a BS in Math and Computer Science from Central College in Iowa, MBA work at the University of Northern Iowa and attended

various executive leadership programs.

Ganesh Pai
Ganesh Pai is the Executive Vice President and leads the consulting services business at Majesco. In this role, he is respon-
sible for growth, P&L management and he oversees all aspects of the business from strategy to execution. Prior to joining
Majesco, Ganesh was the Vice President and Global Head of IT, Insurance Business Unit at Genpact, responsible for IT ser-
vices and taking to market innovative digital and technology enabled insurance solutions. Previously, Ganesh spent 17 years
at Mphasis (a Blackstone company) where he contributed significantly to their growth playing multiple leadership roles
across geographies, business units and industry verticals. At the time of leaving he was the SVP & Global Head of Insurance, CEO of Mphasis
Wyde and a member of the executive leadership team managing a global business for software products and outsourcing services with end-
to-end responsibility including financials, marketing, sales and client relationships, solution portfolio, R&D, product development, operations
and service delivery. During his tenure in the company, he held several key regional and industry vertical leadership positions and was based
out of Singapore, London, New York and Chicago. Ganesh holds an undergraduate degree in Electrical Engineering from Bangalore University,
India, and an MBA from the University of Chicago’s Booth School of Business.

Mallinath Sengupta
Mallinath Sengupta serves as the Executive Vice President & Head of P&C Delivery at Majesco since joining Majesco in November
2017. In his role, Mallinath is responsible for delivering client programs that meet customer expectations. Mallinath is passionate
about transforming the software product delivery and implementation playbook. Mallinath is helping optimize the delivery
processes for this new paradigm. Mallinath has over 30 years of international experience. In his long career in the IT Industry,
he has performed various roles that include large-scale delivery (team size exceeding 10,000), Account Management, Pre-Sales,
Engagement Initiation and Product Development. Mallinath previously worked for Wipro, NIIT and Mphasis. In his last role, Mallinath was Chief
Executive-NextAngles at Mphasis Corp where he helped develop an AI-enabled software solution for banking regulatory compliance. Mallinath
is an alum of Indian Institute of Management, Bangalore.

Lori Stanley
Lori Stanley is General Counsel and Corporate Secretary of Majesco. She has served as General Counsel, North America for
Majesco since July 2011 and as Corporate Secretary since December 2011. Prior to joining Majesco, Ms. Stanley was General
Counsel and Corporate Secretary of Enherent Corp. (“Enherent”), an information technology (“IT”) provider, since April 2004,
following Enherent’s acquisition by merger of Dynax Solutions, Inc. (“Dynax”). From July 2002 to March 2004, she was General
Counsel of Dynax, and Vice President of Human Resources and Corporate Secretary since April 2003. Ms. Stanley also served
as a member of the board of directors of Dynax from September 2003 to March 2004. From November 2000 to June 2002, Ms. Stanley was General
Counsel and Vice President of Human Resources for The A Consulting Team, Inc. (now known as Helios & Matheson Analytics, Inc.), an IT services
and solutions provider. From July 1999 to October 2000, Ms. Stanley was the Vice President of Legal Operations and Human Resources for The
Netplex Group, Inc. From January 1997 to June 1999, Ms. Stanley was General Counsel of the Solutions Division of Computer Horizons Corp. Ms.
Stanley earned a B.S. from St. John’s University and a J.D. from Seton Hall Law School.

MAJESCO 2018 ANNUAL REPORT

Fiscal Year Revenue Comparisons

Client Concentration

FY17

Top Client

Top Five

Top Ten

Remainder

7.5%

27.1%

40.9%

59.1%

FY18

Top Client

Top Five

Top Ten

Remainder

9.0%

28.4%

43.1%

56.9%

MAJESCO 2018 ANNUAL REPORT

North American Customers by Solution

Not all customers* have all products creating
opportunities to extend the Majesco relationship

Policy

Billing

Claims

*North America P&C IP Customers

Insurance Customers by Tier

FY17

Direct Written
Premium

FY18

> $5B

$1B to < $5B

$100M to < $1B

< $100M

MAJESCO 2018 ANNUAL REPORT

Business Highlights

57 % Increase
in Cloud Business

13% Increase
in Y-on-Y
Recurring
Revenue

Tier 1 Customer
Homesite Won
Digital Initiative
Award

Impact
Award

IBM

First Deal on
IBM Industry
Platform

19 Successful
Customer
Implementations

New Client
Wins Globally

Launched
New Platforms
CloudInsurer™ and
Digital1st Insurance™

7 of the 9 new IP
deals in North
America were cloud

Operating Highlights FY18

Line of
Business

P&C: 55.8%
L&A: 22.5%
Insurance
Services: 20.5%
Non-Insurance: 1.1%

Global Footprint
NA - 88.9%
UK - 5.4%
APAC - 5.7%

Cloud
Customers;
30% of Total
Revenue

14%

R&D Spend 14% of
Revenue in FY18

$216.4
Mn

Total Contract
Value in FY18

$90.6
Mn

12 Month
Executable
Backlog as on
31st March 2018

$9.2
Mn

Cash & Cash
Equivalent

$13.6
Mn

Total Debt

MAJESCO 2018 ANNUAL REPORTUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED MARCH 31, 2018

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
TO

FOR THE TRANSITION PERIOD FROM

COMMISSION FILE NUMBER 001-37466

MAJESCO
(Exact name of registrant as specified in its charter)

California
(State or other jurisdiction
of incorporation or organization)

412 Mount Kemble Ave.,
Suite 110C
Morristown, NJ
(Address of principal executive offices)

77-0309142
(I.R.S. Employer
Identification No.)

07960
(Zip code)

(973) 461-5200
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class
Common Stock, par value $0.002 per share

Name of Each Exchange on Which Registered
NYSE American

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934

during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File

required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be

contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an

emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in
Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐
Non-accelerated filer ☒ (Do not check if a smaller reporting company)

Accelerated filer ☐
Smaller reporting company ☐
Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new

or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant as of September 30, 2017, the last business

day of the registrant’s most recently completed second fiscal quarter, was approximately $27,719,000.

As of June 14, 2018, there were 36,601,491 shares of the registrant’s common stock outstanding, par value $0.002 per share.

DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates by reference information from certain portions of the registrant’s definitive proxy statement to be filed with the Securities and

Exchange Commission within 120 days of the fiscal year end of March 31, 2018.

[This Page Intentionally Left Blank]

TABLE OF CONTENTS

PART I

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ITEM 1.

ITEM 1A.

ITEM 1B.

ITEM 2.

ITEM 3.

ITEM 4.

BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

UNRESOLVED STAFF COMMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MINE SAFETY DISCLOSURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ITEM 5.

ITEM 6.

ITEM 7.

ITEM 7A.

ITEM 8.
ITEM 9.

ITEM 9A.
ITEM 9B.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . .
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . . . .
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE . . . . . . . . . . . . . . . . . . .
CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ITEM 10.

ITEM 11.
ITEM 12.

PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS . . . . . . . . .
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PRINCIPAL ACCOUNTANT FEES AND SERVICES . . . . . . . . . . . . . . . . . .

ITEM 14.

ITEM 13.

PART IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ITEM 15.
ITEM 16.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES . . . . . . . . . . . . .
FORM 10-K SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

SIGNATURES

EXHIBIT INDEX

43
44

44
45
45

46
46

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements
of historical fact could be deemed forward-looking statements. Statements that include words such as
“may,” “will,” “might,” “projects,” “expects,” “plans,” “believes,” “anticipates,” “targets,” “intends,” “hopes,”
“aims,” “can,” “should,” “could,” “would,” “goal,” “potential,” “approximately,” “estimate,” “pro forma,”
“continue” or “pursue” or the negative of these words or other words or expressions of similar meaning
may identify forward-looking statements. For example, forward-looking statements include any statements
of the plans, strategies and objectives of management for future operations, including the execution of
integration and restructuring plans and the anticipated timing of filings; any statements concerning
proposed new products, services or developments; any statements regarding future economic conditions or
performance; statements of belief and any statement of assumptions underlying any of the foregoing.

These forward-looking statements are found at various places throughout this Annual Report on
Form 10-K and the other documents referred to and relate to a variety of matters, including, but not
limited to, other statements that are not purely statements of historical fact. These forward-looking
statements are made on the basis of the current beliefs, expectations and assumptions of management, are
not guarantees of performance and are subject to significant risks and uncertainty. These forward-looking
statements should not be relied upon as predictions of future events and Majesco cannot assure you that
the events or circumstances discussed or reflected in these statements will be achieved or will occur.
Furthermore, if such forward-looking statements prove to be inaccurate, the inaccuracy may be material. In
light of the significant uncertainties in these forward-looking statements, you should not regard these
statements as a representation or warranty by Majesco or any other person that we will achieve our
objectives and plans in any specified timeframe, or at all.

These forward-looking statements should, therefore, be considered in light of various important
factors, including those set forth in “Item 1A. Risk Factors” and elsewhere in this Annual Report on
Form 10-K. Important factors that could cause actual results to differ materially from those described in
forward-looking statements contained herein include, but are not limited to:

•

our ability to achieve increased market penetration for our product and service offerings and
obtain new customers;

our ability to raise future capital as needed to fund our growth and innovation plans;

growth prospects of the property & casualty and life & annuity insurance industry;

the strength and potential of our technology platform and our ability to innovate and anticipate
future customer needs;

our ability to protect our intellectual property rights;

our ability to compete successfully against other providers and products;

our dependence on certain key customers and the risk of loss of these customers;

security breaches affecting our systems, software, applications, and products;

the unauthorized access, acquisition, disclosure, theft or compromise of proprietary or personal
customer or consumer data and information;

the risk of telecommunication or technological disruptions;

our exposure to additional scrutiny and increased expenses as a result of being a public company;

our ability to identify and complete acquisitions, manage growth and successfully integrate
acquisitions;

our financial condition, financing requirements and cash flow;

market expectations regarding our potential growth and ability to implement our short and
long-term strategies;

•

the risk of loss of strategic relationships;

the success of our research and development investments;

changes in economic conditions, political conditions and trade protection measures and licensing
requirements in the United States and in the foreign jurisdictions in which we operate;

changes in laws or regulations affecting the insurance industry in particular;

changes in tax laws, including to the transfer pricing regime;

restrictions and changes in laws on immigration;

our inability to achieve sustained profitability;

our ability to obtain, use or successfully integrate third-party licensed technology;

our ability and cost of retaining and recruiting key personnel or the risk of loss of such key
personnel;

the adverse outcome of legal proceedings against us;

the risk that our customers internally develop new competitive products; and

the impact of new accounting standards and changes we may need to make in anticipation or as a
result of these standards.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only

as of the date of this Annual Report on Form 10-K. Majesco disclaims any obligation to publicly update or
release any revisions to these forward-looking statements, whether as a result of new information, future
events or otherwise, after the date of this Annual Report on Form 10-K or to reflect the occurrence of
unanticipated events, except as required by law.

iii

[This Page Intentionally Left Blank]

ITEM 1. BUSINESS

Overview

PART I

We are a global provider of core insurance platform solutions, consulting services and other insurance

solutions for business transformation of the insurance industry. In addition to the United States, we operate
in Canada, Mexico, the United Kingdom, Malaysia, Singapore, Thailand and India. We offer core
insurance platform solutions for Property & Casualty/General Insurance (“P&C”), and Life, Annuities,
Pensions and Group/Benefits (“L&A and Group”) providers, enabling them to automate and manage
business processes across the end-to-end insurance value chain and comply with policies and regulations
across their organizations. In addition, we offer a variety of other technology-based solutions for
distribution management, digital, data and cloud. Our consulting services solutions provide enterprise
consulting, application development management and testing for insurers. Our portfolio of solutions enable
our customers to respond to evolving market needs, growth and innovation opportunities and regulatory
changes, which enables agility, innovation and speed while improving the effectiveness and efficiency of
their business operations.

Majesco is a California corporation which was incorporated in April 1992 under the name Mastek

Software, Inc. In 1995, this name was changed to Majesco Software, Inc., which was changed to
MajescoMastek in 2006 and to Majesco in October 2014.

Our principal offices are located at 412 Mount Kemble Ave, Suite 110C, Morristown, NJ 07960, and

our telephone number is (973) 461-5200. Our principal website is www.majesco.com. Information on our
website does not constitute a part of, nor is it incorporated in any way, into this Annual Report on
Form 10-K.

Majesco Reorganization

Majesco Limited (“Majesco Limited”), a public limited company domiciled in India whose equity
shares are listed on the BSE Limited (Bombay Stock Exchange) and the National Stock Exchange of India
Limited, currently owns 69.75% of our issued and outstanding common stock.

Previously, Majesco was 100% owned (directly and indirectly) by Mastek Limited (“Mastek”), a public

limited company domiciled in India whose equity shares are listed on the BSE Limited and the National
Stock Exchange of India Limited.

Pursuant to a de-merger process which was completed on June 1, 2015, Mastek’s insurance-related
business was separated from Mastek’s non-insurance related businesses and all insurance-related operations
of Mastek that were not directly owned by Majesco were contributed to Majesco (such de-merger and
reorganization process is referred to in this Annual Report on Form 10-K as the “Majesco
Reorganization”).

In connection with the de-merger, 83.5% of Mastek’s then ownership interest in Majesco was

transferred to a newly-formed company in India, called Majesco Limited, which was spun-off from Mastek.
Mastek continues to own a 13.78% indirect minority interest in Majesco through its wholly-owned
subsidiary, Mastek (UK) Ltd.

Agile Asset Acquisition

On January 1, 2015, we acquired substantially all of the insurance consulting business of Agile
Technologies LLC, a business and technology management consulting firm (“Agile”), for a total estimated
consideration of approximately $8.5 million with a total maximum of $9.2 million potentially payable as
earn-out payments.

Through this acquisition, we acquired the insurance-focused business and IT consulting business of
Agile, as well as business transformation and process optimization capabilities, strategy enablement for data
and digital and data services including data management and architecture strategy and services. In
connection with this acquisition, over 55 insurance technology professionals and other personnel formerly

employed or engaged by Agile became employees or independent contractors of Majesco. This acquisition
also resulted in the addition of approximately 20 customers to our customer base. In connection with this
acquisition, we assumed office leases under which Agile was lessee in New Jersey, Georgia and Ohio, and
acquired certain trademarks, service marks, domain names and the business process framework of Agile.

Cover-All Technologies Merger

On June 26, 2015, Cover-All Technologies Inc. (“Cover-All”), a provider of core insurance software
and business analytics solution primarily focused on commercial lines for the P&C insurance industry listed
on the NYSE American (formerly, the NYSE MKT), merged into Majesco, with Majesco as the surviving
corporation, in a stock-for-stock transaction. In the merger, each share of Cover-All common stock issued
and outstanding immediately prior to the effective time of the merger (other than treasury shares) was
automatically cancelled and extinguished and converted into the right to receive 0.21641 shares of common
stock of Majesco. This exchange ratio resulted in holders of issued and outstanding Cover-All common
stock and outstanding options and restricted stock units and other equity awards of Cover-All holding in
the aggregate approximately 16.5% of the total capitalization of the combined company immediately
following consummation of the merger.

Cover-All’s customers include insurance companies, agents, brokers and managing general agents
(“MGAs”) throughout the United States and Puerto Rico. Cover-All’s software solutions and services are
designed to enable customers to introduce new products quickly, expand their distribution channels, reduce
costs and improve service to their customers. Cover-All’s business analytics solution enables customers to
leverage their information assets for real time business insights and for better risk selection, pricing and
financial reporting. In 2013, Cover-All announced the general availability of Cover-All Dev Studio, a visual
configuration platform for building new and maintaining existing pre-built commercial insurance products
for Cover-All Policy. In 2011, Cover-All expanded its portfolio of insurance solutions by acquiring the
assets of a recognized claims solution provider, Ho’ike Services, Inc. (doing business as BlueWave
Technology).

In connection with the merger, we listed our common stock on the NYSE American under the symbol

“MJCO” and began trading under this symbol following the consummation of the merger.

Financial Statements Presentation

Our historical financial statements and information presented in this Annual Report on Form 10-K are

presented on a combined basis giving effect to the Majesco Reorganization as if it had occurred as of the
date of the historical balance sheet data presented in such historical financial statements, or as of the
beginning of the periods presented in such historical financial statements, as applicable.

Our fiscal year ends March 31. Accordingly, references in this Annual Report on Form 10-K to “fiscal

2018” mean the fiscal year ended March 31, 2018, references to “fiscal 2017” mean the fiscal year ended
March 31, 2017, references to “fiscal 2016” mean the fiscal year ended March 31, 2016, references to “fiscal
2015” mean the fiscal year ended March 31, 2015 and references to “fiscal 2014” mean the fiscal year ended
March 31, 2014.

Business

We have been operating in the insurance industry for more than twenty years, successfully partnering

with market leading insurance companies and enabling them to transform their business, introduce
innovative products, and expand distribution channels to generate growth and increase profitability. We are
a global provider of core insurance platform solutions and consulting services for insurance business
transformation for P&C, L&A and Group providers, allowing them to enable the entire insurance value
chain. We offer a portfolio of platform solutions and consulting services for all lines of business and all tiers
of insurers. The portfolio includes core insurance platform solutions for policy, rating, underwriting, billing,
claims, distribution management, digital and data and analytics as well as consulting services for enterprise
consulting, digital, data, testing and application development and maintenance.

Long-term, strong customer relationships are a key component of our success given the long-term

nature of our contracts, and provide an opportunity for deeper relationships using our portfolio of
solutions. They provide critical customer references for new sales. Our customers range from some of the

largest global tier one insurance carriers in the industry to mid-market insurers, MGAs, startups and
greenfields, including specialty, mutual and regional carriers. As of March 31, 2018, we served
approximately 160 insurance customers on a worldwide basis. For fiscal 2017, fiscal 2016, fiscal 2015 and
fiscal 2014, we served approximately 148, 149, 108 and 97 insurance customers on a worldwide basis,
respectively.

We generate revenue from our global IP led business as well as from engagements in the insurance
services space. The IP business is primarily driven through either an on-premise deployment or deployment
of the platform on the cloud. While the on-premise model generates revenues from the licensing of our
proprietary software (perpetual or annual license fees), related implementation and support and
maintenance fees pursuant to contracts with customers, we have been witnessing a significant shift in the
business model with customers preferring the cloud model which offers a speed to value benefit together
with low upfront investments. The revenues from the cloud model are led by an implementation/
configuration contract and followed by monthly subscriptions once the platform is in production for the
customer to use. The implementation contracts for both the models are on a time and material or fixed bid
basis. License fees, support and maintenance and cloud subscription fees are usually managed through
multi-year agreements which are typically over a period of five to seven years. Insurance services revenues is
primarily driven by professional services offered in the areas of transformation consulting, data, digital,
testing and application development and management.

For the past several years, we have:

•

released a major version updates for the L&A and Group software — Majesco Policy for L&A
and Group, Majesco Billing for L&A and Group, Majesco Billing and Claims for L&A and
Group;

released major version updates for Majesco Billing for P&C, Majesco Claims for P&C and
Majesco Policy for P&C;

launched a major new solution portfolio, Majesco Digital 1st Insurance inclusive of Majesco
Digital 1st eConnect, Majesco Digital 1st EcoExchange, Majesco Digial 1st Journey Designer and
Majesco Digital 1st Platform;

launched new data solutions, Majesco Enterprise Data Model and Majesco Enterprise Data
Warehouse;

added new partners, including a growing number of InsurTech ones;

announced a strategic partnership with IBM to jointly offer a new cognitive, cloud-based platform
to help insurance carriers worldwide create new services on IBM Cloud;

actively engaged and supported InsurTech, including participation in some accelerators;

published primary and secondary research/thought leadership regarding industry trends, shifts,
demands and more; and

cultivated and expanded our client base across tier one, mid-market and greenfield/start-ups. We
generated revenues of $122.9 million, $121.8 million, $113.3 million, $79.3 million and
$82.8 million in fiscal 2018, fiscal 2017, fiscal 2016, fiscal 2015 and fiscal 2014, respectively.

Overview of the Insurance Industry

The insurance industry is large, fragmented, highly regulated and complex. In order to effectively
manage their operations, insurance carriers require core business systems that integrate with other internal
systems, control workflow, enable extensive configurability and provide visibility to every user.

The insurance industry is in the midst of profound change fueled by trends that are converging and

pushing a sometimes slow-to-adapt industry. This seismic shift is creating leaps in innovation and
disruption, challenging the traditional business assumptions, operations, processes and products of the last
30 to 50 years represented as Insurance 1.0. Insurance carriers are currently faced with a wide range of

challenges. Increasing competition, emerging technologies and changing customer expectations are pushing
carriers to make their business more agile, improve their time to market for new products, reach new
markets, expand channels and respond quickly to market changes, moving to Digital Insurance 2.0.

Many insurance carriers are experiencing increased operational risk and financial loss due to the
inadequacy of their existing legacy core systems to meet the needs of Digital Insurance 2.0. The inherent
functional and technical limitations of these systems have impeded carriers’ ability to grow profitability and
adapt to the evolving expectations of consumer, commercial and government insurance customers. Most
organizations cannot simply flip off one switch (traditional business model and products administered on
traditional systems) and flip another on (new business model and products on modern, flexible systems that
will handle digital integration and better data acquisition and analysis). So, the shift will require steps.
Those steps will operate as both a bridge and a proving ground, with the traditional system still operational
as a firm foundation while the new foundation is being constructed.

Our Solutions

We provide core insurance software to insurance carriers from greenfields to mid-market and large
insurance companies using two different models including (1) the licensed use of our proprietary software;
and (2) cloud/SaaS using the same proprietary software but managed on cloud (private, public or hybrid)
infrastructure. Our consulting and other insurance technology services likewise are offered to insurance
carriers from greenfields to mid-market and large insurance companies based on the scope and services
selected.

Our solutions are designed to provide insurance carriers with the core system capabilities required to

effectively manage their business and enable agility, innovation and speed to meet changing market
dynamics and opportunities. Our offering is comprised primarily of:

•

core insurance software platform solutions for all lines of business in the insurance industry;

project delivery and implementation of our solutions; and

consulting services that support the business transformation, digital, data and ongoing use.

Software Solutions

Enterprise Solutions

We deliver enterprise software solutions that support all lines of business for P&C, L&A and Group,
enabling customer centricity for insurers. This includes billing, distribution management, digital platform
with portals and mobile capabilities, and a cloud business platform. Our enterprise solutions include:

• Majesco Distribution Management;

• Majesco Digital 1st Insurance;

• Majesco Cloud Insurer; and

•

Implementation Services.

Life, Annuity, Pension and Group/Benefits Solutions

We deliver solutions for L&A and Group/Employee Benefits core insurance areas, including policy
management, product modeling, product configuration, new business processing, and claims. Our L&A and
Group/Employee Benefits solutions include:

• Majesco Policy for L&A and Group;

• Majesco Billing for L&A and Group;

• Majesco Claims for L&A and Group; and

• Majesco New Business and Underwriting.

Majesco Property and Casualty/General Insurance Solutions

We deliver solutions for P&C/General Insurance core insurance areas, including policy management,
claims management, rating, underwriting, product configuration and reinsurance. Our P&C and General
Insurance solutions include:

• Majesco Policy for P&C;

• Majesco Billing for P&C;

• Majesco Claims for P&C;

• Majesco Business Analytics;

• Majesco Enterprise Data Warehouse; and

• Majesco Enterprise Data Model.

Consulting Services Solutions

We offer an array of consulting services to enable insurance companies’ business transformation,
backed by our methodologies and best practices for customers across all lines of business and geography.
Our consulting services solutions include:

• Majesco Enterprise Consulting Services;

• Majesco Data Services;

• Majesco Digital Services;

• Majesco Testing Services; and

• Majesco Application Development and Maintenance Services.

Our Growth Strategy

We intend to extend our leadership as a provider of core system software to the global insurance

industry. The key elements of our strategy include:

•

Proactively innovate and extend our insurance platform solution leadership. We continue to
enhance the business and technical capabilities of our market leading solution portfolio for
insurance carriers through consistent significant research and development (“R&D”) investment
in core platform software, cloud, distribution, data, digital and services for innovative and scalable
solutions.

Aggressively expand cloud capabilities. Through our pre-configured, pre-integrated Majesco
Cloud Insurer platform we plan to offer a more comprehensive cloud based solution that enables
insurers agility, innovation and speed.

• Maintain the depth and breadth of our solutions. Our solution portfolio provides a unique

combination of software and services across all lines of business to enable insurer’s business
transformation.

•

Client Centricity. Continue to enhance our client centric business model that enables long term
customers relationships, provides a single point of accountability for outcomes and offers deeper
customer relationships with cross sell opportunities across our solution portfolio, creating
customer “stickiness”.

Diversify our solutions. Extend value through acquisitions that have accretive value and diversify
or strengthen our solution offerings.

•

Expand our customer base. We continue to aggressively pursue new customers by specifically
targeting key market segments and key accounts, expanding our sales and marketing
organizations, leveraging current customers as references and strengthening our geographic
presence. We uniquely have multiple points of entry with new customers using our broad solution
portfolio of software, consulting and services to meet each customers’ initial needs.

Cross selling to existing customers. We continue to build upon our established customer
relationships and track record of successful implementations to sell additional solutions to
existing customers.

Deepen and expand our partner ecosystem. We seek to collaborate and extend our capabilities and
solution business value through a growing partner ecosystem for systems integrators, solutions,
content, infrastructure and industry relationships. The partner ecosystem provides our customers
with strategic and operational business value through the integration and adoption of our
solutions throughout the insurance industry.

Expand market awareness and strengthen thought leadership with our brand and solutions. We
intend to continue to proactively strengthen our brand and reputation, enhance market awareness
of our solutions, and thought leadership market position as a strategic partner for the insurance
industry.

Intellectual Property

We rely on a combination of contractual provisions and intellectual property laws to protect our
proprietary technology. We believe that due to the dynamic nature of the computer and software industries,
factors such as the knowledge and experience of our management and personnel, the frequency of product
enhancements and the timeliness and quality of our support services are critical to the Company’s success.

We have registered the copyrights of our software products, and we seek to protect the source code of

our products as trade secret information and as unpublished copyright work, although we often agree to
place our source code into escrow in connection with entering into new customer agreements. We also rely
on security and copy protection features in our proprietary software. We distribute our products under
software license agreements which grant customers a personal, non-transferable license to use our products
and contain terms and conditions prohibiting the unauthorized reproduction or transfer of our products.
We do not hold any patents.

MajescoMastek®, Majesco®, Elixir®, Agile Technologies®, CloudInsurer™, Majesco CloudInsurer™,
Digital1st™ and Majesco Digital1st™ are trademarks of Majesco. In addition, Cover-All® is a trademark
of Cover-All Systems Inc.

Competition

The insurance solution provider market is highly competitive and fragmented. This market is subject to

changing technology, shifting customer needs and introductions of new and innovative products and
services. Our competitors vary in size and in the breadth and scope of the products and services offered.

Our current principal competitors include, but are not limited to, the following:

Area of Product/Service

Internally developed software

Insurance software vendors

Competitors

Many insurance companies have sufficient IT resources to maintain and
augment their own proprietary, legacy systems, or consider developing
new custom systems.
Vendors such as Duck Creek, Guidewire Software, Inc., FINEOS,
OneShield, Inc., FAST, Oracle, Sapiens International Corporation, and
Insurity, provide software solutions that are specifically designed to
meet the needs of insurance carriers.

Area of Product/Service

Consulting Services firms

Sales and Marketing

Competitors

Firms such as Accenture, Deloitte, E&Y, Nolan Group, CSC,
Cognizant, CGI, Mphasis and Tata Consultancy Services Limited offer
consulting and other services such as testing, application maintenance,
and custom development, solutions for the insurance industry.

We market our solution portfolio through an integrated sales and marketing platform through digital
and client marketing, client partners working with existing customers and through a direct sales force with
assigned accounts to provide a consultative approach. Strategic partnerships with consultants and systems
integrators are important to our sales efforts because they influence buying decisions, help us to identify
sales opportunities, and complement our software and services with their domain expertise and professional
services capabilities.

We have a strategic marketing program that conducts a broad range of integrated marketing programs
that leverage thought leadership and other content developed by us to support market segment and solution
targeted campaigns, press relations, media relations, industry research analyst relations, social media,
industry tradeshows, roundtables, videos, webinars and website. We work closely with partners and other
third parties to conduct joint marketing campaigns that generate growth in the sales pipeline.

Major Customers

As of March 31, 2018, 2017 and 2016, our product line was in use in approximately 160, 148 and

149 companies worldwide, respectively. For fiscal 2018 and fiscal 2017 we had no customer contributing
10% or more of total revenues. For fiscal 2016, we had one customer contributing 10% or more of total
revenues. For fiscal 2016, our largest customer was Unum, with approximately 10.2% of total revenues.

For fiscal 2018, fiscal 2017 and fiscal 2016 our top five customers generated approximately 28.4%,
27.1% and 26.5% of revenue, respectively. We expect that the top five customers will continue to account for
a significant portion of revenue for the foreseeable future.

Backlog

As of March 31, 2018, we had unrecognized licenses and support services or professional services
backlog of unbilled work totaling $90.6 million, which are expected to be recognized by March 31, 2019.

As of March 31, 2017, we had unrecognized licenses and support services or professional services

backlog of unbilled work totaling $64 million, which we recognized as of March 31, 2018.

Research and Development

We continue to enhance the business and technical capabilities of our market leading solution portfolio

for insurance carriers through consistent significant R&D investment in core platform software, cloud,
distribution, data, digital and services for innovative and scalable solutions. For fiscal 2018 we spent $17,250
on R&D compared to $17,236 in fiscal 2017.

Capital Expenditures

As a growing company, we have on-going capital expenditure needs based on our short term and long

term business plans. Although our requirements for capital expenses vary from time to time, for the next
twelve months, we anticipate incurring capital expenditures of $3,000 to $4,000 for new business
development activities and infrastructure enhancements.

We believe that our current cash balances and anticipated cash flows from operations will be sufficient

ability to fund our working capital needs and address planned capital expenditures will depend on our
ability to generate cash in the future. We anticipate generating future working capital through sales to new
customers and continued sales and services to our existing customers.

Our future liquidity and capital resource requirements will depend on many factors, including, but not

limited to, the following trends and uncertainties we face and those described in “Item 1A. Risk Factors”:

•

Our ability to generate cash is subject to general economic, financial, competitive and other
factors beyond our control.

Our need to invest resources in product development in order to continue to enhance our current
products, develop new products, attract and retain customers and keep pace with competitive
product introductions and technological developments.

• We experience competition in our industry and continuing technological changes.

•

Insurance companies typically are slow in making decisions and have numerous bureaucratic and
institutional obstacles, which can make our efforts to attain new customers difficult.

• We compete on the basis of insurance knowledge, products, services, price, technological advances

and system functionality and performance.

We do not expect for there to be a need for a change in the mix or relative cost of our sources of

capital.

Information about Segment and Geographic Revenue

Information about segment and geographic revenue is set forth in Note 20 to our consolidated

financial statements under Item 8 of this Annual Report on Form 10-K.

Employees

As of March 31, 2018, we had 2,248 full-time employees and no part-time employees on a worldwide

basis. In addition, as of March 31, 2018, we actively received services from a total of 108 individuals in their
capacities as independent contractors.

None of our employees are covered by collective bargaining arrangements or represented by a union

with respect to their employment with Majesco. We consider relations with our employees to be good.

Available Information

We file annual, quarterly and current reports and, proxy statements and other information with the
Securities and Exchange Commission (the “SEC”) under the Exchange Act. You may read and copy this
information at the Public Reference Room of the SEC, Room 1580, 100 F Street, N.E., Washington,
D.C. 20549. You may obtain information about the Public Reference Room by calling the SEC
at 1-800-SEC-0330. In addition, the SEC maintains a website (http://www.sec.gov) that contains reports,
proxy and information statements, and other information regarding issuers that file electronically through
the EDGAR System.

We also maintain a website at http://www.majesco.com. Information on this website does not constitute
a part of, nor is it incorporated in any way, into this Annual Report on Form 10-K. We make available, free
of charge, on our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, proxy
statements, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such reports are
electronically filed with, or furnished to, the SEC.

ITEM 1A. RISK FACTORS

Risks Related to Our Business

We depend on a small number of large customers and the loss of one or more major customers could have a
material adverse effect on our business, financial condition and results of operations.

For fiscal 2018, we had one customer contributing 9.0% of total revenues and our top five customers,
in the aggregate, generating approximately 28.4% of total revenues. We expect that our top five customers
will continue to account for a significant portion of our revenues for the foreseeable future. For fiscal 2017,
we had one customer contributing 7.5% of total revenues and our top five customers, in the aggregate,
generating approximately 26.5% of total revenues. For fiscal 2016, we had one customer contributing 10.2%
of total revenues and our top five customers, in aggregate, generating approximately 25.5% of total
revenues. We have had in the past large customers terminate their relationship with us and it is possible that
any of our large customers could decide to terminate their relationship with us in the future. The loss of one
or more of our top five customers, or a substantial decrease in demand by any of those customers for our
services and solutions, could have a material adverse effect on our business, results of operations and
financial condition. Additionally, our large customers have substantial negotiating leverage, which may
require that we agree to terms and conditions that result in increased cost of sales, decreased revenues and
lower average selling prices and gross margins, all of which could harm our operating results.

Our information systems, like those of other software and technology companies, are vulnerable to the threat of
cybersecurity and data privacy risks.

Our business involves the storage, management, and transmission of the proprietary information of

our customers, including personal, financial, and other sensitive or confidential information of our
customers’ insureds. Cyberattacks and other efforts by bad actors to steal personal information, to steal
proprietary and sensitive company information, and to disrupt service are on the rise, and the methods used
to attack, to obtain unauthorized access to, to disable, to degrade, or to otherwise compromise our systems,
our software, and our applications are continuously changing and evolving. We may be unable to anticipate
or detect successfully these methods or implement adequate preventive measures. Moreover, software or
applications we develop or obtain from third parties may contain defects in design or manufacture or other
vulnerabilities that could unexpectedly compromise or lead to the compromise of our systems, our software,
our applications, or the information security and privacy of the proprietary and personal information
stored, managed, and transmitted by or on those systems, software, or applications.

Although we have in place control procedures and security measures to protect the proprietary and

personal data we store, manage and transmit for our customers, we cannot guarantee that these measures
will be sufficient to detect or prevent interceptions, intrusions, break-ins, security breaches, theft, the
introduction of viruses or malicious code, or other disruptions or attacks that may jeopardize the security,
confidentiality, or integrity of the proprietary and personal information stored, managed, or transmitted by
our systems, software, applications, and products. Security breaches or other malicious attacks of our
systems, software, applications, and products could result in system or service disruptions or the theft,
misappropriation, misuse, unauthorized disclosure, or compromise of personal and proprietary
information. In addition, security breaches or other malicious attacks of our systems, software,
applications, and products could also result in impact to or compromise of the systems of our customers
who utilize our software, applications, and products. Our systems, software, applications, and productions
are also exposed to computer viruses, denial of service attacks and bulk unsolicited commercial email, or
spam. Despite the security measures we have in place, these events could cause a loss of service and data to
customers.

If our products or systems experience data security breaches or there is unauthorized access to or release of
our customers’ data, we may lose current or future customers and our reputation and business may be harmed.
We may also incur liabilities to repair or replace our systems or in connection with litigation or regulatory
enforcement actions that may result from such breaches.

We are subject to data security and data privacy laws that are becoming more widespread, burdensome,
and increasingly require notification of security breaches to affected individuals, regulators, customers, and
other third-parties. The occurrence of a security breach impacting our systems, software, applications, or

products, or the claim that the Company has suffered such a security breach, whether accurate or not, could
result in adverse publicity, loss of customer confidence, increased costs, lost sales and profits, criminal
penalties, civil liabilities, and reputational harm. This could lead to the loss of current and potential
customers. In addition, a security breach may require us to expend significant capital and other resources to
respond to, remedy, mitigate, alleviate, and further protect against the security breach and related problems.
We may also be required to make significant expenditures to repair our systems, software, applications, and
products in the event that they are damaged or destroyed or if the delivery of our services to our customers
is disrupted; this could result in harm to our business and operations. Further, we may not be able to
remedy these problems in a timely manner, or at all. Even the perception that the privacy of proprietary or
personal information is not satisfactorily protected or does not meet regulatory requirements or that our
systems, software, applications, and products are unsecure or unstable could inhibit sales of our products or
services, and could limit adoption of our products and services. The insurance we carry may not provide
coverage adequate to compensate us fully for losses that may occur or litigation that may be instituted
against us in these circumstances.

Additionally, the U.S. Federal Trade Commission and state consumer protection authorities have

brought a number of enforcement actions against U.S. companies for alleged deficiencies in companies’
data security practices, and they may continue to bring such actions. Enforcement actions, which may or
may not be based upon actual cyber attacks or security breaches, or other disclosures of personal or
proprietary information, present an ongoing risk to us, could result in a loss of customers, damage to our
reputation and monetary damages. Other liability could include claims from customers or consumers
alleging misrepresentation or violation of our privacy and data security practices, as well as claims alleging
unfair and deceptive trade practices, negligence, or breach of contract. Any such liability could decrease our
profitability and materially adversely affect our financial condition.

We face intense and growing competition. If we are unable to compete successfully, our business will be
seriously harmed through the loss of customers or increased negative pricing pressure.

The market for our services and solutions is extremely competitive. Our competitors vary in size and in

the variety of services and solutions.

Some of our current and potential direct competitors have longer operating histories, significantly

greater financial, technical, marketing and other resources than we do, greater brand recognition and, we
believe, a larger base of customers. In addition, competitors may operate more successfully or form
alliances to acquire significant market share. These direct competitors may be able to adapt more quickly to
new or emerging technologies and changes in customer requirements. They may also be able to devote more
resources to the promotion, sale and development of their services and solutions than us and there can be
no assurance that our current and future competitors will not be able to develop services and solutions
comparable or superior to those offered by us at more competitive prices. As a result, in the future, we may
suffer from an inability to offer competitive services and solutions or be subject to negative pricing pressure
that would adversely affect our ability to generate revenue and adversely affect our operating results.

Our business will be adversely affected if we cannot successfully retain key members of our management team
or retain, hire, train and manage other key employees, particularly in the sales and customer service areas.

Our continued success is largely dependent on the personal efforts and abilities of our executive officers

and senior management, including our President and Chief Executive Officer and our executive
management team. Our success also depends on our continued ability to attract, retain, and motivate key
employees throughout our business. In particular, we are substantially dependent on our skilled technical
employees and our sales and customer service employees. Competition for skilled technical, sales and
customer service professionals is intense and our competitors often attempt to solicit our key employees and
may be able to offer them employment benefits and opportunities that we cannot. There can be no
assurance that we will be able to continue to attract, integrate or retain additional highly qualified personnel
in the future. In addition, our ability to achieve significant growth in revenue will depend, in large part, on
our success in effectively training sufficient numbers of technical, sales and customer service personnel. New
employees require significant training before they achieve full productivity. Our recent and planned hires
may not be as productive as anticipated, and we may be unable to hire sufficient numbers of qualified
individuals. If we are not successful in retaining our existing employees, or hiring, training and integrating

new employees, or if our current or future employees perform poorly, growth in the sales of our services
may not materialize and our business will suffer.

Risks associated with potential acquisitions and expansion activities or divestitures may disrupt our business
and adversely affect our operating results.

We may, from time to time, consider certain acquisitions or divestitures. Acquisitions and divestitures
involve numerous risks, including identifying attractive target acquisitions, undisclosed risks affecting the
target, difficulties integrating acquired businesses, the assumption of unknown liabilities, potential adverse
effects on existing business relationships with current customers and suppliers, the diversion of our
management’s attention from other business concerns, and decreased geographic or customer
diversification.

We cannot provide assurance that any acquisitions or divestitures will perform as planned or prove to

be beneficial to our operations and cash flow. Any such failure could seriously harm our financial
condition, results of operations and cash flows.

We cannot predict the frequency, size or timing of our acquisitions, as this will depend on the

availability of prospective target opportunities at valuation levels we find attractive and the competition for
such opportunities from other parties. There can be no assurance that our acquisitions will have the
anticipated positive results, including results related to: the total cost of integration; the retention of key
personnel; the time required to complete the integration; the amount of longer-term cost savings; continued
growth; or the overall performance of the acquired company or combined entity. We also may encounter
difficulties in obtaining required regulatory approvals and unexpected contingent liabilities can arise from
the businesses we acquire. Further, the asset quality or other financial characteristics of a business or assets
we may acquire may deteriorate after an acquisition agreement is signed or after an acquisition closes,
which could result in impairment or other expenses and charges which would reduce our operating results.
Integration of an acquired business can be complex and costly. If we are not able to integrate successfully
past or future acquisitions, there is a risk that results of operations could be adversely affected. To the
extent that we grow through acquisitions, there is a risk that we will not be able to adequately or profitably
manage this growth. In addition, we may sell or restructure portions of our business. Any divestitures or
restructuring may result in significant expenses and write-offs, which would have a material adverse effect
on our business, results of operations and financial condition, and may involve additional risks, including
difficulties in obtaining any required regulatory approvals, the diversion of management’s attention from
other business concerns, the disruption of our business and the potential loss of key employees. We may not
be successful in addressing these or any other significant risks encountered in connection with any
acquisition or divestitures we might make.

We resell products and services of third parties that may require us to pay for such products and services even if
our customers fail to pay us for the products and services, which may have a negative impact on our cash flow
and operating results.

In order to provide resale services or products, we contract with third-party service providers. These

services require us to enter into fixed term contracts for services with third party suppliers of products and
services. If we experience the loss of a customer who has purchased a resale product or service, we may
remain obligated to continue to pay our suppliers for the term of the underlying contracts. The payment of
these obligations without a corresponding payment from customers will reduce our financial resources and
may have a material adverse effect on our financial performance, cash flow and operating results.

We may fail to adequately protect our proprietary technology, which would allow competitors or others to take
advantage of our research and development efforts.

We rely upon trade secrets, proprietary know-how, and continuing technological innovation to develop

new services and solutions and to remain competitive. If our competitors learn of our proprietary
technology or processes, they may use this information to produce services and solutions that are equivalent
or superior to our services and solutions, which could materially adversely affect our business, operations
and financial position. Our employees and consultants may breach their obligations not to reveal our

confidential information, and any remedies available to us may be insufficient to compensate our damages.
Even in the absence of such breaches, our trade secrets and proprietary know-how may otherwise become
known to our competitors, or be independently discovered by our competitors, which could adversely affect
our competitive position.

Our sales cycle is lengthy and variable, depends upon many factors outside our control, and could cause us to
expend significant time and resources prior to earning associated revenues.

The typical sales cycle for our products and services is lengthy and unpredictable, requires pre-purchase

evaluation by a significant number of employees in our customers’ organizations, and often involves a
significant operational decision by our customers. Our sales efforts involve educating our customers about
the use and benefits of our products, including the technical capabilities of our products and the potential
cost savings achievable by organizations deploying our products. Customers typically undertake a
significant evaluation process, which frequently involves not only our products, but also those of our
competitors and can result in a lengthy sales cycle. Moreover, a purchase decision by a potential customer
typically requires the approval of several senior decision makers, including the boards of directors of our
customers. Our sales cycle for new customers is typically one to two years and can extend even longer in
some cases. We spend substantial time, effort and money in our sales efforts without any assurance that our
efforts will produce any sales. In addition, we sometimes commit to include specific functions in our base
product offering at the request of a customer or group of customers and are unable to recognize license
revenues until the specific functions have been added to our products. Providing this additional
functionality may be time consuming and may involve factors that are outside of our control. The lengthy
and variable sales cycle may also have a negative impact on the timing of our revenues, causing our revenues
and results of operations to vary significantly from period to period.

Our business depends on customers renewing and expanding their license and maintenance contracts for our
products. A decline in our customer renewals and expansions could harm our future results of operations.

Our customers have no obligation to renew their term licenses after their license period expires, and

these licenses may not be renewed on the same or more favorable terms. Moreover, under certain
circumstances, our customers have the right to cancel their license agreements before they expire. We have
limited historical data with respect to rates of customer license renewals, upgrades and expansions so we
may not accurately predict future trends in customer renewals. In addition, our term and perpetual license
customers have no obligation to renew their maintenance arrangements after the expiration of the initial
contractual period. Our customers’ renewal rates may fluctuate or decline because of several factors,
including their satisfaction or dissatisfaction with our products and services, the prices of our products and
services, the prices of products and services offered by our competitors or reductions in our customers’
spending levels due to the macroeconomic environment or other factors. In addition, in some cases, our
customers have a right to exercise a perpetual buyout of their term licenses at the end of the initial contract
term. If our customers do not renew their term licenses for our solutions or renew on less favorable terms,
our revenues may decline or grow more slowly than expected and our profitability may be harmed.

Our implementation cycle is lengthy and variable, depends upon factors outside our control, and could cause us
to expend significant time and resources prior to earning associated revenues.

The implementation and testing of our products by our customers takes several months or longer and
unexpected implementation delays and difficulties can occur. Implementing our products typically involves
integration with our customers’ systems, as well as adding their data to our system. This can be complex,
time-consuming and expensive for our customers and can result in delays in the implementation and
deployment of our products. The lengthy and variable implementation cycle may also have a negative
impact on the timing of our revenues, causing our revenues and results of operations to vary significantly
from period to period.

Our product development cycles are lengthy, and we may incur significant expenses before we generate
revenues, if any, from new products.

Because our products are complex and require rigorous testing, development cycles can be lengthy,

taking us up to two years to develop and introduce new products. Moreover, development projects can be
technically challenging and expensive. The nature of these development cycles may cause us to experience

delays between the time we incur expenses associated with research and development and the time we
generate revenues, if any, from such expenses. If we expend a significant amount of resources on research
and development and our efforts do not lead to the successful introduction or improvement of products
that are competitive in the marketplace, our business and results of operations could be materially and
adversely affected. Additionally, anticipated customer demand for a product we are developing could
decrease after the development cycle has commenced. Such decreased customer demand may cause us to
fall short of our sales targets, and we may nonetheless be unable to avoid substantial costs associated with
the product’s development. If we are unable to complete product development cycles successfully and in a
timely fashion and generate revenues from such future products, the growth of our business may be harmed.

Failure to meet customer expectations on the implementation of our products could result in negative publicity
and reduced sales, both of which would significantly harm our business, results of operations, financial
condition and growth prospects.

We provide our customers with upfront estimates regarding the duration, budget and costs associated

with the implementation of our products. Failing to meet these upfront estimates and the expectations of
our customers for the implementation of our products could result in a loss of customers and negative
publicity regarding us and our products and services, which could adversely affect our ability to attract new
customers and sell additional products and services to existing customers. Such failure could result from our
product capabilities or service engagements by us, our system integrator partners or our customers’ IT
employees. The consequences could include, and have included: monetary credits for current or future
service engagements, reduced fees for additional product sales, and a customer’s refusal to pay their
contractually-obligated license, maintenance or service fees. In addition, time-consuming implementations
may also increase the amount of services personnel we must allocate to each customer, thereby increasing
our costs and adversely affecting our business, results of operations and financial condition.

If we are unable to develop, introduce and market new and enhanced versions of our products, we may be put at
a competitive disadvantage.

Our success depends on our continued ability to develop, introduce and market new and enhanced
versions of our products to meet evolving customer requirements. However, we cannot assure you that this
process can be maintained. If we fail to develop new products or enhancements to our existing products,
our business could be adversely affected, especially if our competitors are able to introduce products with
enhanced functionality. We plan to continue our investment in product development in future periods. It is
critical to our success for us to anticipate changes in technology, industry standards and customer
requirements and to successfully introduce new, enhanced and competitive products to meet our customers’
and prospective customers’ needs on a timely basis. However, we cannot assure you that revenues will be
sufficient to support the future product development that is required for us to be competitive. Although we
may be able to release new products in addition to enhancements to existing products, we cannot assure you
that our new or upgraded products will be accepted by the market, will not be delayed or canceled, will not
contain errors or “bugs” that could affect the performance of the products or cause damage to users’ data,
or will not be rendered obsolete by the introduction of new products or technological developments by
others. If we fail to develop products that are competitive in technology and price and fail to meet customer
needs, our market share will decline and our business and results of operations could be harmed.

We may be subject to significant liability claims if our core system software fails and the limitation of liability
provided in our license agreements may not protect us, which may adversely impact our financial condition.

The license and support of our core system software creates the risk of significant liability claims
against us. Our license agreements with our customers contain provisions designed to limit our exposure to
potential liability claims. It is possible, however, that the limitation of liability provisions contained in such
license agreements may not be enforced as a result of international, federal, state and local laws or
ordinances or unfavorable judicial decisions. Breach of warranty or damage liability or injunctive relief
resulting from such claims could have a material and adverse impact on our results of operations and
financial condition.

Certain of our software products may be deployed through cloud-based implementations, and if such
implementations are compromised by data security breaches or other disruptions, our reputation could be
harmed, and we could lose customers or be subject to significant liabilities.

Although our software products typically are deployed on our customers’ premises, our customers may

at times require our products to be deployed in cloud-based environments, in which our products and
associated services are made available using an Internet-based infrastructure. At times, in cloud
deployments, the infrastructure of third-party service providers is used by the customers at their own
behest, which may be vulnerable to cyber attacks, security breaches, computer viruses, telecommunications
failures, power loss and other system failures, disruptions and attacks.

Any of these occurrences, whether intentional or accidental, could lead to interruptions, delays or
cessation of operation of the servers of third-party service providers’ used by our customers, and to the
unauthorized use, access, acquisition or compromise of our software and/or the proprietary information
and sensitive or confidential data stored, managed or transmitted by our software and products. The
inability of service providers used by our customers to provide continuous access to their hosted services,
and to secure their hosted services and associated customer information from unauthorized use, access,
disclosure or compromise, could cause us to lose customers and to incur significant liability, and could
harm our reputation, business, financial condition and results of operations.

We are dependent on the reliability and performance of our internally developed systems and operations. Any
difficulties in maintaining these systems, whether due to human error or otherwise, may result in service
interruptions, decreased service quality for our customers, a loss of customers or increased expenditures.

Our revenue and profitability depend on the reliability and performance of our services and solutions.

We have contractual obligations to provide service level credits to almost all of our application services
provider (“ASP”) customers against future invoices in the event that certain service disruptions occur.
Furthermore, customers may terminate their ASP agreements with us as a result of significant service
interruptions, or our inability, whether actual or perceived, to provide our services and solutions at the
contractually required levels or at any time. If our services are unavailable, or customers are dissatisfied with
our performance, we could lose customers, our revenue and profitability would decrease and our business
operations or financial position could be harmed. In addition, the software and workflow processes that
underlie our ability to deliver our services and solutions have been developed primarily by our own
employees and consultants. Malfunctions in the software we use or human error could result in our inability
to provide services or cause unforeseen technical problems. If we incur significant financial commitments to
our customers in connection with our failure to meet service level commitment obligations, we may incur
significant liability and our liability insurance and revenue reserves may not be adequate. In addition, any
loss of services, equipment damage or inability to meet our service level commitment obligations could
reduce the confidence of our customers and could consequently impair our ability to obtain and retain
customers, which would adversely affect both our ability to generate revenue and our operating results.

We operate in a price sensitive market and we are subject to pressures from customers to decrease our fees for
the services and solutions we provide. Any reduction in price would likely reduce our margins and could
adversely affect our operating results.

The competitive market in which we conduct our business could require us to reduce our prices. If our
competitors offer discounts on certain products or services in an effort to recapture or gain market share or
to sell other products, we may be required to lower our prices or offer other favorable terms to compete
successfully. Any of these changes would likely reduce our margins and could adversely affect our operating
results. Some of our competitors may bundle products and services that compete with us for promotional
purposes or as a long-term pricing strategy or provide guarantees of prices and product implementations.
In addition, many of the services and solutions that we provide and market are not unique to us and our
customers and target customers may not distinguish our services and solutions from those of our
competitors. All of these factors could, over time, limit or reduce the prices that we can charge for our
services and solutions. If we cannot offset price reductions with a corresponding increase in the number of
sales or with lower spending, then the reduced revenue resulting from lower prices would adversely affect
our margins and operating results.

If we are unable to retain and grow our customer base, as well as their end-user base, our revenue and
profitability will be adversely affected.

In order to execute our business plan successfully, we must maintain existing relationships with our

customers and establish new relationships with additional businesses. If we are unable to diversify and
extend our customer base, our ability to grow our business may be compromised, which would have a
material adverse effect on our financial condition and results of operations.

If economic or other factors negatively affect the insurance industry, our customers and target customers may
become unwilling or unable to purchase our services and solutions, which could cause our revenue to decline and
impair our ability to operate profitably.

Most of our existing and target customers operate in the insurance industry. If a material portion of

the insurance businesses that we service, or are looking to service, experience economic hardship, these
customers may be unwilling or unable to expend resources on the services and solutions we provide, which
would negatively affect the overall demand for our services and could cause our revenue to decline.

If we do not respond effectively and on a timely basis to rapid technological change, our business could suffer.

The markets in which we operate are characterized by changing technology and evolving industry

standards. There can be no assurance that our current and future competitors will not be able to develop
services or expertise comparable or superior to those we have developed or to adapt more quickly than us to
new technologies, evolving industry standards or customer requirements. Failure or delays in our ability to
develop services and solutions to respond to industry or user trends or developments and the actions of our
competitors could have a material adverse effect on our business, results of operations and financial
condition. Our ability to anticipate changes in technology, technical standards and product offerings will be
a significant factor in the success of our current business and in expanding into new markets.

If we are unable to quickly react to changes in insurance laws and similar regulation in the jurisdictions in
which we operate and update our products on a frequent basis, our customer base (as well as end-user base),
revenue and profitability will be adversely affected. Such updates requires significant investment, which may
come at a cost.

In order for us to maintain and grow our customer base (as well as our customers’ end-user base) and
maintain and increase revenues and profit, we must maintain familiarity with legal and regulatory changes
in the jurisdictions in which we operate and update our existing products frequently. Frequent and timely
product updates require significant investment in research and development and in personnel experienced in
legal and regulatory matters as well as technical personnel. To maintain such a level of investment, we may
need to raise additional debt or equity capital, which may be costly, or require a reduction in other areas of
our budget. Our inability to continually update our products as needed due to regulatory changes could
have an adverse effect on our financial condition and results of operations and reduce our ability to
compete.

Litigation could result in substantial costs to us and our insurance may not cover these costs.

There is a risk that our services and solutions may not perform up to expectations. While in certain

circumstances we attempt to contractually limit our liability for damages arising from our provision of
services, there can be no assurance that they will be enforceable in all circumstances or in all jurisdictions.
Furthermore, litigation, regardless of contractual limitations, could result in substantial costs or divert
management’s attention and resources from our operations and result in negative publicity and therefore
adversely affect our ability to maintain and grow our customer base. Although we have general liability
insurance in place, there is no assurance that this insurance will cover these claims or that these claims will
not exceed the insurance limit under our current policies.

Our global operations are subject to complex risks, some of which might be beyond our control.

We have offices and operations in various countries around the world and provide services and
solutions to clients globally. For fiscal 2018, approximately 89% of our revenues were attributable to the
North American region, approximately 5% were attributable to the European region, and approximately 6%

were attributable to the rest of the world, primarily the Asia-Pacific region. If we are unable to manage the
risks of our global operations, including regulatory, economic, political and other uncertainties, fluctuations
in foreign exchange and inflation rates, international hostilities, terrorism, natural disasters and multiple
legal and regulatory systems, our results of operations could be adversely affected.

Our international sales and operations subject us to additional risks that can adversely affect our business,
results of operations and financial condition.

Our current international operations and our plans to expand our international operations subject us

to a variety of risks, including:

•

increased management, travel, infrastructure and legal compliance costs associated with having
multiple international operations;

longer payment cycles and difficulties in enforcing contracts and collecting accounts receivable;

the need to localize our products and licensing programs for international customers;

lack of familiarity with and unexpected changes in foreign regulatory requirements;

increased exposure to fluctuations in currency exchange rates;

the burdens of complying with a wide variety of foreign laws and legal standards;

compliance with anticorruption laws, including the U.S. Foreign Corrupt Practices Act of 1977,
particularly in emerging market countries;

import and export license requirements, tariffs, taxes and other trade barriers;

increased financial accounting and reporting burdens and complexities;

weaker protection of intellectual property rights in some countries;

multiple and possibly overlapping tax regimes; and

political, social and economic instability abroad, terrorist attacks and security concerns in general.
As we continue to expand our business globally, our success will depend, in large part, on our
ability to anticipate and effectively manage these and other risks associated with our international
operations. Any of these risks could harm our international operations and reduce our
international sales, adversely affecting our business, results of operations, financial condition and
growth prospects.

A substantial portion of our assets and operations are located outside of the United States and we are subject
to regulatory, tax, economic, political and other uncertainties in other foreign countries in which we operate.

We have significant offshore facilities in foreign countries, including India and Malaysia. Wages in
these countries have historically increased at a faster rate than in the United States. If this trend continues in
the future, it would result in increased costs for our skilled professionals and thereby potentially reduce our
operating margins. Also, there is no assurance that, in future periods, competition for skilled professionals
will not drive salaries higher in those countries, thereby resulting in increased costs for our technical
professionals and reduced operating margins.

Certain of these countries have also recently experienced civil unrest and terrorism and have been

involved in conflicts with neighboring countries. These events could materially adversely affect our
operations in these countries. In addition, companies may decline to contract with us for services, even
where these countries are not involved, because of more generalized concerns about relying on a service
provider utilizing international resources that may be viewed as less stable than those provided in the United
States.

In addition, these countries have in the past experienced many of the problems that commonly
confront the economies of developing countries, including high inflation, erratic gross domestic product
growth and shortages of foreign exchange. Government actions concerning the economy in these countries
could have a material adverse effect on private sector entities like us. In the past, certain of these

governments have provided significant tax incentives and relaxed certain regulatory restrictions in order to
encourage foreign investment in specified sectors of the economy, including the software development
services industry. Programs that have benefited us include, among others, tax holidays, liberalized import
and export duties and preferential rules on foreign investment and repatriation. Notwithstanding these
benefits, as noted above, changes in government leadership or changes in policies in these countries that
result in the elimination of any of the benefits realized by us or the imposition of new taxes applicable to
such operations could have a material adverse effect on our business, results of operations and financial
condition.

Our operating results may be adversely affected by fluctuations in the Indian rupee and other foreign currency
exchange rates and restrictions on the deployment of cash across our global operations.

Although we report our operating results in U.S. dollars, a portion of our revenues and expenses are
denominated in currencies other than the U.S. dollar. Fluctuations in foreign currency exchange rates can
have a number of adverse effects on us. Because our consolidated financial statements are presented in U.S.
dollars, we must translate revenues, expenses and income, as well as assets and liabilities, into U.S. dollars at
exchange rates in effect during or at the end of each reporting period. Therefore, changes in the value of the
U.S. dollar against other currencies will affect our revenues, income from operations, other income
(expense), net and the value of balance sheet items originally denominated in other currencies. There is no
guarantee that our financial results will not be adversely affected by currency exchange rate fluctuations or
that any efforts by us to engage in currency hedging activities will be effective. In addition, in some
countries we could be subject to strict restrictions on the movement of cash and the exchange of foreign
currencies, which could limit our ability to use these funds across our global operations. Finally, as we
continue to leverage our global delivery model, more of our expenses are incurred in currencies other than
those in which we bill for the related services. An increase in the value of certain currencies, such as the
Indian rupee, against the U.S. dollar could increase costs for delivery of services at offshore sites by
increasing labor and other costs that are denominated in local currency.

One of our subsidiaries, Majesco Software and Solutions Inc. (“MSSI”), has received a summons with notice
filed in the Supreme Court of the State of New York alleging breach of services and license agreement. Any
adverse outcome in this proceeding may adversely affect our profitability, reputation, business, financial
condition and results of operations.

On January 24, 2018, MSSI, one of our subsidiaries, received a summons with notice filed in the
Supreme Court of the State of New York by a customer, Alamance Services Inc. (“Alamance”), alleging a
purported breach of services and license agreement. In the summons, Alamance seeks compensatory
damages (including lost profits) of an amount to be proven at trial of at least $10 million, pre-and
post-judgment interest and costs and fees. We intend to defend against this matter vigorously and will assert
all of our rights against Alamance. While we believe we have made adequate provisions against bad and
doubtful receivables and have notified the carrier under our professional indemnity insurance policy for this
claim, we cannot assure you that this proceeding will be decided in our favor or that no further liability will
arise out of this proceeding, which may adversely affect our profitability and reputation. Further, this
proceeding may divert management time and attention and consume financial resources.

Our shareholders may have difficulty effecting service of process or enforcing judgments obtained in the
United States against our foreign subsidiaries or against some of our officers, directors or executive
management or gaining access to our assets located outside the United States.

Several of our operating subsidiaries are located outside the United States, including India, Singapore,

Thailand, Malaysia, the United Kingdom and Canada, and a number of our officers, directors and
executive management reside abroad. Many of our assets are located in countries outside the United States.
As a result, you may be unable to effect service of process upon our affiliates who reside outside the United
States except in their jurisdiction of residence. In addition, you may be unable to enforce outside of the
jurisdiction of these affiliates’ residence judgments obtained against these individuals or entities in courts of
the United States, including judgments predicated solely upon the federal securities laws of the United
States. You may also have difficulty gaining access to assets of us or our affiliates located outside the United
State to the extent necessary to satisfy a judgment against us or one of our affiliates. In particular, should

you seek to enforce a judgment of a United States court against us or one of our affiliates, directors or
officers in a jurisdiction outside the United States, you may be unable to obtain recognition or enforcement
of some or all of the amount of damages or other remedies awarded by the United States court. You may
also be required to comply with laws or regulations applicable to relevant jurisdiction governing the
repatriation of any money damages recovered from a court in such jurisdiction to the United States or
another country.

Our growth may be hindered by immigration restrictions.

Our future success continues to depend on our ability to attract and retain employees with technical
and project management skills, including those from developing countries, especially India. The ability of
foreign nationals to work in the United States and Europe, where a significant proportion of our operations
are located, depends on their ability and our ability to obtain the necessary visas and work permits.

Immigration and work permit laws and regulations in the United States, the United Kingdom, and
other countries are subject to legislative and administrative changes as well as changes in the application of
standards and enforcement. Immigration and work permit laws and regulations can be significantly affected
by political forces and levels of economic activity. Our international expansion strategy and our business,
results of operations, and financial condition may be materially adversely affected if changes in immigration
and work permit laws and regulations or the administration or enforcement of such laws or regulations
impair our ability to staff projects with professionals who are not citizens of the country where the work is
to be performed.

Our earnings may be adversely affected if we change our intent not to repatriate foreign earnings or if such
earnings become subject to U.S. tax on a current basis.

We have earnings outside of the United States. Other than amounts for which we have already accrued
U.S. taxes, we consider foreign earnings to be indefinitely reinvested outside of the United States. While we
have no plans to do so, events may occur that could effectively force us to change our intent not to
repatriate such earnings. If such earnings are repatriated in the future or are no longer deemed to be
indefinitely reinvested, we may have to accrue taxes associated with such earnings at a substantially higher
rate than our projected effective income tax rate, and we may be subject to additional tax liabilities in
certain foreign jurisdictions in which we operate. These increased taxes could have a material adverse effect
on our business, results of operations and financial condition.

We may not be able to enforce or protect our intellectual property rights, which may harm our ability to
compete and harm our business.

Our future success will depend, in part, on our ability to protect our proprietary methodologies and

other valuable intellectual property. We presently hold no issued patents.

Our ability to enforce our software license agreements, service agreements, and other intellectual

property rights is subject to general litigation risks, as well as uncertainty as to the enforceability of our
intellectual property rights in various countries. To the extent that we seek to enforce our rights, we could be
subject to claims that an intellectual property right is invalid, otherwise not enforceable, or is licensed to the
party against whom we are pursuing a claim. In addition, our assertion of intellectual property rights may
result in the other party seeking to assert alleged intellectual property rights or assert other claims against
us, which could harm our business. If we are not successful in defending such claims in litigation, we may
not be able to sell or license a particular service or solution due to an injunction, or we may have to pay
damages that could, in turn, harm our results of operations. In addition, governments may adopt
regulations, or courts may render decisions, requiring compulsory licensing of intellectual property to
others, or governments may require that products meet specified standards that serve to favor local
companies. Our inability to enforce our intellectual property rights under these circumstances may harm
our competitive position and our business.

We generally agree in our agreements with our customers to place source code for our proprietary

software in escrow. In most of those cases, the escrowed source code may be made available to such
customers in the event that we were to file for bankruptcy or materially fail to support our products in the

future. Release of our source code upon any such event may increase the likelihood of misappropriation or
other misuse of our software; however, such customers would still be obligated to comply with the terms of
our license agreements with them, which restricts the use of the software.

Our services or solutions could infringe upon the intellectual property rights of others and we may be subject to
claims of infringement of third-party intellectual property rights.

We cannot be sure that our services and solutions, or the solutions of others that we offer to our
clients, do not infringe on the intellectual property rights of others. Third parties may assert against us or
our customers claims alleging infringement of patent, copyright, trademark, or other intellectual property
rights to technologies or services that are important to our business. Infringement claims could harm our
reputation, cost us money and prevent us from offering some services or solutions. In our contracts, we
generally agree to indemnify our clients for certain expenses or liabilities resulting from potential
infringement of the intellectual property rights of third parties. In some instances, the amount of our
liability under these indemnities could be substantial. Any claims that our products, services or processes
infringe the intellectual property rights of others, regardless of the merit or resolution of such claims, may
result in significant costs in defending and resolving such claims, and may divert the efforts and attention of
our management and technical personnel from our business. In addition, as a result of such intellectual
property infringement claims, we could be required or otherwise decide that it is appropriate to:

•

pay third-party infringement claims;

discontinue using, licensing, or selling particular products subject to infringement claims;

discontinue using the technology or processes subject to infringement claims;

develop other technology not subject to infringement claims, which could be costly or may not be
possible; and/or

license technology from the third party claiming infringement, which license may not be available
on commercially reasonable terms.

The occurrence of any of the foregoing could result in unexpected expenses or require us to recognize

an impairment of our assets, which would reduce the value of our assets and increase expenses. In addition,
if we alter or discontinue our offering of affected items or services, our revenue could be affected. If a claim
of infringement were successful against us or our clients, an injunction might be ordered against our client
or our own services or operations, causing further damages.

We expect that the risk of infringement claims against us will increase if our competitors are able to

obtain patents or other intellectual property rights for software products and methods, technological
solutions, and processes. We may be subject to intellectual property infringement claims from certain
individuals or companies who have acquired patent portfolios for the primary purpose of asserting such
claims against other companies. The risk of infringement claims against us may also increase as we continue
to develop and license our intellectual property to our clients and other third parties. Any infringement
claim or litigation against us could have a material adverse effect on our business, results of operations and
financial condition.

Some of our products may incorporate open source software, which may expose us to potential claims or
litigation.

Some of our products may incorporate software licensed under so-called “open source” licenses,

including, but not limited to, the GNU General Public License and the GNU Lesser General Public
License. We use our methodology to ensure that our proprietary software is not combined with, and does
not incorporate, open source software in ways that would require our proprietary software to be subject to
an open source license. However, few courts have interpreted open source licenses, and the manner in which
these licenses may be interpreted and enforced is therefore subject to some uncertainty. The usage of open
source software may subject us to claims from others seeking to enforce the terms of an open source license,
including by demanding release of the open source software, derivative works or our proprietary source

code that was developed using such software. Such claims could also result in litigation, and may require us
to devote additional research and development resources to change our products, any of which could reduce
or diminish the value of our products and have a negative effect on our business and operating results.

We are an emerging growth company under U.S. securities laws and intend to take advantage of the reduced
disclosure and governance requirements applicable to emerging growth companies, which could make our
common stock less attractive to investors.

We are an emerging growth company and may take advantage of certain exemptions from various
reporting requirements that are otherwise applicable to public companies that are not emerging growth
companies including, but not limited to:

•

a requirement to provide selected financial data only for those periods since those presented in our
registration statement on Form S-4 filed in connection with our merger with Cover-All;

not being required to comply with the auditor attestation requirements regarding internal controls
under Section 404 of the Sarbanes-Oxley Act;

reduced disclosure obligations regarding executive compensation in periodic reports and proxy
statements;

exemptions from the requirements of holding a non-binding shareholder advisory vote on
executive compensation and shareholder approval of any golden parachute payments not
previously approved;

exemption from the requirement to provide pay for performance disclosure; and

exemption from the requirement to provide compensation ratio disclosure.

We also intend to take advantage of the extended transition period for complying with new or revised

accounting standards until those standards would otherwise apply to private companies provided under the
JOBS Act. As a result, our financial statements may not be comparable to those of companies that comply
with public company effective dates for complying with new or revised accounting standards.

Moreover, we also are eligible under the JOBS Act for an exemption from compliance with any
requirement that the Public Company Accounting Oversight Board may adopt regarding mandatory audit
firm rotation or supplements to the auditor’s report providing additional information about the audit and
the financial statements.

We may take advantage of these reporting exemptions until we no longer are an emerging growth

company, which in certain circumstances could be for up to five years.

We will remain an emerging growth company until the earliest of (a) the last day of the first fiscal year

in which our annual gross revenues exceed $1.07 billion, (b) the date that we become a “large accelerated
filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our
shares that are held by non-affiliates exceeds $700 million as of the last business day of our most recently
completed second fiscal quarter, (c) the date on which we have issued more than $1.0 billion in
nonconvertible debt securities during the preceding three-year period and (d) the last day of our fiscal year
containing the fifth anniversary of the date on which shares of our common stock were offered in
connection with the completion of our merger with Cover-All.

We cannot predict if investors will find our common stock less attractive because we may rely on these

exemptions. If some investors find our common stock less attractive as a result, there may be a less active
trading market for our common stock and our stock price may be more volatile.

If we fail to maintain an effective system of internal control over financial reporting in the future, we may not
be able to accurately report our financial condition, results of operations or cash flows.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls for

financial reporting and disclosure controls and procedures. We are required to furnish a report by
management on, among other things, the effectiveness of internal control over financial reporting. This
assessment will include disclosure of any material weaknesses identified by management in our internal

control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in
internal control over financial reporting that results in more than a reasonable possibility that a material
misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.
Section 404 of the Sarbanes-Oxley Act also generally requires an attestation from an issuer’s independent
registered public accounting firm on the effectiveness of its internal control over financial reporting.
However, for as long as we remain an emerging growth company under the JOBS Act, we may take
advantage of the exemption permitting us not to comply with the independent registered public accounting
firm attestation requirement.

Our compliance with Section 404 of the Sarbanes-Oxley Act may require that we incur substantial

accounting expense and expend significant management efforts. We may not be able to complete our
evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing
process, if we identify one or more material weaknesses in our internal control over financial reporting, we
may be unable to assert that our internal control over financial reporting is effective. We cannot assure you
that there will not be material weaknesses or significant deficiencies in our internal control over financial
reporting in the future. Any failure to maintain internal control over financial reporting could severely
inhibit our ability to accurately report our financial condition, results of operations or cash flows. If we are
unable to conclude that our internal control over financial reporting is effective, or if our independent
registered public accounting firm determines that we have a material weakness or significant deficiency in
our internal control over financial reporting once that firm begin its Section 404 reviews, we could lose
investor confidence in the accuracy and completeness of our financial reports, the value of our common
stock could decline, and we could be subject to sanctions or investigations by regulatory authorities. Failure
to remedy any material weakness in our internal control over financial reporting, or to implement or
maintain other effective control systems required of public companies, could also restrict our future access
to the capital markets.

Our status as an emerging growth company may make it more difficult to raise capital as and when we need it.

Because of the exemptions from various reporting requirements available to us as an emerging growth

company, we may be less attractive to investors and it may be difficult for us to raise additional capital as
and when we need it. Investors may be unable to compare our business with other companies in our
industry if we believe that our financial accounting is not as transparent as other companies in our industry.
If we are unable to raise additional capital as and when we need it, our financial condition and results of
operations may be materially and adversely affected.

We are a “controlled company” within the meaning of the NYSE American rules and, as a result, qualify for,
and rely on, exemptions from certain corporate governance requirements of the NYSE American. As a result,
our shareholders do not have the same protections afforded to shareholders of companies that are subject to
such requirements and the interests of our controlling shareholder may be different from other holders of our
common stock.

Majesco Limited owns 69.75% of our issued and outstanding common stock. As a result, we are a
“controlled company” within the meaning of the NYSE American corporate governance standards. Under
the NYSE American rules, a company of which more than 50% of the voting power is held by another
person or group of persons acting together is a controlled company and may elect not to comply with
certain NYSE American corporate governance requirements, including the requirements that:

•

a majority of our Board of Directors consist of independent directors;

we have a nominating committee that is composed entirely of independent directors with a written
charter addressing the committee’s purpose and responsibilities; and

we have a compensation committee that is composed entirely of independent directors with a
written charter addressing the committee’s purpose and responsibilities.

We are currently utilizing, and intend to continue to utilize, the exemption relating to the compensation
committee and nominating committee, and we may utilize this exemption for so long as we are a controlled
company. Accordingly, our shareholders do not have the same protections afforded to shareholders of
companies that are subject to all of the corporate governance requirements of the NYSE American.

It is also possible that the interests of Majesco Limited may, in some circumstances, conflict with our

interests and the interests of our other shareholders.

Anti-takeover and similar provisions of California law and our governing documents may deter or prevent a
future acquisition or change of control that our shareholders may consider favorable.

Anti-takeover and similar provisions of California law and of our governing documents could make it

more difficult for a third party, or an existing shareholder, to engage in a business combination with or
acquire control of Majesco, even if shareholders may consider such transaction to be favorable to them.
Such provisions may have the effect of discouraging a hostile bid, or delaying, preventing or deterring a
merger, acquisition or tender offer in which Majesco’s shareholders could receive a premium for their
shares, or effect a proxy contest for control of Majesco or other changes in our management, particularly if
such proposed transaction is opposed by our Board of Directors.

Under Section 1203 of the CGCL, if an “interested person” makes an offer to purchase the shares of
some or all of our shareholders, we must obtain an affirmative opinion in writing as to the fairness of the
offering price prior to completing the transaction. If after receiving an offer from such an “interested
person”, we receive a subsequent offer from a neutral third party, then we must notify our shareholders of
this offer and afford each of them the opportunity to withdraw their consent to the “interested person”
offer.

Moreover, even if shareholders may consider such a transaction to be favorable to them, the CGCL

may effectively prohibit a cash-out merger of minority shareholders by a majority shareholder of Majesco
without the unanimous approval of the merger by our shareholders, which is often difficult to achieve in the
case of a public company. Under Sections 1101 and 1101.1 of the CGCL, a merger with a majority
shareholder for cash consideration requires unanimous shareholder approval, except where (i) the party
interested in effecting the merger already owns 90% or more of the voting power of the combined company
(and could, therefore, accomplish such a cash-out of minority shareholders by means of a “short-form”
merger without the need for approval by the combined company’s shareholders) or (ii) the California
Commissioner of Corporations has granted its consent. In addition, under our articles of incorporation
and bylaws, certain provisions may make it difficult for a third party to acquire us, or for a change in the
composition of our Board of Directors or management to occur.

Risks Related to Our Common Stock

If we are unable to maintain the listing standards of the NYSE American, our common stock may be delisted,
which may have a material adverse effect on the liquidity and value of our common stock.

Our common stock is traded on the NYSE American. To maintain our listing on the NYSE American,

we must meet certain financial and liquidity criteria. The market price of our common stock has been and
may continue to be subject to significant fluctuation as a result of periodic variations in our revenues and
results of operations. If we fail to meet any of the NYSE American’s listing standards, we may be delisted.
In the event of delisting, trading of our common stock would most likely be conducted in the over the
counter market on an electronic bulletin board established for unlisted securities, which could have a
material adverse effect on the market liquidity and value of our common stock.

Holders of our common stock may have difficulty in selling those shares.

While our common shares trade on the NYSE American, our stock is thinly traded and investors may

have difficulty in selling their shares. The low trading volume of our common stock is outside of our
control, and may not increase in the near future or, even if it does increase in the future, may not be
maintained. Brokers effecting transactions in our common stock may also be subject to additional sales
practice requirements under certain Exchange Act rules, including making inquiries into the suitability of
investments for each customer or obtaining a prior written agreement for the specific stock purchase.
Because of these additional obligations, some brokers will not effect transactions in our common stock.

Our stock price has been volatile.

Quarterly operating results have fluctuated and are likely to continue to fluctuate. The market price of

our common stock has been and may continue to be volatile. Factors that are difficult to predict, such as

quarterly revenues and operating results, limited trading volumes and overall market performance, may have
a significant effect on the price of our common stock. Revenues and operating results have varied
considerably in the past from period to period and are likely to vary considerably in the future. We plan
product development and other expenses based on anticipated future revenue. If revenue falls below
expectations, financial performance is likely to be adversely affected because only small portions of expenses
vary with revenue. As a result, quarterly period-to-period comparisons of operating results are not
necessarily meaningful and should not be relied upon to predict future performance.

We may not pay any cash dividends on our common stock in the future.

Declaration and payment of any dividend on our common stock is subject to the discretion of our
Board of Directors. The timing and amount of dividend payments will be dependent upon factors such as
our earnings, financial condition, cash requirements and availability, and restrictions in our credit facilities.
Accordingly, it is likely that investors may have to rely on sales of their common stock after price
appreciation, which may never occur, as the only way to realize any future gains on their investment.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We lease office space in the United States, Canada, the United Kingdom, Malaysia, Singapore and
India. We lease approximately 37,220 square feet in the United States; approximately 110 square feet in
Canada; approximately 3,893 square feet in Malaysia; approximately 200 square feet in Singapore;
approximately 190 square feet in the United Kingdom; and approximately 181,545 square feet in India.

Our corporate headquarters are located in Morristown, New Jersey, where we lease 31,030 square feet

of office space under a lease agreement that was amended in October 2015. The lease term terminates in
March 2020. The initial lease terms for our other spaces that we currently occupy are generally three to ten
years. We do not own any real property. We believe that our existing facilities are adequate for our current
and expected future needs. We may seek to negotiate new leases or evaluate additional or alternate space for
our operations. We believe that appropriate alternative space is readily available on commercially reasonable
terms.

ITEM 3. LEGAL PROCEEDINGS

From time to time, we are party to ordinary and routine litigation incidental to our business. We do not

expect the outcome of such litigation to have a material effect on our business or results of operations.

On January 24, 2018, MSSI, a subsidiary of Majesco, received a summons with notice filed in the
Supreme Court of the State of New York by a customer, Alamance, alleging a purported breach of services
and license agreement by MSSI. In the summons, Alamance seeks compensatory damages (including lost
profits) of an amount to be proven at trial of at least $10 million, pre-and post-judgment interest and costs
and fees. Majesco believes this claim has no merit and intends to defend against it vigorously and assert all
of its rights against this customer. In the opinion of management, Majesco has made adequate provisions
against bad and doubtful receivables arising from this claim. In addition, Majesco has notified its carrier
under its $40 million professional indemnity insurance policy. Majesco does not expect the outcome of this
litigation to have a material effect on its business or results of operations. However, litigation is inherently
unpredictable, and the costs and other effects of such matter and the possibility of any adverse outcome
cannot be determined at this time.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER

MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Price

Our shares of capital stock began to be publicly traded on June 29, 2015. Our common stock is traded
on the NYSE American under the symbol “MJCO”. The table below sets forth for the periods indicated the
high and low sales prices for our common stock as reported on the NYSE American.

Fiscal 2018:

4th Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3rd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2nd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1st Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fiscal 2017:

4th Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3rd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2nd Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1st Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

High

$6.00

$6.43

$5.18

$5.57

High

$6.09
$6.28
$5.72
$6.50

Low

$5.03

$4.84

$4.35

$4.60

Low

$4.92
$4.50
$4.82
$4.80

Record Holders

As of June 14, 2018, we had 81 shareholders of record. The approximate number of holders is based

upon the actual number of holders registered in our records at such date and excludes holders in street
name or persons, partnerships, associations, corporations, or other entities identified in security positions
listings maintained by depository trust companies.

On June 14, 2018, the closing price of our common stock was $5.90.

Dividends

We did not declare or pay any cash dividend on our common stock during fiscal 2018 or fiscal 2017.
We do not expect to pay dividends on our shares of common stock in the foreseeable future. Instead, it is
expected that we will continue to retain any earnings to finance the development and expansion of our
business, and will not pay any cash dividends on our common stock. Any future determination to pay
dividends on shares of common stock will be at the discretion of our Board of Directors and will depend
upon a number of factors, including our results of operations, financial condition, future prospects, capital
requirements, contractual restrictions, restrictions imposed by applicable law and other factors that our
Board of Directors deems relevant. Under our term loan with HSBC, we are currently restricted from
paying dividends upon and during the continuation of an event of default.

Unregistered Sales of Equity Securities

There were no unregistered sales of equity securities during the period covered by this Annual Report

on Form 10-K.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers.

There were no purchases of equity securities by Majesco or its affiliates.

Equity Compensation Plan Information

See Item 12. “Security Ownership of Certain Beneficial Owners and Management and Related

Stockholder Matters” for information regarding securities authorized for issuance under equity
compensation plans.

PERFORMANCE GRAPH

The graph below compares the cumulative total stockholder returns (including reinvestment of

dividends) from the period from June 29, 2015 through March 31, 2018 on an investment of $100 in (i) our
common stock, (ii) the Russell 2000 Index and (iii) the S&P North American Technology Software Index.
You should be aware that historical results are not necessarily indicative of future performance.

We have selected the Russell 2000 Index and the S&P North American Technology Software Index for
comparative purposes. We believe that, given our current size of operations and market capitalization, the
Russell 2000 Index and the S&P North American Technology Software Index, which measure the
performance of stocks in the small cap and technology segment of the U.S. equity securities market,
provide an appropriate benchmark against which to measure our stock performance.

This performance graph shall not be deemed “soliciting material” or to be filed with the SEC for
purposes of Section 18 under the Exchange Act or otherwise subject to the liabilities under that Section,
and shall not be deemed to be incorporated by reference into any of our filings.

Cumulative Performance

s
n
r
u
t
e
R
e
c
i
r
P
$

200

175

150

125

100

6/30/2015 9/30/201512/31/2015 3/31/2016

6/30/2016 9/30/2016 12/31/2016 3/31/2017 6/30/2017 9/29/2017 12/29/2017 3/30/2018

MJCO

Russell 2000

S&P NA Tech

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth selected combined consolidated historical financial data as of the dates

and for each of the periods indicated for us and our subsidiaries giving effect to the Majesco
Reorganization. For more information on the Majesco Reorganization, see “Item 1. Business — Majesco
Reorganization.”

The financial data as of and for fiscal 2018, fiscal 2017, fiscal 2016, fiscal 2015 and fiscal 2014 is
derived from our audited financial statements, which are included elsewhere in this Annual Report on
Form 10-K or in our other Annual Reports on Form 10-K filed with the SEC.

You should read the selected combined consolidated historical financial data below together with the

section entitled “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and with the financial statements and notes thereto for fiscal 2018, fiscal 2017 and fiscal 2016,
each of which are included elsewhere in this Annual Report on Form 10-K.

Statements of Operations Data (U.S. dollars; in thousands, except for share and per share data):

Revenues . . . . . . . . . . . . . . .

$82,837

$79,282

$113,302

$121,768

$122,985

Fiscal Year
Ended
March 31, 2014

Fiscal Year
Ended
March 31, 2015

Fiscal Year
Ended
March 31, 2016

Fiscal Year
Ended
March 31, 2017

Fiscal Year
Ended
March 31, 2018

Income (loss) before income

tax . . . . . . . . . . . . . . . . . .

Net income (loss) . . . . . . . . . .

Net income (loss) per share –

basic . . . . . . . . . . . . . . . . .

Net income (loss) per share –

diluted . . . . . . . . . . . . . . .

4,813

2,920

0.02

(792)

(651)

(0.02)

(4,749)

(3,562)

(825)

(922)

(2,946)

(5,001)

(0.10)

(0.02)

(0.14)

(0.10)

(0.02)

(0.14)

Fiscal Year
Ended
March 31, 2014

Fiscal Year
Ended
March 31, 2015

Fiscal Year
Ended
March 31, 2016

Fiscal Year
Ended
March 31, 2017

Fiscal Year
Ended
March 31, 2018

Cash and cash equivalents

. . .

$10,041

$ 6,532

$ 6,154

$12,464

$ 9,152

Working capital . . . . . . . . . . .
Total assets . . . . . . . . . . . . . .
Short-term debt . . . . . . . . . . .
Long-term debt . . . . . . . . . . .
Stockholders’ equity . . . . . . .

4,854
48,438
0
0
20,538

6,275
45,545
1,470
3,000
20,556

5,665
94,621
6,951
6,800
45,557

9,599
90,014
2,561
10,000
45,848

5,734
96,526
5,269
8,367
45,167

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

This discussion of our financial condition and results of operations should be read together with the
financial statements and notes contained elsewhere in this Annual Report on Form 10-K. Certain statements in
this section and other sections are forward-looking. While we believe these statements are accurate, our
business is dependent on many factors, some of which are discussed in “Item 1A. Risk Factors” in this Annual
Report on Form 10-K. Many of these factors are beyond our control and any of these and other factors could
cause actual results to differ materially from the forward-looking statements made in this Annual Report on
Form 10-K. See “Item 1A. Risk Factors” for further information regarding these factors.

All currency amounts in this MD&A are in thousands unless indicated otherwise. Except where context
requires otherwise, references in this MD&A to “Majesco,” “we” or “us” are to Majesco and its subsidiaries on
a worldwide consolidated basis after giving effect to the Majesco Reorganization.

Overview

We are a global provider of core insurance platform solutions and consulting and other insurance
solutions for business transformation of the insurance industry. We operate in the United States, India,
Canada, the United Kingdom, Malaysia, Thailand, Singapore and Mexico. We offer core insurance
platform solutions for P&C and L&A and Group providers, which enables automate and manage business
processes across the end-to-end insurance value chain and comply with policies and regulations across their
organizations.. In addition, we offer a variety of other technology-based solutions for distribution
management, digital, data and cloud. Our consulting services solutions provide enterprise consulting,
application development management and testing for insurers. Our portfolio of solutions enable our
customers to respond to evolving market needs, growth and innovation opportunities and regulatory
changes, enabling agility, innovation and speed while improving the effectiveness and efficiency of their
business operations.

Long-term, strong customer relationships are a key component of our success given the long-term

nature of our contracts, opportunity for deeper relationships with our portfolio of solutions, and the
importance of customer references for new sales. Our customers range from some of the largest global tier
one insurance carriers in the industry to mid-market insurers, MGAs, startups and greenfields, including
specialty, mutual and regional carriers. As of March 31, 2018, we served approximately 160 insurance
customers on a worldwide basis.

We generates revenue from our global IP led business as well as from engagements in the insurance
services space. The IP business is primarily driven through either an on-premise deployment or deployment
of the platform on the cloud. While the on-premise model generates revenues from the licensing of our
proprietary software (perpetual or annual license fees), related implementation and support and
maintenance fees pursuant to contracts with customers, we have been witnessing a significant shift in the
business model with customers preferring the cloud model which offers a speed to value benefit together
with low upfront investments. The revenues from the cloud model are led by an implementation/
configuration contract and followed by monthly subscriptions once the platform is in production for the
customer to use. The implementation contracts for both the models are on a time and material or fixed bid
basis. License fees, support and maintenance and cloud subscription fees are usually managed through
multi-year agreements which are typically over a period of five to seven years. Insurance services revenues is
primarily driven by professional services offered in the areas of transformation consulting, data, digital,
testing and application development and management.

Fiscal 2018 Highlights

A few of our highlights of fiscal 2018 were:

•

Revenues of $122,985 with a gross profit of 45.4% of revenue;

$17,250 (14.03% of revenue) in R&D expenses;

$41,022 (33.35% of revenue) in sales, general and administrative expenses;

Net loss of $5,001; and

Adjusted EBITDA of $5,695, representing 4.63% of revenue.

Use of Non-GAAP Financial Measures

In evaluating our business, we consider and use EBITDA as a supplemental measure of operating
performance. We define EBITDA as earnings before interest, taxes, depreciation and amortization. We
present EBITDA because we believe it is frequently used by securities analysts, investors and other
interested parties as a measure of financial performance. We define Adjusted EBITDA as EBITDA before
one-time non-recurring exceptional costs related to the merger with Cover-All and the listing of our
common stock on the NYSE American (formerly, NYSE MKT) in connection with the merger and expense
charge with regard to stock based compensation.

The terms EBITDA and Adjusted EBITDA are not defined under U.S. generally accepted accounting
principles (“U.S. GAAP”) and are not a measure of operating income, operating performance or liquidity
presented in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA have limitations as an
analytical tool, and when assessing our operating performance, investors should not consider EBITDA or
Adjusted EBITDA in isolation, or as a substitute for net income (loss) or other consolidated income
statement data prepared in accordance with U.S. GAAP. Among other things, EBITDA and Adjusted
EBITDA do not reflect our actual cash expenditures. Other companies may calculate similar measures
differently than us, limiting their usefulness as comparative tools. We compensate for these limitations by
relying on U.S. GAAP results and using EBITDA and Adjusted EBITDA only supplementally.

For an unaudited reconciliation of U.S. GAAP net income to EBITDA and Adjusted EBITDA for
fiscal 2018 and fiscal 2017, see “— Results of Operations — Fiscal Year Ended March 31, 2018 Compared
to Fiscal Year Ended March 31, 2017 — Adjusted EBITDA”. For an unaudited reconciliation of U.S.
GAAP net income to EBITDA and Adjusted EBITDA for fiscal 2017 and fiscal 2016, see “— Results of
Operations — Fiscal Year Ended March 31, 2017 Compared to Fiscal Year Ended March 31,
2016 — Adjusted EBITDA”.

Agile Asset Acquisition

On January 1, 2015, we acquired substantially all of the insurance consulting business of Agile, a

business and technology management consulting firm. We estimate the total consideration for the Agile
asset acquisition will amount to approximately $85,000, with a total maximum of $92,000 potentially
payable as earn-out payments. Of the estimated approximately $85,000 total consideration, (1) $10,000 was
paid in connection with the execution of the acquisition agreement and $20,000 was paid in connection
with the closing of the acquisition with available cash on hand, (2) approximately $390 will be paid in cash
as deferred payments over three years to certain former Agile employees who became employees of Majesco
in connection with the acquisition, of which $105 had been paid as of March 31, 2018, and (3) up to
$51,000 will be paid by way of earn-out over three years based on the satisfaction of certain time milestones
and performance targets, with maximum potential aggregate earn-out payments of up to $58,000 if
performance targets are exceeded.

On January 26, 2016, we amended the asset purchase and sale agreement with Agile and its members to

amend the terms and conditions of the earn-out. The amendment added in the calculation of revenue for
purposes of determining the earn-out for 2015 5% of the initial order book revenue of Majesco software
(intellectual property) deals closed by the Agile Division and 40% of revenue and EBITDA for Data Center
of Excellence projects that have been signed in calendar year 2015. For determining the earn-out for 2016
and 2017, the amendment provides that the earn-out performance metrics will be determined at the
Majesco level and not the Agile Division level and will be based only on revenue and EBITDA goals of
Majesco as reported in Majesco’s consolidated financial statements. The amendment also provides that 50%
of the earn-out in the amount of $583,333 will be fixed with the remainder of the earn-out (the “Variable
Earn-Out”) payable to Agile on a percentage basis as calculated below only if Majesco achieves 90% of
corporate revenue and EBITDA goals for 2016 and 2017. No Variable Earn-Out will be payable for
achieving less than 90% of the corporate revenue and EBITDA goals for 2016 and 2017, respectively, and
any additional earn-out will not exceed 20% of the Variable Earn-Out. For revenue and EBITDA between
90% and 120% of Majesco’s revenue and EBITDA goals, Majesco will pay Agile a Variable Earn-Out
calculated on a percentage basis. The amendment also adjusts the earn-out periods determination over a
period of three years with the first year of the earn-out period commencing on January 1, 2015 and ending
on December 31, 2015; the second year commencing on April 1, 2016 and ending on March 31, 2017; and
the third year commencing on April 1, 2017 and ending on March 31, 2018. We paid approximately
$11,000, $11,000 and $15,000 as earn-out to Agile in fiscal 2018, 2017 and 2016, respectively, and $0 for
fiscal 2015.

Through this acquisition, we acquired the insurance-focused IT consulting business of Agile, as well as

business process optimization capabilities and additional technology services including data architecture
strategy and services. In connection with this acquisition, over 55 insurance technology professionals and
other personnel formerly employed or engaged by Agile became our employees or independent contractors.
This acquisition also resulted in the addition of approximately 20 customers to our customer base. In
connection with this acquisition, we assumed office leases under which Agile was lessee in New Jersey,
Georgia and Ohio, and acquired certain trademarks, service marks, domain names and business process
framework of Agile.

Cover-All Merger

On June 26, 2015, Cover-All, a provider of core insurance software and business analytics solution
primarily focused on commercial lines for the property and casualty insurance industry listed on the NYSE
American (formerly, NYSE MKT), merged into Majesco, with Majesco as the surviving corporation, in a
stock-for-stock transaction. In the merger, each share of Cover-All common stock issued and outstanding
immediately prior to the effective time of the merger (other than treasury shares) was automatically
cancelled and extinguished and converted into the right to receive 0.21641 shares of common stock of
Majesco. This exchange ratio resulted in holders of issued and outstanding Cover-All common stock and
outstanding options and restricted stock units and other equity awards of Cover-All holding in the
aggregate approximately 16.5% of the total capitalization of the combined company immediately following
consummation of the merger.

Cover-All’s customers include insurance companies, agents, brokers and MGAs throughout the United

States and Puerto Rico. Cover-All’s software solutions and services are designed to enable customers to
introduce new products quickly, expand their distribution channels, reduce costs and improve service to
their customers. Cover-All’s business analytics solution enables customers to leverage their information
assets for real time business insights and for better risk selection, pricing and financial reporting. In 2013,
Cover-All announced the general availability of Cover-All Dev Studio, a visual configuration platform for
building new and maintaining existing pre-built commercial insurance products for Cover-All Policy. In
2011, Cover-All expanded its portfolio of insurance solutions by acquiring the assets of a recognized claims
solution provider, Ho’ike Services, Inc. (doing business as BlueWave Technology).

We always look at additional acquisitions to complement our service offerings and growth strategy.
Our success, in the near term, will depend, in large part, on our ability to: (a) successfully integrate our
acquisitions into our business, (b) build up momentum for new sales, (c) cross-sell to existing customers and
(d) exceed customer satisfaction through our state of the art products and solutions.

Inflation

Although we cannot accurately determine the amounts attributable thereto, our net revenues and
results of operations have been affected by inflation experienced in the U.S., Indian and other economies in
which we operate through increased costs of employee compensation and other operational expenses during
fiscal 2018, fiscal 2017 and fiscal 2016. To the extent permitted by the marketplace for our products and
services, we attempt to recover increases in costs by periodically increasing prices. However, there can be no
assurance that we will be able to fully offset such higher costs through price increases. Our inability or
failure to do so could harm our business, financial condition and results of operations.

Currency Fluctuations

We are affected by fluctuations in currency exchange rates with respect to our contracts. We hedge a

substantial portion of our foreign currency exposure. For more information, see “— Quantitative and
Qualitative Disclosures About Market Risk.”

Critical Accounting Policies

Our financial statements and accompanying notes are prepared in accordance with U.S. GAAP.
Preparing financial statements requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected
by management’s application of accounting policies. Critical accounting policies for us include revenue
recognition, intangible assets, software development costs, and goodwill.

Revenue Recognition

Revenues are recognized when all of the following general revenue recognition criteria are met:

•

Persuasive evidence of an arrangement exists. Evidence of an arrangement consists of a written
contract signed by both the customer and management prior to the end of the reporting period.

Delivery or performance has occurred. The software product has met the milestones contained in
the software development contract, professional services are rendered, and any customer
acceptance provisions have been satisfied.

Fees are fixed or determinable. Fees from customer arrangements are generally at a contractually
fixed price or based upon agreed upon time and material rates.

Collectability is probable. Collectability is assessed on a customer-by-customer basis, based
primarily on creditworthiness as determined by credit checks and analysis, as well as customer
payment history. If it is determined prior to revenue recognition that collection of an arrangement
fee is not probable, revenues are deferred until collection becomes probable or cash is collected,
assuming all other revenue recognition criteria are satisfied.

We recognize some license revenue upon delivery, provided that collection is determined to be probable

and no significant obligations remain. Some license revenues are not accounted separately from software
services revenues as professional services are essential to the software functionality and include significant
modification or customization to or development of the underlying software code. Since these software
arrangements do not qualify as a separate unit of accounting, the software license revenues are recognized
using the percentage of completion method. When contracts contain multiple software and software-related
elements (for example, software license, and maintenance and professional services) wherein Vendor-
Specific Objective Evidence (“VSOE”) exists for all undelivered elements, we account for the delivered
elements in accordance with the “Residual Method.” VSOE of fair value for post-contract customer
support services is established by a stated renewal rates charged in stand-alone sales. VSOE of fair value of
hosting services is based upon stand-alone sales of those services. Revenue from support services is
recognized ratably over the life of the contract. Revenue from professional consulting services is recognized
when the service is provided.

In addition, we have made further investments to create a robust and market-leading cloud platform

that is well positioned to take advantage of significant opportunities in the insurance marketplace. We
invoice customers a subscription based fee for our cloud platform. Revenue from subscription fees is
recognized ratably over the life of the contract.

Time and Material Contracts — Professional services revenue consists primarily of revenue received for

assisting with the development, implementation of our software, on-site support, and other professional
consulting services. In determining whether professional services revenue should be accounted, we review
the nature of our software products; whether they are ready for use by the customer upon receipt; the
nature of our implementation services, which typically do involve significant customization to or
development of the underlying software code; and whether milestones or acceptance criteria exist that affect
the realization of the services rendered. Substantially all of our professional services arrangements are billed
on a time and materials basis and, accordingly, are recognized as the services are performed. If there is
significant uncertainty about the project completion or receipt of payment for professional services, revenue
is deferred until the uncertainty is sufficiently resolved. Payments received in advance of rendering
professional services are deferred and recognized when the related services are performed. Work performed
and expenses incurred in advance of invoicing are recorded as unbilled receivables. These amounts are billed
in the subsequent month.

Fixed Price Contracts — For arrangements that do not qualify for separate accounting for the license

and professional services revenues, including arrangements that involve significant modification or
customization of the software, that include milestones or customer specific acceptance criteria that may
affect collection of the software license fees or where payment for the software license is tied to the
performance of professional services, software license revenue is generally recognized together with the
professional services revenue using the percentage-of-completion method. Under the percentage-of
completion method, revenue recognized is equal to the ratio of costs expended to date to the anticipated
total contract costs, based on current estimates of costs to complete the project. If there are milestones or
acceptance provisions associated with the contract, the revenue recognized will not exceed the most recent
milestone achieved or acceptance obtained. If the total estimated costs to complete a project exceed the
total contract amount, indicating a loss, the entire anticipated loss would be recognized in the current
period.

Revenue is shown net of applicable service tax, sales tax, value added tax and other applicable taxes.

We have accounted for reimbursements received for out of pocket expenses incurred as revenues in the
combined Statement of Operations.

Goodwill and Other Intangible Assets

Goodwill represents the cost of the acquired businesses in excess of the estimated fair value of assets
acquired, identifiable intangible assets and liabilities assumed. Goodwill is not amortized but is tested for
impairment at the reporting unit level at least annually or as circumstances warrant. If impairment is
indicated and carrying value of the goodwill of a reporting unit exceeds the implied fair value of that
goodwill, then goodwill is written-down. There are no indefinite-lived intangible assets.

Intangible assets other than goodwill are amortized over their estimated useful lives on a straight line

basis. The estimated useful life of an identifiable intangible asset is based on a number of factors, including
the effects of obsolescence, demand, competition, the level of maintenance expenditures required to obtain
the expected future cash flows from the asset and other economic factors (such as the stability of the
industry, known technological advances, etc.).

The estimated useful lives of intangible assets are as follows:

Non-compete agreements

3 years

Leasehold benefit

Internal-use Software

Intellectual Property Rights

Customer Contracts

Customer Relationships

Technology

Ascertainable life or primary period of lease whichever is less

1 – 5 years

1 – 3 years

6 – 8 years

6 years

Impairment of Long-Lived Assets and Intangible Assets

We review long-lived assets and certain identifiable intangible assets subject to amortization for

impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. During this review, we re-evaluate the significant assumptions used in determining the
original cost and estimated lives of long-lived assets. Although the assumptions may vary from asset to
asset, they generally include operating results, changes in the use of the asset, cash flows and other
indicators of value. Management then determines whether the remaining useful life continues to be
appropriate or whether there has been an impairment of long-lived assets based primarily upon whether
expected future undiscounted cash flows are sufficient to support the assets’ recovery. If impairment exists,
we adjust the carrying value of the asset to fair value, generally determined by a discounted cash flow
analysis.

Property and Equipment

Property and equipment are stated at actual cost less accumulated depreciation. Depreciation is

computed using the straight-line method over the estimated useful lives. The cost and the accumulated
depreciation for premises and equipment sold, retired or otherwise disposed of are removed from the stated
values and the resulting gains and losses are included in the combined Statement of Operations.
Maintenance and repairs are charged to combine Statement of Operations when incurred. Advance paid
towards acquisition of long-lived assets and cost of assets not put to use before the balance sheet date are
disclosed under the caption “capital work in progress”.

The estimated useful lives of assets are as follows:

Leasehold Improvements

5 years or over the primary period of lease whichever is less

Computers
Plant and Equipment
Furniture and Fixtures
Vehicles
Office Equipment

2 years
2 – 5 years
5 years
5 years
2 – 5 years

Results of Operations

Fiscal Year Ended March 31, 2018 Compared to Fiscal Year Ended March 31, 2017 and Fiscal Year Ended
March 31, 2017 Compared to Fiscal Year Ended March 31, 2016

The following table summarizes our consolidated statements of operations for fiscal 2018, fiscal 2017

and fiscal 2016 including as a percentage of revenues:

Statement of Operations Data

(U.S. Dollars; dollar amounts in thousands):
Total Revenue . . . . . . . . . . . . . . . . . . . .
Total cost of revenues . . . . . . . . . . . . . .
Total gross profit . . . . . . . . . . . . . . . . . .
Operating expenses:

Research and development expenses . . .
Selling, general and administrative

expenses . . . . . . . . . . . . . . . . . . . .
Restructuring costs . . . . . . . . . . . . . .
Total operating expenses . . . . . . . . .
Income (loss) from operations
. . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . .
Other income (expenses), net
. . . . . . . . .
Income (loss) before provision for income
. . . . . . . . . . . . . . . . . . . . . . . .
Income taxes (benefit) . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .
Net income (loss)

taxes

March 31,
2018
$122,985
67,120
55,865

Fiscal Years Ended

55%

March 31,
2017
$121,768
63,461
58,307

52%

March 31,
2016
$113,302
62,832
50,470

55%

17,250

14%

17,236

14%

16,267

14%

41,022
—
58,272
(2,407)
51
(516)
(74)

(2,946)
2,055
$ (5,001)

34%

33%

41,310
—
58,546
(239)
41
(612)
(15)

34%

38,204
465
54,936
(4,466)
24
(596)
289

(825)
97
(922)

(4,749)
(1,187)
(0.76)% $ (3,562)

(3)%

(4.07)% $

The following table represents revenues by each subsidiary and corresponding geographical region:

(U.S. dollars; dollar amounts in thousands):
Geography: North America
Legal Entity

Majesco . . . . . . . . . . . . . . . . . . . . . .
Majesco Software and Solutions Inc . .
Cover-All Systems Inc . . . . . . . . . . . .
Majesco Canada Ltd., Canada . . . . . .

Geography: The United Kingdom
Legal Entity:

March 31,
2017

March 31,
2016

Fiscal years ended

$ 35,539
46,430
26,173
1,203
$109,345

29% $ 27,395
52,357
38%
27,325
21%
1%
1,748
89% $108,825

23% $ 25,646
54,928
43%
17,636
22%
1%
2,175
89% $100,385

23%
48%
16%
2%
89%

Majesco UK Limited, UK . . . . . . . . .

6,651

5% $

8,167

7% $

8,935

Geography: Other
Legal Entity:

Majesco Sdn. Bhd., Malaysia . . . . . . .
Majesco Asia Pacific Pte. Ltd.,

5,248

4% $

3,625

3% $

3,671

Singapore . . . . . . . . . . . . . . . . . . .

379

Majesco Software and Solutions India

Private Limited, India . . . . . . . . . . .

Total Revenues . . . . . . . . . . . . . . . . . . .

1,362
$
6,989
$122,985

1%
6% $

1,092
4,776
$121,768

1%
4% $

238
3,982
$113,302

0%
3%

Comparison of Fiscal Years Ended March 31, 2018 and 2017

Revenues

Revenues for fiscal 2018 were $122,985 compared to $121,768 for fiscal 2017. Though the growth for
the year is only about 1%, the revenues have been subject to significant shift in mix. While revenues from
on-premise implementation have declined 25% on a full year basis, cloud revenues have increased 57% to
fully mitigate this decline. Subscription revenues from cloud customers also increased 63% on a year on year
basis indicating a strong momentum of the Company’s transition to a cloud based recurring revenue model.
We now believe that we are reaching a stage where the topline will no longer be impacted by a decline in
on-premise implementation but may begin to see the impact of the growing base of cloud revenues.

Gross Profit

Gross profit was $55,865 for fiscal 2018 compared with $58,307 for fiscal 2017. This represents a
decrease of 4.2%. The decline in gross profit margin was primarily due to the ramp up of resources to
support revenue growth in our cloud business and recent new customer wins. As a percentage of revenues,
cost of sales increased to 55% for fiscal 2018 from 52% for fiscal 2017.

Salaries and consultant fees in the cost of revenues were $47,545 for fiscal 2018 compared to $47,857
for fiscal 2017. This represents a decrease of 1% in salaries and consultant fees related to the growth in our
revenues. We had 2,298 and 2,010 technical and technical support employees as of March 31, 2018 and
2017, respectively. As a percentage of revenues, salaries and consultant fees were 39% for fiscal 2018 and
fiscal 2017.

Operating Expenses

Operating expenses were $58,272 for fiscal 2018 compared to $58,546 for fiscal 2017. This represents a

decrease of 0.5%. As a percentage of revenues, however, operating expenses decreased to 47.5% from 48.1%.
The decrease in operating expenses was primarily due to a decrease in selling, general and administrative
expenses of $288 offset by an increase in research and development costs of $14.

Loss from Operations

Loss from operations was $(2,407) for fiscal 2018 compared to $(239) for fiscal 2017. As a percentage

of revenues, loss from operations was (1.96%) for fiscal 2018 compared to loss of (0.2%) for fiscal 2017.

Other Expenses

Other expenses, net was $(74) for fiscal 2018 compared to $(15) for fiscal 2017. The loss was primarily

due to an exchange loss on account of a change in the currency exchange rate and a onetime provision
made in Majesco UK Limited for other finance charges of $184 in fiscal 2017.

Tax Provision

Tax charge was $2,055 and 97 for fiscal 2018 and fiscal 2017. The main reason for the increase in the
tax provision is the reduction in opening deferred tax assets due to change in tax rate in U.S. During fiscal
2018, an adjustment of $2,399 was made to write down our deferred tax asset consistent with the recent
changes made to the Tax Code by the Tax Cuts and Jobs Act of 2017.

Net Loss

Net loss was $(5,001) for fiscal 2018 compared to net loss of $(922) for fiscal 2017. Loss per share,
basic and diluted, was $(0.14) and $(0.14), respectively, for fiscal 2018. compared to loss per share, basic and
diluted, of $(0.02) and $(0.02), respectively, for fiscal 2017.

Adjusted EBITDA

Adjusted EBITDA, a non-GAAP metric, was $5,695 for fiscal 2018 compared to $$6,059 for fiscal

2017.

The following is an unaudited reconciliation of U.S. GAAP net income to EBITDA and Adjusted

EBITDA for fiscal 2018 and fiscal 2017:

(U.S. dollar amounts; in thousands)

Fiscal years ended

March 31, 2018

March 31, 2017

Net Income (loss)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ (5,001)

(922)

Add:

Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . .

Depreciation and amortization . . . . . . . . . . . . . . . . . . . .

Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Less:

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,055

4,849

516

(51)

4,720

612

(41)

EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,442

4,481

Add:

Stock based compensation . . . . . . . . . . . . . . . . . . . . . . . .

Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted EBITDA as a % of Revenue . . . . . . . . . . . . . . . . .

3,253

5,695
122,985

1,578

6,059
121,768

4.63%

4.98%

Comparison of Fiscal Years Ended March 31, 2017 and 2016

Revenues

Revenues for fiscal 2017 were $121,768 compared to $113,302 for fiscal 2016, reflecting an increase of

7.47%. This increase was mainly due to the addition of the Cover-All business and revenues from expanding
relationships with P&C customers through upsell and cross-sell opportunities.

Gross Profit

Gross profit was $58,307 for fiscal 2017 compared with $50,470 for fiscal 2016. This represents an
increase of 15.5%. The increase in gross profit is primarily due to the combination of a higher revenue base
and improved operating efficiencies. As a percentage of revenues, cost of sales decreased to 52% for fiscal
2017 from 55% for fiscal 2016.

Salaries and consultant fees in the cost of revenues were $47,857 for fiscal 2017 compared to $43,904

for fiscal 2016. This represents an increase of 9% in salaries and consultant fees related to the growth in our
revenues. We had 2,010 and 2,232 technical and technical support employees as of March 31, 2017 and
2016, respectively. As a percentage of revenues, salaries and consultant fees were 39% for fiscal 2017 and
2016.

Operating Expenses

Operating expenses were $58,546 for fiscal 2017 compared to $54,936 for fiscal 2016. This represents an
increase of 6.6%. As a percentage of revenues, however, operating expenses decreased to 48.1% from 48.5%.
The increase in operating expenses was primarily due to planned increase of the selling, general and
administrative expenses of $3,106 offset by a decrease in restructuring costs of $465 due to the
consummation of the Majesco Reorganization and an increase in research and development costs of $969.

Loss from Operations

Loss from operations was $(239) for fiscal 2017 compared to $(4,466) for fiscal 2016. As a percentage

of revenues, loss from operations was (0.2%) for fiscal 2017 compared to a loss of (3.9%) for fiscal 2016.

Other Income (Expenses)

Other income/(expenses), net was $(15) for fiscal 2017 compared to $289 for fiscal 2016. The loss was

primarily due to an exchange loss on account of a change in the currency exchange rate and a one-time
provision made in Majesco UK Limited for other finance charges of $184.

Tax Provision

Tax charge was $97 for fiscal 2017 compared to a tax benefit of $1,187 for fiscal 2016. The main reason

for the increase in tax provision is the increase in taxable profit in our foreign subsidiaries having an
effective tax rate higher than the losses incurred by our U.S. companies where the effective rate is lower. Our
effective tax rate for fiscal 2017 was (11.7%) as compared to 24.9% for fiscal 2016.

Net Loss

Net loss was $(922) for fiscal 2017 compared to net loss of $(3,562) for fiscal 2016. Loss per share,
basic and diluted, was $(0.02) and $(0.02), respectively, for fiscal 2017 compared to loss per share, basic and
diluted, of $(0.10) and $(0.10), respectively, for fiscal 2016.

Adjusted EBITDA

Adjusted EBITDA, a non-GAAP metric, was $6,059 for fiscal 2017 compared to $589 for fiscal 2016.

The following is an unaudited reconciliation of U.S. GAAP net income to EBITDA and Adjusted

EBITDA for fiscal 2018, fiscal 2017 and fiscal 2016:

(U.S. dollar amounts; in thousands)

Fiscal years ended

March 31, 2017

March 31, 2016

Net Income (loss)
Add:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(922)

$ (3,562)

Provision (benefit) for income taxes . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Less:

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expenses), net . . . . . . . . . . . . . . . . . . . . . .

97
4,720
612

(41)
15

EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,481

Add:

Restructuring costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock based compensation . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted EBITDA as a % of Revenue . . . . . . . . . . . . . . . . .

—
1,578
6,059
121,768

(1,187)
3,842
596

(24)
(289)

(624)

465
748
589
113,302

4.98%

0.52%

Liquidity and Capital Resources

Our cash and cash equivalent and short term investments position was $9,152 at March 31, 2018,

$12,464 at March 31, 2017 and $6,154 at March 31, 2016.

Net cash provided (used) by operating activities was $(2,650) for fiscal 2018, $10,361 for fiscal 2017 and

$(5,751) for fiscal 2016. We had accounts receivable of $19,103 at March 31, 2018, $12,227 at March 31,
2017 and $22,503 at March 31, 2016. We had revenues in excess of billings of $9,997 at March 31, 2018,
$8,563 at March 31, 2017, and $7,379 at March 31, 2016. Accounts payable and accrued expenses, and
current portions of capital lease obligations amounted to $24,588 at March 31, 2018, $18,144 at March 31,
2017, and $20,519 at March 31, 2016. The average days sales outstanding for fiscal 2018, fiscal 2017 and

fiscal 2016 were 80 days, 67 days and 96 days, respectively. The increase to 80 days was primarily on account
of our increase in revenue coupled with an increase in customer balances at the end of the year due to
milestone billing. The day’s sales outstanding have been calculated by taking into consideration the
combined balances of accounts receivable and unbilled accounts receivable.

Net cash used by investing activities amounted to $(789) for fiscal 2018, $2,938 for fiscal 2017, and

$3,992 for fiscal 2016. Net cash used by investing activities for fiscal 2018 included the purchase of plant,
property and equipment and intangible assets aggregating to $1,698.

Sale/(purchase) of investments in mutual funds was $869 for fiscal 2018, $(223) for fiscal 2017 and
$(364) for fiscal 2016, respectively. Restricted cash was $53 for fiscal 2018, $53 for fiscal 2017 and $257 for
fiscal 2016.

Net cash generated/(used) by financing activities was $690 for fiscal 2018, $(831) for fiscal 2017, and
$9,218 for fiscal 2016. The increase in cash generation was on account of the net addition of debt of $1,085.
The details of our borrowings are described below.

We operate in multiple geographical regions of the world through our various subsidiaries. We typically

fund the cash requirements for our operations through license, services, and support agreements. As of
March 31, 2018, we had approximately $9,152 of cash, cash equivalents and marketable securities of which
approximately $4,399 is held by our foreign subsidiaries. We intend to permanently reinvest these funds
outside the U.S., and therefore, we do not anticipate repatriating undistributed earnings from our non-U.S.
operations. If funds from foreign operations are required to fund U.S. operations in the future and if U.S.
tax has not previously been provided, we would be required to accrue and pay additional U.S. taxes to
repatriate these funds.

As a growing company, we have on-going capital expenditure needs based on our short term and long

We believe that our current cash balances and anticipated cash flows from operations will be sufficient

to meet our normal operating needs for at least the next twelve months. These projections include
anticipated sales to new customers and upsell/cross sell to existing customers, the exact timing of which
cannot be predicted with absolute certainty and can be influenced by factors outside our control. Our
ability to fund our working capital needs and address planned capital expenditures will depend on our
ability to generate cash in the future. We anticipate generating future working capital through sales to new
customers and continued sales and services to our existing customers.

Our future liquidity and capital resource requirements will depend on many factors, including, but not

limited to, the following trends and uncertainties we face and those described in “Item 1A. Risk Factors”:

•

Our ability to generate cash is subject to general economic, financial, competitive and other
factors beyond our control.

• We experience competition in our industry and continuing technological changes.

•

Insurance companies typically are slow in making decisions and have numerous bureaucratic and
institutional obstacles, which can make our efforts to attain new customers difficult.

• We compete on the basis of insurance knowledge, products, services, price, technological advances

and system functionality and performance.

We do not expect for there to be a need for a change in the mix or relative cost of our sources of

capital.

Financing Arrangements

Term Loan Facility

On March 25, 2011, the we entered into a secured revolving working capital line of credit facility with
ICICI Bank Limited (“ICICI”) under which the maximum borrowing limit was $5,000. The interest rate on
the credit facility at March 31, 2016 was three-month LIBOR plus 350 basis points and increased to
three-month LIBOR plus 375 basis points with the second extension of this facility described below. The
credit facility was guaranteed by Mastek Ltd. subject to the terms and conditions set forth in the guarantee.
The credit facility initially matured on November 11, 2015. On November 20, 2015, we extended this line of
credit to February 11, 2016. The facility was further extended to May 9, 2016 and again extended to May
15, 2017. Majesco paid a processing fee of $12.50 in connection with the second extension and a processing
fee of $50.83 in connection with the third extension. In connection with these extensions of the Majesco
line of credit, Mastek Ltd. also extended its guarantee of such line of credit. Majesco has agreed to pay a
fee and indemnify Mastek Ltd. against any payments made by Mastek Ltd. in connection with this
guarantee. On January 20, 2017, we paid in full the balance under this facility with proceeds from a new
$10,000 receivables purchase facility with HSBC Bank USA, National Association (“HSBC”) described
below, and this facility was terminated. On repayment of this facility, the guarantee by Mastek Ltd. of this
facility was also terminated and our liability to Mastek Ltd. regarding this guarantee also ceased to exist.
The interest rate was 4.75% at January 20, 2017.

This facility was secured by a continuing first priority lien on and security interest in, among other
things, all of Majesco’s personal property and assets (both tangible and intangible), including accounts
receivable, cash, certificated and uncertificated securities and proceeds of any insurance or indemnity
payable to us with respect to the collateral. This facility contained financial covenants, as well as restrictions
on, among other things, our ability to incur debt or liens; make loans and investments; enter into mergers,
acquisitions and other business combinations; engage in asset sales; or amend our governing documents.
This facility also restricted us from paying dividends upon and during the continuation of an event of
default.

MSSIPL Facilities

On June 30, 2015, our subsidiary, Majesco Software and Solutions India Pvt. Ltd. (“MSSIPL”),
entered into a secured Pre Shipment in Foreign Currency and Post Shipment in Foreign Current (the
“PCFC”) facility with Yes Bank pursuant to which MSSIPL may request 3 months pre-export advances
and advances against export collection bills. The maximum borrowing limit was initially 300 million Indian
rupees. The interest rate on this PCFC facility was initially USD 3 months LIBOR plus 275 basis points.
The interest rate on this PCFC facility is determined at the time of each advance. This PCFC facility is
secured by a first pari passu charge over the current assets of MSSIPL. Excess outstanding beyond 100
million Indian rupees is to be backed by 100% fixed deposit receipts in MSSIPL or Majesco Limited. On
September 27, 2016, MSSIPL extended this PCFC facility to June 17, 2017.

On September 13, 2017, MSSIPL entered into an addendum facility letter (the “2017 Addendum”) to

its addendum facility letter dated September 27, 2016 with respect to the PCFC facility with Yes Bank
dated June 30, 2015. The 2017 Addendum further extended the maturity date of the PCFC facility to May
22, 2018 and reduced the maximum borrowing limit from 300 million Indian rupees to 130 million Indian
rupees, or approximately $1,998 based upon the exchange rate on March 31, 2018. There is no outstanding
balance against this loan as of March 31, 2018.

In addition, the 2017 Addendum also amended the interest rate of the PCFC facility to LIBOR plus
150 basis points plus 2%. The interest rate on the PCFC facility is determined at the time of each advance.

As of March 31, 2018, we were in compliance with the terms of this facility.

On May 9, 2017, our subsidiary, MSSIPL, and Standard Chartered Bank entered into an Export
Invoice Financing Facility, Working Capital Overdraft Facility, Short Term Loans Facility, Bonds and
Guarantees Facility and Pre Shipment Financing Under Export Orders Facility (the “Combined Facility”)
pursuant to which Standard Chartered Bank agreed to a Combined Facility of up to 200 million Indian
rupees (or approximately $3,075 at exchange rates in effect on March 31, 2018). The Export Invoice

Financing Facility is for the financing of MSSIPL’s sale of goods, as evidenced by MSSIPL’s invoice to the
customer. Each amount drawn is required to be repaid within 90 days. The interest on this facility is based
on the marginal cost of funds based lending rate (the “MCLR”) plus a margin to be agreed with Standard
Chartered Bank at the time of each drawdown. The MCLR is to be determined on the date of each
disbursement and be effective until repayment. Interest will accrue from the utilization date to the date of
repayment or payment of that utilization. The Working Capital Overdraft Facility and the Short Term
Loans Facility are for working capital purposes and subject to sub-limits. The interest on these facilities is
based on the MCLR plus a margin to be agreed with Standard Chartered Bank at the time of each
borrowing. The MCLR is to be determined on the date of each disbursement and be effective until
repayment or maturity. Interest will accrue from the draw down date up to the repayment or maturity date.
The Bonds and Guarantees Facility is for the issuance of guarantees and subject to commissions as agreed
with Standard Chartered Bank from time to time. The Pre Shipment Financing Under Export Orders
Facility is for the purchase of raw material, processing, packing, transportation, warehousing and other
expenses and overheads incurred by MSSIPL to ready goods for sale. The interest on this facility is based
on the MCLR plus a margin to be agreed with Standard Chartered Bank at the time of each borrowing.
The MCLR is to be determined on the date of utilization and be effective until repayment. Interest will
accrue from the utilization date up to the repayment date.

The interest under the Combined Facility may be changed by Standard Chartered Bank upon the
occurrence of certain market disruption events. The Combined Facility is secured by a first pari passu
security interest over the current assets of MSSIPL. MSSIPL was in compliance under the terms of this
Combined Facility as of March 31, 2018. There are no outstanding loans under this Combined Facility as
of March 31, 2018.

Term Loan Facility

On March 23, 2016, we entered into a Loan Agreement (the “Loan Agreement”) with HSBC pursuant

to which HSBC agreed to extend loans to us in the amount of up to $10,000 and we issued a promissory
note to HSBC in the maximum principal amount of $10,000 or any lesser amount borrowed under the
Loan Agreement (the “Note”, and together with the “Loan Agreement”, the “Facility”). The outstanding
principal balance of the loan bears interest based on LIBOR plus a margin in effect on the first day of the
relevant interest period. Until January 1, 2018, only interest was payable under the loan. Commencing on
January 1, 2018, and on each January 1 and July 1 thereafter until July 1, 2020, installments of principal in
the amount of $1,667 shall be due and payable semi-annually. All principal and interest outstanding under
the Note shall be due and payable on March 1, 2021. The Facility is unsecured and supported by a letter of
credit issued by a bank of $10,000, which is secured by a cash pledge of our parent company, Majesco
Limited. As of March 31, 2018, we had $8,333 outstanding under this facility. As of March 31, 2018, we
were in compliance with the terms of this Facility.

The Facility contains affirmative covenants that require us to furnish financial statements to HSBC

and cause Majesco Limited to maintain (1) a Net Debt-to-EBITDA Ratio (as defined in the Loan
Agreement) of not more than (a) 5.00 to 1.00 as of the last day of its 2017 fiscal year and (b) 2.50 to 1.00 as
of the last day of each fiscal year thereafter, and (2) a Debt Service Coverage Ratio (as defined in the Loan
Agreement) of not less than 1.50 to 1.00 as of the last day of each fiscal year. The Facility contains
restrictive covenants on us, including restrictions on declaring or paying dividends upon and during the
continuation of an event of default, incurring additional indebtedness, selling material portions of our
assets or undertaking other substantial changes to the business, purchasing or holding securities for
investment, and extending credit to any person outside the ordinary course of business. The Facility also
restricts any transfer or change in, or assignment or pledge of the ownership or control of Majesco which
would cause Majesco Limited to directly own less than fifty one percent (51%) of the issued and
outstanding equity interests in Majesco. The Facility also restricts Majesco Limited from incurring any Net
Debt (as defined in the Loan Agreement) in excess of $25,000 at any time prior to April 1, 2017. The
Facility also contains customary events of default provision and indemnification provisions whereby we will
indemnify HSBC against all losses or damages related to the Facility, provided, however, that we shall not
have any indemnification obligations to HSBC for any claims caused by HSBC’s gross negligence or willful
misconduct. We used the loan proceeds to repay existing indebtedness and for capital expenditures, working
capital and other general corporate purposes.

Receivable Purchase Facility

On January 13, 2017, Majesco and its subsidiaries MSSI, and Cover-All Systems, jointly and severally

entered into a Receivable Purchase Agreement with HSBC pursuant to which HSBC may advance funds
against receivables at an agreed advance rate. The outstanding aggregate amount of all advances may not
exceed a $10,000 facility limit. The facility bears interest at two (2%) per cent plus the ninety (90) day
LIBOR rate. HSBC will also receive an arrangement fee equal to 0.20% of the facility limit and a facility
review fee equal to 0.20% of the facility limit. Majesco will serve as HSBC’s agent for the collection of
receivables, and Majesco will collect and otherwise enforce payment of the receivables. HSBC has a security
interest in accounts of MSSI and Cover-All Systems. The term of the Receivable Purchase Agreement is for
a minimum period of twelve (12) months and shall continue unless terminated by either party. Either party
may terminate the Receivable Purchase Agreement at any time upon sixty (60) days’ prior written notice to
the other party. The Receivable Purchase Agreement will provide additional liquidity to us for working
capital and other general corporate purposes. As of March 31, 2018, Majesco had $5,262 outstanding under
this facility. Majesco used proceeds from this facility to refinance the ICICI facility described above, to fund
capital expenditures and for working capital and other general corporate purposes.

Auto loan

MSSIPL has obtained an auto loan from HDFC Bank for the purchase of vehicle. This loan bears

interest at a rate of 8.75% per annum, is payable in 60 monthly installments over a 5 yearperiod and is
secured by the hypothecation of the vehicle. The outstanding balance of loan as of March 31, 2018 is
$41.39.

Dividends and Redemption

We have not declared or paid any cash dividend on our common stock since 2000. It has been our
policy to invest earnings in growth rather than distribute earnings as common stock dividends. This policy,
is expected to continue, but is subject to regular review by our Board of Directors.

Contractual Obligations

The following table summarizes our known contractual obligations as of March 31, 2018:

Payments due by period
(in thousands)

Particulars

Total

<1 Year

1 – 3 Years

3 – 5 Years

>5 Years

Capital Leases . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating Leases . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .
Purchase Obligations
Long-Term Debt – HSBC Term Loan . . . . . . . . . . .
PCFC Facility, HSBC Receivable Purchase Facility

and Auto loan . . . . . . . . . . . . . . . . . . . . . . . . . .

Other Obligations – Contingent Consideration . . . .

203
8,176
—
8,333

5,303

835

203
3,166
—
3,333

5,269

835

—
3,993
—
5,000

—

—
580
—
—

—

—
437
—
—

—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$22,850

$12,806

$9,027

$580

$437

As of March 31, 2018, our operating leases consisted of leases for office space in the United States,
Canada, the United Kingdom, Malaysia, Singapore and India for terms ranging from three to ten years
each. Many of these leases include renewal options, with renewal periods generally between two to five
years. We also leased automobiles under capital leases and acquired software under hire purchase
arrangement. Contingent consideration reflects discounted future cash flows during the earn-out period
related to our acquisition of the Agile assets in December 2014. See Notes 5, 21 and 22 to our consolidated
financial statements as well as “Item 2. Properties” for additional information related to our capital and
operating leases and other contractual obligations.

In addition to our contractual obligations set forth in the table above, we also have contractual and

non-contractual employee benefits and related obligations, including those described below:

(1) Obligations under a post-employment defined benefit plan (the “Gratuity Plan”) covering all

employees in India who are eligible under the terms of their employment, and governed by India’s
Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested
employees at retirement or upon termination of employment based on the respective employee’s
salary and the years of employment with Majesco. We determine our liability towards the
Gratuity Plan on the basis of actuarial valuation. Actuarial gains and losses arising from
experience adjustments, and changes in actuarial assumptions are recognized immediately in the
combined Statement of Operations as income or expense. These obligations are valued by
independent qualified actuaries. We evaluate these critical actuarial assumptions at least annually.
If actual results differ significantly from our estimates, our gratuity expense and our results of
operations could be materially impacted. Our aggregate obligations under the Gratuity Plan were
$53 for fiscal 2018.

(2) We have obligations with respect to the encashment of leave balances of certain of our employees
in India and other countries. Our aggregate obligations under provision for accrued vacation
(leave encashment) were $961 for fiscal 2018. Our total obligations under leave encashment was
$4,303, as of March 31, 2018.

(3) We pay contributions to a defined contribution pension scheme covering our employees in

Canada and the United Kingdom. The assets of the scheme are held separately from those of
Majesco in an independently administered fund. We contributed $15 to the fund during fiscal
2018.

(4) Senior employees of our Indian subsidiary are entitled to superannuation, a defined contribution
plan (the “Superannuation Plan”). We make a yearly contribution to the Superannuation Plan,
which is administered and managed by the Life Insurance Corporation of India based on a
specified percentage (presently at 12.5% to 15% depending on the grade of the employee) of each
covered employee’s basic salary. We contributed $37 towards the Superannuation Plan during
fiscal 2018.

(5)

In accordance with Indian law, generally all employees in India are entitled to receive benefits
under the Provident Fund, which is a defined contribution plan. Both the employee and the
employer make monthly contributions to the plan at a predetermined rate (presently at 12% each)
of the employees’ basic salary. These contributions are made to the fund which is administered
and managed by the Government of India.

(6) We make payments to defined contribution plans established and maintained in accordance with
the local laws of the United States and of the jurisdictions in which our subsidiaries are located.
Our aggregate monthly contributions to all of these plans are charged to combined Statement of
Operations in the year they are incurred and there are no further obligations under these plans
beyond those monthly contributions. We contributed $1,521 in the aggregate towards all these
contribution plans during fiscal 2018.

See Notes 2(l) and 13 to our consolidated financial statements for fiscal 2018 for additional

information.

In addition, as of March 31, 2018, we had gross unrecognized tax benefits of $441. At this time, we are

unable to make a reasonably reliable estimate of the timing of payments in individual years in connection
with these tax liabilities; therefore, such amounts are not included in the above contractual obligations table.
See Note 15 to our consolidated financial statements for additional information.

Off-Balance Sheet Arrangements

We do not maintain any off-balance sheet arrangements, transactions, obligations or other

relationships with unconsolidated entities that would be expected to have a material current or future effect
upon our financial condition or results of operations.

Recent Accounting and Auditing Development

Improvements on Employee Share-Based Payment Accounting

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards

Update (“ASU”) No. 2016-09, “Improvements on Employee Share-Based Payment Accounting
(Topic 718)” (“ASU 2016-09”), which simplifies several aspects of the accounting for employee share-based
payment transactions for both public and nonpublic entities, including the accounting for income taxes,
forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash
flows. The new standard is effective for annual periods beginning after December 15, 2016 and interim
periods within those years. The standard became effective for the Company on April 1, 2017. The adoption
of this update did not have a material impact on the Company’s consolidated financial statements.

Revenue from Contracts with Customers

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers
(Topic 606)”, which provides guidance for revenue recognition. This ASU affects any entity that either
enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of
non-financial assets. This ASU will supersede the revenue recognition requirements in Topic 605, Revenue
Recognition, and most industry-specific guidance.

In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers
(Topic 606): Deferral of the Effective Date”, deferring the effective date of this standard. As a result, the
ASU and related amendments will be effective for the Company for its fiscal year beginning April 1, 2018,
including interim periods within that fiscal year.

Subsequently, the FASB issued ASU No. 2016-08, “Principal Versus Agent Consideration (or
Reporting Revenue Gross versus Net)” in March 2016, ASU No. 2016-10, Identifying Performance
Obligations and Licensing in April 2016, and ASU No. 2016-12, Narrow-Scope Improvements and
Practical Expedients in May 2016. These amendments clarified certain aspects of Topic 606 and will also be
effective for the Company for its fiscal year beginning April 1, 2018.

The core principle of Topic 606 is to recognize revenues when promised goods or services are
transferred to customers in an amount that reflects the consideration that is expected to be received for
those goods or services. Topic 606 defines a five-step process to achieve this core principle and, in doing so,
it is possible more judgment and estimates may be required within the revenue recognition process than are
required under existing U.S. GAAP, including identifying performance obligations in the contract,
estimating the amount of variable consideration to include in the transaction price and allocating the
transaction price to each separate performance obligation, among others. Topic 606 also provides guidance
on the recognition of costs related to obtaining customer contracts.

The Company plans to adopt these ASUs (collectively, Topic 606) on April 1, 2018. Topic 606 permits
two methods of adoption: retrospectively to each prior reporting period presented (the “Full Retrospective
Method”), or retrospectively with the cumulative effect of initially applying the guidance recognized at the
date of initial application (the “Modified Retrospective Method”). The Company currently intends to apply
the Modified Retrospective Method. Although the Company does not expect a material impact on revenues
upon adoption, we expect that the new standard will expand disclosure, specifically around the quantitative
and qualitative information about the Company’s underlying performance obligations.

Business Combinations (Topic 805): Clarifying the Definition of a Business

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805)”: Clarifying the

Definition of a Business, which provides a more robust framework to use in determining when a set of
assets and activities is a business. The standard will be effective for the Company beginning April 1, 2018.
Based on its current assessment, the Company does not expect the adoption of this update to have a
material impact on its consolidated financial statements.

Financial Instruments

In January 2016, the FASB issued ASU 2016-01, Financial Instruments, which impacts certain aspects

of recognition, measurement, presentation and disclosure of financial instruments. The standard will be
effective for the Company beginning April 1, 2018. The Company is currently evaluating the effect the
updated standard will have on its consolidated financial statements and related disclosures.

Statement of Cash Flows (Topic 230): Restricted Cash

In November 2016, the FASB issued ASU 2016-18,” Statement of Cash Flows (Topic 230)”: Restricted
Cash, which requires the statement of cash flows to report changes in cash, cash equivalents, and restricted
cash. The standard will be effective for the Company beginning August 1, 2018. Based on its current
assessment, the Company does not expect the adoption of this update to have a material impact on its
consolidated financial statements.

Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230)”: Classification

of Certain Cash Receipts and Cash Payments (ASU 2016-15), which clarifies how companies present and
classify certain cash receipts and cash payments in the statement of cash flows. The standard will be
effective for the Company beginning April 1, 2018. Based on its current assessment, the Company does not
expect the adoption of this update to have a material impact on its consolidated financial statements.

Income Tax Consequences of an Intra-Entity Transfer of Assets Other Than Inventory (Topic 740)

In October 2016, the FASB issued ASU 2016-16, “Income Taxes — Intra-Entity Transfers of Assets

Other Than Inventory (Topic 740)”, which requires entities to recognize the income tax consequences of an
intra-entity transfer of an asset other than inventory when the transfer occurs. The new standard must be
adopted using a modified retrospective transition method which is a cumulative-effective adjustment to
retained earnings as of the beginning of the first effective reporting period. The standard will be effective
for the Company beginning April 1, 2018. Based on its current assessment, the Company does not expect
the adoption of this update to have a material impact on its consolidated financial statements.

Scope of Modification Accounting

In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting (Topic 718)

(“ASU 2017-09”), which amends the scope of modification accounting for share-based payment
arrangements. ASU 2017-09 provides guidance on the types of changes to the terms or conditions of
share-based payment awards to which an entity would be required to apply modification accounting under
ASC 718. Specifically, an entity would not apply modification accounting if the fair value, vesting
conditions, and classification of the awards are the same immediately before and after the modification.
The new standard is effective for annual periods beginning after December 15, 2017 and interim periods
within those years. Early adoption is permitted. The standard will be effective for the Company beginning
April 1, 2018. The Company is currently evaluating the impact this update will have on its consolidated
financial statements.

Accounting for Leases (Topic 842)

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which

requires lessees to put most leases on their balance sheets but recognize the expenses on their income
statements in a manner similar to current practice. ASU 2016-02 states that a lessee would recognize a lease
liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying
asset for the lease term. The standard will be effective for the Company beginning April 1, 2019. Based on
its current assessment, the Company does not expect the adoption of this update to have a material impact
on its consolidated financial statements.

Simplifying the Test for Goodwill Impairment (Topic 350)

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, “Intangibles —

Goodwill and Other (Topic 350)”: Simplifying the Test for Goodwill Impairment, which removes the

requirement for an entity to calculate the implied fair value of goodwill (as part of step 2 of the current
goodwill impairment test) in measuring a goodwill impairment loss. The standard will be effective for the
Company beginning April 1, 2020. Early adoption is permitted for interim or annual goodwill impairment
tests performed on testing dates after January 1, 2017. Based on its current assessment, the Company does
not expect the adoption of this update to have a material impact on its consolidated financial statements.

Emerging Growth Company

We are an “emerging growth company” under the federal securities laws and are subject to reduced

public company reporting requirements. In addition, Section 107 of the Jumpstart Our Business Startups
(“JOBS”) Act also provides that an emerging growth company can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised
accounting standards. In other words, an emerging growth company can delay the adoption of certain
accounting standards until those standards would otherwise apply to private companies. We have taken
advantage of the extended transition period for complying with new or revised accounting standards. As a
result, our financial statements may not be comparable to those of companies that comply with public
company effective dates for complying with new or revised accounting standards.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of loss that may impact our financial position due to adverse changes in

financial market prices and rates. We are exposed to market risk primary due to fluctuations in foreign
currency exchange rates and interest rates, each as described more fully below. We do not hold or issue
derivative financial instruments for trading or speculative purposes.

Interest Rate Sensitivity

Our exposure to market risk for changes in interest rates relates primarily to our cash and cash

equivalents and investments. We do not use derivative financial instruments to hedge interest rate exposure.
Our cash and cash equivalents and investments as of March 31, 2018 were $9,152 and nil, respectively. We
invest primarily in highly liquid, money market funds and bank fixed deposits. Because of the short-term
nature of the majority of the interest-bearing securities we hold, we believe that a 10% fluctuation in the
interest rates applicable to our cash and cash equivalents and investments would not have a material effect
on our financial condition or results of operations.

The rate of interest on our receivables facility with HSBC, our PCFC facility and our term loan with
HSBC which were in effect as of March 31, 2018, are variable and are based on LIBOR plus a fixed margin.
As of March 31, 2018, we had $5,262 and nil in borrowings outstanding under our receivables facility with
HSBC and PCFC facility, respectively. As of March 31, 2018, we had borrowed $8,333 under our term loan
with HSBC. As of March 31, 2018 we had borrowed $41.39 pursuant to an auto loan from HDFC Bank
which bears interest at a rate of 8.75% per annum. We believe that a 10% fluctuation in the interest rates
applicable to our borrowings would not have a material effect on our financial condition or results of
operations.

Foreign Currency Exchange Risk

Our reporting currency is the U.S. dollar. However, payments to us by customers outside the U.S. are
generally made in the local currency. Accordingly, our results of operations and cash flows are subject to
fluctuations due to changes in foreign currency exchange rates, particularly changes in the Canadian dollar,
Indian rupee, British pound, Thai baht, Singapore dollars, Mexican peso and Malaysian ringgit. The
volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy.

We generated approximately 12.1% and 12.1% of our gross revenues outside of the United States for

fiscal 2018 and fiscal 2017, respectively. The effect of foreign exchange rate changes on cash and cash
equivalents resulted in a gain/(loss) of $266 and $(477) for fiscal 2018 and fiscal 2017, respectively. For fiscal
2018 and fiscal 2017, we had a foreign exchange loss of approximately $(81) and $(108), respectively.

We use foreign currency forward contracts and par forward contracts to hedge our risks associated

with foreign currency fluctuations related to certain commitments and forecasted transactions. The use of
hedging instruments is governed by our policies which are approved by our Board of Directors. We

designate these hedging instruments as cash flow hedges. Derivative financial instruments we enter into that
are not designated as hedging instruments in hedge relationships are classified as financial instruments at
fair value through profit or loss.

The aggregate contracted USD principal amounts of our foreign exchange forward contracts (sell)

outstanding as of March 31, 2018 and 2017 amounted to 18,250 and nil, respectively. The aggregate
contracted GBP principal amounts of our foreign exchange forward contracts (sell) outstanding as of
March 31, 2018 amounted to $1,155 and as of March 31, 2017 amounted to $2,080. The outstanding
forward contracts as of March 31, 2018 mature between 1 to 24 months. As of March 31, 2018, we estimate
that $68, net of tax, of the net gains/(losses) related to derivatives designated as cash flow hedges recorded
in accumulated other comprehensive income (loss) is expected to be reclassified into earnings within the
next 15 months.

The fair value of derivative financial instruments is determined based on observable market inputs and

valuation models. The derivative financial instruments are valued based on valuations received from the
relevant counterparty (i.e., bank). The fair value of the foreign exchange forward contract and foreign
exchange par forward contract has been determined as the difference between the forward rates on
reporting date and the forward rate on the original transaction, multiplied by the transaction’s notional
amount (with currency matching). The following table provides information of fair values of derivative
financial instruments:

(in US dollars; dollar amounts in thousands)

Noncurrent*

Current* Noncurrent*

Current*

Asset

Liability

As of March 31, 2018
Designated as hedging instruments under Cash Flow Hedges

Foreign exchange forward contracts . . . . . . . . . . . . . . . . .

As of March 31, 2017
Designated as hedging instruments under Cash Flow Hedges

Foreign exchange forward contracts . . . . . . . . . . . . . . . . .

$194
$194

$
$

0
0

$46
$46

$99
$99

$17
$17

$10
$10

$127
$127

$ —
$ —

The noncurrent and current portions of derivative assets are included in ‘Other Assets’ and ‘Prepaid
Expenses And Other Current Assets’, respectively and of derivative liabilities are included in ‘Other
Liabilities’ and ‘Accrued Expenses And Other Liabilities’, respectively in our Combined Balance Sheet.

For more information on foreign currency translation adjustments and cash flow hedges and other
derivative financial instruments, see Notes 2, 4 and 12 to our consolidated financial statements for the fiscal
year ended March 31, 2018.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements required to be filed pursuant to this Item 8 are appended to this Annual
Report on Form 10-K. A list of the financial statements filed herewith is found at “Item 15. Exhibits and
Financial Statement Schedules.”

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING

AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required

to be disclosed in our reports under the Exchange Act, and the rules and regulations thereunder, is
recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and
forms and that such information is accumulated and communicated to our management, including our
principal executive officer and principal financial officer, as appropriate, to allow for timely decisions
regarding required disclosure. In designing and evaluating the disclosure controls and procedures,
management recognizes that any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives, and management is required
to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rule 13a-15(b) under the Exchange Act, our management, under the supervision and

with the participation of our principal executive officer and principal financial officer, has evaluated the
effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined
in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2018. Based on such evaluation,
our principal executive officer and principal financial officer have concluded that, as of March 31, 2018, our
disclosure controls and procedures were effective at the reasonable assurance level.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). Our internal control
over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect

misstatements. Therefore, even those systems determined to be effective can provide only reasonable
assurance of achieving their control objectives. Furthermore, smaller companies face additional limitations.
Smaller companies employ fewer individuals and find it difficult to properly segregate duties. Smaller
companies tend to utilize general accounting software packages that lack a rigorous set of software
controls.

Our management, with the participation of the Chief Executive Officer and Chief Financial Officer,
evaluated the effectiveness of the Company’s internal control over financial reporting as of March 31, 2018.
In making this assessment, our management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework. Based
on that evaluation, our management concluded that, as of March 31, 2018, our internal control over
financial reporting was effective to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles as a result of material weaknesses.

Attestation Report on Internal Control Over Financial Reporting

This Annual Report on Form 10-K does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting due to the rules of the SEC for emerging
growth companies.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during our most recent
fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item 10 is incorporated herein by reference from our definitive proxy

statement for the 2018 Annual Meeting of Shareholders.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item 11 is incorporated herein by reference from our definitive proxy

statement for the 2018 Annual Meeting of Shareholders.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS

The information required by this Item 12 is incorporated herein by reference from our definitive proxy

statement for the 2018 Annual Meeting of Shareholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

INDEPENDENCE

The information required by this Item 13 is incorporated herein by reference from our definitive proxy

statement for the 2018 Annual Meeting of Shareholders.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item 14 is incorporated herein by reference from our definitive proxy

statement for the 2018 Annual Meeting of Shareholders.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) 1. Financial Statements

See Index to our financial statements on page F-1 of this Annual Report on Form 10-K.

2. Financial Statement Schedule

All schedules are omitted as information required is inapplicable or the information is presented in the

combined financial statements and related notes included elsewhere in this Annual Report on Form 10-K.

3. Exhibits

The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as a

part of this Annual Report on Form 10-K.

(b) Exhibits. See Item 15(a)(3) above.

ITEM 16. FORM 10-K SUMMARY

None.

Majesco

Index to Consolidated and Combined Financial Statements

Page

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2

Consolidated and Combined Balance Sheets — March 31, 2018 and 2017 . . . . . . . . . . . . . . . . . . . F-3

Consolidated and Combined Statements of Operations — Fiscal Years Ended March 31, 2018,

March 31, 2017 and March 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4

Consolidated and Combined Statements of Comprehensive Income — Fiscal Years Ended

March 31, 2018, March 31, 2017 and March 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5

Consolidated and Combined Statements of Changes in Stockholders’ Equity — Fiscal Years

Ended March 31, 2018, March 31, 2017 and March 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6

Consolidated and Combined Statements of Cash Flows — Fiscal Years Ended March 31, 2018,

March 31, 2017 and March 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-7

Notes to Consolidated and Combined Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Majesco

Opinion on the Financial Statements

We have audited the accompanying consolidated and combined balance sheets of Majesco (the
“Company”) as of March 31, 2018 and 2017, and the related consolidated and combined statements of
operations, stockholders’ deficiency, and cash flows for each of the years in the three-year period ended
March 31, 2018, and the related notes (collectively referred to as the “financial statements”). In our
opinion, the consolidated and combined financial statements present fairly, in all material respects, the
financial position of the Company as of March 31, 2018 and2017, and the results of its operations and its
cash flows for each of the three years in the period ended March 31,2018, in conformity with accounting
principles generally accepted in the United States of America.

Basis for Opinion

These consolidated and combined financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the Company’s consolidated and combined
financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent
with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require

that we plan and perform the audit to obtain reasonable assurance about whether the consolidated and
combined financial statements are free of material misstatement, whether due to error or fraud. The
Company is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. As part of our audits we are required to obtain an understanding of internal control
over financial reporting but not for purposes of expressing an opinion on the effectiveness of the
Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the

consolidated and combined financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the
amounts and disclosures in the consolidated and combined financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the consolidated and combined financial statements. We believe that
our audits provide a reasonable basis for our opinion.

MSPC

Certified Public Accountants and Advisors,
A Professional Corporation

We have served as the Company’s auditor since 2015.

Cranford, NJ
June 22, 2018

F-2

Consolidated and Combined Balance Sheets
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

ASSETS

CURRENT ASSETS

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short term investments
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivables, net
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unbilled accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES

Loan from bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital lease obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital lease obligation, net of current portion . . . . . . . . . . . . . . . . . . . . . . . . . .
Term loan – bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

March 31,

2018

2017

$ 9,152
—
53
19,103
9,997
—
9,494
47,799
2,755
6,535
7,171
50
32,216
$ 96,526

$ 5,269
2,353
22,032
203
12,201
42,058
—
8,367
928
$ 51,353
—

$ 11,635
829
53
12,227
8,563
2,018
5,961
41,286
3,659
8,708
3,856
289
32,216
$ 90,014

$ 2,561
2,923
14,911
310
10,982
31,687
288
10,000
2,191
$ 44,166
—

STOCKHOLDERS’ EQUITY

Preferred stock, par value $0.002 per share – 50,000,000 share authorized as of

March 31, 2018 and March 31, 2017; NIL shares issued and outstanding as of
March 31, 2018 and March 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Common stock, par value $0.002 per share – 450,000,000 shares authorized as of

March 31, 2018 and 450,000,000 shares authorized as of March 31, 2017; 36,600,457
shares issued and outstanding as of March 31, 2018 and 36,508,203 shares issued and
outstanding as of March 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY . . . . . . . . . . . . . . . . . . .

— $

—

73
75,022
(30,283)
361
45,173
$ 96,526

73
71,343
(25,282)
(286)
45,848
$ 90,014

See accompanying notes to the Consolidated and Combined Financial Statements.
F-3

Consolidated and Combined Statements of Operations
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Gross profit

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating expenses

Year ended
March 31,
2018

Year ended
March 31,
2017

Year ended
March 31,
2016

122,985

67,120

55,865

121,768

63,461

58,307

113,302

62,832

50,470

Research and development expenses . . . . . . . . . . . . . . . . .

17,250

17,236

Selling, general and administrative expenses . . . . . . . . . . . .

Restructuring costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41,022

—

41,310

—

16,267

38,204

465

Total operating expenses

. . . . . . . . . . . . . . . . . . . . . . . . . . .

Loss from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expenses),net . . . . . . . . . . . . . . . . . . . . . . .

Loss before provision for income taxes . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . .

(Benefit)/Provision for income taxes

Net Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Earnings (Loss) per share:

Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Weighted average number of common shares outstanding(1)

$
$

58,272

58,546

54,936

(2,407) $
51
(516)
(74)

(2,946) $
2,055

(5,001) $

(239) $
41
(612)
(15)

(825) $
97

(922) $

(4,466)
24
(596)
289

(4,749)
(1,187)

(3,562)

(0.14) $
(0.14) $

(0.02) $
(0.02) $

(0.10)
(0.10)

Basic and diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36,540,199

36,477,774

35,055,000

(1) The common stock shares for 2016 period presented reflect the one-for-six reverse stock split which

took effect on June 26, 2015.

See accompanying notes to the Consolidated and Combined Financial Statements.
F-4

Majesco

Consolidated and Combined Statements of Comprehensive Income
(All amounts are in thousands of US Dollars)

Year ended
March 31,
2018

Year ended
March 31,
2017

Net Loss

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(5,001)

$ (922)

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments . . . . . . . . . . . . . . . .

Unrealized (loss)/gains on cash flow hedges . . . . . . . . . . . . . .

638

Other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . .

647

Comprehensive Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$(4,354)

Less: Comprehensive income attributable to the

non-controlling interest

. . . . . . . . . . . . . . . . . . . . . . . . . .

$ —

Comprehensive Loss attributable to Owners of the Company . . .

$(4,354)

(567)

(58)

$ (625)

$(1,547)

$ —

$(1,547)

Year ended
March 31,
2016

$(3,562)

(1,662)

(243)

$(1,905)

$(5,467)

$ —

$(5,467)

See accompanying notes to the Consolidated and Combined Financial Statements.
F-5

Consolidated and Combined Statements of Changes in Stockholders’ Equity
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

Common Stock

Amount

Additional
paid-in
capital

Accumulated
deficit

Accumulated
other
comprehensive
income

Non-
controlling
interests

Total
Stockholders’
equity

Balance as of April 1, 2015 . . . . . . . . . . . . . 30,575,000

$61

$39,049

$(20,798)

$ 2,244

Stock based compensation . . . . . . . . . . . .

—

Cover-All Merger . . . . . . . . . . . . . . . . .

5,876,357

Net loss . . . . . . . . . . . . . . . . . . . . . . .

Foreign currency translation adjustments . . .

Unrealized gains on cash flow hedges . . . . .

—

748

29,708

—

(3,562)

—

(1,662)

(243)

—

$20,556

748

29,720

(3,562)

(1,662)

(243)

Balance as of March 31, 2016 . . . . . . . . . . . . 36,451,357

$73

$69,505

$(24,360)

339

$—

$45,557

Net loss . . . . . . . . . . . . . . . . . . . . . . .

—

Issue of stock under ESOP and ESPP . . . . .

56,846

Stock based compensation . . . . . . . . . . . .

Foreign currency translation adjustments . . .

Unrealized gains on cash flow hedges . . . . .

—

260

1,578

—

(922)

—

(567)

(58)

—

(922)

260

1,578

(567)

(58)

Balance as of March 31, 2017 . . . . . . . . . . . . 36,508,203

$73

$71,343

$(25,282)

$ (286)

$—

$45,848

Net loss . . . . . . . . . . . . . . . . . . . . . . .

—

Issue of stock under ESOP and ESPP . . . . .

92,254

Stock based compensation . . . . . . . . . . . .

Foreign currency translation adjustments . . .

Unrealized gains on cash flow hedges . . . . .

—

426

3,253

—

(5,001)

—

638

—

(5,001)

426

3,253

638

Balance as of March 31, 2018 . . . . . . . . . . . . 36,600,457

$73

$75,022

$(30,283)

361

$—

$45,173

See accompanying notes to the Consolidated and Combined Financial Statements.
F-6

Majesco

Consolidated and Combined Statements of Cash Flows
(All amounts are in thousands of US Dollars)

Net income (loss)
Adjustments to reconcile net (loss) to net cash provided by

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share based compensation expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision/(recovery) for doubtful receivables . . . . . . . . . . . . . . . . . . . . .
Deferred tax (benefit)/expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unbilled accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other liabilities – Others
. . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash generated (used in) from operating activities . . . . . . . . . . . . . . . . . .

Cash flows from investing activities:

Purchase of property and equipment
. . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sale of tangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of Agile Technologies, LLC assets, net of $158 cash acquired . .
Cash acquired on business combination . . . . . . . . . . . . . . . . . . . . . . . .
Consideration paid on acquisition of Majesco Singapore . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sale/(Purchase) of investments
Payment to related party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment to Majesco as reorganization consideration . . . . . . . . . . . . . . . .
(Increase)/decrease in restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash flows from financing activities:

Payment of capital lease obligation . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receipt of term loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment of loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment for buy back of non-controlling Interest . . . . . . . . . . . . . . . . . .
Net cash (used in)/provided by financing activities . . . . . . . . . . . . . . . . . . . .
Effect of foreign exchange rate changes on cash and cash equivalents . . . . . .
Net (decrease)/increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents, beginning of the period . . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents at end of the period . . . . . . . . . . . . . . . . . . . . . .

Year ended
March 31,
2018
$ (5,001)

Year ended
March 31,
2017

(922)

Year ended
March 31,
2016
$ (3,562)

4,848
3,253
—
335
(1,300)
(6,767)
(1,216)
(3,284)
(570)
7,130
1,179
(1,257)
$ (2,650)

$ (1,166)
(532)
40
—
—
—
869
—
—
—
$ (789)

$ (395)
4,709
(3,624)
—
690
266
$ (2,483)
11,635
$ 9,152

4,720
1,578
60
984
(429)
9,049
(1,399)
428
(751)
(1,459)
(215)
(1,283)
$ 10,361

$ (2,104)
(955)
139
—
—
—
(223)
—
—
205
$ (2,938)

3,843
748
—
(149)
(2,227)
(13,135)
(1,615)
(1,355)
2,097
6,215
3,859
(470)
$ (5,751)

$ (2,875)
(268)
60
—
3,203
(276)
(364)
—
(3,520)
48
$ (3,992)

318
13,404
(14,553)
—
(831)
(477)
$ 6,115
5,520
$ 11,635

(62)
43,340
(34,060)
—
$ 9,218
(217)
(742)
6,262
$ 5,520

Supplementary disclosure of non-cash items

Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash paid for income taxes (net of refunds received) . . . . . . . . . . . . . . . .

491
3,235

591
614

Supplementary disclosure of non-cash items

Non-cash items – Assets acquired under Capital leases . . . . . . . . . . . . . .

$ Nil

484

510
1,257

See accompanying notes to the Consolidated and Combined Financial Statements.
F-7

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

1 DESCRIPTION OF BUSINESS

Majesco is a global provider of core insurance platform solutions, consulting services and other
insurance solutions for business transformation for the insurance industry. Majesco offers core insurance
platform solutions for property and casualty Property & Casualty/General Insurance (“P&C”) and Life,
Annuities, Pensions and Group/Benefits (“L&A and Group”) providers, enabling them to automate and
manage business processes across the end-to-end insurance value chain and comply with policies and
regulations across their organizations. In addition, Majesco offers a variety of other technology-based
solutions for distribution management, digital, data and cloud. Our portfolio of solutions enable our
customers to respond to evolving market needs, growth and innovation opportunities and regulatory
changes, which enables agility, innovation and speed while improving the effectiveness and efficiency of
their business operations.

Majesco’s customers are insurers, managing general agents and other risk providers from the P&C,

L&A and group insurance segments worldwide. Majesco delivers proven platform solutions for policy,
rating, underwriting, billing, claims, distribution management, digital and data and analytics as well as
consulting services for enterprise consulting, digital, data, testing and application development and
maintenance.

Majesco was previously 100% owned (directly or indirectly) by Mastek Ltd. (“Mastek Ltd.”), a
publicly traded limited company domiciled in India whose equity shares are listed on the Bombay Stock
Exchange and the National Stock Exchange (India). Mastek Ltd. underwent a demerger through a scheme
of arrangement under India’s Companies Act, 1956 pursuant to which its insurance related business was
separated from Mastek Ltd.’s non-insurance related business and the insurance related operations of
Mastek Ltd. that were not directly owned by Majesco were contributed to Majesco (the “Reorganization”).
The Reorganization was completed on June 1, 2015.

Majesco, along with its subsidiaries, operates in the United States, Canada, Mexico, the

United Kingdom, Malaysia, Singapore, Thailand and India (hereinafter referred to as the “Group”).

Merger with Cover-All Technologies Inc.

On June 26, 2015, Cover-All Technologies Inc. (“Cover-All”), an insurance software company listed on

NYSE American, merged into Majesco in a 100% stock-for-stock merger, with Majesco surviving the
merger.

In connection with the merger, Majesco’s common stock was listed on the NYSE American and began

trading on the NYSE American on June 29, 2015. Pursuant to the merger, Cover-All’s stockholders and
holders of its options and restricted stock units received equity or equity interests in Majesco representing
approximately 16.5% of the total capitalization of the combined company in the merger.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements presented herein represent the period as of and subsequent to March 31, 2015

when Majesco became a separate publicly-traded company (referred to as “Consolidated Financial
Statements”).

The combined financial statements reflect the Group’s financial position, results of operations and
cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”). The
combined Balance Sheet, combined Statement of Operations and combined Statement of cash flows of the
Group may not be indicative of the Group had it been a separate operation during the periods presented,
nor are the results stated herein indicative of what the Group’s financial position, results of operations and
cash flows may be in the future.

F-8

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

The accompanying consolidated financial statements were prepared in accordance with accounting

principles generally accepted in the United States of America, or U.S. GAAP. All inter-company balances
and transactions have been eliminated in consolidation.

Mastek Ltd. maintained benefit and stock-based compensation programs at the parent company level.

After the demerger from Mastek Ltd., which became effective on June 1, 2015, the Group employees who
participated in those programs were allotted options of Majesco’s parent company, Majesco Limited, in the
same proportion in addition to the existing options of Mastek Ltd., which these employees already had.
The consolidated balance sheets do not include any outstanding equity related to the stock-based
compensation programs of Mastek Ltd., but include outstanding equity related to the equity-based
compensation programs of Majesco Limited.

Use of estimates

The preparation of the consolidated and combined financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and contingent liabilities as of the date of the financial
statements, and the reported amount of revenues and expenses during the reported period.

Significant estimates used in preparing these consolidated and combined financial statements include
revenue recognition based on the percentage of completion method of accounting for fixed bid contracts
applied to the expected contract cost to be incurred to complete various engagements, allowances for
doubtful debts, provisions for losses on uncompleted contracts, valuation allowances for deferred taxes,
identification and measurement of unrecognized tax benefit, provision for uncertain tax positions, future
obligations under employee benefit plans, expected future cash flows used to evaluate the recoverability of
long-lived assets, estimated fair values of long-lived assets used to record impairment charges related to
intangible assets and goodwill, allocation of purchase price in business combinations, useful lives and
residual value of property and equipment and intangible assets, valuation of derivative financial
instruments, goodwill, contingent liabilities and assumptions used in valuing stock-based compensation
expense.

Although the Group regularly assesses these estimates, actual results could differ materially from these
estimates. Changes in estimates are recorded in the period in which they become known. The Group bases
its estimates on historical experience and various other assumptions that it believes to be reasonable under
the existing circumstances. Actual results may differ from management’s estimates if these results differ
from historical experience or other assumptions do not turn out to be substantially accurate, even if such
assumptions were reasonable when made.

Foreign Currency Translation

The functional currency of Majesco is the US dollar. However, Indian Rupees, Great Britain Pounds,

US Dollars, Mexican Pesos, Malaysian Ringgits, Thai Baht, Canadian dollars, and Singapore dollars are
the functional currencies for the Group entities operating in India, the UK, the US, Mexico, Malaysia,
Thailand, Canada, and Singapore, respectively.

Adjustments resulting from the translation of functional currency financial statements to reporting

currency are accumulated and reported as a part of Accumulated other comprehensive income, a separate
component of stockholders’ equity.

F-9

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the
transaction. Monetary assets and liabilities denominated in foreign currency are expressed in functional
currency at the exchange rates in effect at the balance sheet date. Non-Monetary assets and liabilities
denominated in foreign currency are expressed in functional currency at the historical exchange rates.
Gains/(losses) resulting from foreign currency transactions amounting to $(108), $(108), and $122 for the
years ended March 31, 2018, March 31, 2017 and March 31, 2016 are included in the Consolidated and
Combined Statement of Operations under the “Other income (expenses), net” caption.

Cash and cash equivalents, investments and restricted cash

Cash and cash equivalents are comprised of cash and highly liquid investments with an original
maturity of three months or less. Cash equivalents are stated at amortized cost, which approximates their
fair value due to the short maturity of the investments.

The Group’s short-term investment portfolio is comprised primarily of time deposits. Time deposits

with banks are valued at amortized cost, which approximates their fair value.

Interest income is recognized over time on a proportionate basis.

Cash and claims to cash that are restricted as to withdrawal or use in the ordinary course of business

are disclosed separately as restricted cash, unless they are to be utilized for other than current operations in
which case they will be separately classified as noncurrent assets.

Property and equipment

Property and equipment are stated at actual cost less accumulated depreciation. Depreciation is

computed using the straight-line method over the estimated useful lives. The cost and the accumulated
depreciation for premises and equipment sold, retired or otherwise disposed of are removed from the stated
values and the resulting gains and losses are included in the consolidated and combined Statement of
Operations. Maintenance and repairs are recognized when incurred. Advance paid towards acquisition of
long-lived assets and cost of assets not put to use before the balance sheet date are disclosed under the
caption “capital work in progress”.

The estimated useful lives of assets are as follows:

Leasehold Improvements
Computers
Plant and Equipment
Furniture and Fixtures
Vehicles
Office Equipment

5 years or over the primary period of lease whichever is less
2 years
2 – 5 years
5 years
5 years
2 – 5 years

Goodwill and other intangible assets

Goodwill represents the cost of the acquired businesses in excess of the estimated fair value of assets
acquired, identifiable intangible assets and liabilities assumed. Goodwill is not amortized but is tested for
impairment at the reporting unit level at least annually or as circumstances warrant. If impairment is
indicated and the carrying value of the goodwill of a reporting unit exceeds the implied fair value of that
goodwill, then goodwill is written-down. There are no indefinite-lived intangible assets.

Intangible assets other than goodwill are amortized over their estimated useful lives on a straight line

F-10

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

the expected future cash flows from the asset and other economic factors (such as the stability of the
industry, known technological advances, etc.).

The estimated useful lives of intangible assets are as follows:

Non-compete agreements
Leasehold benefit
Internal-use Software
Intellectual Property Rights
Customer Contracts
Customer Relationships
Technology

3 years
Ascertainable life or primary period of lease whichever is less
1 – 5 years
1 – 5 years
1 – 3 years
6 – 8 years
6 years

Software development costs

The costs incurred for the development of software that will be sold, leased or otherwise marketed are
capitalized when technological feasibility has been established. In certain situations in which technological
feasibility is established by completing a working model, substantially all development costs could be
expensed when costs qualifying for capitalization are not material. Current engineering costs related to
routine updates, customer support issues, and other modifications that do not extend the life or improve the
marketability of the existing software are expensed as incurred.

Impairment of long-lived assets and intangible assets

The Group reviews long-lived assets and certain identifiable intangible assets subject to amortization
for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. During this review, the Group re-evaluates the significant assumptions used in
determining the original cost and estimated lives of long-lived assets. Although the assumptions may vary
from asset to asset, they generally include operating results, changes in the use of the asset, cash flows and
other indicators of value. Management then determines whether the remaining useful life continues to be
appropriate or whether there has been an impairment of long-lived assets based primarily upon whether
expected future undiscounted cash flows are sufficient to support the assets’ recovery. If impairment exists,
the Group would adjust the carrying value of the asset to fair value, generally determined by a discounted
cash flow analysis.

Concentration of credit risk

Financial instruments that potentially subject the Group to concentrations of credit risk consist of
cash and cash equivalents, time deposits, derivative financial instruments and accounts receivables. The
Group maintains its cash and cash equivalents, time deposits, derivative financial instruments with banks
having good reputation, good past track record, and who meet the minimum threshold requirements under
the counterparty risk assessment process, and reviews their credit-worthiness on a periodic basis. Accounts
receivables of the Group are typically unsecured. As there is no independent credit rating of the customer
available with the Group, Management reviews the creditworthiness of customers based on their financial
position, past experience and other factors. The Group entities perform ongoing credit evaluations of their
customers’ financial condition and monitor the creditworthiness of their customers to which they grant
credit terms in the normal course of business. Refer to note 20 on ‘Segment information’ for details relating
to customers with revenue that accounted for 10% or more of total revenue and their outstanding total
accounts receivables and unbilled accounts receivable as of March 31, 2018 and 2017.

F-11

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

Accounts receivables and allowance for accounts receivables

Accounts receivables are recorded at invoiced amounts, net of the Group’s estimated allowances for

doubtful accounts. The Group performs ongoing credit evaluations of its customers. Allowance for
doubtful receivables is established in amounts considered to be appropriate based primarily upon write-off
history, historical collections experience, aging analysis and management’s specific evaluation of potential
losses in the outstanding receivable balances. There is judgment involved with estimating the Group’s
allowance for doubtful accounts and if the financial condition of its customers were to deteriorate, resulting
in their inability to make the required payments, the Group may be required to record additional allowances
or charges against revenues. The Group writes-off accounts receivables against the allowance when it
determines a balance is uncollectible and no longer actively pursues collection of the receivable. Amounts
recovered, if any, from such debtors written off are accounted for on a receipt basis and disclosed as other
income. The Group’s accounts receivables are not collateralized by any security.

Revenue recognition

Revenues are recognized when all of the following general revenue recognition criteria are met:

•

Persuasive evidence of an arrangement exists: Evidence of an arrangement consists of a written
contract signed by both the customer and management prior to the end of the reporting period.

Delivery or performance has occurred: The Group’s software product has met the milestones
contained in the software development contract, professional services are rendered, and any
customer acceptance provisions have been satisfied.

Fees are fixed or determinable: Fees from customer arrangements are generally at a contractually
fixed price or based upon agreed upon time and material rates.

Collectability is probable: Collectability is assessed on a customer-by-customer basis, based
primarily on creditworthiness as determined by credit checks and analysis, as well as customer
payment history. If it is determined prior to revenue recognition that collection of an arrangement
fee is not probable, revenues are deferred until collection becomes probable or cash is collected,
assuming all other revenue recognition criteria are satisfied.

License revenues sometimes may not be accounted for separately from software services revenues if

professional services are essential to the software functionality and include significant modification or
customization to or development of the underlying software code. Since these software arrangements do
not qualify as a separate unit of accounting, the software license revenues are recognized using the
percentage of completion method. When contracts contain multiple software and software-related elements
(for example, software license, and maintenance and professional services) wherein Vendor-Specific
Objective Evidence (“VSOE”) exists for all undelivered elements, we account for the delivered elements in
accordance with the “Residual Method”. VSOE of fair value for post-contract customer support services is
established by a stated renewal rates charged in stand-alone sales. VSOE of fair value of hosting services is
based upon stand-alone sales of those services.

In addition, we have made further investments to create a robust and market-leading cloud platform

Time and material contracts — Professional services revenue consists primarily of revenue received for

assisting with the development, and implementation of the Group’s software, on-site support, and other
professional consulting services. In determining whether professional services revenue should be accounted,

F-12

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

we review the nature of the Group’s software products; whether they are ready for use by the customer
upon receipt; the nature of the Group’s implementation services, which typically do involve significant
customization to or development of the underlying software code; and whether milestones or acceptance
criteria exist that affect the realization of the services rendered. Substantially all of the Group’s professional
services arrangements are billed on a time and materials basis and, accordingly, are recognized as the
services are performed. If there is significant uncertainty about the project completion or receipt of
payment for professional services, revenue is deferred until the uncertainty is sufficiently resolved. Payments
received in advance of rendering professional services are deferred and recognized when the related services
are performed. Work performed and expenses incurred in advance of invoicing are recorded as unbilled
receivables. These amounts are billed in the subsequent month.

Fixed price contracts — For arrangements that do not qualify for separate accounting for the license

The Group also enters into multiple element revenue arrangements in which a customer may purchase
a combination of a software license, hosting services, maintenance, and professional services. For multiple
element arrangements that contain non-software related elements, for example the Group’s hosting services,
the Group allocates revenue to each element based upon VSOE of the undelivered elements and the Group
accounts for the delivered elements in accordance with the “Residual Method”. VSOE of fair value for the
hosting, maintenance, and other post-contract customer support services (“PCS”) is established by a stated
renewal rate charged in stand-alone renewals of each type of PCS.

Revenue is shown net of applicable service tax, sales tax, value added tax and other applicable taxes.
The Group has accounted for reimbursements received for out of pocket expenses incurred as revenues in
the combined Statement of Operations.

Employee benefits

In accordance with Indian law, generally all

Provident fund and other contribution plans:
employees in India are entitled to receive benefits under the Provident Fund, which is a defined
contribution plan. Both the employee and the employer make monthly contributions to the plan at
a predetermined rate (presently at 12% each) of the employees’ basic salary. These contributions
are made to the fund which is administered and managed by the Government of India. The
Group also makes payments to defined contribution plans established and maintained in
accordance with the local laws of its Group entities. The Group’s monthly contributions to all of
these plans are charged to the combined Statement of Operations in the year they are incurred
and there are no further obligations under these plans beyond those monthly contributions. The
Group contributed $1,521, $1,378 and $1,292 towards all these contribution plans during the
years ended March 31, 2018, March 31, 2017, and March 31, 2016, respectively.

F-13

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

ii) Superannuation plan: The senior employees of the Indian Group entity are entitled to

superannuation, a defined contribution plan (the “Superannuation Plan”). The Group makes a
yearly contribution to the Superannuation Plan, which is administered and managed by the Life
Insurance Corporation of India based on a specified percentage (presently at 12.5% to 15%
depending on the grade of the employee) of each covered employee’s basic salary. The Group
contributed $37, $42 and $33 towards the Superannuation Plan during the fiscal years ended
March 31, 2018, March 31, 2017, and March 31, 2016, respectively.

iii) Pension commitments: The Group pays contributions to a defined contribution pension scheme
covering its employees for employees of the Group. The assets of the scheme are held separately
from those of the Group in an independently administered fund. The pension cost charge
represents contributions payable by the Group to the fund and amounted to $15, $30 and $25 for
the fiscal years ended March 31, 2018, March 31, 2017, and March 31, 2016, respectively.

iv) Gratuity plan: The Group provides for gratuity obligation, a defined benefit retirement plan (the

“Gratuity Plan”) covering all employees in India who are eligible under the terms of their
employment, and governed by India’s Payment of Gratuity Act, 1972. The Gratuity Plan provides
a lump sum payment to vested employees at retirement or upon termination of employment based
on the respective employee’s salary and the years of employment with the Group. The Group
determines its liability towards the Gratuity Plan on the basis of actuarial valuation. Actuarial
gains and losses arising from experience adjustments, and changes in actuarial assumptions are
recognized immediately in the combined Statement of Operations as income or expense. These
obligations are valued by independent qualified actuaries. The Group evaluates these critical
actuarial assumptions at least annually. If actual results differ significantly from the Group’s
estimates, the Group’s gratuity expense and its results of operations could be materially impacted.
The Group’s aggregate obligations under the Gratuity Plan were $420 for fiscal 2018.

v) Leave encashment: The Group has obligations with respect to the encashment of leave balances
of certain of our employees in India and other countries. Leave encashment benefit is recognized
using the accrual method. The Group’s aggregate obligations under provision for accrued vacation
(leave encashment) were $961 for fiscal 2018. The Group’s total obligation under leave encashment
was $4,303, as of March 31, 2018.

Financing costs

The Group amortizes financing costs and premiums, and accretes discounts, over the remaining life of

the related debt using the effective interest amortization method. The expense is included in “Interest
expense” in the combined Statements of Operations. We record discounts or premiums as a direct
deduction from, or addition to, the amount of the related borrowing.

Stock-based compensation

Stock-based compensation represents the cost related to stock-based awards granted to employees. The
Group measures stock-based compensation costs at the grant date, based on the estimated fair value of the
award and recognizes the cost (net of estimated forfeitures) over the employee’s requisite service period for
the entire award. Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture
activity differs materially from the original estimates. The Group estimates the fair value of stock options
using a Black-Scholes valuation model. The cost is recorded in Cost of Revenues, Selling, General and
Administrative expenses and Research and Development expenses in the Consolidated and Combined
Statement of Operations based on the employees’ respective function.

F-14

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

Advertising and sales commission costs

Advertising and promotion related expenses are charged to the combined Statement of Operations in

the period incurred. Advertising expense for the years ended March 31, 2018, March 31, 2017 and
March 31, 2016 was approximately $965, $1,032 and $1,350, respectively.

Sales commissions are recognized as an expense when earned by the sales representative, generally

occurring at the time the customer order is signed.

Derivative instruments

All derivative instruments are recorded in the Consolidated Balance Sheet as either an asset or liability

at their fair value. The Group normally enters into foreign exchange forward contracts and par forward
contracts where the counter party is generally a bank, to mitigate its foreign currency risk on foreign
currency denominated inter-company balances. For derivative financial instruments to qualify for hedge
accounting, the following criteria must be met: (1) the hedging instrument must be designated as a hedge;
(2) the hedged exposure must be specifically identifiable and expose the Group to risk; and (3) it is expected
that a change in fair value of the derivative financial instrument and an opposite change in the fair value of
the hedged exposure will have a high degree of correlation. The changes in the Group’s derivatives’ fair
values are recognized in the consolidated and combined Statement of Operations unless specific hedge
accounting and documentation criteria are met (i.e., the instruments are accounted for as hedges).

For items to which hedge accounting is applied, the Group records the effective portion of derivative

financial instruments that are designated as cash flow hedges in Accumulated Other Comprehensive
Income, a separate component of Stockholders’ equity, and an amount is reclassified out of accumulated
other comprehensive income into earnings to offset the earnings impact that is attributable to the risk being
hedged. Any ineffectiveness or excluded portion of a designated cash flow hedge is recognized in the
statement of operations. The related cash flow impacts of derivative activities are reflected as cash flows
from operating activities.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or

exercised, or no longer qualifies for hedge accounting. At that time for forecasted transactions, any
cumulative gain or loss on the hedging instrument recognized in Accumulated Other Comprehensive
Income is retained there until the forecasted transaction occurs. If a hedged transaction is no longer
expected to occur, the net cumulative gain or loss recognized in hedging reserve is transferred to the
consolidated and combined Statement of Operations for the year.

For derivative financial instruments that do not qualify for hedge accounting, realized gains or losses

and changes in the estimated fair value of these derivative financial instruments are recorded in Other
Income/(Expenses).

The fair value of derivatives expiring within 12 months is classified as a current asset or liability, and

that with a longer maturity is classified as a non-current asset or liability.

Income taxes

Income taxes are accounted for under the asset and liability method. Deferred income taxes reflect the

tax effect of temporary differences between asset and liability amounts that are recognized for financial
reporting purposes and the amounts that are recognized for income tax purposes. These deferred taxes are
measured by applying currently enacted tax laws. The effect on deferred tax assets and liabilities of a change
in enacted tax rates is recognized in the Statement of Operations in the year of change.

F-15

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

Valuation allowances are recognized to reduce deferred tax assets to the amount that will more likely

than not be realized. In assessing the need for a valuation allowance, management considers all available
evidence for each jurisdiction including past operating results, estimates of future taxable income and the
feasibility of ongoing tax planning strategies. When the Group changes its determination as to the amount
of deferred tax assets that can be realized, the valuation allowance is adjusted with a corresponding impact
to income tax expense in the period in which such determination is made. In fiscal year ended March 31,
2018 the Company made an adjustment of $2.40 million to write down the Company’s deferred tax asset in
line with the recent changes made to the Tax Code.

The Group recognizes tax liabilities when, despite the Group’s belief that its tax return positions are
supportable, the Group believes that certain positions may not be fully sustained upon review by the tax
authorities. Benefits from tax positions are measured at the largest amount of benefit that is greater than 50
percent likely of being realized upon settlement. To the extent that new information becomes available
which causes the Group to change its judgment regarding the adequacy of existing tax liabilities, such
changes to tax liabilities will impact income tax expense in the period in which such determination is made.
Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in
income tax expense.

Business combination

The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities
assumed based upon their estimated fair values at the date of acquisition. To the extent the purchase price
exceeds the fair value of the net identifiable tangible and intangible assets acquired and liabilities assumed,
such excess is allocated to goodwill. The Group determines the estimated fair values after review and
consideration of relevant information, including discounted cash flows, and estimates made by
management. Acquisition-related costs are recognized separately from the acquisition and are expensed as
incurred. The cost of an acquisition also includes the fair value of any contingent consideration. Any
subsequent changes to the fair value of contingent consideration classified as liabilities are recognized in the
Statement of operations.

Earnings per share

Basic and diluted earnings/(losses) per share are computed as net income/(loss) divided by the

weighted-average number of common shares outstanding for the period.

RECENT ACCOUNTING PRONOUNCEMENTS

Recently Issued Accounting Standards

Improvements on Employee Share-Based Payment Accounting

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards

Update (“ASU”) No. 2016-09, “Improvements on Employee Share-Based Payment Accounting (Topic
718)” (“ASU 2016-09”), which simplifies several aspects of the accounting for employee share-based
payment transactions for both public and nonpublic entities, including the accounting for income taxes,
forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash
flows. The new standard is effective for annual periods beginning after December 15, 2016 and interim
periods within those years. The standard became effective for the Company on April 1, 2017. The adoption
of this update did not have a material impact on the Company’s consolidated financial statements.

F-16

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

RECENT ACCOUNTING PRONOUNCEMENTS continued

Revenue from Contracts with Customers

In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers
(Topic 606): Deferral of the Effective Date”, deferring the effective date of this standard. As a result, the
ASU and related amendments became effective for the Company for its fiscal year beginning April 1, 2018,
including interim periods within that fiscal year.

The core principle of Topic 606 is to recognize revenues when promised goods or services are
transferred to customers in an amount that reflects the consideration that is expected to be received for
those goods or services. Topic 606 defines a five-step process to achieve this core principle and, in doing so,
it is possible more judgment and estimates may be required within the revenue recognition process than are
required under existing GAAP, including identifying performance obligations in the contract, estimating
the amount of variable consideration to include in the transaction price and allocating the transaction price
to each separate performance obligation, among others. Topic 606 also provides guidance on the
recognition of costs related to obtaining customer contracts.

The Company has adopted these ASUs (collectively, Topic 606) as of April 1, 2018. Topic 606 permits
two methods of adoption: retrospectively to each prior reporting period presented (the “Full Retrospective
Method”), or retrospectively with the cumulative effect of initially applying the guidance recognized at the
date of initial application (the “Modified Retrospective Method”). The Company intends to apply the
Modified Retrospective Method. Although the Company does not expect a material impact on revenues, we
expect that the new standard will expand disclosure, specifically around the quantitative and qualitative
information about the Company’s underlying performance obligations.

Business Combinations (Topic 805): Clarifying the Definition of a Business

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805)”: Clarifying the

Definition of a Business, which provides a more robust framework to use in determining when a set of
assets and activities is a business. The standard became effective for the Company beginning April 1, 2018.
Based on its current assessment, the Company does not expect the adoption of this update to have a
material impact on its consolidated financial statements.

Financial Instruments

In January 2016, the FASB issued ASU 2016-01, Financial Instruments, which impacts certain aspects

F-17

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

RECENT ACCOUNTING PRONOUNCEMENTS continued

Statement of Cash Flows (Topic 230): Restricted Cash

In November 2016, the FASB issued ASU 2016-18,” Statement of Cash Flows (Topic 230)”: Restricted
Cash, which requires the statement of cash flows to report changes in cash, cash equivalents, and restricted
cash. The standard will be effective for the Company beginning April 1, 2018. Based on its current
assessment, the Company does not expect the adoption of this update to have a material impact on its
consolidated financial statements.

Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230)”: Classification

of Certain Cash Receipts and Cash Payments (ASU 2016-15), which clarifies how companies present and
classify certain cash receipts and cash payments in the statement of cash flows. The standard became
effective for the Company beginning April 1, 2018. Based on its current assessment, the Company does not
expect the adoption of this update to have a material impact on its consolidated financial statements.

Income Tax Consequences of an Intra-Entity Transfer of Assets Other Than Inventory (Topic 740)

In October 2016, the FASB issued ASU 2016-16, “Income Taxes — Intra-Entity Transfers of Assets

Other Than Inventory (Topic 740)”, which requires entities to recognize the income tax consequences of an
intra-entity transfer of an asset other than inventory when the transfer occurs. The new standard must be
adopted using a modified retrospective transition method which is a cumulative-effective adjustment to
retained earnings as of the beginning of the first effective reporting period. The standard became effective
for the Company beginning April 1, 2018. Based on its current assessment, the Company does not expect
the adoption of this update to have a material impact on its consolidated financial statements.

Scope of Modification Accounting

In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting (Topic 718)

Accounting for Leases (Topic 842)

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which

requires lessees to put most leases on their balance sheets but recognize the expenses on their income
statements in a manner similar to current practice. ASU 2016-02 states that a lessee would recognize a lease
liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying
asset for the lease term. The standard became effective for the Company beginning April 1, 2019. Based on
its current assessment, the Company does not expect the adoption of this update to have a material impact
on its consolidated financial statements.

Simplifying the Test for Goodwill Impairment (Topic 350)

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, “Intangibles —

Goodwill and Other (Topic 350)”: Simplifying the Test for Goodwill Impairment, which removes the

F-18

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

RECENT ACCOUNTING PRONOUNCEMENTS continued

Emerging growth company

We are an “emerging growth company” under the federal securities laws and are subject to reduced

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Group’s financial instruments consist primarily of cash and cash equivalents, short term

investments in time deposits, restricted cash, derivative financial instruments, accounts receivables, unbilled
accounts receivable, accounts payable, contingent consideration liability and accrued liabilities. The carrying
amount of cash and cash equivalents, short term investments in time deposits, restricted cash, accounts
receivables, unbilled accounts receivable, accounts payable and accrued liabilities as of the reporting date
approximates their fair market value due to the relatively short period of time of original maturity tenure of
these instruments.

Basis of Fair Value Measurement

Fair value is defined as the exchange price that would be received for an asset or an exit price paid to

transfer a liability in the principal or most advantageous market for the asset or liability in an orderly
transaction between market participants on the measurement date. Valuation techniques used to measure
fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The
current accounting guidance for fair value measurements defines a three-level valuation hierarchy for
disclosures as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included within Level I that are observable, unadjusted

quoted prices in markets that are not active, or other inputs that are observable or can be
corroborated by observable market data.

F-19

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

FAIR VALUE OF FINANCIAL INSTRUMENTS continued

Level 3: Unobservable inputs that are supported by little or no market activity, which require the
Group to develop its own assumptions. The following table sets forth the financial assets,
measured at fair value, by level within the fair value hierarchy as of March 31, 2018 and 2017:

Assets
Level 2
Derivative financial instruments (included in the following line items in

the Combined balance sheet)

Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . .

Level 3
Contingent consideration
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses and other liabilities . . . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

As of March 31,

2018

2017

$ 46
(17)
194
(127)
$ 96

$ —
(835)
$(835)
$(739)

$ —
(10)
99
—
$ 89

$ —
(756)
$(756)
$(667)

The following table presents the change in level 3 instruments:

Opening balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total (Losses)/gains recognized in Statement of

Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Closing balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

As of March 31,

2018
$(756)
—

(79)
—
$(835)

2017
$(593)
—

(163)
—
$(756)

2016
$(1,712)
—

(344)
1,463
$ (593)

Contingent consideration pertaining to the acquisition of the consulting business of Agile

Technologies, LLC, a New Jersey limited liability company (“Agile”), as of December 31, 2015 has been
classified under level 3 as the fair valuation of such contingent consideration has been done using one or
more of the significant inputs which are not based on observable market data. The fair value of the
contingent consideration was estimated using a discounted cash flow technique with significant inputs that
are not observable in the market. The significant inputs not supported by market activity included the
Group’s probability assessments of expected future cash flows related to its acquisition of the consulting
business of Agile during the earn-out period, appropriately discounted considering the uncertainties
associated with the obligation, and calculated in accordance with the terms of the asset purchase agreement
(the “Agile Agreement”), dated December 12, 2014, as amended on January 26, 2016. The total
(losses)/gains attributable to contingent consideration payable for the acquisition of the Agile business
were $(79) and $(163) for the fiscal years ended March 31, 2018 and March 31, 2017.

F-20

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

FAIR VALUE OF FINANCIAL INSTRUMENTS continued

The fair value of derivative financial instruments is determined based on observable market inputs and

valuation models. The derivative financial instruments are valued based on valuations received from the
relevant counter-party (i.e., bank). The fair value of the foreign exchange forward contract and foreign
exchange par forward contract has been determined as the difference between the forward rate on the
reporting date and the forward rate on the original transaction, multiplied by the transaction’s notional
amount (with currency matching). The Group paid $11,000 to Agile as earn-out consideration in the fiscal
year ended March 31, 2018. The Group paid $11,000 to Agile as earn-out consideration in the fiscal year
ended March 31, 2017. The Group paid $15,000 to Agile as earn-out consideration in the fiscal year ended
March 31, 2016. The Group no further obligations with respect to earn-out payments.

PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Computers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plant and Equipment
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and Fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Office Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital Work in Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and Equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

As of March 31,

2018

2017

655
6,191
1,316
1,537
266
697
37
$10,699
(7,944)
$ 2,755

549
6,444
3,506
2,469
260
971
—
$ 14,199
(10,540)
$ 3,659

As of March 31, 2018 and 2017, the Group has hypothecated assets with net carrying values

amounting to $41 and $59, respectively. Depreciation expense was $2,130, $1,955 and $1,080 for the fiscal
years ended March 31, 2018, March 31, 2017, and March 31, 2016, respectively.

INTANGIBLE ASSETS

Intangible assets consist of the following:

Customer contracts . . . . . . . .
Customer relationships . . . . .
Intellectual Property Rights . .
Technology . . . . . . . . . . . . .
Software . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . .

Weighted
Average
amortization
period (in years)
3
6
3
6
3
4

As of March 31, 2018

As of March 31, 2017

Net
Gross
Accumulated
carrying
carrying
amortization
value
amount
$ (1,955) $ 995 $ 2,950
6,720
— 2,299
3,110
4,165
$(11,546) $6,535 $19,244

(2,205)
(494)
(2,781)
(4,111)

329
696

4,515

Net
carrying
value

Accumulated
amortization
$ (1,955) $ 995
4,892
—
2,203
618
$(10,536) $8,708

(1,828)
(2,299)
(907)
(3,547)

Gross
carrying
amount
$ 2,950
6,720
494
3,110
4,807
$18,081

F-21

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

INTANGIBLE ASSETS continued

All the intangible assets have finite lives and as such are subject to amortization. Amortization expense

was $2,719, $2,764 and $2,762 for the fiscal years ended March 31, 2018, March 31, 2017, and March 31,
2016, respectively.

The estimated aggregate amortization expense for the next five fiscal years and thereafter is as follows:

Year ended March 31,

Future
Amortization

2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,893

2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,457

1,358

677

558

592

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$6,535

ACCOUNTS RECEIVABLES AND ALLOWANCE FOR DOUBTFUL DEBTS

Customers (trade) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$20,838

$13,627

Less: Allowance for doubtful receivables . . . . . . . . . . . . . . . . . . . . . . . .

(1,735)

(1,400)

Accounts receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$19,103

$12,227

The Group’s credit period for its customers generally ranges from 30 – 45 days. The Group has

collectively and individually evaluated all of its accounts receivables for collectability.

As of March 31,

2018

2017

As of March 31,

2018

2017

Opening balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,400

Current period provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reversals during current period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . .

795

(458)

(2)

$ 427

1,017

(32)

(12)

Closing balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,735

$1,400

The Group entities perform ongoing credit evaluations of their customers’ financial condition and

monitor the credit worthiness of their customers to which they grant credit terms in the normal course of
business. In their evaluation, they use certain factors like historical experience and use management
judgment in assessing credit quality.

F-22

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following:

As of March 31

2018

2017

Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,951

$1,941

Advance for expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loans and advance to employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Derivative financial instruments

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Advance tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rent Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Service tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other advances and receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

603

206

194

4,957

1,250

286

419

117

1,530

1,263

453

139

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$9,494

$5,961

Advance for expenses includes foreign currency advances, travel advances and advances to suppliers.

Other advances and receivables mainly include amount recoverable from statutory authorities and
miscellaneous advances.

CAPITAL LEASE OBLIGATIONS

The Group leases vehicles under capital leases which are stated at the present value of the minimum

lease payments. The gross stated amounts for such capital leases are nil and $101 and related accumulated
depreciation recorded under capital leases are nil and $42, respectively as of March 31, 2018 and 2017. At
the termination of the leases, the Group has an option to receive title to the assets at no cost or for a
nominal payment.

Depreciation expenses in respect of assets held under capital leases were $5, $25 and $21 for the years

ended March 31, 2018, March 31, 2017, and March 31, 2016, respectively.

There are no future minimum lease payments under capital leases as of March 31, 2018.

The Group acquired software under a hire purchase arrangement which are stated at the present value
of the minimum installment payments. The gross stated amounts for such software are $430 and $459 and
related accumulated depreciation recorded is $107 and $23, respectively as of March, 2018 and 2017.

Depreciation expenses, in respect of assets held under hire purchase were $86 and $23 for the fiscal

years ended March 31, 2018 and March 31, 2017, respectively.

The following is a schedule of the future minimum installment payment under hire purchase, together

with the present value of the net minimum installment payments as of March 31, 2018.

Year ended March 31,
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total minimum installment payments of hire purchase. . . . . . . . . . . . . . . . . . . . . . . .
Less: Interest portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Present value of net minimum installments of hire purchase . . . . . . . . . . . . . . . . . . . .

Amount
$209
$209
6
$203

F-23

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

10 BORROWINGS

Line of Credit

On March 25, 2011, we entered into a secured revolving working capital line of credit facility with
ICICI Bank Limited (“ICICI”) under which the maximum borrowing limit was $5,000. The interest rate on
the credit facility at March 31, 2016 was three-month LIBOR plus 350 basis points and increased to
three-month LIBOR plus 375 basis points with the second extension of this facility described below. The
credit facility was guaranteed by Mastek Ltd., subject to the terms and conditions set forth in the
guarantee. The credit facility initially matured on November 11, 2015. On November 20, 2015, we extended
this line of credit to February 11, 2016. The facility was further extended to May 9, 2016 and again
extended to May 15, 2017. Majesco paid a processing fee of $12.50 in connection with the second extension
and a processing fee of $50.83 in connection with the third extension. In connection with these extensions
of the Majesco line of credit, Mastek Ltd. also extended its guarantee of such line of credit. Majesco has
agreed to pay a fee and indemnify Mastek Ltd. against any payments made by Mastek Ltd. in connection
with this guarantee. On January 20, 2017, we paid in full the balance under this facility with proceeds from
a new $10,000 receivables purchase facility with HSBC Bank USA, National Association (“HSBC”)
described below, and this facility was terminated. On repayment of this facility, the guarantee by Mastek
Ltd. of this facility was also terminated and our liability to Mastek Ltd. regarding this guarantee also
ceased to exist. The interest rate on the credit facility was 4.75% at January 20, 2017.

MSSIPL Facilities

On June 30, 2015, our subsidiary, Majesco Software and Solutions India Pvt. Ltd. (“MSSIPL”),

entered into a secured Pre Shipment in Foreign Currency and Post Shipment in Foreign Currency
(“PCFC”) facility with Yes Bank pursuant to which MSSIPL may request 3 months pre-export advances
and advances against export collection bills. The maximum borrowing limit was initially 300 million Indian
rupees. The interest rate on this PCFC facility was initially USD 3 months LIBOR plus 275 basis points.
The interest rate on this PCFC facility is determined at the time of each advance This PCFC facility is
secured by a first pari passu charge over the current assets of MSSIPL. Excess outstanding beyond
100 million Indian rupees is to be backed by 100% fixed deposit receipts in MSSIPL or Majesco Limited.
On September 27, 2016, MSSIPL extended this PCFC facility to June 17, 2017.

On September 13, 2017, MSSIPL entered into an addendum facility letter (the “2017 Addendum”) to

its addendum facility letter dated September 27, 2016 with respect to the PCFC facility with Yes Bank
dated June 30, 2015. The 2017 Addendum further extended the maturity date of the PCFC facility to
May 22, 2018 and reduced the maximum borrowing limit from 300 million Indian rupees to 130 million
Indian rupees, or approximately $1,998 based upon the exchange rate on March 31, 2018. There is no
outstanding balance against this loan as of March 31, 2018.

As of March 31, 2018, the Group was in compliance with the terms of this facility.

F-24

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

10 BORROWINGS continued

On May 9, 2017, MSSIPL and Standard Chartered Bank entered into an Export Invoice Financing
Facility, Working Capital Overdraft Facility, Short Term Loans Facility, Bonds and Guarantees Facility and
Pre Shipment Financing Under Export Orders Facility (the “Combined Facility”) pursuant to which
Standard Chartered Bank agreed to a Combined Facility of up to 200 million Indian rupees (or
approximately $3,075 at exchange rates in effect on March 31, 2018). The Export Invoice Financing Facility
is for the financing of MSSIPL’s sale of goods, as evidenced by MSSIPL’s invoice to the customer. Each
amount drawn is required to be repaid within 90 days. The interest on this facility is based on the marginal
cost of funds based lending rate (the “MCLR”) plus a margin to be agreed with Standard Chartered Bank
at the time of each drawdown. The MCLR is to be determined on the date of each disbursement and be
effective until repayment. Interest will accrue from the utilization date to the date of repayment or payment
of that utilization. The Working Capital Overdraft Facility and the Short Term Loans Facility are for
working capital purposes and subject to sub-limits. The interest on these facilities is based on the MCLR
plus a margin to be agreed with Standard Chartered Bank at the time of each borrowing. The MCLR is to
be determined on the date of each disbursement and is effective until repayment or maturity. Interest will
accrue from the draw down date up to the repayment or maturity date. The Bonds and Guarantees Facility
is for the issuance of guarantees and subject to commissions as agreed with Standard Chartered Bank from
time to time. The Pre Shipment Financing Under Export Orders Facility is for the purchase of raw material,
processing, packing, transportation, warehousing and other expenses and overheads incurred by MSSIPL
to ready goods for sale. The interest on this facility is based on the MCLR plus a margin to be agreed with
Standard Chartered Bank at the time of each borrowing. The MCLR is to be determined on the date of
utilization and is effective until repayment. Interest will accrue from the utilization date up to the repayment
date.

Term Loan Facility

On March 23, 2016, Majesco entered into a Loan Agreement (the “Loan Agreement”) with HSBC

pursuant to which HSBC agreed to extend loans to Majesco in the amount of up to $10,000 and Majesco
issued a promissory note to HSBC in the maximum principal amount of $10,000 or any lesser amount
borrowed under the Loan Agreement (the “Note”, and together with the “Loan Agreement”, the
“Facility”). The outstanding principal balance of the loan bears interest based on LIBOR plus a margin in
effect on the first day of the relevant interest period. Until January 1, 2018, only interest was payable under
the loan. Commencing on January 1, 2018, and on each January 1 and July 1 thereafter until July 1, 2020,
installments of principal in the amount of $1,667 shall be due and payable semi-annually. All principal and
interest outstanding under the Note shall be due and payable on March 1, 2021. The Facility is unsecured
and supported by a letter of credit issued by a bank of $10,000, which is secured by a cash pledge of our
parent company, Majesco Limited. As of March 31, 2018, we had $8,333 outstanding under this Facility.
As of March 31, 2018, we were in compliance with the terms of this Facility.

The Facility contains affirmative covenants that require Majesco to furnish financial statements to

HSBC and cause Majesco Limited to maintain (1) a Net Debt-to-EBITDA Ratio (as defined in the Loan
Agreement) of not more than (a) 5.00 to 1.00 as of the last day of its 2017 fiscal year and (b) 2.50 to 1.00 as
of the last day of each fiscal year thereafter, and (2) a Debt Service Coverage Ratio (as defined in the Loan
Agreement) of not less than 1.50 to 1.00 as of the last day of each fiscal year. The Facility contains
restrictive covenants on Majesco, including restrictions on declaring or paying dividends upon and during

F-25

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

10 BORROWINGS continued

the continuation of an event of default, incurring additional indebtedness, selling material portions of its
assets or undertaking other substantial changes to the business, purchasing or holding securities for
investment, and extending credit to any person outside the ordinary course of business. The Facility also
restricts any transfer or change in, or assignment or pledge of the ownership or control of Majesco which
would cause Majesco Limited to directly own less than fifty one percent (51%) of the issued and
outstanding equity interests in Majesco. The Facility also restricts Majesco Limited from incurring any Net
Debt (as defined in the Loan Agreement) in excess of $25,000 at any time prior to April 1, 2017. The
Facility also contains a customary events of default provision and indemnification provisions whereby
Majesco will indemnify HSBC against all losses or damages related to the Facility; provided, however, that
Majesco shall not have any indemnification obligations to HSBC for any claims caused by HSBC’s gross
negligence or willful misconduct. Majesco used the loan proceeds to repay existing indebtedness and for
capital expenditures, working capital and other general corporate purposes.

Receivable Purchase Facility

On January 13, 2017, Majesco and its subsidiaries Majesco Software and Solutions Inc. (“MSSI”), and

Cover-All Systems, jointly and severally entered into a Receivable Purchase Agreement with HSBC
pursuant to which HSBC may advance funds against receivables at an agreed advance rate. The outstanding
aggregate amount of all advances may not exceed a $10,000 facility limit. The facility bears interest at two
(2%) per cent plus the ninety (90) day LIBOR rate. HSBC will also receive an arrangement fee equal to
0.20% of the facility limit and a facility review fee equal to 0.20% of the facility limit. Majesco will serve as
HSBC’s agent for the collection of receivables, and Majesco will collect and otherwise enforce payment of
the receivables. HSBC has a security interest in accounts of MSSI and Cover-All Systems. The term of the
Receivable Purchase Agreement is for a minimum period of twelve (12) months and shall continue unless
terminated by either party. Either party may terminate the Receivable Purchase Agreement at any time
upon sixty (60) days’ prior written notice to the other party. The Receivable Purchase Agreement will
provide additional liquidity to the Group for working capital and other general corporate purposes. As of
March 31, 2018, Majesco had $5,262 outstanding under this facility. Majesco used proceeds from this
facility to refinance the ICICI facility described above, to fund capital expenditures and for working capital
and other general corporate purposes.

Auto loan

MSSIPL has obtained the auto loan from HDFC Bank for purchase of a vehicle. This loan is secured

by the hypothecation of the vehicle. The outstanding balance of loan as of March 31, 2018 is $41.39.

F-26

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

11 ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consist of the following:

As of March 31,

2018

2017

Accrued expenses

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 4,537

$ 3,826

Statutory payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Leave encashment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Derivative financial instruments

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,757

4,324

3,393

127

7,059

835

1,423

1,298

3,130

—

4,739

495

Accrued expenses and other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . .

$22,032

$14,911

12 DERIVATIVE FINANCIAL INSTRUMENTS

The following table provides information of fair values of derivative financial instruments:

Asset

Liability

Noncurrent*

Current* Noncurrent*

Current*

As of March 31, 2018
Designated as hedging instruments under Cash Flow Hedges
Foreign exchange forward contracts
Total

. . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

As of March 31, 2017
Designated as hedging instruments under Cash Flow Hedges
Foreign exchange forward contracts
Total

. . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$46
$46

$ 0
$ 0

$194
$194

$ 99
$ 99

$17
$17

$10
$10

$127
$127

$ 0
$ 0

The noncurrent and current portions of derivative assets are included in ‘Other assets’ and ‘Prepaid
expenses and other current assets’, respectively, and of derivative liabilities are included in ‘Other
liabilities’ and ‘Accrued expenses and other liabilities’, respectively in the Combined Balance Sheet.

Cash Flow Hedges and Other derivatives

The Group uses foreign currency forward contracts and par forward contracts to hedge its risks
associated with foreign currency fluctuations relating to certain commitments and forecasted transactions.
The Group designates these hedging instruments as cash flow hedges. The use of hedging instruments is
governed by the policies which are approved by Board of Directors of the Group.

Derivative financial instruments entered into by the Group that are not designated as hedging

instruments in hedge relationships are classified in financial instruments at fair value through profit or loss.

The aggregate contracted USD notional amounts of the Group’s foreign exchange forward contracts
(sell) outstanding as of March 31, 2018 amounted to $18,250 and as of March 31, 2017 amounted to nil.

The aggregate contracted GBP notional amounts of the Group’s foreign exchange forward contracts
(sell) outstanding as of March 31, 2018 amounted to GBP 1,155 and as of March 31, 2017 amounted to
GBP 2,080.

F-27

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

12 DERIVATIVE FINANCIAL INSTRUMENTS continued

The outstanding forward contracts as of March 31, 2018 mature between 1 to 12 months. As of March
31, 2018, the Group estimates that $68, net of tax, of the net gains/(losses) related to derivatives designated
as cash flow hedges recorded in accumulated other comprehensive income (loss) is expected to be
reclassified into earnings within the next 12 months.

The related cash flow impacts of all of the Group’s derivative activities are reflected as cash flows from

operating activities.

The following table provides information of the amounts of pre-tax gains/(losses) recognized in and

reclassified from AOCI of derivative instruments designated as cash flow hedges:

Amount of
Gain/(Loss)
recognized in
AOCI (effective portion)

Amount of
Gain/(Loss)
reclassified from
AOCI to
Statement of
Operations
(Revenue )

For the year ended March 31, 2018
Foreign exchange forward contracts . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

For the year ended March 31, 2017
Foreign exchange forward contracts . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

For the year ended March 31, 2016
Foreign exchange forward contracts . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 294
$ 294

$ 167
$ 167

$(167)
$(167)

$(287)
$(287)

$(254)
$(254)

$(202)
$(202)

13 RETIREMENT BENEFIT OBLIGATION — GRATUITY

Employees of the Group who are in India, participate in a gratuity employee benefit plan sponsored by

MSSIPL, which is a defined benefit plan. In India, gratuity is governed by the Payment of Gratuity Act,
1972. This plan is accounted for as multi-employer benefit plan in these combined financial statements and,
accordingly, the Group’s Consolidated Balance Sheets do not reflect any assets or liabilities related to these
plans. The Group’s Combined Statements of Operations includes expense allocations for these benefits. The
Group considers the expense allocation methodology and results to be reasonable for all periods presented.

Plan information is as follows:

Legal name of the plan: Majesco Software & Solutions India Private Limited Employees’ Group

Gratuity Assurance Scheme (C. A.)

Group’s Total Contributions to plan . . . . . . . . .

Year ended
March 31, 2018
$2,957
$2,957

Year ended
March 31, 2017
$2,957
$2,957

Year ended
March 31, 2016
$2,957
$2,957

F-28

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

13 RETIREMENT BENEFIT OBLIGATION — GRATUITY continued

Total plan assets and actuarial present value of accumulated plan benefits are as follows:

Total plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial present value of accumulated plan benefits . . . . . . . . . . . . . . .
Total contributions received by the plan from all employers (for the period
ended) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

As of March 31,

2018
$2,921
2,975

2017
$2,908
2,449

0.06

14 ACCUMULATED OTHER COMPREHENSIVE INCOME

Changes in accumulated other comprehensive income by component are as follows:

Year ended
March 31, 2018

Year ended
March 31, 2017

Year ended
March 31, 2016

Before
tax

Tax
effect

Net of
Tax

Before
tax

Tax
effect

Net of
Tax

Before
tax

Tax
effect

Net of
Tax

Other comprehensive income
Foreign currency translation adjustments
Opening balance . . . . . . . . . . . . . . . . . . . . . . . . $(345) — (345) $ 222 — 222 $ 1,884 — 1,884
(1,662) — (1,662)
Change in foreign currency translation adjustments . .

(567) — (567)

638 — 638

Closing balance . . . . . . . . . . . . . . . . . . . . . . . . . $ 293 — 293 $(345) — (345) $

222 — 222

Unrealized gains/(losses) on cash flow hedges
Opening balance . . . . . . . . . . . . . . . . . . . . . . . . $ 89
Unrealized gains/(losses) on cash flow hedges . . . . . .
294
(287)
Reclassified to Statement of Operations
. . . . . . . . .
7
Net change . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

Closing balance . . . . . . . . . . . . . . . . . . . . . . . . . $ 96

(31)
(84)
86
2

(29)

58 $ 176
167
210
(254)
(201)
9 $ (87)

67 $ 89

(60)
(57)
86
29

(31)

545 (185)
116 $
57
(167)
110
(168)
69
(202)
(58) $ (369) 126

360
(110)
(133)
(243)

58 $

176

(59)

117

15 INCOME TAXES

United States
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Loss)/Income before provision for income taxes. . . . . . . . . . .

Year ended
March 31,
2018
$(12,049)
9,103
$ (2,946)

Year ended
March 31,
2017
$(1,508)
683
$ (825)

Year ended
March 31,
2016
$ 19.189
(23,938)
$ (4,749)

F-29

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

15 INCOME TAXES continued

The Group’s (provision)/benefit for income taxes consists of the following:

Current:
U.S. Federal and state . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Prior Period – Current Tax:
U.S. Federal and state . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Prior Period – Current Tax . . . . . . . . . . . . . . . . . . . .

Deferred:
U.S. Federal and state . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for income taxes recognized in Statement of

Year ended
March 31,
2018

Year ended
March 31,
2017

Year ended
March 31,
2016

109
3,188
$ 3,297

$
109
$ —
109
$

$ 28
270
$ 298

$ 86
$ 27
$ 113

753
238
991

$
49
$ —
49
$

$(1,321)
(30)
$(1,351)

$(366)
52
$(314)

$(2,052)
(175)
$(2,227)

Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 2,055

$ 97

$(1,187)

The total income tax expense differs from the amounts computed by applying the statutory federal

income tax rate of 30.75% as follows:

Net (loss)/income before taxes . . . . . . . . . . . . . . . . . . . . . .
Computed tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-deductible expenses
– Stock based compensation and Meals & Entertainment
. . .
– Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax charge/(credit) of earlier year assessed in current year . . .
Loss on effective tax rate reduction from 39.3% to 27.3% . . . .
Net tax credit on R&D and Sec 199 deduction . . . . . . . . . . .
Tax exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Difference arising from different tax jurisdiction . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total taxes recognized in Statement of Operations . . . . . . . . .

Year ended
March 31,
2018
(2,946)
(1,157)

Year ended
March 31,
2017
(825)
(324)

Year ended
March 31,
2016
(4,749)
(1,866)

1,625
70
—
108
2,399
(361)
(246)
(427)
44
2,055

697
66
(228)
113
—
(306)

(140)
219
97

367
97
—
330
—
(169)

(127)
181
(1,187)

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred

to as the Tax Cuts and Jobs Act (“Tax Act”). The Tax Act establishes new tax laws that affect 2018 and
future years, including a reduction in the U.S. federal corporate income tax rate to 21 percent effective
April 1, 2018. The blended statutory federal rate, taking into account the 21% rate under the new law, is

F-30

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

15 INCOME TAXES continued

30.75%. For certain deferred tax assets and deferred tax liabilities, the Company has reduced the carrying
value of the deferred tax assets and liabilities as a result of the Tax Act. In fiscal year ended March 31, 2018
the Company made an adjustment of $2.40 million to write down the Company’s deferred tax asset in line
with the recent changes made to the Tax Code.

Significant components of activities that gave rise to deferred tax assets and liabilities included on the

Balance Sheet was as follows:

As of March 31,

2018

2017

Deferred tax assets/(liability):
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for impairment of accounts receivables . . . . . . . . . . . . . . . . .
Carry forwarded income tax losses . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax credit for R&D expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative financial instruments
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net deferred tax assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current portion of deferred tax assets . . . . . . . . . . . . . . . . . . . . . .

1,890
206
573
443
4,687
1,295
(28)
(819)
8,247
(1,076)
7,171
__
7,171

1,538
38
1,120
385
4,883
951
(—)
(1,413)
7,502
(1,628)
5,874
2,018
3,856

A valuation allowance is established attributable to deferred tax assets recognized on carry forward tax

losses and tax credit for R&D expenses by the Group where, based on available evidence, it is more likely
than not that they will not be realized. Significant management judgment is required in determining
provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against
deferred tax assets. The valuation allowance is based on the Group’s estimates of taxable income by
jurisdiction in which the Group operates and the period over which deferred tax assets will be recoverable.
The change in valuation allowance is $(551), $165 and $353 for the years ended March 31, 2018, March 31,
2017, and March 31, 2016, respectively.

The Group entity in Canada has recognized a valuation allowance on deferred income tax assets
recognized on carry-forward losses and tax credit for R&D expenses amounting to $798 and nil as of
March 31, 2018, $1,335 and nil as of March 31, 2017 and $1,194 and nil as of March 31, 2016, respectively
because it is not probable that future taxable profit will be available against which these temporary
difference can be utilized. These carry forward losses and tax credit for R&D expenses do not have any
expiry date.

The Group entity in Thailand has recognized a valuation allowance on deferred income tax assets

recognized on carry-forward losses amounting to $278 as of March 31, 2018, $293 as of March 31, 2017
and $269 as of March 31, 2016, respectively, because it is not probable that future taxable profit will be
available against which these temporary difference can be utilized. These carry forward losses are subject to
expiration beginning in 2020.

F-31

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

15 INCOME TAXES continued

Changes in unrecognized income tax benefits were as follows:

Opening balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in unrecognized tax benefits – due to tax Positions

taken in current period for prior periods . . . . . . . . . . . . . .
Closing balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

As of March 31,

2018
$441

—
$441

2017
$441

—
$441

2016
$310

131
$441

As of March 31, 2018, the entire balance of unrecognized income tax benefits would affect the Group’s

effective income tax rate, if recognized. Significant changes in the amount of unrecognized tax benefits are
not reasonably possible within the next 12 months from the reporting date. The Group includes interest and
penalties relating to unrecognized tax benefits within the provision for income taxes. The total amount of
accrued interest and penalties as of March 31, 2018, 2017, and 2016 is nil, nil, and nil, respectively. The
amount of interest and penalties expenses for the fiscal years ended March 31, 2018, 2017 and 2016 is nil,
nil and nil, respectively.

Majesco and Majesco Software and Solutions Inc. file a consolidated income tax return, and the

provision for income tax for the fiscal years ended March 31, 2018, 2017 and 2016 has been made
accordingly.

There were no undistributed earnings in Majesco and its US subsidiaries as of March 31, 2018 and

2017. The remaining earnings of Majesco from its non-US subsidiaries are considered to be permanently
reinvested. As of March 31, 2018 and 2017, the cumulative amounts of such undistributed earnings were
$4,198 and $(1,848), respectively.

The determination of the amount of the unrecognized deferred tax liability relating to undistributed
earnings is not practicable because numerous possible methods could be used to facilitate the repatriation of
earnings to the US, and each would require evaluation of withholding taxes, evaluation of the local
taxability of dividends as well as an analysis of Majesco’s historical tax position and the ability to use
foreign tax credits. Furthermore, due to Majesco’s complex legal structure, the number of jurisdictions
involved, and the layers of regulatory requirements, all of which would have to be evaluated to determine
the amount of allowable dividends between legal entities and ultimately to the U.S., such an effort would
require significant amount of Company resources.

Because any estimate would not be meaningful due to the numerous assumptions upon which it would
be based, and because of the significant resources this exercise would require, Majesco has determined that
it is not practical to estimate the amount of unrecognized deferred tax liabilities.

In the US and India, the income tax returns are subject to examination by the appropriate tax
authorities for the year ended June 30, 2010 and onwards and March 31, 2012 and onwards, respectively.

16 EMPLOYEE STOCK OPTION PLAN

Employee Stock Option Scheme of Majesco Limited — Plan 1

Certain employees of the Group participate in the Group’s parent company Majesco Limited’s

employee stock option plan. The plan termed as “ESOP plan 1”, became effective June 1, 2015, the effective
date of the demerger of Mastek Ltd. Group employees who were having options in the earlier ESOP plans
of Mastek Ltd. have now been given options of Majesco Limited. Under the plan, Majesco Limited during
the year has also granted newly issued options to the employees of MSSIPL. During the year ended March
31, 2018, 151,900 options were granted. The options were granted at the market price on the grant date.

F-32

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

16 EMPLOYEE STOCK OPTION PLAN continued

As of March 31, 2018, the total future compensation cost related to non-vested options not yet
recognized in the Statement of Operations was $881 and the weighted average period over which these
awards are expected to be recognized was 1.93 years. The weighted average remaining contractual life of
options expected to vest as of March 31, 2018 is 8.93 years.

Activity in the stock options granted under the Majesco Limited’s stock option plans granted to

Majesco’s employees during the year was as follows:

Year Ended
March 31, 2018

Year Ended
March 31, 2017

Year Ended
March 31, 2016

Particulars
Outstanding at the beginning of the year . . . .
Granted during the year . . . . . . . . . . . . . .
Forfeited during the year . . . . . . . . . . . . . .
Expired during the year . . . . . . . . . . . . . . .
Exercised during the year . . . . . . . . . . . . .
Transfer adjustment . . . . . . . . . . . . . . . . .
Outstanding at the end of the year . . . . . . . . $1,512,791

Number
of
Options
1,624,040
151,900
(96,453)
(9,594)
(157,102)

Weighted
Average
Exercise
Price*
$3.23
5.60
6.33
3.00
1.67
(—) —
$3.38

Number
of
Option
2,015,401
37,500
(257,705)
(18,145)
(153,011)

Weighted
Average
Exercise
Price*
$3.23
7.96
5.57
2.79
1.86

Number
of
Options
1,599,015
825,000
(147,982)
(19,514)
(130,522)
(—) — (110,596)
$2,015,401

$3.06

$1,624,040

Weighted
Average
Exercise
Price*
$1.45
5.82
2.99
3.37
1.75
1.14
$3.23

Exercisable at the end of the year . . . . . . . . .

942,450

$2.69

807,695

$2.18

560,417

$1.51

The per share value has been converted at year end rate 1 US$=Rs. 64.479, Rs. 64.85 and Rs. 66.255 as
of March 31, 2018, 2017 and 2016, respectively.

The weighted average grant date fair values of options granted during the fiscal years ended March 31,
2018, 2017 and 2016 is $2.70, $4.65 and $5.70, respectively, per option. The weighted average grant date fair
value of vested options as of March 31, 2018 and 2017 is $1.80 and $1.55, respectively, per option. The
Aggregate Intrinsic Value of options outstanding is $114 and options exercisable is $66 as of March 31,
2018.

The Group calculated the fair value of each option grant on the date of grant using the Black-Scholes

pricing method with the following assumptions:

Variables (range)
Expected term of share options . . . . . . . . . . . . . . . . . . . . . .
Risk-free interest rates . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . .

2018
6 Years
6.70.%
48.97%
0%

2017
6 Years
7.29%
51.16%
0%

2016
6 Years
7.61%
49.17%
0%

As of March 31,

The volatility is determined based on annualized standard deviation of the continuously compounded

rate of return on the stock over the time to maturity of the options. The risk free interest rates are
determined using the expected life of options based on the zero-coupon yield curve for Government
Securities in India. The expected dividend is based on the average dividend yields for the preceding seven
years. Weighted average price is based on latest available closing market price on the stock exchange with
the highest trading volume on the date of grant.

F-33

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

16 EMPLOYEE STOCK OPTION PLAN continued

Summary of outstanding options as of March 31, 2018 is as follows

Exercise Price Range*
$0.1 – $3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3.1 – $6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$6.1 – $9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of
shares arising
out of options
790,367
621,684
100,740
1,512,791

Wtd. Avg.
Exercise Price*
1.45
5.08
8.10
3.38

Wtd. Avg.
remaining
Contractual life
6.59
8.91
8.80
7.69

Summary of exercisable options as of March 31, 2018 is as follows:

Exercise Price range*
$0.1 – $3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3.1 – $6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$6.1 – $9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of
shares arising
out of options
667,141
215,559
59,750
942,450

Wtd. Avg.
Exercise Price*
1.44
5.15
7.75
$2.69

Wtd. Avg.
remaining
Contractual life
6.09
8.40
8.77
6.94

The per share value has been converted at year end average rate 1 US$= Rs 64.48 as of March 31,
2018.

In accordance with SAB Topic 14, Majesco uses the simplified method for estimating the expected

term when measuring the fair value of employee stock options using the Black-Scholes option pricing
model. Majesco believes the use of the simplified method is appropriate due to the employee stock options
qualifying as “plain-vanilla” options under the following criteria established by SAB Topic 14:

•

stock options are granted at-the-money;

exercisability is conditional only on the completion of a service condition through the vesting
date;

employees who terminate their service prior to vesting forfeit the options;

employees who terminate their service after vesting are granted limited time to exercise their stock
options (typically 30 – 90 days); and

stock options are nontransferable and non hedgable.

Given our limited history with employee grants, we use the “simplified” method in estimating the
expected term for our employee grants. The “simplified” method, as permitted by applicable regulations, is
calculated as the average of the time-to-vesting and the contractual life of the options.

Majesco 2015 Equity Incentive Plan

In the fiscal year ended March 31, 2018, we recognized $1,650 compared to $1,324 in the fiscal year
ended March 31, 2017, of stock-based compensation expense in our consolidated Financial Statements.

In June 2015, Majesco adopted the Majesco 2015 Equity Incentive Plan (the “2015 Plan”). Options

and stock awards for the purchase of up to 3,877,263 shares may be granted by the Board of Directors to
our employees, consultants and directors at an exercise or grant price determined by the Board of Directors

F-34

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

16 EMPLOYEE STOCK OPTION PLAN continued

on the date of grant. Options may be granted as incentive or nonqualified stock options with a term of not
more than ten years. The 2015 Plan allows the Board of Directors to grant restricted or unrestricted stock
awards or awards denominated in stock equivalent units or any combination of the foregoing and may be
paid in common stock or other securities, in cash, or in a combination of common stock or other securities
and cash. On March 31, 2018, an aggregate of 545,788 shares were available for grant under the 2015 Plan.

Majesco uses the Black-Scholes-Merton option-pricing model (“Black-Scholes”) to measure fair value

of the share-based awards. The Black-Scholes model requires us to make significant judgments regarding
the assumptions used within the model, the most significant of which are the expected stock price volatility,
the expected life of the option award, the risk-free interest rate of return and dividends during the expected
term.

•

Expected volatilities are based on peer entities as the historical volatility of Majesco’s common
stock is limited.

In accordance with SAB Topic 14, Majesco uses the simplified method for estimating the expected
term when measuring the fair value of employee stock options using the Black-Scholes option
pricing model. Majesco believes the use of the simplified method is appropriate due to the
employee stock options qualifying as “plain-vanilla” options under the criteria established by SAB
Topic 14.

The risk-free interest rate for periods within the contractual life of the option is based on the U.S.
Treasury yields for an equivalent term at the time of grant.

• Majesco does not anticipate paying dividends during the expected term.

Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted-average volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected term (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2018

2017

41% – 50% 41% – 50%

41%
0
3 – 5 Years
0.46

As of March 31, 2018, there was $$3,943 of total unrecognized compensation costs related to

non-vested share-based compensation arrangements previously granted by Majesco. That cost is expected
to be recognized over a weighted-average period of 2.3 years.

F-35

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

16 EMPLOYEE STOCK OPTION PLAN continued

A summary of the outstanding common stock options under the 2015 Plan is as follows:

Exercise
Price
Per Share

Weighted-Average
Remaining
Contractual Life

Balance, April 1, 2015 . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . .
Canceled . . . . . . . . . . . . . . . . . . .
Balance, April 1, 2016 . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . .
Canceled . . . . . . . . . . . . . . . . . . .
Balance, March 31, 2017 . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . .
Canceled . . . . . . . . . . . . . . . . . . .
Balance, March 31, 2018 . . . . . . . .

— $

2,279,882
(100,497)
2,179,385
860,331
(2,083)
(168,991)
2,868,642
715,000
(51,249)
(254,250)
3,278,143

—
4.81 – 7.72
4.81 – 6.93
$4.81 – 7.72
4.79 – 6.22
4.92
4.81 – 7.53
$4.79 – 7.72
4.85 – 5.64
4.92 – 5.05
4.87 – 6.22
$4.79 – 7.72

—
9.07 Years

9.07 Years
9.41 Years

8.91 Years
8.77 Years

7.69 Years

Weighted-Average
Exercise Price
$ —
5.24
4.95
$5.25
5.56
4.92
5.37
$5.34
5.01
4.94
5.38
$5.27

The options granted during fiscal 2018 are distributed as follows, relative to the difference between the

exercise price and the stock price at grant date:

Number

Weighted-Average
Granted

Weighted-Average
Exercise Price

Exercise Price at Stock Price . . . . . . . . . . . . . . . . .

715,000

$5.01

Fair Value

$2.21

The options granted during fiscal 2017 are distributed as follows, relative to the difference between the

exercise price and the stock price at grant date:

Number
Granted

Weighted-Average
Exercise Price

Weighted-Average
Fair Value

Exercise Price at Stock Price . . . . . . . . . . . . . . . . .

860,331

$5.56

$2.25

Exercisable options at March 31, 2018 were as follows:

March 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of
Exercisable Options
1,200,212
627,675

Weighted-Average
Exercise Price
$5.45
$5.70

The following table summarizes information about stock options at March 31, 2018:

Outstanding Stock Options

Exercisable Stock Options

Range of
Exercise Prices
$4.79 – $6.22 . . . . . .
$7.53 – $7.72 . . . . . .

Shares
3,122,327
155,816

Weighted-Average
Remaining
Contractual Life
7.9 Years
3.9 Years

Weighted-Average
Exercise Price
$5.15
$7.64

Shares
1,044,396
155,816

Weighted-Average
Exercise Price
$5.13
$7.64

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded

options which have no vesting restrictions and are fully transferable. In addition, option valuation models
require the input of highly subjective assumptions including the expected stock price volatility. Because our

F-36

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

16 EMPLOYEE STOCK OPTION PLAN continued

employee stock options have characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect the fair value estimate, in
management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair
value of our employee stock options.

We follow FASB Accounting Standards Codification (“ASC”) 718, Accounting for Stock Options and

Other Stock-Based Compensation. Among other items, ASC 718 requires companies to record the
compensation expense for share-based awards issued to employees and directors in exchange for services
provided. The amount of the compensation expense is based on the estimated fair value of the awards on
their grant dates and is recognized over the required service periods. Our share-based awards include stock
options and restricted stock awards. For restricted stock awards, the calculation of compensation expense
under ASC 718 is based on the intrinsic value of the grant.

Majesco Employee Stock Purchase Plan

Majesco established the Majesco Employee Stock Purchase Plan (the “ESPP”). The ESPP is intended

to be qualified under Section 423 of the Internal Revenue Code. If a plan is qualified under Section 423,
employees who participate in the ESPP enjoy certain tax advantages. The ESPP allows employees to
purchase shares of Majesco common stock at a discount, without being subject to tax until they sell the
shares, and without having to pay any brokerage commissions with respect to the purchases.

The purpose of the ESPP is to encourage the purchase of Majesco common stock by our employees, to
provide employees with a personal stake in our business and to help us retain our employees by providing a
long range inducement for such employees to remain in our employ.

The ESPP provides employees with the right to purchase shares of common stock through payroll
deductions. The total number of shares available for purchase under the ESPP is 2,000,000. The ESPP Plan
became effective January 1, 2016. As of March 31, 2018, we had issued and sold 97,075 shares under the
ESPP.

Warrants

As of March 31, 2018, there were warrants to purchase 25,000 shares of common stock outstanding. A
summary of the terms of the outstanding warrants as of March 31, 2018, 2017, 2016 and 2015 is as follows:

Balance, April 1, 2015 . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . .
Balance, March 31, 2016 . . . . . . .
Granted . . . . . . . . . . . . . . . . . . .
Balance, March 31, 2017 . . . . . . .
Expired . . . . . . . . . . . . . . . . . . .
Balance, March 31, 2018 . . . . . . .

Exercise
Price
Per Warrant

Weighted-Average
Remaining
Contractual Life

Weighted-Average
Exercise Price

6.84 – 7.00

1.7

—
6.85
$6.85
—
$6.85
6.84
$7.00

Outstanding
and Exercisable
Warrants
—
334,064
334,064
—
334,064
(309,064)
25,000

F-37

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

16 EMPLOYEE STOCK OPTION PLAN continued

Exercisable Warrants at March 31, 2018 and 2017 were as follows:

March 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of
Exercisable Warrants
25,000
334,064

Weighted-Average
Exercise Price
$7.00
$6.85

On September 1, 2015, Majesco issued to Maxim Partners LLC a five year warrant to purchase 25,000

shares of common stock of Majesco at an exercise price of $7.00 per share. The warrant was issued in
connection with the engagement of the holder to perform certain advisory services to the Group. The
number of shares issuable upon exercise of the warrant may be reduced under certain circumstances of
non-performance under the services agreement. The warrant may be exercised at any time after
September 1, 2016 and will expire, if unexercised, on September 1, 2020. The warrant contains certain
anti-dilution adjustment protection in case of certain future issuances of securities, stock dividends, split
and other transactions affecting Majesco’s securities. The holder of the warrant is entitled to piggyback
registration rights in case of certain registered securities offerings by Majesco.

Total employee stock option plans expenses

The total amount of compensation expense recognized in Majesco’s Statement of Operations in respect

of employee stock option plans is as follows:

Cost of revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Research and development expenses . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . . .
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17 OTHER INCOME/(EXPENSES)

Other income/(expenses) consists of following:

Year Ended
March 31,
2018
$ 639
72
2,542
$3,253

Year Ended
March 31,
2017
$ 360
118
1,100
$1,578

Year Ended
March 31,
2016
$148
83
517
$748

Year ended
March 31,
2018

Year ended
March 31,
2017

Year ended
March 31,
2016

(Loss) on derivative instruments not designated as hedges and
ineffective portion of derivative instruments designated as
hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income/(expenses) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$—
81
(7)
$74

$ —
(108)
93
$ (15)

$ —
122
167
$289

F-38

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

18 EARNINGS PER SHARE

The basic and diluted earnings/(loss) per share were as follows:

Net income/(Loss) . . . . . . . . . . . . . . . . . . . . . . . . .
Basic weighted average outstanding equity shares . . .
Adjustment for dilutive potential common stock

Options under Majesco 2015 Equity Plan Dilutive
weighted average outstanding equity shares . . . . . .

Year ended
March 31,
2018

Year ended
March 31,
2017

(5,001) $

(922) $

36,540,199

36,477,774

Year ended
March 31,
2016

(3,562)
35,055,000

36,540,199

36,477,774

35,055,000

Earnings per share
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$
$

(0.14) $
(0.14) $

(0.02) $
(0.02) $

(0.10)
(0.10)

Basic earnings per share amounts are calculated by dividing net income for the years ended March 31,

2018, 2017 and 2016 attributable to common shareholders by the weighted average number of ordinary
shares outstanding during the same periods.

Diluted earnings per share amounts are calculated by dividing the net income attributable to common
shareholders by the sum of the weighted average number of ordinary shares outstanding during the periods
plus the weighted average number of common shares that would be issued on the conversion of all the
dilutive potential common shares into common shares.

The calculation of diluted earnings per share excluded potential equity shares and options granted to

employees, as their inclusion would have been antidilutive.

19 RELATED PARTIES TRANSACTIONS

Reimbursement of Expenses

The following tables summarize the liabilities to or by related parties:

Net reimbursable expenses receivable/(payable) to Majesco Limited or

Mastek Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$98

$(622)

As of
March 31,
2018

As of
March 31,
2017

(1) The net reimbursable expenses payable at March 31, 2018 and March 31, 2017 include employee stock

option charges of Majesco Limited and various expenses which are recurring in nature and attributable
to shared resources with Majesco Limited or Mastek Limited that are in the process of being separated
after the Reorganization, including air travel, travel insurance, telephone costs, water charges, insurance
costs, administrative personnel costs, software and hardware costs and third party license costs, less
receivables from Majesco Limited or Mastek Limited for similar expenses.

Leases

MSSIPL entered into an operating lease for its operation facilities in Mahape, India, as lessee, with

Majesco Limited, Majesco’s parent company, as lessor. The approximate aggregate annual rent payable to
Majesco Limited under this lease agreement is $1,304. The lease is effective June 1, 2015 and expires on
May 31, 2020.

F-39

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

19 RELATED PARTIES TRANSACTIONS continued

MSSIPL also entered into a lease for facilities for its operations in Pune, India, with Mastek Ltd. as

lessor. The lease is effective June 1, 2015 and expires on May 31, 2020. MSSIPL has also entered into a
supplementary lease for its operations in Pune, India, with Mastek Ltd. as lessor. The lease is effective
April 1, 2016 and expires on May 31, 2020. The approximate aggregate annual rent payable to Mastek Ltd.
under these lease agreements is $410.

As of
March 31,
2018

As of
March 31,
2017

Security deposits paid to Majesco Limited by MSSIPL for use of Mahape
premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$644

$648

Security deposits paid to Mastek Ltd. by MSSIPL for use of Pune

premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$202

$224

Rental expenses paid by MSSIPL to Majesco Limited for use of premises for the years ended

March 31, 2018 and March 31, 2017 was $1,304 and $1,259, respectively. Rental expenses paid by MSSIPL
to Mastek Ltd. for use of premises for the years ended March 31, 2018 and March 31, 2017 was $397 and
$397, respectively.

Joint Venture Agreement

On September 24, 2015, MSSIPL and Mastek (UK) Limited, a wholly owned subsidiary of Mastek
Ltd. (“Mastek UK”), entered into a Joint Venture Agreement (the “Joint Venture Agreement”) pursuant to
which the two companies agreed to work together to deliver services to third parties under the terms of the
Joint Venture Agreement, which services comprise the delivery of development, integration and support
services to third parties by use of Mastek Ltd.’s development, integration and support methodologies and
tools. The Joint Venture Agreement is effective September 24, 2015 and will remain in force, unless
terminated by either party upon three months’ notice in writing to the other of its intention to terminate the
Joint Venture Agreement. The consideration for each party’s performance of its obligations under the Joint
Venture Agreement is the performance of the other’s obligations under the same agreement, being services
to the other. The services comprise in the case of Mastek Ltd., Mastek Ltd.’s development, integration and
support methodologies and tools and business development services. In the case of MSSIPL, the services
comprise the provision of leading edge technical expertise and advice. The parties will also exchange
technical and business information.

Services Agreements

On December 2, 2015, Majesco UK Limited, a company registered in England and Wales wholly
owned by Majesco (“Majesco UK”), entered into a Services Agreement with Mastek UK, pursuant to
which Mastek UK provides certain corporate and operational support services to Majesco UK, including
managed office accommodation and facilities; managed office IT infrastructure and networks; and
corporate support services, insurance coverage and subscription to professional associations and
publications. The charges for these core services consist of a monthly charge of 13 UK Pounds (USD $20)
and a pass through of actual costs of providing the services. Any support services by Mastek UK staff not
included in the core services is charged on a basis to be determined separately between both parties but
before provision of such services. Either party may at any time, by notice in writing to the other party,
terminate this agreement for breach or if the other party becomes subject to insolvency issues. Either party
for any reason or no reason may also terminate this agreement by providing the other party written notice
of the termination ninety (90) days in advance. The Services Agreement contains customary
representations, warranties and indemnities of the parties. The effective date of this Services Agreement is
January 1, 2015. The expense by Majesco UK to Mastek UK under the Services Agreement for the years
ended March 31, 2018 and March 31, 2017 was nil and $138, respectively.

F-40

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

19 RELATED PARTIES TRANSACTIONS continued

On March 1, 2016, Majesco, and Digility Inc., a Delaware corporation (“Digility”) wholly-owned by

Mastek UK, entered into a Services Agreement, pursuant to which Majesco will provide certain
management and operational support services to Digility, including managed office accommodation and
facilities, managed office IT infrastructure and networks, and corporate support services. The charges for
these services consist of an initial set-up fee of $1, a monthly fee of $4 and a pass through of actual costs of
providing the services incurred in excess of the monthly fee. Either party may at any time, by notice in
writing to the other party, terminate the Services Agreement for breach or if the other party becomes
subject to insolvency issues. Either party for any reason or no reason may terminate the Services Agreement
by providing the other party written notice of the termination thirty (30) days in advance. The Services
agreement contains customary representations, warranties and indemnities of the parties. The effective date
of the Services Agreement is March 1, 2016. Service charges received from Digility for the years ended
March 31, 2018 and March 31, 2017 was $19 and $45, respectively. This agreement was terminated on
August 31, 2017.

On August 2, 2016, Majesco Limited and MSSIPL entered into a master service agreement, effective as

of June 30, 2016 pursuant to which MSSIPL will provide software development services to Majesco
Limited. Under this agreement, MSSIPL will charge Majesco Limited cost plus a margin for the services
rendered. Software development charges charged by MSSIPL under the agreement for the years ended
March 31, 2018 and March 31, 2017 was $1,075 and $823, respectively.

Sublease

On March 1, 2016, Majesco and Digility entered into a Sublease Agreement (the “Sublease
Agreement”), pursuant to which Majesco sublets the premises located on the first floor of 685 Route
202/206, Bridgewater, New Jersey to Digility. Digility will pay monthly $1 for rent to Majesco during the
term of the Sublease Agreement. Digility will also reimburse Majesco for any costs charged by the landlord,
Route 206 Associates, a New Jersey partnership, for additional services requested by Digility. The term of
the Sublease Agreement commenced on March 1, 2016 and will expired on July 31, 2017 Rental charges
received from Digility for the years ended March 31, 2018 and March 31, 2017 was $5 and $14, respectively.

Guarantee

During the fiscal years ended March 31, 2018 and March 31, 2017, Majesco paid $48 and $213,
respectively, to Majesco Limited as arrangement fees and guarantee commission for the guarantee given by
Majesco Limited to HSBC and ICICI Bank for the facilities taken by Majesco and its subsidiaries.

Intellectual Property License

On August 2, 2016, Majesco Limited and MSSIPL entered into a Memorandum of Understanding
(the “MOU”) pursuant to which MSSIPL granted Majesco Limited a perpetual, royalty-free right to use
the intellectual property rights of MSSIPL in “Elixir”, including any improvements and upgrades, in
connection with Majesco Limited’s own India insurance business.

20 SEGMENT INFORMATION

The Group operates in one segment as software solutions provider for the insurance industry. The

Group’s chief operating decision maker (the “CODM”) of the Group is the Chief Executive Officer. The
CODM manages the Group’s operations on a consolidated basis for purposes of allocating resources. When
evaluating the Group’s financial performance, the CODM reviews all financial information on a
consolidated basis. Majority of the Group’s principal operations and decision-making functions are located
in the United States.

F-41

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

20 SEGMENT INFORMATION continued

The following table sets forth revenues by country based on the billing address of the customer:

Year ended
March 31,
2018

Year ended
March 13,
2017

Year ended
March 31,
2016

USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$108,142

$107,077

$ 98,209

UK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Malaysia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Singapore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,651

1,203

5,248

379

1,362

8,167

1,748

3,625

1,092

8,935

2,175

3,672

238

$122,985

$121,768

$113,302

The following table sets forth the Group’s property and equipment, net by geographic region:

As of March 31,

2018

2017

USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Malaysia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,195
1,332
7
205
16

$1,812
1,835
11
1
—

$2,755

$3,659

We provide a significant volume of services to many customers. Therefore, a loss of a significant

customer could materially reduce our revenues. The Group had no customer for the fiscal year ended March
31, 2018, no customer for the fiscal year ended March 31, 2017 and one customer for the fiscal year ended
March 31, 2016 that accounted for 10% or more of total revenue. The Group had one customer as of
March 31, 2018 and no customer as of March 31, 2017 that accounted for 10% or more of total accounts
receivables and unbilled accounts receivable. Presented in the table below is information about our major
customers:

Customer A
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivables and unbilled accounts

Year ended
March 31,
2018

Year ended
March 31,
2017

Year ended
March 31,
2016

% of
combined
revenue

Amount

% of
combined
revenue

Amount

$11,070

9.0% $9,106

7.5% $11,540

10.2%

receivable . . . . . . . . . . . . . . . . . . . . . . . .

$ 5,240

18.0% $ 697

3.4% $ 4,295

14.4%

Customer B
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivables and unbilled accounts

$ 6,623

5.4% $6,511

5.3% $ 6,166

5.4%

receivable . . . . . . . . . . . . . . . . . . . . . . . .

$ 1,000

3.4% $ 243

1.2% $

923

3.1%

F-42

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

21 COMMITMENTS

Capital Commitments

The Group had outstanding contractual commitments of $20 and $358 as of March 31, 2018 and

2017, respectively for capital expenditures relating to the acquisition of property, equipment and new
network infrastructure.

Operating Leases

The Group leases certain office premises under operating leases. Many of these leases include a renewal

option on a periodic basis at the Group’s option, with the renewal periods extending in the range of 2 — 5
years. Rental expense for operating leases amounted to $3,292, $3,348 and $2,788 for the fiscal years ended
March 31, 2018, 2017 and 2016, respectively. The schedule for future minimum rental payments over the
lease term in respect of operating leases is set out below.

Year ended March 31,
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Beyond 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amount
3,166
3,233
760
289
291
437
$8,176

22 ACQUISITIONS

On December 14, 2014, Majesco entered into a definitive merger agreement with Cover-All. The

merger was completed on June 26, 2015. Cover-All licenses and maintains software products for the
property/casualty insurance industry throughout the United States and Puerto Rico. Majesco merged with
Cover-All to expand its insurance business in the United States.

The following table summarizes the consideration paid in the merger of Cover-All into Majesco and

the amounts of identified assets acquired and liabilities assumed at the merger date:

Fair value of consideration transferred

Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital
Total consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$
12
$29,708
$29,720

The merger of Cover-All and Majesco was a stock-for-stock merger with each share of Cover-All
common stock issued and outstanding immediately prior to the merger converted into the right to receive
the number of shares of Majesco common stock multiplied by the exchange ratio. The exchange ratio in the
merger was 0.21641. Accordingly, at the closing of the merger, Cover-All in the aggregate represented 16.5%
of the total capitalization of the combined company.

In the merger, 5,844,830 shares of Majesco common stock were issued to the shareholders of

Cover-All and 197,081 equity incentives were issued to the holders of options and restricted stock units of
Cover-All. Consequently, common stock of Majesco increased by $12 and additional paid in capital is
increased by $29,708.

F-43

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

22 ACQUISITIONS continued

Recognized amount of identifiable assets acquired and liabilities assumed

Amount

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 2,990

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,592

Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Property, plant and equipment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other assets

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Customer contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Customer relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax asset on NOL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued expenses
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital lease liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total fair value of assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of consideration paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

629

454

148

2,410

4,460

3,110
459
(1,120)
(623)
(2,515)
(294)

11,700
29,720

Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$18,020

The goodwill of $18,020 arising from the merger consists largely of the synergies and economies of
scale expected from combining the operations of Majesco and Cover-All. Further, though workforce has
been valued, it is not recognized separately, but subsumed in goodwill. Goodwill deductible for tax purpose
amounts to nil.

On October 31, 2015, Majesco Malaysia entered into a Share Purchase Agreement with Mastek Ltd.

for the purchase of the issued and authorized shares of Mastek Asia Pacific Pte. Limited, which was
renamed Majesco Asia Pacific Pte. Limited.

Recognized amount of identifiable assets acquired and liabilities assumed

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets
Accrued expenses
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total fair value of assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of consideration paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amount

$212
18
1
(14)
217
276

$ 59

F-44

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

22 ACQUISITIONS continued

The following table summarizes the consideration paid to Mastek Ltd. and the amounts of identified

assets acquired and liabilities assumed at the effective date:

The changes in the varying amount of goodwill are as follows:

Changes in carrying amount of the goodwill

Opening value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Addition of goodwill related to acquisition . . . . . . . . . . . . . . . . . . . . . .
Changes on account of current fluctuation . . . . . . . . . . . . . . . . . . . . . .
Impairment of Goodwill
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Closing value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

As of
March 31,
2018
$32,275
—
1
(60)
$32,216

As of
March 31,
2017
32,275
—
1
(60)
32,216

Due to uncertainty in the future business of Majesco Asia Pacific Pte. Limited, which indicated the

potential impairment of goodwill, the Group decided to impair the amount of goodwill recognized earlier
in the acquisition of this entity as at March 31, 2017.

Details of identifiable intangible assets acquired are as follows:

Weighted average
amortization
period
(in years)

Customer contracts . . . . . . . . . . . . . . . . . . . . . . . . . .
Customer relationships . . . . . . . . . . . . . . . . . . . . . . . .
Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3
8
6
6

Amount
assigned
$2,410
4,460
3,110
$9,980

Residual
value
—
—
—
—

Revenues and earnings specific to the Cover-All business for the period July 1, 2015 to March 31, 2016

were $17,636 and $1,260, respectively.

23 NON CONTROLLING INTEREST

As of March 31, 2016, all the subsidiaries are 100% subsidiaries through direct and step down holdings

and hence non-controlling interest is Nil.

F-45

Notes to Consolidated and Combined
Financial Statements
(All amounts are in thousands of US Dollars except per share data and as stated otherwise)

Majesco

24 QUARTERLY RESULTS

Revenue. . . . . . . . . . . . . . . . . . . . . . . . .
Income/(loss) from operations . . . . . . . . . .
Net Income (loss) . . . . . . . . . . . . . . . . . .
Net income/(loss) attributable to Owners of
the Company . . . . . . . . . . . . . . . . . . .
Basic EPS . . . . . . . . . . . . . . . . . . . . . . .
Diluted EPS . . . . . . . . . . . . . . . . . . . . .

Revenue. . . . . . . . . . . . . . . . . . . . . . . . .
Income from operations . . . . . . . . . . . . . .
Net Income (loss) . . . . . . . . . . . . . . . . . .
Net income/(loss) attributable to Owners of
the Company . . . . . . . . . . . . . . . . . . .
Basic EPS . . . . . . . . . . . . . . . . . . . . . . .
Diluted EPS . . . . . . . . . . . . . . . . . . . . .

June 30, 2017
27,922
(2,336)
(1,650)

(1,650)
(0.05)
(0.05)

June 30, 2016
32,554
(435)
(550)

(550)
(0.02)
(0.02)

(Unaudited) Quarter ended

September 30, 2017 December 31, 2017 March 31, 2018

30,347
(1,029)
(716)

(716)
(0.02)
(0.02)

31,769
98
(3,069)

(3,069)
(0.08)
(0.08)

32,947
860
434

434
0.01
0.01

(Unaudited) Quarter ended

September 30, 2016 December 31, 2016 March 31, 2017

31,046
271
217

217
0.01
0.01

30,012
192
209

209
0.01
0.01

28,156
(267)
(798)

(798)
(0.02)
(0.02)

F-46

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Principal Officers

Ketan Mehta
President and Chief Executive Officer

Edward Ossie
Chief Operating Officer

Farid Kazani
Chief Financial Officer and Treasurer

Prateek Kumar
Executive Vice President, P&C Business

Manish Shah
Executive Vice President, Products

Denise Garth
Senior Vice President, Strategic Marketing

Board of Directors

Arun K. Maheshwari
Chairman of the Board of Directors

Earl Gallegos
Vice Chairman of the Board of Directors

Rajesh Hukku
Director

Steven R. Isaac
Director

Atul Kanagat
Director

Ketan Mehta
Director

Ganesh Pai
Executive Vice President, Consulting Services Business

Sudhakar Ram
Director

Mallinath Sengupta
Executive Vice President & Head of P&C Delivery

Robert P. Restrepo, Jr
Director

Lori Stanley
General Counsel and Corporate Secretary

Additional Information

Common Stock Quotation Service
NYSE American: MJCO

Transfer Agent and Registrar
American Stock Transfer & Trust Company
59 Maiden Lane
New York, New York 10038
PH: (800) 937-544

Majesco on the Internet
www.majesco.com

Stockholders Communications E-mail
proxy@majesco.com

Counsel
Sheppard Mullin
30 Rockefeller Plaza
New York, New York 10112
PH: (212) 653-8700

Independent Auditors
MSPC
An independent firm associated with Moore Stephens
International Limited

Majesco Corporate Headquarters
412 Mt. Kemble Avenue, Suite 110C
Morristown, NJ 07960
PH: (973) 461-5200

MAJESCO 2018 ANNUAL REPORT

Majesco Corporate Headquarters

412 Mt. Kemble Avenue, Suite 110C

Morristown, NJ 07960

PH: (973) 461-5200