Dear Fellow Shareholders
Fiscal 2017 was a year of transition of business model from on-premise to on-demandcloud driven model. This was the year in which we focused on supporting new and existingcustomer growth enhancing our product offerings and expanding our sales and marketinginfrastructure. We continued to invest in expanding our cloud platform that is wellpositioned to take advantage of the significant changes underway in the insurancetechnology marketplace. As a result of these business trends MajescoRss total revenuegrew by 9.3% in fiscal 2017. EBITDA margin witnessed substantial improvement and increasedby 410 basis points from 1.3% of operating revenue for fiscal 2016 to 5.4% of operatingrevenue for fiscal 2017. Our cloud-based revenues continued to outperform and increased by19.7% to Rs 158.9 crore for fiscal 2017. We expect sales of our cloud offerings willcontinue to grow at a faster pace compared to other areas of our business and we areencouraged by this shift as cloud based sales are higher-margin and recurring. The cloudmodel is not only an attractive business model for us it is filling a critical need inthe industry.
We continue to focus exclusively on serving the global insurance industry with corebusiness solutions and consulting services that help modernize and bring change toProperty and Casualty (P&C) Life and Annuity (L&A) and Group insurance carriers.Not unlike other industries the insurance industry is rapidly evolving and changing. Asinsurance customer expectations change so do the carrierS' requirement to respond quicklywith lower-risk and speed-to-value business platforms that provide the ability to innovatenew products reach new markets create new customer experiences and liberate differentbusiness models.
In this rapidly evolving environment undertaking multi-year multi-million dollartransformation programs to replace legacy systems no longer serves the need of carriers.As a result Majesco proactively began realigning its business strategy to this marketshift to focus on speed to value using our cloud based platform Majesco Cloudlnsurerwhich we believe will lead the next wave of innovation and investment in insurance. Withour Majesco Cloudlnsurer platform we have successfully partnered with over 164 clientsincluding existing legacy insurers new startups or greenfields backed by existinginsurers or by venture capital funds to empower their business strategies by helping theminnovate grow and transform their business models to capture the opportunities today andin the future.
During the year I am proud that 15 clients successfully went into production withMajescoRss solutions. We are delighted with our customerS' success as we help to supporttheir strategic plans for growth innovation and market expansion. In addition Majescomade meaningful investments to strengthen its organization support a growing and diversecustomer base and expand the Majesco Cloudlnsurer platform. R&D expenditures werehigher by 7.4% as compared to the prior year period as we advanced our product roadmapfor both the P&C L&A and Group and Enterprise solutions. We released newversions of Majesco L&A Policy Majesco P&C Policy Majesco Claims MajescoBilling and Majesco Distribution Management. We launched new products with MajescoEnterprise Data Model and Majesco Enterprise Data Warehouse.
Majesco also expanded and strengthened the companyRss Partner EcoSystem. During theyear we entered into a 5-year global strategic partnership with IBM to jointly offer anew cognitive cloud-based platform to help insurance carriers worldwide create newservices on IBM Cloud. The integration of IBM Cloud and cognitive capabilities withMajescoRss market-leading core system for policy billing and claims offers newinnovative products and services for insurers. I am pleased to see that the partnershipwith IBM has successfully kicked off the inception work with a Tier 1 insurerspecifically on a platform-as-a-service model. Furthermore we also added 4 new partnersas part of our Majesco Partner EcoSystem including a number of InsurTech startups such asSplice Elafris and Dropln.
As we move into the new fiscalyear we are enthused about our strategy the marketpotential of our portfolio of solutions our cloud platform and Partner Ecosystem and ourexpanding partnership with IBM around cognitive core and cloud that help us differentiateour value proposition for current and prospective customers.
We expect momentum in our cloud business will remain strong as we take advantage of theshift underway in insurance software. We also expect to see improvement in non-cloudbusiness as demand increases for MajescoRss data and digital solutions. As a result Iexpect Majesco will experience a reacceleration in growth in fiscal 2018.1 am confidentthat we are on the right track to achieve strong profitable growth in the years ahead.MajescoRss management team and board of directors have high expectations for the companyin fiscal 2018 and beyond and I look forward to sharing our success with you in thefuture.
Delivering and delighting our customers today is the foundation for continued growthand success. It requires a fully engaged highly energized and knowledgeable staff. IRsdlike to thank our employees for their customer focus teamwork and support.
In closing we sincerely thank our customers for their confidence and trust. We willcontinue to direct our energy innovation and effort to proving that their confidence waswell placed.
Co-Founderand CEO ofMajesco