Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jun. 30, 2015 | Aug. 10, 2015 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Majesco | |
Entity Central Index Key | 1,626,853 | |
Trading Symbol | mjco | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 36,451,357 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 9,266 | $ 6,262 |
Short term investments | 270 | |
Restricted cash | $ 305 | 305 |
Accounts receivables, net | 15,115 | 7,758 |
Unbilled accounts receivable | 4,411 | 5,615 |
Deferred income tax assets | 1,538 | 2,168 |
Prepaid expenses and other current assets | 4,814 | 2,911 |
Total current assets | 35,449 | 25,289 |
Property and equipment, net | 1,785 | 1,173 |
Intangible assets, net | 12,549 | 3,434 |
Deferred income tax assets | 2,307 | 2,182 |
Other assets | 459 | 271 |
Goodwill | 32,666 | 14,196 |
Total Assets | 85,215 | 46,545 |
CURRENT LIABILITIES | ||
Capital lease obligation | 306 | 17 |
Loan from bank | 8,501 | 1,470 |
Accounts payable | 2,569 | 442 |
Accrued expenses and other liabilities | ||
Related Parties | 3,457 | 3,520 |
Others | 9,470 | 8,739 |
Deferred revenue | 5,462 | 4,826 |
Total current liabilities | 29,765 | 19,014 |
Capital lease obligation, net of current portion | 30 | 31 |
Term loan- bank | 3,000 | 3,000 |
Other | 3,609 | 3,944 |
Total Liabilities | $ 36,404 | $ 25,989 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value $0.002 per share - 50,000,000 shares authorized as of June 30, 2015 and March 31, 2015, NIL shares issued and outstanding as of June 30, 2015 and March 31, 2015 | ||
Common stock, par value $0.002 per share - 450,000,000 shares authorized as of June 30, 2015 and 300,000,000 shares authorized as of March 31, 2015; 36,451,357 shares issued and outstanding as of June 30, 2015 and 30,575,000 shares issued and outstanding as of March 31, 2015 | $ 73 | $ 61 |
Additional paid-in capital | 68,802 | 39,049 |
Accumulated deficit | (21,410) | (20,798) |
Accumulated other comprehensive income | 1,346 | 2,244 |
Total equity of common stockholder | 48,811 | 20,556 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 85,215 | $ 46,545 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares | Jun. 30, 2015 | Mar. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value per share (in dollars per share) | $ 0.002 | $ 0.002 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value per share (in dollars per share) | $ 0.002 | $ 0.002 |
Common stock, shares authorized | 450,000,000 | 300,000,000 |
Common stock, shares, issued | 36,451,357 | 30,575,000 |
Common stock, shares outstanding | 36,451,357 | 30,575,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||
Revenue | $ 23,163 | $ 16,882 |
Cost of revenue | 12,107 | 10,405 |
Gross profit | 11,056 | 6,477 |
Operating expenses | ||
Research and development expenses | 3,151 | 2,792 |
Selling, general and administrative expenses | 7,586 | $ 5,980 |
Restructuring costs | 228 | |
Total operating expenses | 10,965 | $ 8,772 |
Income/(Loss) from operations | 91 | $ (2,295) |
Interest income | 10 | |
Interest expense | (55) | $ (34) |
Other income (expenses),net | 136 | 321 |
Income /(Loss) before provision for income taxes | 182 | (2,008) |
(Benefit)/Provision for income taxes | 100 | (1,146) |
Net Income/(Loss) | $ 82 | (862) |
Net income/(loss) attributable to Non-controlling interests | 12 | |
Net Income (Loss) Attributable to Majesco | $ 82 | $ (874) |
Earnings (Loss) per share: | ||
Basic (in dollars per share) | $ 0 | $ (0.03) |
Diluted (in dollars per share) | $ 0 | $ (0.03) |
Weighted average number of common shares outstanding | ||
Basic (in shares) | 30,836,171 | 30,575,000 |
Diluted (in shares) | 30,951,441 | 30,575,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income/(Loss) | $ 82 | $ (862) |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | (752) | 57 |
Unrealized gains on cash flow hedges | (147) | 370 |
Other comprehensive income (loss) | (899) | 427 |
Comprehensive (Loss)/Income | $ (817) | (435) |
Comprehensive income attributable to the non-controlling interest | 12 | |
Comprehensive (Loss)/Income attributable to Majesco | $ (817) | $ (447) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Net cash used from operating activities | ||
Net cash used from operating activities | $ (3,305) | $ (3,851) |
Net cash flows from investing activities | ||
Purchase of Property and equipment | (199) | (107) |
Proceeds from sale of Investments | 270 | $ 3,025 |
Cash acquired in business combination | 2,990 | |
Net cash provided by investing activities | 3,061 | $ 2,918 |
Net cash flows from financing activities | ||
Payment of Capital lease obligation | (1) | $ (7) |
Receipt of loan | 3,501 | |
Net cash provided (used) by financing activities | 3,500 | $ (7) |
Effect of foreign exchange rate changes on cash and cash equivalents | (252) | 54 |
Net (Decrease)/Increase in cash and cash equivalents | 3,004 | (886) |
Cash and cash equivalents, beginning of the period | 6,262 | 7,016 |
Cash and cash equivalents at end of the period | $ 9,266 | $ 6,130 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 3 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | 1. DESCRIPTION OF BUSINESS Majesco (the “Company”) is a global provider of software solutions for the insurance industry. We offer core software solutions for P&C and L&A providers, allowing them to manage policy administration, claims management and billing functions. In addition, we offer a variety of other technology-based solutions that enable organizations to automate business processes and comply with policies and regulations across their organizations. Our solutions enable customers to respond to evolving market needs and regulatory changes, while improving the efficiency of their core operations, thereby increasing revenues and reducing costs. Majesco’s customers are insurers, managing general agents and other risk providers from the Property and Casualty, Life, Annuity and Group insurance segments worldwide. Majesco delivers proven software solutions, consulting and services in the core insurance areas such as policy, billing, claims, distribution management, BI/ analytics, digital, application management, cloud and more. Majesco was previously 100% owned (directly or indirectly) by Mastek Ltd. (“Mastek”), 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 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’s non-insurance related business and insurance related operations of Mastek 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, the United Kingdom, Malaysia, Thailand and India (hereinafter referred to as the “Group”). In connection with the demerger 83.5% of Mastek Limited’s equity ownership interest in Majesco was transferred to a newly formed publicly traded company in India, named Majesco Limited. Merger with Cover-All Technologies Inc. On December 14, 2014, Majesco entered into a definitive merger agreement with Cover-All Technologies Inc. (“Cover-All”), an insurance software company listed on NYSE MKT, for a 100% stock-for-stock merger of Cover-All with and into Majesco, with Majesco surviving the merger. Pursuant to the merger, Cover-All’s stockholders and holders of its options and restricted stock units would receive 16.5% of the outstanding shares of common stock of the combined company in the merger. A proxy statement/registration statement was filed and declared effective by the U.S. Securities and Exchange Commission (“SEC”). Necessary approvals from High Courts in India were obtained for the Reorganization and the shareholders of Cover-All approved the merger at the meeting of shareholders held on June 22, 2015. Majesco consummated the merger on June 26, 2015. Majesco’s common stock was listed on the NYSE MKT and began trading on the NYSE MKT on June 29, 2015. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Basis of Presentation The accompanying unaudited consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of SEC Regulation S-X. The March 31, 2015 consolidated balance sheet was derived from our audited combined financial statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2015, as filed with the SEC, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting only of normal recurring adjustments except as otherwise noted, considered necessary for a fair statement of results of operations and financial position have been included. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2015. In connection with the merger with Cover-All, the Group’s Board of Directors and stockholders approved a one for six reverse stock split of the Group’s common stock. The reverse stock split became effective June 22, 2015. All share and per share amounts in the consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid in capital. The consolidated financial statements have been prepared on a ‘carve-out’ basis (assuming the Reorganization had been effected as of July 1, 2012) and are derived from the historical consolidated financial statements and accounting records of Mastek. All material inter-company balances and transactions have been eliminated on combination. The consolidated financial statements reflect the Group’s financial position, results of operations and cash flows in conformity with U.S. GAAP. The consolidated Balance Sheet, consolidated Statement of Operations and consolidated 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. These consolidated financial statements include assets and liabilities that are specifically identifiable or have been allocated to the Group. Costs directly related to the Group have been included in the accompanying financial statements. The Group receives service and support functions from Mastek. The costs associated with these support functions have been allocated relative to Mastek in its entirety, which is considered to be the most meaningful under the circumstances. The costs were allocated to the Group using various allocation inputs, such as head count, services rendered, and assets assigned to the Group. These allocated costs are primarily related to corporate administrative expenses, employee related costs, including gratuity and other benefits, and corporate and shared employees. The Group considers the expense allocation methodology and results to be reasonable for all periods presented. These allocations may not be indicative of the actual expenses the Group may have incurred as a separate independent public company during the periods presented nor are these costs indicative of what the Group will incur in the future. Mastek maintains benefit and stock-based compensation programs at the parent company level. To the extent that Group employees participate in these programs, the Group was allocated a portion of the associated expenses and estimated net benefit plan obligation. However, the consolidated Balance Sheets do not include any Mastek outstanding equity related to the stock-based compensation programs. Majesco also maintains its own stock-based compensation plans as well. The consolidated Balance Sheets include Majesco outstanding equity related to the stock-based compensation programs. Historically, Mastek has been providing the Group with financing, cash management and other treasury services. Most of the inter-company payable and receivable has been assumed to be settled, except in case of non-availability of cash at the quarter end in a specific entity. The Group’s acquisition costs for the insurance related businesses of Mastek under the Reorganization has been reflected under ‘Accrued expenses and other liabilities — Related Parties’ and ‘Other liabilities — Related Parties’ in the consolidated Balance Sheet as of June 30, 2015 and March 31, 2015, respectively, until such costs have been actually settled. b. Significant Accounting Policies For a description of significant accounting policies, see Note 2, Summary of Significant Accounting Policies, of the Notes to the consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2015 filed with the SEC on June 19, 2015. There have been no material changes to our significant accounting policies since the filing of the Annual Report on Form 10-K. c. Principles of Consolidation Our consolidated financial statements include the accounts of Majesco and its wholly owned subsidiaries, Cover-All Systems, Inc., Majesco Canada Ltd., Majesco Software and Solutions Inc., Majesco Sdn. Bhd., Majesco UK Limited, Majesco (Thailand) Co., Ltd. and Majesco Software and Solutions India Private Limited, as of June 30, 2015 and the period subsequent to the merger, June 27 – 30, 2015. All material intercompany balances and transactions have been eliminated in consolidation. d. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, cash equivalents and marketable securities, accounts receivable, income taxes, goodwill, and stock-based compensation. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Jun. 30, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | 3. RECENT ACCOUNTING PRONOUNCEMENTS Recently Issued Accounting Standards In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. The amendments in this update provide clarification regarding the release of a cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets within a foreign entity. The guidance became effective for annual reporting periods beginning after December 15, 2013, and interim periods within those annual periods for public companies and will be effective for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods for private companies. The Group’s current accounting policies comply with this guidance. Accordingly, the Group does not expect the amendment will have a material impact to its consolidated Financial Statements. In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The amendments in this update provide guidance on the presentation of unrecognized tax benefits and will better reflect the manner in which an entity would settle, at the reporting date, any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist. The guidance became effective for annual reporting periods beginning after December 15, 2013, and interim periods within those annual periods for public companies and will be effective for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods for private companies. The guidance will be applied prospectively for the year ended March 31, 2016 and interim periods of this year. The Group does not expect the amendment will have a material impact to its consolidated Financial Statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (ASC 606), which, when effective, will supersede the guidance in former ASC 605, Revenue Recognition. The new guidance requires entities to recognize revenue based on the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance is effective for annual periods beginning after December 15, 2016 and interim periods within that year for public companies and effective for annual reporting periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018 for private companies. Early adoption is not permitted. The Group will adopt this standard for the year ended March 31, 2019 and interim periods of the year ended March 31, 2020. On July 9, 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for the interim and annual reporting periods. The Group is currently evaluating the impact of this standard on its consolidated Financial Statements. In February 2015, the FASB issued ASU No. 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis", which makes changes to both the variable interest model and the voting model. These changes will require re-evaluation of certain entities for consolidation and will require us to revise our documentation regarding the consolidation or deconsolidation of such entities. ASU No. 2015-02 is effective for reporting periods after December 15, 2015 and interim periods within those fiscal years. We are currently evaluating the effect that this ASU will have on the Group’s consolidated Financial Statements and related disclosures. In April 2015, the FASB issued ASU No. 2015-06, “Earnings Per Share (Topic 260): Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions (a consensus of the FASB Emerging Issues Task Force),” which applies to master limited partnerships that receive net assets through a dropdown transaction. ASU 2015-06 specifies that for purposes of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method also are required. ASU 2015-06 is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years and will be applied retrospectively. Earlier application is permitted. We are currently evaluating the effect that this ASU will have on the Group’s consolidated Financial Statements and related disclosures. In April 2015, the Financial Accounting Standards Board (the “FASB”) issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs Emerging growth company The Group is an “emerging growth company” under the federal securities laws and is subject to reduced public company reporting requirements. In addition, Section 107 of the 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 of 1933, as amended (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. The Group has taken the 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 accounting standards. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 4. 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 their 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. 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 June 30, 2015 and March 31, 2015: As of June 30, 2015 March 31, 2015 Assets Level 2 Derivative financial instruments (included in the following line items in the Condensed Combined balance sheet) Other assets $ 30 $ 28 Other liabilities (15 ) (15 ) Prepaid expenses and other current assets 331 545 Accrued expenses and other liabilities (22 ) (13 ) $ 324 $ 545 Level 3 Contingent consideration Other liabilities $ (1,053 ) $ (989 ) Accrued expenses and other liabilities (766 ) (723 ) $ (1,819 ) $ (1,712 ) Total $ ( 1,495 ) $ (1,167 ) The following table presents the change in level 3 instruments: As of June 30, March 31, 2015 Opening balance $ (1,712 ) $ (628 ) Additions - (1,610 ) Total (Losses)/gains recognized in Statement of Operations (107 ) (526 ) Settlements - - Closing balance $ (1,819 ) $ (1,712 ) Contingent consideration pertaining to the acquisition of the consulting business of Agile Technologies, LLC, a New Jersey limited liability company (“Agile”) as of June 30, 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 our probability assessments of expected future cash flows related to our 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. The amount of total gains/(losses) included in Statement of Operations that is attributable to change in fair value of contingent consideration arising from the acquisition of the consulting business of Agile were $(107) and $(101) for the quarter ended June 30, 2015 and the year ended March 31, 2015 respectively. 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 reporting date and the forward rate on the original transaction, multiplied by the transaction’s notional amount (with currency matching). |
CAPITAL LEASE OBLIGATIONS
CAPITAL LEASE OBLIGATIONS | 3 Months Ended |
Jun. 30, 2015 | |
Leases [Abstract] | |
CAPITAL LEASE OBLIGATIONS | 5. 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 $105 and $74 and related accumulated depreciation recorded under capital leases are $44 and $29, respectively as of June 30, 2015 and March 31, 2015. 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 respects of assets held under capital leases was $5 and $5 for the quarter ended June 30, 2015 and June 30, 2014, respectively. The following is a schedule of the future minimum lease payments under capital leases, together with the present value of the net minimum lease payments as of June 30, 2015. Year ended Amount 2016 $ 118 2017 149 2018 94 2019 - 2020 - Total minimum lease payments $ 361 Less: Interest portion 25 Present value of net minimum capital leases payments $ 336 |
BORROWINGS
BORROWINGS | 3 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
BORROWINGS | 6. BORROWINGS Bank borrowing The Group borrowed $3,000 in February 2015 to refinance the upfront cash payment made by Majesco for its acquisition of the consulting business of Agile. The loan is expected to be repaid over a period of 3 years. The loan is payable over four installments on August 2, 2016, February 2, 2017, August 2, 2017 and January 29, 2018 in amounts of $375, $375, $375 and $1,875, resepectively. The loan bears interest at LIBOR + 2.75% and guarantees fees of .95% of the principal amount annually. The interest rate as of June 30, 2015 was 3.15%. The interest is payable half yearly at the end of the half year except for the first installment which is deposited in advance. The loan has a roll over option at the end of its term subject to renewal of stand by letters of credit and re-negotiation of the interest rate. The bank has the right to change the margin over LIBOR if in its reasonable opinion it perceives a change in risk associated with the facility and/or there is a breach of the agreement. The aggregate amounts of payments of term loan year on year are as follows: 2015-16 2016-17 2017-18 Total Maturities of Debt — 750 2,250 3,000 Line of Credit On November 18, 2014, the Group entered into a secured revolving working capital line of credit facility under which the maximum borrowing limit is $5,000. Interest rate on the credit facility is three-month LIBOR plus 350 basis points. The credit facility is guaranteed by Mastek, subject to the terms and conditions set forth in the guarantee. The credit facility matures on November 11, 2015. As of June 30, 2015 and March 31, 2015, the Group had $5,000 and $1,470 of borrowings outstanding under this credit facility respectively. PCFC Facility Further, on June 30, 2015, the Group entered into a secured Pre Shipment in Foreign Currency and Past Shipment in Foreign Currency (“PCFC”) facility under which the Group may request 3 months pre-export advances and advances against export collection bills. The maximum borrowing limit is $5,656. The interest rate on this PCFC facility is determined at the time of each advance. This PCFC facility has a first pari passu charge over the current assets of Majesco Software and Solutions India Pvt. Ltd. As of June 30, 2015, the Group had $3,501 of borrowings outstanding under this PCFC facility. Those borrowings bear interest at LIBOR + 150 basis points and are due within 90 days. This PCFC facility is available for 12 months. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | 7. DERIVATIVE FINANCIAL INSTRUMENTS The following table provides information of fair values of derivative financial instruments: Asset Liability Noncurrent* Current* Noncurrent* Current* As of June 30, 2015 Designated as hedging instruments under Cash Flow Hedges Foreign exchange forward contracts $ 30 $ 331 $ 15 $ 22 Total $ 30 $ 331 $ 15 $ 22 As of March 31, 2015 Designated as hedging instruments under Cash Flow Hedges Foreign exchange forward contracts $ 28 $ 545 $ 13 $ 15 $ 28 $ 545 $ 13 $ 15 * The noncurrent and current portions of derivative assets are included in ‘Other assets’ and ‘Prepaid expenses and other current assets’, respectively and the noncurrent and current portions of derivative liabilities are included in ‘Other liabilities’ and ‘Accrued expenses and other liabilities’, respectively in the consolidated 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 of the Group which are approved by its Board of Directors. 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 principal amounts of the Group’s foreign exchange forward contracts (sell) outstanding as of June 30, 2015 amounted to $22,480 and as of March 31, 2015 amounted to $22,980, respectively. The outstanding forward contracts as of June 30, 2015 mature between 1 month to 23 months. As of June 30, 2015, the Group estimates that $210, 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 our 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 Accumulated Other Comprehensive Income “AOCI” of derivative instruments designated as cash flow hedges: DERIVATIVE FINANCIAL INSTRUMENTS continued 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 June 30, 2015 Foreign exchange forward contracts $ (6 ) $ 215 Total $ (6 ) $ 215 For the year ended June 30, 2014 Foreign exchange forward contracts $ 360 $ (199 ) Total $ 360 $ (199 ) |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 3 Months Ended |
Jun. 30, 2015 | |
Accumulated Other Comprehensive Income [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | 8. ACCUMULATED OTHER COMPREHENSIVE INCOME Changes in accumulated other comprehensive income by component was as follows: Quarter ended June 30, 2015 Quarter ended June 30, 2014 Before tax Tax effect Net of Tax Before tax Tax effect Net of Tax Other comprehensive income Foreign currency translation adjustments Opening balance $ 1,883 $ - $ 1,883 $ 2,209 $ — $ 2,209 Change in foreign currency translation adjustments (752 ) - (752 ) 57 — 57 Closing balance $ 1,131 $ - $ 1,131 $ 2,266 $ — $ 2,266 Unrealized gains/(losses) on cash flow hedges Opening balance $ 545 $ (186 ) $ 360 $ 455 $ (155 ) $ 300 Unrealized gains/(losses) on cash flow hedges (6 ) 2 (4 ) 360 (122 ) 237 Reclassified to Revenue (215 ) 73 (142 ) 199 (68 ) 131 Net change $ (221 ) $ 75 $ (146 ) $ 559 $ (190 ) $ 368 Closing balance $ 324 $ (111 ) $ 214 $ 1014 $ (345 ) $ 668 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 9. INCOME TAXES The Group recognized income tax provision of $100 for the quarter ended June 30, 2015 and recognised income tax benefit of $1,146 for the quarter ended June 30, 2014. The change is mainly on account of the creation of a deferred tax asset on the accumulated carry forward losses amounting to $1,373 in the quarter ended June 30, 2014. 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. During the three months ended June 30, 2015, the change in unrecognized tax benefits from the beginning of the period was NIL. Accordingly, as of June 30, 2015, the Group had unrecognized tax benefits of $310 that, if recognized, would affect the Group’s effective tax rate. The effective tax rate of 56% for the quarter ended June 30, 2015 differs from the statutory US federal income tax rate of 39.3% mainly due to stock based compensation, the impact of different tax jurisdictions, net tax credits on R&D and the valuation allowance. |
EMPLOYEE STOCK OPTION PLAN
EMPLOYEE STOCK OPTION PLAN | 3 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EMPLOYEE STOCK OPTION PLAN | 10. EMPLOYEE STOCK OPTION PLAN Majesco 2015 Equity Incentive Plan In the three months ended June 30, 2015 and June 30, 2014, we recognized $54 and $26, respectively, of stock-based compensation expense in our consolidated Financial Statements. In June 2015, the Company 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 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, securities or debentures convertible into common stock, 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 June 30, 2015, an aggregate of 1,926,015 shares were available for grant under the 2015 Plan. The Company 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 the Company’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. - The Company does not anticipate issuance of dividends during the expected term. 2015 Expected volatility 41%–50 % Weighted-average volatility 41 % Expected dividends 0 % Expected term (in years) 3-5 Risk-free interest rate 0.46 % As of June 30, 2015, there was $3,715 A summary of the changes in outstanding common stock options for all outstanding plans is as follows: Shares Exercise Price Per Share Weighted-Average Remaining Contractual Life Weighted-Average Exercise Price Balance, June 30, 2015 1,919,721 $ 4.92 – 7.72 9.14 years $ 5.15 Of the stock options outstanding, an aggregate of 165,554 are currently exercisable. 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 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 Financial Accounting Standards Board (“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 shared-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. Warrants As of June 30, 2015, there were warrants to purchase 309,064 shares of common stock outstanding. A summary of the changes in outstanding warrants is as follows: Outstanding and Exercisable Warrants Exercise Price Per Warrant Weighted-Average Remaining Contractual Life Weighted-Average Exercise Price Balance, June 30, 2015 309,064 $ 6.84 1.2 $ 6.84 Majesco Limited Equity Incentives In addition to the above, certain employees of the Group participate in Majesco Limited’s (parent of Majesco) employee stock option plan. This plan is similar to the ESOP plan of Mastek Limited, the demerger from which formed Majesco Limited. Under this plan, Majesco Limited grants options to employees of Majesco Limited and its subsidiaries, including employees of the Group in India, which are subject to service conditions. Options issued under the plan vest in a graded manner over a maximum period of 4 years and expire within 7 years from the date of vesting. As of June 30, 2015, there was $446 of total unrecognized compensation cost related to non-vested share-based compensation arrangements previously granted by Majesco Limited. That cost is expected to be recognized over a weighted-average period of 4 years. Majesco Limited calculated the fair value of each option grant on the date of grant using the Black-Scholes pricing method with the following assumptions: 2015 2014 Expected volatility 45%-50 % 45%-50 % Weighted-average volatility 47.77 % 48.94 % Expected dividends 2.56 % 2.91 % Expected term (in years) 6 Years 6 Years Risk-free interest rate 8.70 % 7.90 % The summary of outstanding options of Majesco Limited as of June 30, 2015 is as follows: Outstanding and Exercisable Exercise Price Per Share Weighted-Average Remaining Contractual Life Weighted-Average Exercise Price Balance, June 30, 2015 1,261,799 $0.1-$3 9.00 1.45 57,161 $3.1-$6 3.66 3.20 Of the stock options of Majesco Limited outstanding, an aggregate of 607,650 are currently exercisable. Majesco Performance Bonus Plan Majesco established the Majesco Performance Bonus Plan (the “Performance Bonus Plan”). The Performance Bonus Plan is administered by the Compensation Committee. The purpose of the Performance Bonus Plan is to benefit and advance the interests of the company, by rewarding selected employees of the company and its affiliates for their contributions to the company’s financial success and thereby motivate them to continue to make such contributions in the future by granting performance-based awards that are fully tax deductible to the company. 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 Code. If a plan is qualified under Section 423, employees who participate in the plan enjoy certain tax advantages. The ESPP allows employees to purchase shares of our 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 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 employee to remain in our employ. The ESPP provides employees with the right to purchase shares of common stock through payroll deductions. The total of number shares available for purchase under the ESPP is 2,000,000. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 11. EARNINGS PER SHARE The basic and diluted earnings/(loss) per share were as follows: Quarter ended June 30, 2015 Quarter ended June 30, 2014 Net income/(Loss) $ 82 $ (862 ) Basic weighted average outstanding 30,836,171 30,575,000 Adjustment for dilutive potential ordinary shares Options under Majesco 2015 Equity Plan 115,270 Dilutive weighted average outstanding 30,951,441 30,575,000 Earnings per share Basic $ 0.00 $ (0.03 ) Diluted 0.00 (0.03 ) Basic earnings per share amounts are calculated by dividing net income for the year attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the quarter after considering he additional shares issued by Majesco to the shareholders of Cover-All. Diluted earnings per share amounts are calculated by dividing the net income attributable to ordinary shareholders by the sum of the weighted average number of ordinary shares outstanding during the quarter plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. The calculation of diluted earnings per share for the quarter ended June 30, 2015 excluded 2,142,681 shares and options granted to employees, as their inclusion would have been antidilutive. |
RELATED PARTIES TRANSACTIONS
RELATED PARTIES TRANSACTIONS | 3 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES TRANSACTIONS | 12. RELATED PARTIES TRANSACTIONS The following tables summarize the liabilities related parties: As of June 30, 2015 As of March 31, 2015 Reorganization consideration payable to Majesco Ltd for MSSIPL $ 3,457 $ 3,520 $ 3,457 $ 3,520 On July 1, 2015 the Company paid the $3,457 of reorganization consideration payable to Majesco LTD at June 30, 2015 in exchange for the Majesco Software and Solutions India Private Limited (“MSSIPL”) business. |
STOCKHOLDERS EQUITY
STOCKHOLDERS EQUITY | 3 Months Ended |
Jun. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS EQUITY | 13. STOCKHOLDERS EQUITY In June 2015, the Company’s amended and restated certificate of incorporation allows it to issue 50,000,000 shares of preferred stock. The preferred stock may be issued in one or more series with such rights, preferences and privilieges and restrictions as the board of directors of Majesco may determine from time to time. Presently, Majesco does not have plans to issue any shares of Majesco preferred stock. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 14. 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”) is its 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. A majority of the Group’s principal operations and decision-making functions are located in the United States. The following table sets forth revenues by country based on the billing address of the customer: Quarter ended June 30, 2015 Quarter ended June 30, 2014 USA $ 19,183 $ 12,313 UK 1,964 1,555 Canada 866 1,343 Malaysia 1,150 1,188 Thailand - 260 Others - 223 $ 23,163 $ 16,882 The following table sets forth the Group’s property and equipment, net by geographic region: As of June 30, 2015, As of March 31, 2015 USA $ 890 $ 474 India 892 698 Canada 1 1 UK 2 — Malaysia — — $ 1,785 $ 1,173 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 quarter ended June 30, 2015 and one customer for the quarter ended June 30, 2014 that accounted for 10% or more of total revenue. The Group had no customer as of June 30, 2015 and one customer as of June 30, 2014 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: Quarter ended June 30, 2015 Quarter ended June 30, 2014 Amount % of combined revenue Amount % of combined revenue Customer A Revenue $ 1,640 7 % $ 2,290 14 % Accounts receivables and unbilled accounts receivable $ 40 — $ 6,244 47 % Customer B Revenue $ 1,366 6 % $ 1,044 6 % Accounts receivables and unbilled accounts receivable $ 1,039 5 % $ 348 3 % |
COMMITMENTS
COMMITMENTS | 3 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | 15. COMMITMENTS Capital Commitments The Group had outstanding contractual commitments of $10 and $81 as of June 30, 2015 and March 31, 2015, 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 $418 and $256 for the quarter ended June 30, 2015 and June 30, 2014, respectively. The schedule for future minimum rental payments over the lease term in respect of operating leases is set out below. Quarter ended June 30 Amount 2016 $ 1,627 2017 1,976 2018 1,800 2019 1,820 2020 1,861 Beyond 5 years 310 Total minimum lease payments $ 9,394 Facility Leases In connection with the Majesco Reorganization, MSSIPL entered into an operating lease for its operation facilities in Mahape, India, as lessee, with Majesco Limited, Majesco’s new publicly-traded parent company in India, as lessor. The approximate aggregate annual rent payable to Majesco Limited under this lease agreement is expected to be $1,323. The lease is effective June 1, 2015. Majesco Software and Solutions India also entered into a lease for facilities for its operations in Pune, India, with Mastek as lessor. The approximate aggregate annual rent payable to Mastek under this lease agreement is expected to be $265. The lease is effective June 1, 2015. |
ACQUISITION
ACQUISITION | 3 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
ACQUISITION | 16. ACQUISITION 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 its 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 transferred to acquire Cover-All and the amounts of identified assets acquired and liabilities assumed at the acquisition date: Fair value of consideration transferred Common stock $ 73 Additional paid-in capital 29,877 Total consideration $ 29,950 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, Cover-All in the aggregate represents 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 is increased by $73 and additional paid in capital is increased by $29,877. Recognized amount of identifiable assets acquired and liabilities assumed Amount Cash $ 2,990 Accounts receivable 1,590 Prepaid expenses and other current assets 630 Property, plant and equipment 450 Other assets 150 Customer contracts 2,410 Customer relationships 4,460 Technology 3,110 Accounts payable (1,130 ) Accrued expenses (380 ) Deferred revenue (2,510 ) Capital lease liability (290 ) Total fair value of assets acquired 11,480 Fair value of consideration paid 29,950 Goodwill $ 18,470 The goodwill of $18,470 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. The changes in the varying amount of goodwill are as follows: Changes in carrying amount of the goodwill As of June 30, 2015 As of March 31, 2015 Opening value $ 14,196 11,676 Addition of goodwill related to acquisition 18,470 2,520 Closing value $ 32,666 14,196 No impairment loss has been recognised on goodwill. Details of identifiable intangible assets acquired are as follows: Weighted average amortisation period (in years) Amount assigned Residual value Customer contracts 3 $ 2,410 - Customer relationships 8 4,460 - Technology 6 3,110 - Total 6 $ 9,980 - Revenues and earnings specific to the Cover-All business for the period June 26, 2015 to June 30, 2015 were $233 and $47, respectively. Pro-Forma Financial Information (Unaudited): The following unaudited pro-forma financial information is presented to illustrate the estimated effect of the Cover-All merger, the related financing of funds and tax effects from these transactions. The unaudited pro-forma information for the periods set forth below gives effect to 2015 and 2014 transactions as if they had occurred as of April 1, 2014. Majesco has a fiscal year-end of March 31 st st The unaudited pro-forma financial information is presented for illustrative purposes only, and is not necessarily indicative of the financial condition or results of operations of future periods or the financial condition or results of operations that actually would have been realized had the entities been combined during the periods presented. The following unaudited pro-forma summary presents consolidated information of Majesco as if the business combination had occurred on April 1, 2014: Unaudited Pro forma quarter ended June 30, 2015 Unaudited Pro forma quarter ended June 30, 2014 Revenue $ 28,219 $ 22,090 Earnings $ 283 $ (517 ) There are no material non-recurring pro forma adjustments directly attributable to the merger included in the reported pro forma revenue and earnings. These pro-forma amounts have been calculated after applying Majesco’s accounting policies and adjusting the results of Cover-All to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment and intangible assets had been applied from April 1, 2014 with consequential tax effects. Short-Term Debt On September 11, 2012, Cover-All entered into a Loan and Security Agreement (“Loan Agreement”) by and among Imperium Commercial Finance Master Fund, LP, a Delaware limited partnership (“Imperium”), as lender, Cover-All Systems, Inc., a wholly-owned subsidiary of Cover-All (the “Subsidiary”), as borrower, and Cover-All as guarantor. The Loan Agreement provided for a three-year term loan to the Subsidiary of $2,000,000 and a three-year revolving credit line to the Subsidiary of up to $250,000, evidenced by a Revolving Credit Note in favor of Imperium (together with the Term Note, the “Imperium Notes”). Prior to the merger with Majesco, Cover-All paid in full the balance of the Imperium Notes. In connection with the Loan Agreement, Cover-All issued to Imperium a five-year warrant (the “Stock Purchase Warrant”) to purchase 1,400,000 shares of Cover-All’s common stock at an exercise price of $1.48 per share. Cover-All also issued five-year warrants (the “Monarch Warrants”) to purchase 42,000 shares, in the aggregate, of Cover-All’s common stock at an exercise price of $1.48 per share, to Monarch Capital Group, LLC (“Monarch”), which acted as the Company’s financial adviser in connection with the loan transaction, and an officer of Monarch. The Stock Purchase Warrants became exercisable on the date of the merger with Majesco. These issued and outstanding warrants to purchase shares of Cover-All common stock were not exercised or cancelled prior to the merger and were assumed by Majesco in accordance with their terms on the same terms and conditions as were applicable to such warrants immediately prior to the merger, with the number of shares subject to, and the exercise price applicable to, such warrants being appropriately adjusted based on the exchange ratio of 0.21641. |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | a. Basis of Presentation The accompanying unaudited consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of SEC Regulation S-X. The March 31, 2015 consolidated balance sheet was derived from our audited combined financial statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2015, as filed with the SEC, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting only of normal recurring adjustments except as otherwise noted, considered necessary for a fair statement of results of operations and financial position have been included. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2015. In connection with the merger with Cover-All, the Group’s Board of Directors and stockholders approved a one for six reverse stock split of the Group’s common stock. The reverse stock split became effective June 22, 2015. All share and per share amounts in the consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid in capital. The consolidated financial statements have been prepared on a ‘carve-out’ basis (assuming the Reorganization had been effected as of July 1, 2012) and are derived from the historical consolidated financial statements and accounting records of Mastek. All material inter-company balances and transactions have been eliminated on combination. The consolidated financial statements reflect the Group’s financial position, results of operations and cash flows in conformity with U.S. GAAP. The consolidated Balance Sheet, consolidated Statement of Operations and consolidated 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. These consolidated financial statements include assets and liabilities that are specifically identifiable or have been allocated to the Group. Costs directly related to the Group have been included in the accompanying financial statements. The Group receives service and support functions from Mastek. The costs associated with these support functions have been allocated relative to Mastek in its entirety, which is considered to be the most meaningful under the circumstances. The costs were allocated to the Group using various allocation inputs, such as head count, services rendered, and assets assigned to the Group. These allocated costs are primarily related to corporate administrative expenses, employee related costs, including gratuity and other benefits, and corporate and shared employees. The Group considers the expense allocation methodology and results to be reasonable for all periods presented. These allocations may not be indicative of the actual expenses the Group may have incurred as a separate independent public company during the periods presented nor are these costs indicative of what the Group will incur in the future. Mastek maintains benefit and stock-based compensation programs at the parent company level. To the extent that Group employees participate in these programs, the Group was allocated a portion of the associated expenses and estimated net benefit plan obligation. However, the consolidated Balance Sheets do not include any Mastek outstanding equity related to the stock-based compensation programs. Majesco also maintains its own stock-based compensation plans as well. The consolidated Balance Sheets include Majesco outstanding equity related to the stock-based compensation programs. Historically, Mastek has been providing the Group with financing, cash management and other treasury services. Most of the inter-company payable and receivable has been assumed to be settled, except in case of non-availability of cash at the quarter end in a specific entity. The Group’s acquisition costs for the insurance related businesses of Mastek under the Reorganization has been reflected under ‘Accrued expenses and other liabilities — Related Parties’ and ‘Other liabilities — Related Parties’ in the consolidated Balance Sheet as of June 30, 2015 and March 31, 2015, respectively, until such costs have been actually settled. |
Principles of Consolidation | c. Principles of Consolidation Our consolidated financial statements include the accounts of Majesco and its wholly owned subsidiaries, Cover-All Systems, Inc., Majesco Canada Ltd., Majesco Software and Solutions Inc., Majesco Sdn. Bhd., Majesco UK Limited, Majesco (Thailand) Co., Ltd. and Majesco Software and Solutions India Private Limited, as of June 30, 2015 and the period subsequent to the merger, June 27 – 30, 2015. All material intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | d. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, cash equivalents and marketable securities, accounts receivable, income taxes, goodwill, and stock-based compensation. |
FAIR VALUE OF FINANCIAL INSTR24
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets measured at fair value | As of June 30, 2015 March 31, 2015 Assets Level 2 Derivative financial instruments (included in the following line items in the Condensed Combined balance sheet) Other assets $ 30 $ 28 Other liabilities (15 ) (15 ) Prepaid expenses and other current assets 331 545 Accrued expenses and other liabilities (22 ) (13 ) $ 324 $ 545 Level 3 Contingent consideration Other liabilities $ (1,053 ) $ (989 ) Accrued expenses and other liabilities (766 ) (723 ) $ (1,819 ) $ (1,712 ) Total $ ( 1,495 ) $ (1,167 ) |
Schedule of change in level 3 instruments | As of June 30, March 31, 2015 Opening balance $ (1,712 ) $ (628 ) Additions - (1,610 ) Total (Losses)/gains recognized in Statement of Operations (107 ) (526 ) Settlements - - Closing balance $ (1,819 ) $ (1,712 ) |
CAPITAL LEASE OBLIGATIONS (Tabl
CAPITAL LEASE OBLIGATIONS (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Leases [Abstract] | |
Schedule of future minimum lease payments under capital leases | Year ended Amount 2016 $ 118 2017 149 2018 94 2019 - 2020 - Total minimum lease payments $ 361 Less: Interest portion 25 Present value of net minimum capital leases payments $ 336 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of aggregate amounts of payments of term loan year on year | 2015-16 2016-17 2017-18 Total Maturities of Debt — 750 2,250 3,000 |
DERIVATIVE FINANCIAL INSTRUME27
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair values of derivative financial instruments | Asset Liability Noncurrent* Current* Noncurrent* Current* As of June 30, 2015 Designated as hedging instruments under Cash Flow Hedges Foreign exchange forward contracts $ 30 $ 331 $ 15 $ 22 Total $ 30 $ 331 $ 15 $ 22 As of March 31, 2015 Designated as hedging instruments under Cash Flow Hedges Foreign exchange forward contracts $ 28 $ 545 $ 13 $ 15 $ 28 $ 545 $ 13 $ 15 * The noncurrent and current portions of derivative assets are included in ‘Other assets’ and ‘Prepaid expenses and other current assets’, respectively and the noncurrent and current portions of derivative liabilities are included in ‘Other liabilities’ and ‘Accrued expenses and other liabilities’, respectively in the consolidated Balance Sheet. |
Schedule of pre-tax gains/(losses) recognized in and reclassified from Accumulated Other Comprehensive Income | 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 June 30, 2015 Foreign exchange forward contracts $ (6 ) $ 215 Total $ (6 ) $ 215 For the year ended June 30, 2014 Foreign exchange forward contracts $ 360 $ (199 ) Total $ 360 $ (199 ) |
ACCUMULATED OTHER COMPREHENSI28
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Accumulated Other Comprehensive Income [Abstract] | |
Schedule of changes in accumulated other comprehensive income by component | Quarter ended June 30, 2015 Quarter ended June 30, 2014 Before tax Tax effect Net of Tax Before tax Tax effect Net of Tax Other comprehensive income Foreign currency translation adjustments Opening balance $ 1,883 $ - $ 1,883 $ 2,209 $ — $ 2,209 Change in foreign currency translation adjustments (752 ) - (752 ) 57 — 57 Closing balance $ 1,131 $ - $ 1,131 $ 2,266 $ — $ 2,266 Unrealized gains/(losses) on cash flow hedges Opening balance $ 545 $ (186 ) $ 360 $ 455 $ (155 ) $ 300 Unrealized gains/(losses) on cash flow hedges (6 ) 2 (4 ) 360 (122 ) 237 Reclassified to Revenue (215 ) 73 (142 ) 199 (68 ) 131 Net change $ (221 ) $ 75 $ (146 ) $ 559 $ (190 ) $ 368 Closing balance $ 324 $ (111 ) $ 214 $ 1014 $ (345 ) $ 668 |
EMPLOYEE STOCK OPTION PLAN (Tab
EMPLOYEE STOCK OPTION PLAN (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of summary of changes in outstanding warrants | Outstanding and Exercisable Warrants Exercise Price Per Warrant Weighted-Average Remaining Contractual Life Weighted-Average Exercise Price Balance, June 30, 2015 309,064 $ 6.84 1.2 $ 6.84 |
Majesco 2015 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of share based awards fair value assumptions | 2015 Expected volatility 41%–50 % Weighted-average volatility 41 % Expected dividends 0 % Expected term (in years) 3-5 Risk-free interest rate 0.46 % |
Schedule of changes in outstanding common stock options | Shares Exercise Price Per Share Weighted-Average Remaining Contractual Life Weighted-Average Exercise Price Balance, June 30, 2015 1,919,721 $ 4.92 – 7.72 9.14 years $ 5.15 |
Majesco Limited Equity Incentives | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of share based awards fair value assumptions | 2015 2014 Expected volatility 45%-50 % 45%-50 % Weighted-average volatility 47.77 % 48.94 % Expected dividends 2.56 % 2.91 % Expected term (in years) 6 Years 6 Years Risk-free interest rate 8.70 % 7.90 % |
Schedule of changes in outstanding common stock options | Outstanding and Exercisable Exercise Price Per Share Weighted-Average Remaining Contractual Life Weighted-Average Exercise Price Balance, June 30, 2015 1,261,799 $0.1-$3 9.00 1.45 57,161 $3.1-$6 3.66 3.20 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings/(loss) per share | Quarter ended June 30, 2015 Quarter ended June 30, 2014 Net income/(Loss) $ 82 $ (862 ) Basic weighted average outstanding 30,836,171 30,575,000 Adjustment for dilutive potential ordinary shares Options under Majesco 2015 Equity Plan 115,270 Dilutive weighted average outstanding 30,951,441 30,575,000 Earnings per share Basic $ 0.00 $ (0.03 ) Diluted 0.00 (0.03 ) |
RELATED PARTIES TRANSACTIONS (T
RELATED PARTIES TRANSACTIONS (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Schedule of summary of liabilities with related parties | As of June 30, 2015 As of March 31, 2015 Reorganization consideration payable to Majesco Ltd for MSSIPL $ 3,457 $ 3,520 $ 3,457 $ 3,520 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of revenues by country based on billing address | Quarter ended June 30, 2015 Quarter ended June 30, 2014 USA $ 19,183 $ 12,313 UK 1,964 1,555 Canada 866 1,343 Malaysia 1,150 1,188 Thailand - 260 Others - 223 $ 23,163 $ 16,882 |
Schedule of property and equipment net by geographic region | As of June 30, 2015, As of March 31, 2015 USA $ 890 $ 474 India 892 698 Canada 1 1 UK 2 — Malaysia — — $ 1,785 $ 1,173 |
Schedule of information about major customers | Quarter ended June 30, 2015 Quarter ended June 30, 2014 Amount % of combined revenue Amount % of combined revenue Customer A Revenue $ 1,640 7 % $ 2,290 14 % Accounts receivables and unbilled accounts receivable $ 40 — $ 6,244 47 % Customer B Revenue $ 1,366 6 % $ 1,044 6 % Accounts receivables and unbilled accounts receivable $ 1,039 5 % $ 348 3 % |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments over lease term in respect of operating leases | Quarter ended June 30 Amount 2016 $ 1,627 2017 1,976 2018 1,800 2019 1,820 2020 1,861 Beyond 5 years 310 Total minimum lease payments $ 9,394 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 3 Months Ended |
Jun. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of consideration transferred to acquire Cover-All | Fair value of consideration transferred Common stock $ 73 Additional paid-in capital 29,877 Total consideration $ 29,950 |
Schedule of recognized amount of identifiable assets acquired and liabilities assumed | Amount Cash $ 2,990 Accounts receivable 1,590 Prepaid expenses and other current assets 630 Property, plant and equipment 450 Other assets 150 Customer contracts 2,410 Customer relationships 4,460 Technology 3,110 Accounts payable (1,130 ) Accrued expenses (380 ) Deferred revenue (2,510 ) Capital lease liability (290 ) Total fair value of assets acquired 11,480 Fair value of consideration paid 29,950 Goodwill $ 18,470 |
Schedule of changes in carrying amount of goodwill | As of June 30, 2015 As of March 31, 2015 Opening value $ 14,196 11,676 Addition of goodwill related to acquisition 18,470 2,520 Closing value $ 32,666 14,196 |
Schedule of identifiable intangible assets acquired | Weighted average amortisation period (in years) Amount assigned Residual value Customer contracts 3 $ 2,410 - Customer relationships 8 4,460 - Technology 6 3,110 - Total 6 $ 9,980 - |
Summary of unaudited pro-forma consolidated information | Unaudited Pro forma quarter ended June 30, 2015 Unaudited Pro forma quarter ended June 30, 2014 Revenue $ 28,219 $ 22,090 Earnings $ 283 $ (517 ) |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details Textuals) | Dec. 14, 2014 | Jun. 30, 2015 |
Cover-All | Definitive merger agreement | ||
Description Of Business [Line Items] | ||
Percentage of stock-for-stock issue | 100.00% | |
Percentage of common stock shares issued by combined company | 16.50% | |
Mastek | ||
Description Of Business [Line Items] | ||
Ownership percent | 100.00% | |
Mastek | Majesco Limited | ||
Description Of Business [Line Items] | ||
Percentage of equity ownership interest transferred in demerger | 83.50% |
SUMMARY OF SIGNIFICANT ACCOUN36
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textuals) | 1 Months Ended |
Jun. 22, 2015 | |
Cover-All | Definitive merger agreement | |
Business Acquisition [Line Items] | |
Reverse stock split of Group's common stock | One for six reverse stock split |
FAIR VALUE OF FINANCIAL INSTR37
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 |
Derivative financial instruments (included in the following line items in the Condensed Combined balance sheet) | ||
Total | $ (1,495) | $ (1,167) |
Level 2 | ||
Derivative financial instruments (included in the following line items in the Condensed Combined balance sheet) | ||
Other assets | 30 | 28 |
Other liabilities | (15) | (15) |
Prepaid expenses and other current assets | 331 | 545 |
Accrued expenses and other liabilities | (22) | (13) |
Total | 324 | 545 |
Level 3 | ||
Contingent consideration | ||
Other liabilities | (766) | (723) |
Accrued expenses and other liabilities | (1,053) | (989) |
Total | $ (1,819) | $ (1,712) |
FAIR VALUE OF FINANCIAL INSTR38
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Mar. 31, 2015 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Opening balance | $ (1,712) | $ (628) |
Additions | (1,610) | |
Total (Losses)/gains recognized in Statement of Operations | $ (107) | $ (526) |
Settlements | ||
Closing balance | $ (1,819) | $ (1,712) |
FAIR VALUE OF FINANCIAL INSTR39
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details Textuals) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Mar. 31, 2015 | |
Agile | Agile Agreement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Change in fair value of contingent consideration | $ (107) | $ (101) |
CAPITAL LEASE OBLIGATIONS (Deta
CAPITAL LEASE OBLIGATIONS (Details) $ in Thousands | Jun. 30, 2015USD ($) |
Leases [Abstract] | |
2,016 | $ 118 |
2,017 | 149 |
2,018 | $ 94 |
2,019 | |
2,020 | |
Total minimum lease payments | $ 361 |
Less: Interest portion | 25 |
Present value of net minimum capital leases payments | $ 336 |
CAPITAL LEASE OBLIGATIONS (De41
CAPITAL LEASE OBLIGATIONS (Details Textuals) - USD ($) $ in Thousands | 3 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Mar. 31, 2015 | |
Leases [Abstract] | |||
Capital leases gross amounts | $ 105 | $ 74 | |
Accumulated depreciation under capital leases | 44 | $ 29 | |
Depreciation expenses | $ 5 | $ 5 |
BORROWINGS (Details)
BORROWINGS (Details) $ in Thousands | Jun. 30, 2015USD ($) |
Debt Disclosure [Abstract] | |
Maturities of Debt 2015-16 | |
Maturities of Debt 2016-17 | $ 750 |
Maturities of Debt 2017-18 | 2,250 |
Total | $ 3,000 |
BORROWINGS (Details Textuals)
BORROWINGS (Details Textuals) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Jun. 30, 2015USD ($) | Feb. 28, 2015USD ($) | Nov. 18, 2014USD ($) | Jun. 30, 2015USD ($)Installment | Mar. 31, 2015USD ($) | |
Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing limit | $ 5,000 | ||||
Borrowings outstanding | $ 5,000 | $ 5,000 | $ 1,470 | ||
Interest rate description | LIBOR plus 350 basis points | ||||
Bank borrowing | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing amount | $ 3,000 | ||||
Repayment term | 3 years | ||||
Number of loan installments | Installment | 4 | ||||
Loan payable installment on August 2, 2016 | $ 375 | ||||
Loan payable installment on February 2, 2017 | 375 | ||||
Loan payable installment on August 2, 2017 | 375 | ||||
Loan payable installment on January 29, 2018 | $ 1,875 | ||||
Interest rate description | LIBOR + 2.75 | ||||
Guarantee fees annual percentage | 0.95% | ||||
Interest rate | 3.15% | 3.15% | |||
PCFC Facility | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing limit | $ 5,656 | $ 5,656 | |||
Borrowings outstanding | $ 3,501 | $ 3,501 | |||
Interest rate description | LIBOR + 150 basis points |
DERIVATIVE FINANCIAL INSTRUME44
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - Designated as hedging instruments - Cash Flow Hedges - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 | |
Derivatives, Fair Value [Line Items] | |||
Asset Noncurrent | [1] | $ 30 | $ 28 |
Asset Current | [1] | 331 | 545 |
Liability Noncurrent | [1] | 15 | 13 |
Liability Current | [1] | 22 | 15 |
Foreign exchange forward contracts | |||
Derivatives, Fair Value [Line Items] | |||
Asset Noncurrent | [1] | 30 | 28 |
Asset Current | [1] | 331 | 545 |
Liability Noncurrent | [1] | 15 | 13 |
Liability Current | [1] | $ 22 | $ 15 |
[1] | The noncurrent and current portions of derivative assets are included in Other assets' and Prepaid expenses and other current assets', respectively and the noncurrent and current portions of derivative liabilities are included in Other liabilities' and Accrued expenses and other liabilities', respectively in the consolidated Balance Sheet. |
DERIVATIVE FINANCIAL INSTRUME45
DERIVATIVE FINANCIAL INSTRUMENTS (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Derivatives, Fair Value [Line Items] | ||
Amount of Gain/(Loss) recognized in AOCI (effective portion) | $ (6) | $ 360 |
Amount of gain/(Loss) reclassified from AOCI to Statement of Operations (Revenue) | 215 | (199) |
Foreign exchange forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Amount of Gain/(Loss) recognized in AOCI (effective portion) | (6) | 360 |
Amount of gain/(Loss) reclassified from AOCI to Statement of Operations (Revenue) | $ 215 | $ (199) |
DERIVATIVE FINANCIAL INSTRUME46
DERIVATIVE FINANCIAL INSTRUMENTS (Details Textuals) - Foreign exchange forward contracts - Designated as hedging instruments - Cash Flow Hedges - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Mar. 31, 2015 | |
Derivatives, Fair Value [Line Items] | ||
Principal amount | $ 22,480 | $ 22,980 |
Outstanding forward contracts mature between | 1 month | |
Outstanding forward contracts mature to | 23 months | |
Other comprehensive income (loss) expected to be reclassified, net of tax | $ 210 |
ACCUMULATED OTHER COMPREHENSI47
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Opening balance Net of Tax | $ 2,244 | |
Change in foreign currency translation adjustments Net of Tax | (752) | $ 57 |
Closing balance Net of Tax | 1,346 | |
Foreign currency translation adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Opening balance Before tax | 1,883 | 2,209 |
Change in foreign currency translation adjustments Before tax | (752) | 57 |
Closing balance Before tax | $ 1,131 | $ 2,266 |
Opening balance Tax effect | ||
Change in foreign currency translation adjustments Tax effect | ||
Closing balance Tax effect | ||
Opening balance Net of Tax | $ 1,883 | $ 2,209 |
Change in foreign currency translation adjustments Net of Tax | (752) | 57 |
Closing balance Net of Tax | 1,131 | 2,266 |
Unrealized gains/(losses) on cash flow hedges | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Opening balance Before tax | 545 | 455 |
Unrealized gains/(losses) on cash flow hedges Before tax | (6) | 360 |
Reclassified to Revenue Before tax | (215) | 199 |
Net change before tax | (221) | 559 |
Closing balance Before tax | 324 | 1,014 |
Opening balance Tax effect | (186) | (155) |
Unrealized gains/(losses) on cash flow hedges Tax effect | 2 | (122) |
Reclassified to Revenue Tax effect | 73 | (68) |
Net change Tax effect | 75 | (190) |
Closing balance Tax effect | (111) | (345) |
Opening balance Net of Tax | 360 | 300 |
Unrealized gains/(losses) on cash flow hedges Net of Tax | (4) | 237 |
Reclassified to Revenue Net of Tax | (142) | 131 |
Net change Net of Tax | (146) | 368 |
Closing balance Net of Tax | $ 214 | $ 668 |
INCOME TAXES (Details Textuals)
INCOME TAXES (Details Textuals) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||
Income tax provision (Benefit) | $ 100 | $ (1,146) |
Deferred tax asset on accumulated carry forward losses | $ 1,373 | |
Change in unrecognized tax benefits | ||
Unrecognized tax benefits | $ 310 | |
Effective tax rate | 56.00% | |
Statutory US federal income tax rate | 39.30% |
EMPLOYEE STOCK OPTION PLAN (Det
EMPLOYEE STOCK OPTION PLAN (Details) - 3 months ended Jun. 30, 2015 - Majesco 2015 Equity Incentive Plan | Total |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility, minimum | 41.00% |
Expected volatility, maximum | 50.00% |
Weighted-average volatility | 41.00% |
Expected dividends | 0.00% |
Risk-free interest rate | 0.46% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 3 years |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (in years) | 5 years |
EMPLOYEE STOCK OPTION PLAN (D50
EMPLOYEE STOCK OPTION PLAN (Details 1) - Jun. 30, 2015 - Stock options - Majesco 2015 Equity Incentive Plan - $ / shares | Total |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Balance Shares, June 30, 2015, | 1,919,721 |
Exercise Price Per Share, minimum | $ 4.92 |
Exercise Price Per Share, maximum | $ 7.72 |
Weighted-Average Remaining Contractual Life | 9 years 1 month 21 days |
Weighted-Average Exercise Price | $ 5.15 |
EMPLOYEE STOCK OPTION PLAN (D51
EMPLOYEE STOCK OPTION PLAN (Details 2) - Jun. 30, 2015 - $ / shares | Total |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Balance, June 30, 2015 Outstanding and Exercisable Warrants | 309,064 |
Warrant | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Balance, June 30, 2015 Outstanding and Exercisable Warrants | 309,064 |
Exercise Price Per Warrant | $ 6.84 |
Weighted-Average Remaining Contractual Life | 1 year 2 months 12 days |
Weighted-Average Exercise Price | $ 6.84 |
EMPLOYEE STOCK OPTION PLAN (D52
EMPLOYEE STOCK OPTION PLAN (Details 3) - Majesco Limited Equity Incentives - Majesco Limited - Stock options | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility, minimum | 45.00% | 45.00% |
Expected volatility, maximum | 50.00% | 50.00% |
Weighted-average volatility | 47.77% | 48.94% |
Expected dividends | 2.56% | 2.91% |
Expected term (in years) | 6 years | 6 years |
Risk-free interest rate | 8.70% | 7.90% |
EMPLOYEE STOCK OPTION PLAN (D53
EMPLOYEE STOCK OPTION PLAN (Details 4) - Majesco Limited Equity Incentives - $ / shares | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Balance Shares, June 30, 2015, | 57,161 | |
Exercise Price Per Share, minimum | $ 3.1 | |
Exercise Price Per Share, maximum | $ 6 | |
Weighted-Average Remaining Contractual Life | 3 years 7 months 28 days | |
Weighted-Average Exercise Price | $ 3.20 | |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Balance Shares, June 30, 2015, | 1,261,799 | |
Exercise Price Per Share, minimum | $ 0.1 | |
Exercise Price Per Share, maximum | $ 3 | |
Weighted-Average Remaining Contractual Life | 9 years | |
Weighted-Average Exercise Price | $ 1.45 |
EMPLOYEE STOCK OPTION PLAN (D54
EMPLOYEE STOCK OPTION PLAN (Details Textuals) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of warrants outstanding | 309,064 | |
Majesco 2015 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Sock based compensation expense | $ 54 | $ 26 |
Number of shares may be granted by Board of Directors | 3,877,263 | |
Number of shares available for grant | 1,926,015 | |
Fair value method used to measure share-based awards | Black-Scholes-Merton option-pricing model | |
Unrecognized compensation cost | $ 3,715 | |
Weighted-average period of unrecognized compensation cost | 4 years | |
Number of stock options outstanding and exercisable | 165,554 | |
Majesco Limited Equity Incentives | Majesco Limited | Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value method used to measure share-based awards | Black-Scholes pricing method | |
Maximum vesting period | 4 years | |
Expiration period | 7 years | |
Unrecognized compensation cost | $ 446 | |
Weighted-average period of unrecognized compensation cost | 4 years | |
Number of stock options outstanding and exercisable | 607,650 | |
Majesco Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant | 2,000,000 |
EARNINGS PER SHARE (Details 1)
EARNINGS PER SHARE (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Earnings Per Share [Abstract] | ||
Net income/(Loss) | $ 82 | $ (862) |
Basic weighted average outstanding equity shares (in shares) | 30,836,171 | 30,575,000 |
Adjustment for dilutive potential ordinary shares | ||
Options under Majesco 2015 Equity Plan (in shares) | 115,270 | |
Dilutive weighted average outstanding equity shares (in shares) | 30,951,441 | 30,575,000 |
Earnings per share | ||
Basic (in dollars per share) | $ 0 | $ (0.03) |
Diluted (in dollars per share) | $ 0 | $ (0.03) |
EARNINGS PER SHARE (Details Tex
EARNINGS PER SHARE (Details Textuals) | 3 Months Ended |
Jun. 30, 2015shares | |
Options | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of diluted earnings per share | 2,142,681 |
RELATED PARTIES TRANSACTIONS (D
RELATED PARTIES TRANSACTIONS (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 |
Related Party Transaction [Line Items] | ||
Reorganization consideration payable to Majesco Ltd for MSSIPL | $ 3,457 | $ 3,520 |
Majesco Ltd | ||
Related Party Transaction [Line Items] | ||
Reorganization consideration payable to Majesco Ltd for MSSIPL | $ 3,457 | $ 3,520 |
RELATED PARTIES TRANSACTIONS 58
RELATED PARTIES TRANSACTIONS (Details Textuals) $ in Thousands | 1 Months Ended |
Jul. 01, 2015USD ($) | |
Majesco Ltd | Subsequent event | Majesco Software and Solutions India Private Limited | |
Related Party Transaction [Line Items] | |
Payment of reorganization consideration | $ 3,457 |
STOCKHOLDERS EQUITY (Details)
STOCKHOLDERS EQUITY (Details) - shares | Jun. 30, 2015 | Mar. 31, 2015 |
Class of Stock [Line Items] | ||
Preferred stock, shares designated | 50,000,000 | 50,000,000 |
Series A Participating Preferred Stock | ||
Class of Stock [Line Items] | ||
Preferred stock, shares designated | 50,000,000 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 23,163 | $ 16,882 |
USA | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 19,183 | 12,313 |
UK | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 1,964 | 1,555 |
Canada | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 866 | 1,343 |
Malaysia | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 1,150 | 1,188 |
Thailand | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 260 | |
Others | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 223 |
SEGMENT INFORMATION (Details 1)
SEGMENT INFORMATION (Details 1) - USD ($) $ in Thousands | Jun. 30, 2015 | Mar. 31, 2015 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 1,785 | $ 1,173 |
USA | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | 890 | 474 |
India | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | 892 | 698 |
Canada | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | 1 | $ 1 |
UK | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 2 | |
Malaysia | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net |
SEGMENT INFORMATION (Details 2)
SEGMENT INFORMATION (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Revenue, Major Customer [Line Items] | ||
Revenues | $ 23,163 | $ 16,882 |
Customer A | Revenue | ||
Revenue, Major Customer [Line Items] | ||
Revenues | $ 1,640 | $ 2,290 |
Percentage of combined revenue | 7.00% | 14.00% |
Customer A | Accounts receivables and unbilled accounts receivable | ||
Revenue, Major Customer [Line Items] | ||
Accounts receivables and unbilled accounts receivable | $ 40 | $ 6,244 |
Percentage of combined revenue | 47.00% | |
Customer B | Revenue | ||
Revenue, Major Customer [Line Items] | ||
Revenues | $ 1,366 | $ 1,044 |
Percentage of combined revenue | 6.00% | 6.00% |
Customer B | Accounts receivables and unbilled accounts receivable | ||
Revenue, Major Customer [Line Items] | ||
Accounts receivables and unbilled accounts receivable | $ 1,039 | $ 348 |
Percentage of combined revenue | 5.00% | 3.00% |
SEGMENT INFORMATION (Details Te
SEGMENT INFORMATION (Details Textuals) | 3 Months Ended | |
Jun. 30, 2015Segment | Jun. 30, 2014Customer | |
Segment Reporting [Abstract] | ||
Number of reportable segments | Segment | 1 | |
Number of customer with 10% or more of total revenue | 1 | |
Number of customer with 10% or more of total accounts receivables | 1 | |
Concentration risk benchmark description | 10% or more | 10% or more |
COMMITMENTS (Details)
COMMITMENTS (Details) $ in Thousands | Jun. 30, 2015USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,016 | $ 1,627 |
2,017 | 1,976 |
2,018 | 1,800 |
2,019 | 1,820 |
2,020 | 1,861 |
Beyond 5 years | 310 |
Total minimum lease payments | $ 9,394 |
COMMITMENTS (Details Textuals)
COMMITMENTS (Details Textuals) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 01, 2015 | Mar. 31, 2015 | |
Operating Leased Assets [Line Items] | ||||
Outstanding contractual commitments | $ 10 | $ 81 | ||
Rental expense for operating leases | $ 418 | $ 256 | ||
Majesco Limited | ||||
Operating Leased Assets [Line Items] | ||||
Aggregate annual rent payable | $ 1,323 | |||
Mastek | ||||
Operating Leased Assets [Line Items] | ||||
Aggregate annual rent payable | $ 265 | |||
Minimum | ||||
Operating Leased Assets [Line Items] | ||||
Renewal period range | 2 years | |||
Maximum | ||||
Operating Leased Assets [Line Items] | ||||
Renewal period range | 5 years |
ACQUISITION (Details)
ACQUISITION (Details) - Cover-All $ in Thousands | 1 Months Ended |
Jun. 26, 2015USD ($) | |
Business Acquisition [Line Items] | |
Common stock | $ 73 |
Additional paid-in capital | 29,877 |
Definitive merger agreement | |
Business Acquisition [Line Items] | |
Common stock | 73 |
Additional paid-in capital | 29,877 |
Total consideration | $ 29,950 |
ACQUISITION (Details 1)
ACQUISITION (Details 1) - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 26, 2015 | Mar. 31, 2015 | Mar. 31, 2014 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 32,666 | $ 14,196 | $ 11,676 | |
Cover-All | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 2,990 | |||
Accounts receivable | 1,590 | |||
Prepaid expenses and other current assets | 630 | |||
Property, plant and equipment | 450 | |||
Other assets | 150 | |||
Customer contracts | 2,410 | |||
Customer relationships | 4,460 | |||
Technology | 3,110 | |||
Accounts payable | (1,130) | |||
Accrued expenses | (380) | |||
Deferred revenue | (2,510) | |||
Capital lease liability | (290) | |||
Total fair value of assets acquired | 11,480 | |||
Fair value of consideration paid | 29,950 | |||
Goodwill | $ 18,470 |
ACQUISITION (Details 2)
ACQUISITION (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Mar. 31, 2015 | |
Goodwill [Roll Forward] | ||
Opening value | $ 14,196 | $ 11,676 |
Addition of goodwill related to acquisition | 18,470 | 2,520 |
Closing value | $ 32,666 | $ 14,196 |
ACQUISITION (Details 3)
ACQUISITION (Details 3) - Jun. 26, 2015 - Cover-All - USD ($) $ in Thousands | Total |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted average amortisation period (in years) | 6 years |
Amount assigned | $ 9,980 |
Residual value | |
Customer contracts | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted average amortisation period (in years) | 3 years |
Amount assigned | $ 2,410 |
Residual value | |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted average amortisation period (in years) | 8 years |
Amount assigned | $ 4,460 |
Residual value | |
Technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted average amortisation period (in years) | 6 years |
Amount assigned | $ 3,110 |
Residual value |
ACQUISITION (Details 4)
ACQUISITION (Details 4) - Cover-All - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Business Acquisition [Line Items] | ||
Revenue | $ 28,219 | $ 22,090 |
Earnings | $ 283 | $ (517) |
ACQUISITION (Details Textuals 1
ACQUISITION (Details Textuals 1) - USD ($) $ / shares in Units, $ in Thousands | Jun. 30, 2015 | Jun. 26, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 32,666 | $ 32,666 | $ 14,196 | $ 11,676 | ||
Revenues | 23,163 | $ 16,882 | ||||
Earnings | $ 82 | $ (862) | ||||
Cover-All | ||||||
Business Acquisition [Line Items] | ||||||
Business combination share exchange ratio | $ 0.21641 | |||||
Share Percentage Of Capitalization Of Combined Company | 16.50% | |||||
Number of shares issued in merger | 5,844,830 | |||||
Number of common stock shares issued to options and restricted stock units holders | 197,081 | |||||
Common stock increased by amount | $ 73 | |||||
Additional paid in capital increased by amount | 29,877 | |||||
Goodwill | $ 18,470 | |||||
Goodwill deductible for tax purpose | ||||||
Revenues | 233 | |||||
Earnings | $ 47 |
ACQUISITION (Details Textuals 2
ACQUISITION (Details Textuals 2) - Cover-All - USD ($) $ / shares in Units, $ in Thousands | Sep. 11, 2012 | Jun. 26, 2015 |
Business Acquisition [Line Items] | ||
Business combination share exchange ratio | $ 0.21641 | |
Monarch Capital Group LLC | Loan Agreement | Monarch Warrants | ||
Business Acquisition [Line Items] | ||
Term of warrant | 5 years | |
Number of shares called by warrant | 42,000 | |
Exercise price | $ 1.48 | |
Business combination share exchange ratio | $ 0.21641 | |
Imperium | Loan Agreement | Stock Purchase Warrant | ||
Business Acquisition [Line Items] | ||
Term of warrant | 5 years | |
Number of shares called by warrant | 1,400,000 | |
Exercise price | $ 1.48 | |
Business combination share exchange ratio | $ 0.21641 | |
Imperium | Subsidiary | Loan Agreement | Revolving credit line | ||
Business Acquisition [Line Items] | ||
Period of loan | 3 years | |
Loan amount | $ 250,000 | |
Imperium | Subsidiary | Loan Agreement | Term loan | ||
Business Acquisition [Line Items] | ||
Period of loan | 3 years | |
Loan amount | $ 2,000,000 |