It gives me immense pleasure to connect with you all. and share with you ourperformance which has been highly satisfying during the past year. Once again we haveraised the bar and have delivered truly industry leading benchmark results. Over the pasttwo years and the foreseeable future till 2020 and beyond the shift of enterprises toleverage specialized testing services vendors as against traditional testing servicesproviders is a significant aspect of consideration that fortifies our growth. We perceivethis shift as a major business enhancer. It keeps us motivated to further growsignificantly and become a global leader in the independent software testing and qualityengineering services for digital enterprises.
As per NelsonHaLl IT Service July 2016 report the Global Testing Spending comprisesabout 6% of the total IT Services Spending. The total (global] testing spending [includingboth Specialized Testing Services and Traditional Testing Services was $38.2 bn in 2015and is expected to grow to $62.8 bn by 2020. NelsonHall has further revised itsSpecialized Testing Services growth forecast in the range of 7-8% due to increased switchin client organizations towards specialized testing offerings and digital testing insteadof core lunction testing. NelsonHall estimates that BFS organizations in North America andthe U.K (including Europe and ANZ) will further focus on cost optimization arid marketacceleration with quality. Thus Specialized Testing Services is growing at 7% p.a. whileTraditional Testing Services continues to witnesses a decline of 3% p.a. Also as perNelsonHall the Specialized Testing Services Digital Testing spending isgrowing by 18%mainly driven by cloud computing. It is estimated that digital spending would grow to 19%of the total Specialized Testing Services by 2020 from 13% in 2015. This makes me furtheraffirm that we as a company are working towards becoming the leader in IndependentSoftware Testing and Quality Engineering services for the Digital Enterprise.
I am proud to share that your firm is now the second largest software testing pure-playcompany by headcount. Last year we had become the world's first independent testingservices company to be appraised at CMMI Level 5. The appraisal reinforces our commitmentto deliver world class testing services with Integrated Process Management System (IPMS).It signifies lhat we are implementing the processes aligned to our business objectives andare ensuring enhanced client gratification. It has also turned out to be a game changerenabling us to compete amongst the top IT service companies in securing partnerships withlarger enterprises globally. In the year under review Cigniti launched its strategicAdvisory and Transformation Services (ATS] with a strong focus on Consulting. Thispositions us to strategically work with the CXOs of the enterprises as they move ahead intheir digital transformation Agile and DevOps initiatives to stay successful.
During FY16 your Company garnered numerous analyst mentions. Gartner positioned us asa ' Challenger'' in the 2(115 Magic Quadrant for Application Testing Services Worldwide.The Everest Group identified us as a 'Star Performer' and positioned us as a MajorContender' in the Everest Group PEAK Matrix for Independent Testing Services 2016.It also conferred the 'Best in Class rating for Buyer satisfaction' in the ServiceProvider Assessment. Forrester cited us in multiple Testing Reports. NelsonHall ranked usas a Leader' in Pure Play Digital Consulting segments and the Overall market segmentin the Software Testing NEAT Charts and mentioned Cigniti as the Second Largest byheadcount.
During the last financial year we have won various awards and accolades. We receivedcoverage as '20 Most Promising Banking Technology Solution Provider' by CIO Review US. Wewere bestowed the 'Global customer leadership value award' from Frost & Sullivan UKin 2015. We won the 'BEST SME Award for Global Excellence - 2015' from Business Today.
We registered a strong financial performance during FY16. The total revenue for theyear stood at Rs 5968 million up by 57% from Rs 3789 million in FY15. Our earningsbefore interest taxes depreciation and amortization (EBITDA) increased to Rs 1016million up by a staggering 156% from last year. In FY16 our EBITDA margin stood at 17%with an improvement of 650 bps as compared to last year. The profit after tax for the yearstood at Rs 697 million up by 93% as compared to FY15.
We have established our global presence in 5 continents and 13 countries serving over500 satisfied customers. We serve 57 of the Global 2000 60 of the Fortune 1000 and 31 ofFortune 500 Companies. We serve key clients across industry verticals. We have a strongteam of over 2200 human capital' including 1800+ career testers.
We have established strategic partnerships successful acquisitions and havedemonstrated an ability to integrate acquisitions across cultures. Cigniti 6.0 is aimed tofacilitate enterprises to succeed in the Age of Digital Transformation. We took todiversify our service offerings with increased focus on value added services like SMARTTesting Test Centers of Excellence Enterprise Frameworks Test Accelerators ToolPartnerships and Expertise and Process Asset Library catering to tap the growing globaldigitalization opportunities. Cigniti has significantly Strengthened its vertical focus -Airlines Banking Financial Services Healthcare. Insurance Life Sciences Retail andTravel & Hospitality - through dedicated domain competency groups under tire globaldelivery leadership Cigniti has invested significantly in bringing senior delivery leaderswho have proven experience in delivering end-to-end quality engineering andtransformation programs for Global 2000 companies across the above mentioned verticals. Weare also creating a world-class testing infrastructure with continued investment in IP ledtools in order to cater to our diversified clientele base spanning across domains andgeographies.
In a quest to be the best we take care that we give back to the society through theCSR activities. Our project Cignificance aims to touch many lives through free and qualityeducation.
I take this opportunity to thank all our shareholders for their continuous support andunwavering belief in us. I would also like to express my gratitude to our 'human capital'for their passion dedication and efforts for steering us to the top.
| ||Best regards. |
| ||C. V. Subramanyam |
| ||Chairman & Managing Director |