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Directors Report of Quick Heal Technologies Ltd.

Mar 31, 2019

DIRECTORSâ REPORT

Dear Members,

The Board of Directors of your Company is pleased to present the 24th Annual Report along with the audited financial statements, for the financial year ended March 31, 2019.

1. FINANCIAL HIGHLIGHTS

(All amounts are in Rs, Millions, unless otherwise stated)

Particulars	2018-2019	2017-2018
Revenue from Operations (Net)	3,149.26	3,183.15
Other Income	326.67	300.02
Total Income	3,475.93	3,483.17
Profit Before Tax	1,370.19	1,234.16
Total Tax	451.95	404.11
Profit After Tax	918.24	830.05

2. BUSINESS OPERATIONS AND OUTLOOK

Your Company recorded a total income of Rs, 3,475.93 Million for the financial year 2018-19 as against Rs, 3,483.17 Million in 2017-18 resulting in a decrease of 1.1% in the total revenue during the year under review on Consolidated basis. The Company continued to position itself as one of the leading players in market. The Profit after Tax of the Company rose by 10.62% from Rs, 830.05 Million in 2017-18 to Rs, 918.24 Million in the year under review.

Outlook of the business has been discussed in detail in the "Management Discussion and Analysis" which forms a part of this Annual Report.

3. DIVIDEND

The Board of Directors of your Company have recommended a Dividend @ 20% i.e. Rs, 2/- per equity share, for the financial year 2018-19.

The payment of aforesaid Dividend is subject to the approval of the Members at the ensuing Annual General Meeting.

4. SHARE BUYBACK

The Board, at its meeting held on March 5, 2019, approved a proposal for the Company to buy back its fully-paid-up equity shares of face value Rs, 10/- each from the eligible equity shareholders of the Company for an amount not exceeding Rs, 1,750 Million. The shareholders approved the proposal of buyback of equity shares through the postal ballot and e-voting that concluded on April 12, 2019. The buyback offer comprised a purchase of 6,363,636 equity shares aggregating 23.87% of the paid-up equity share capital and free reserves as per the latest audited financial statements of the Company as on March 31, 2018, on a standalone basis at a price of Rs, 275/- per equity share. The buyback will be offered to all eligible equity shareholders (including those who became equity shareholders as on the record date of the Company (i.e. April 26, 2019) on a proportionate basis through the âTender offer'' route. In this regard, the Promoter and Promoter Group entities have expressed their intention to participate in the buyback vide their letters dated March 6, 2019 and may tender up to an aggregate maximum of 4,602,772 Equity Shares or such lower number of equity shares in accordance with the provisions of Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018. The Company had filed the draft letter of offer with Securities and Exchange Board of India (SEBI) on April 24, 2019. Further, the Company has received final SEBI observations on the Draft Letter of Offer, and shall be dispatching the Letter of Offer for the Buyback to the eligible shareholders appearing on the record date of April 26, 2019, on or before May 13, 2019.

5. TRANSFER OF PROFITS TO RESERVES

Your Directors have decided not to transfer any amount to General Reserve and to carry forward the entire surplus under the Statement of Profit & Loss.

6. PUBLIC DEPOSITS

During the year under review, your Company did not accept any deposits within the meaning of Chapter V of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014, as amended from time to time.

7. REPORT ON PERFORMANCE OF SUBSIDIARIES

A statement containing salient features of the financial statements of Subsidiary Companies in Form AOC-1, as required under section 129 (3) of the Companies Act, 2013, forms a part of this Annual Report and is annexed as Annexure A. The audited financial statements in respect of each of the subsidiaries shall be kept open for inspection at the Registered Office of the Company on all working days between 11.00 a.m. to 1:00 p.m. up to the date of the forthcoming Annual General Meeting. Further, the Company will make available the audited annual accounts and related information of the subsidiary companies, upon request by any Member of the Company.

8. CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements ("CFS") of your Company along with its subsidiaries as at March 31, 2019 have been prepared in accordance with the Indian Accounting Standard on âConsolidated Financial Statements'' issued by the Institute of Chartered Accountants of India read together with the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the SEBI (LODR) Regulations") form a part of this Annual Report. The Auditors'' Report on the CFS is also attached, which is unqualified.

9. MANAGEMENT DISCUSSION AND ANALYSIS

As per the provisions of Regulation 34 of the SEBI (LODR) Regulations 2015, a detailed review by the Management of the business operations of the Company, future outlook of its business is presented under separate section "Management Discussion and Analysis" which forms a part of this Annual Report.

10. CORPORATE GOVERNANCE

Our value system, culture and policies reflect in our Corporate Governance practices. The Company has complied with the regulatory provisions for Corporate Governance as prescribed under Schedule V of SEBI (LODR) Regulations, 2015. The quarterly Corporate Governance Reports are submitted with the stock exchanges in compliance with the regulatory provisions. M/s J. B. Bhave & Co., Practicing Company Secretary confirming compliance of conditions of the Corporate Governance, forms a part of this Annual Report.

11. COMPLIANCE WITH THE CODE OF CONDUCT

A declaration signed by the Managing Director & CEO affirming compliance with the Company''s Code of Conduct by the Directors and Senior Management Personnel, for the financial year 2018-19, as required under Schedule V of the SEBI (LODR) Regulations, forms a part of this Annual Report.

12. DIRECTORS & KEY MANAGERIAL PERSONNEL

Mr. Sanjay Katkar (DIN: 00397277), Joint Managing Director of the Company, retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for reappointment. A Profile of Mr. Sanjay Katkar, as required by Regulation 36(3) of the SEBI (LODR) Regulations are given in the Notice convening the forthcoming Annual General Meeting.

Mr. Kailash Katkar, Managing Director & CEO, Mr. Sanjay Katkar, Joint Managing Director & CTO, Mr. Nitin Kulkarni, Chief Financial Officer are the Key Managerial Personnel of the Company within the meaning of sections 2(51) and 203 of the Companies Act, 2013 read together with the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, as on March 31, 2019.

During the year, Mr. Raghav Mulay, Company Secretary and who was also Key Managerial Personnel of the Company had resigned effective January 16, 2019 and Mr. Srinivasa Rao Anasingaraju is appointed as Company Secretary of the Company effective May 10, 2019, who is designated as Key Managerial Personnel of the Company.

Mr. Pradeep V. Bhide, an Independent Director, resigned as Member of the Board effective April 01, 2019.

13. BOARD MEETINGS

During the financial year 2018-19, 6 (Six) Board meetings were held, details are as under;

S. No.	Date of Meeting
1.	April 10, 2018
2.	May 10, 2018
3.	August 08, 2018
4.	November 12, 2018
5.	February 13, 2019
6.	March 05, 2019

The maximum time gap between any two meetings did not exceed prescribed period of one hundred twenty days.

14. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, Directors of your Company hereby state and confirm that:

a) in the preparation of the annual accounts for the year ended March 31, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the same period;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls in the company that are adequate and were operating effectively.

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and these are adequate and are operating effectively.

15. DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTORS

The Company has received necessary declarations from each Independent Director under section 149(7) of the Companies Act, 2013, that he/she the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

16. PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS

The Board has established a comprehensive process to evaluate the performance of the Directors, Committee and the Board. The performance evaluation matrix defining the criteria of evaluation for each of the above has been put in place. The performance evaluation of the Independent Directors was carried out by the Board (excluding the Director being evaluated). The Independent Directors also reviewed the performance of Non-Independent Directors. The Chairman had updated the other Members of the Board about the outcome of the process.

17. COMMITTEES OF THE BOARD

During the year under review, the composition of different Committees of your Board of Directors is given hereunder:

Sr. No	Committee	Chairperson	Member	Member	Member	Member
1	*Audit Committee	Mr. Pradeep Vasudeo Bhide	Mr. Kailash Katkar	Mr. Manu Parpia	Ms. Apurva Joshi	Ms. Priti Rao
2	Nomination and Remuneration Committee	Mr. Manu Parpia	Mr. Kailash Katkar	Mr. Pradeep Vasudeo Bhide
3	Stakeholders Relationship Committee	Mr. Mehul Savla	Mr. Kailash Katkar	Ms. Apurva Joshi	#Mr. Pradeep Vasudeo Bhide
4	CSR Committee	Ms. Priti Rao	Mr. Kailash Katkar	Mr. Sanjay Katkar

* Audit Committee performs the functions of Risk Management Committee.

#Resigned as a Member of the Stakeholders and Relationship Committee effective June 26, 2018

18. SECRETARIAL AUDIT REPORT

As required by Section 204 of the Companies Act, 2013 and Rules made thereunder, the Board appointed M/s. J B Bhave & Co., Practising Company Secretaries, Pune as the Secretarial Auditors of the Company for the financial year 2019-20.

The Secretarial Auditor''s Report forms part of this Annual Report, annexed as Annexure B

19. STATUTORY AUDITORS

Under Section 139 of Companies Act, 2013 and Rules made thereunder, it is mandatory for the Company to rotate its statutory auditors on completion of the maximum term permitted under the said section. The current Auditors of the Company will be completing their term of 10 years on the conclusion of 24th Annual General Meeting of the Company. In this regard, the Audit Committee had proposed to the Board and the Board had recommended appointment of M/s MSKA & Associates (Firm Registration No. 105047W), Chartered Accountants as the Statutory Auditors of the Company to hold such office for a period of five consecutive years from the conclusion of 24th Annual General Meeting to the conclusion of 29th Annual General Meeting subject to approval by Members of the Company.

M/s MSKA & Associates, Chartered Accountants have confirmed their eligibility and willingness to accept office, if appointment is ratified by the Members of the Company.

20. AUDIT OBSERVATIONS

Auditors'' observations are suitably explained in notes to the Accounts and are self-explanatory.

21. COST AUDITORS

Pursuant to the provisions of Section 148(3) of the Companies Act, 2013 and applicable rules, the Board has appointed M/s. Bhavesh Marolia & Associates, as the Cost Auditors of the Company to conduct an audit of cost records maintained by the Company for the financial years 2019-20 and 2020-21 at a remuneration of '' 62,000/- and '' 70,000/- respectively, plus applicable taxes and out of pocket expenses. The remuneration payable to the Cost Auditors is subject to the approval of the Members at the ensuing Annual General Meeting.

22. INTERNAL AUDITORS

The Board appointed Earnst & Young LLP, Chartered Accountants, as Internal Auditors of the Company for the financial year 2019-20.

23. PARTICULARS OF EMPLOYEES REMUNERATION

Pursuant to the provisions of Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing details of personnel drawing remuneration in excess of the prescribed limit under the said rules, are annexed as âAnnexure Câ to the Directors'' Report.

During the year under review, the Company continued to focus on talent conservation and talent development.

24. EMPLOYEE STOCK OPTION SCHEME

Your Company has two Employee Stock Option Plans namely, Employees Stock Option Scheme 2010 and Employees Stock Option Scheme 2014 for granting Term based and performance based Stock Options to Employees.

During the year under report, no employee has been granted stock options, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of your Company.

The details of activities under the scheme have been summarized in the Notes forming part of Financial Statements and annexed as Annexure D.

25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars required to be furnished under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are as under:

- Foreign Exchange earnings and outgo:

The operations of the Company involve low energy consumption. The Company has ensured that adequate measures are being taken to conserve energy.

- Technology Absorption, Adaptation and Innovation

The Company continues to use the latest technology for improving the productivity and quality of its products and services and also focuses on innovation and protecting consumers around the world with latest technology. With its continued focus on R&D, the company aims at releasing newer features as well as newer products in retail as well as enterprise/ government segment. During the year under review, the Company has initiated implementation of SAP. The implementation of SAP would provide thrust to the Company''s operations by further streamlining the processes as well as bringing more linearity.

The company has intensified its efforts on unique opportunities which the small and mid-size businesses are projecting with the digitization of India. Developing products that will address the cyber threats to these businesses and protecting their valuable data is an important area where the Company is innovating. In coming years, more investment will go into R&D of several technologies targeted towards products for enterprise, government and retail segments of your Company.

- Benefits derived from the R & D Activities:

Development of highly innovative product providing software security solutions and also fulfilling various added demands of consumers. The expenditure incurred in the same is detailed in the notes to Accounts annexed herewith.

26. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Particulars of Loans, Guarantees and Investments as on March 31, 2019, are given under Notes to the financial statements.

27. RELATED PARTY TRANSACTIONS

All the related party transactions carried out during the year were carried out at Arm''s Length basis and in ordinary course of business. There were no materially significant related party transactions with the Company''s Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company.

All the transactions with related parties were approved by the Audit Committee and the Board of Directors. The particulars of contracts entered during the year are given in Form AOC-2 enclosed as Annexure E.

28. CORPORATE SOCIAL RESPONSIBILITY (CSR)

- Your Company has a strong social commitment towards the society we live in. The Board of Directors of your Company is conscious of their inherent responsibility towards continued contribution to the society at large. This idea inspires your Company to be a trustworthy partner in building our nation and an ethical business player with this inspiration, your Company had formed a public charitable trust âQuick Heal Foundation''.

- Your Company selects one or more CSR activities as specified under Schedule VII of the Companies Act, 2013 for implementation in the area of its operation. The Company strives to promote cyber awareness and internet security and is dedicated towards promoting environment sustainability

- The Board of Directors of your Company has constituted a CSR Committee to help the Company to frame, monitor and execute the CSR activities of the Company under its CSR scope. The Committee defines the parameters and observes them for effective discharge of the social responsibility of your Company. The Directors have further approved the CSR Policy of the Company to provide a guideline for CSR activities of the Company.

- During the year under review, the Company has spent Rs, 14,200,000/- on CSR activities, out of the total amount of Rs, 20,928,128/- as per provisions of the Section 135 of the Companies Act, 2013.

- Your Company was in the process of further identifying worthwhile avenues for CSR expenditure during the year and in its absence, there was unspent of Rs, 6,728,128/-. The Company continues to remain committed towards undertaking CSR activities for the welfare of the society.

- A Report on CSR activities of your Company under the provisions of the Companies Act, 2013 during the financial year 2018-19 is given as Annexure âFâ.

29. ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Board of Directors of your Company are responsible for ensuring that the Internal Financial Controls ("IFC") are laid down in the Company and that such controls ae adequate and are operating efficiently and effectively. The Company''s IFC policies are commensurate with its requirements and are operating effectively. The Internal Financial Controls covered the policies and procedures adopted by the Company for ensuring orderly and efficient conduct of business including adherence to the Company''s policies, safeguarding of the assets of the Company, prevention and detection of fraud and errors, accuracy and completeness of accounting records and the timely preparation of reliable financial information.

30. VIGIL MECHANISM (WHISTLE BLOWER POLICY)

The Company has a well laid down Vigil Mechanism (Whistle Blower Policy), details of which are given in the Report on Corporate Governance forming a part of this Annual Report. The Company has also uploaded the said Whistle Blower Policy on its website at https://www.quickheal.co.in/ documents/investors/policies/Whistle-Blower-Policy.pdf.

31. RISK MANAGEMENT POLICY

The Audit Committee also functions as the Risk Management Committee. The Company has put in place a robust Risk Management Policy which facilitates identification of risks and also mitigation thereof. The Audit Committee is updated on the risks on a quarterly basis. There are no risks which in the opinion of your directors threaten the existence of the Company. However, risks that may pose a concern, are explained under Management Discussion and Analysis which forms part of this Annual Report.

32. OTHER MATTERS

Your Directors state that during the financial year under review -

i. Neither the Managing Director nor the Whole-time Director of the Company received any remuneration or commission from any of its subsidiaries.

ii. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company''s operations in future.

33. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of Annual Report, as on March 31, 2019, in Form MGT - 9 is placed on the website of the Company i.e. https://www.quickheal.co.in/documents/ investors.

34. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Internal Complaints Committee(s) (ICC) has been set up across all its locations in India to address complaints received regarding sexual harassment.

There were no complaints reported during the financial year 2018-19

35. MATERIAL CHANGES/EVENTS AFTER BALANCE SHEET DATE

There were no material changes and commitments affecting the financial position during the period since the end of the financial year till the date of this report.

36. ACKNOWLEDGMENTS

Your Board places on record the help and the support received from the from customers, vendors, investors, bankers, end users, dealers, distributors, business partners, regulatory bodies and other business constituents during the year under review. Further, Board places on record its appreciation for the co-operation received from the employees. We also wish to acknowledge the support received from various government and regulatory authorities.

For and on the behalf of the Board of Directors

Sd/-

Kailash Katkar

Managing Director & CEO (DIN: 00397191)

Sd/-

Sanjay Katkar

Joint Managing Director & CTO

(DIN: 00397277)

Place: Pune

Date: May 10, 2019

Mar 31, 2018

Dear Members,

The Board of Directors of your Company are pleased to present the 23rd Annual Report along with the audited financial statements, for the financial year ended March 31, 2018.

1. FINANCIAL HIGHLIGHTS

(All amounts are in INR Millions, unless otherwise stated)

Particulars	2017-2018	2016-2017
Revenue from Operations (Net)	3,183.15	2,999.73
Other Income	300.02	284.51
Total Income	3,483.17	3,284.24
Profit Before Tax	1,234.16	838.71
Total Tax	404.11	306.44
Profit After Tax	830.05	532.27

2. BUSINESS OPERATIONS AND OUTLOOK

Your Company recorded a total income of INR 3,483.17 Million for the financial year 2017-18 as against INR 3,284.24 Million in 2016-17 resulting in an increase of 6.05% in the total income during the year under review. The Company continued to position itself as one of the leading players in market. The Profit after Tax of the Company rose by 55.95% from INR 532.27 Million in 2016-17 to INR 830.05 Million in the year under review.

The Indian cybersecurity market has been changing at unprecedented speed. The economies across globe and its components are becoming more and more digitized. However, with this changing scenario, the cyber threat landscape is also increasing. India ranked third in the list of countries where the highest number of cyber threats were detected, and second in terms of targeted attacks in 2017 More than 100 countries were affected by WannaCry, and India was the third most affected country in this attack.

To keep up with these changes, government has also taken widespread steps in protecting cyberspace with its initiatives like Cyber Swachchata Kendra, National Cybersecurity Coordination Centre, National Critical Information Infrastructure Protection Centre, all backed by a robust National Cyber Security Policy.

Your Company continues to invest in innovation and technology R&D and is at the forefront of adapting to the ever changing needs of its customers.

Business Outlook of the business has been discussed in detail in the âManagement Discussion and Analysisâ which forms a part of this Annual Report. It is the endeavor of the Company to enhance stakeholder value.

3. DIVIDEND

The Board of Directors of your Company have recommended a Dividend @ 30% i.e. INR 3.00/- per equity share, for the financial year 2017-18.

The payment of aforesaid Dividend is subject to the approval of the members at the ensuing Annual General Meeting.

4. TRANSFER OF PROFITS TO RESERVES

Your Directors have decided not to transfer any amount to General Reserve and to carry forward the entire surplus under the Statement of Profit & Loss.

5. PUBLIC DEPOSITS

6. REPORT ON PERFORMANCE OF SUBSIDIARIES

A statement containing salient features of the financial statements of Subsidiary Companies in Form AOC-1, as required under section 129 (3) of the Companies Act, 2013, forms a part of this Annual Report and is annexed as Annexure A. The audited financial statements in respect of each of the subsidiaries shall be kept open for inspection at the Registered Office of the Company on all working days between 11.00 a.m. to 1:00 p.m. upto the date of the forthcoming Annual General Meeting. Further, the Company will make available the audited annual accounts and related information of the subsidiary companies, upon request by any Member of the Company.

7. CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements (âCFSâ) of your Company along with its subsidiaries as at March 31, 2018 have been prepared in accordance with the Indian Accounting Standard on âConsolidated Financial Statementsâ issued by the Institute of Chartered Accountants of India read together with the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âthe SEBI (LODR) Regulationsâ) form a part of this Annual Report. The Auditorsâ Report on the CFS is also attached, which is unqualified.

8. MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review by the Management of the business operations of the Company, future outlook of its business pursuant to the Schedule V of the SEBI (LODR) Regulations is presented under separate section âManagement Discussion and Analysisâ which forms a part of this Annual Report.

9. CORPORATE GOVERNANCE

The principles of Corporate Governance are enshrined in the very structure of your Company and forms a strong foundation. The Company has complied with the regulatory provisions for Corporate Governance as prescribed under Schedule V of SEBI (LODR) Regulations, 2015. The quarterly Corporate Governance Reports are submitted with the stock exchanges in compliance with the regulatory provisions. M/s J. B. Bhave & Co., Practicing Company Secretary have confirmed compliance of conditions of the Corporate Governance, and their report forms a part of this Annual Report.

10. COMPLIANCE WITH THE CODE OF CONDUCT

A declaration signed by the Managing Director & CEO affirming compliance with the Companyâs Code of Conduct by the Directors and Senior Management Personnel, for the financial year 2017-18, as required under Schedule V of the SEBI (LODR) Regulations, forms a part of this Annual Report.

11. DIRECTORS & KEY MANAGERIAL PERSONNEL

Mr. Shailesh Lakhani (DIN: 03567739), Non-Executive Director of the Company, retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment. A Profile of Mr. Shailesh Lakhani, as required by Regulation 36(3) of the SEBI (LODR) Regulations are given in the Notice convening the forthcoming Annual General Meeting.

During the year under review, Mr. Abhijit Shantaram Jorvekar, Vice President (Sales) and Executive Director separated from the Company from his executive capacity on account of his resignation and was re-classified as a Non-Executive Director of the Company w.e.f. November 10, 2017.

Mr. Rajesh Ghonasgi, Chief Financial Officer of the Company separated from the Company on account of his resignation w.e.f. February 28, 2018. Mr. Kailash S. Katkar, Managing Director & CEO, Mr. Sanjay S. Katkar, Joint Managing Director & CTO and Mr. Raghav Mulay, Company Secretary are the Key Managerial Personnel of the Company within the meaning of sections 2(51) and 203 of the Companies Act, 2013 read together with the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, as on March 31, 2018.

12. BOARD MEETINGS

During the financial year 2017-18, 4 (four) Board meetings were held on May 12, 2017, August 11, 2017, November 10, 2017 & February 7, 2018. The maximum time gap between any two meetings did not exceed prescribed period of one hundred twenty days.

13. DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, Directors of your Company hereby state and confirm that:

a) in the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls in the company that are adequate and were operating effectively.

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and these are adequate and are operating effectively.

14. DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTORS

The Board confirms that all the Independent Directors of the Company have given a declaration to the Board that they continue to meet the criterion of independence as prescribed under Section 149 of the Companies Act, 2013.

15. PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS

A meeting of the Independent Directors was also held to review the performance of Non-Independent Directors and the Board as a whole. The Directors were updated by the Chairman about the outcome of the process.

16. COMMITTEES OF THE BOARD

During the year under review, Nominations and Remuneration Committee was re-constituted by your Board of Directors. The composition of different Committees of your Board of Directors is given hereunder:

Sr. No	Committee	Chairperson	Member	Member	Member
1	*Audit Committee	Mr. Sunil Sethy	Mr. Kailash Katkar	Mr. Pradeep Vasudeo Bhide	Ms. Apurva Joshi
2	Nomination and Remuneration Committee	Mr. Mehul Savla	Mr. Sunil Sethy	Mr. Pradeep Vasudeo Bhide	Mr. Kailash Katkar#
3	Stakeholders Relationship Committee	Mr. Pradeep Vasudeo Bhide	Mr. Sunil Sethy	Mr. Kailash Katkar	Mr. Mehul Savla
4	CSR Committee	Ms. Apurva Joshi	Mr. Kailash Katkar	Mr. Sanjay Katkar

* Audit Committee performs the functions of Risk Management Committee.

#Appointed as a Member of the Nomination and Remuneration Committee on May 12, 2017

17. SECRETARIAL AUDIT REPORT

Pursuant to Section 204 of the Companies Act, 2013, the Board of Directors had appointed M/s. J B Bhave & Co., Practicing Company Secretaries, Pune, as the Secretarial Auditors of the Company for the financial year 2017-18 and 2018-19.

The Secretarial Auditors have provided an unqualified Secretarial Audit Report for the financial year 2017-18, which forms part of this Annual Report, annexed as Annexure B

18. STATUTORY AUDITORS

The Members of the Company at the Annual General Meeting of the Company held on August 11, 2017 had ratified the appointment of M/s SRBC & CO LLP, (Firm Registration No. 324982E/E300003), Chartered Accountants as the Statutory Auditors of the Company to hold such office till the conclusion of the ensuing the Annual General Meeting.

M/s SRBC & CO LLP, have confirmed their eligibility and willingness to accept office, if appointment is ratified by the Members of the Company.

Your Directors recommend ratification of appointment of Statutory Auditors to hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of the Annual General Meeting to be held in the calendar year 2019.

19. AUDIT OBSERVATIONS

Auditorsâ observations are suitably explained in notes to the Accounts and are self-explanatory.

20. COST AUDITORS

Pursuant to the provisions of Section 148(3) of the Companies Act, 2013, the Board has appointed M/s. Bhavesh Marolia & Associates, as the Cost Auditors of the Company to conduct an audit of cost records maintained by the Company for the financial year(s) 2017-18, 2018-19 at the remuneration of INR 47,250/- plus applicable government taxes and out of pocket expenses, per year.

The members of the Company had approved the remuneration payable to M/s Bhavesh Marolia & Associates at their Annual General Meeting held on August 11, 2017

21. INTERNAL AUDITORS

The Board of Directors of your Company has appointed M/s. KPMG, Chartered Accountants as Internal Auditors of the Company for the financial year 2018-19.

22. PARTICULARS OF EMPLOYEES REMUNERATION

During the year under review, the Company continued to focus on talent conservation and talent development.

23. EMPLOYEE STOCK OPTION SCHEME

During the year under report, no employee has been granted stock options, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of your Company.

The details of activities under the scheme have been summarized in the Notes forming part of Financial Statements and annexed as Annexure D.

24. DEPOSITS

During the year under review, the Company has not accepted any deposits.

25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars required to be furnished under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are as under:

- Energy Conservation

The operations of the Company involve low energy consumption. The Company has ensured that adequate measures are being taken to conserve energy.

- Technology Absorption, Adaptation and Innovation

The Company continues to use the latest technology for improving the productivity and quality of its products and services and also focuses on innovation and protecting consumers around the world with latest technology. With its continued focus on R&D, the company aims at releasing newer features as well as newer products in retail as well as enterprise/ government segment. During the year under review, the Company has initiated implementation of SAP. The implementation of SAP would provide thrust to the Companyâs operations by further streamlining the processes as well as bringing more linearity.

The company has intensified its efforts on unique opportunities which the small and mid-size businesses are projecting with the digitisation of India. Developing products that will address the cyber threats to these businesses and protecting their valuable data is an important area where the Company is innovating. In coming years, more investment will go into R&D of several technologies targeted towards products for enterprise, government and retail segments of your Company.

- Benefits derived from the R & D Activities:

26. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Particulars of Loans, Guarantees and Investments as on March 31, 2018, are given under Notes to the financial statements.

27. RELATED PARTY TRANSACTIONS

All the related party transactions carried out during the year were carried out at Armâs Length basis and in ordinary course of business. There were no materially significant related party transactions with the Companyâs Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company.

28. CORPORATE SOCIAL RESPONSIBILITY (CSR)

- Your Company has a strong social commitment towards the society we live in. The Board of Directors of your Company are conscious of their inherent responsibility towards continued contribution to the society at large. This idea inspires your Company to be a trustworthy partner in building our nation and an ethical business player with this inspiration, your Company had formed a public charitable trust âQuick Heal Foundationâ;

- During the year under review, the Company has spent INR 10,825,000/- on CSR activities, out of the total amount of INR 17,935,273/- mandated as per law.

- Your Company was in the process of further identifying worthwhile avenues for CSR expenditure during the year and in its absence, there was unspent of INR 7,110,273/-. The Company continues to remain committed towards undertaking CSR activities for the welfare of the society.

- A Report on CSR activities of your Company under the provisions of the Companies Act, 2013 during the financial year 2017-18 is given as Annexure âFâ.

29. ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Board of Directors of your Company are responsible for ensuring that the Internal Financial Controls (âIFCâ) are laid down in the Company and that such controls ae adequate and are operating efficiently and effectively. The Companyâs IFC policies are commensurate with its requirements and are operating effectively. The Internal Financial Controls covered the policies and procedures adopted by the Company for ensuring orderly and efficient conduct of business including adherence to the Companyâs policies, safeguarding of the assets of the Company, prevention and detection of fraud and errors, accuracy and completeness of accounting records and the timely preparation of reliable financial information.

30. VIGIL MECHANISM (WHISTLE BLOWER POLICY)

The Company has a well laid down Vigil Mechanism (Whistle Blower Policy), details of which are given in the Report on Corporate Governance forming a part of this Annual Report. The Company has also uploaded the said Whistle Blower Policy on its website at http://www.quickheal.com/investors/ whistle-blower-policy.

31. RISK MANAGEMENT POLICY

The Audit Committee also functions as the Risk Management Committee. The Company has put in place a robust Risk Management Policy which facilitates identification of risks and also mitigation thereof. The Audit Committee is updated on the risks on a quarterly basis. There are no risks which in the opinion of your Directors, threaten the existence of the Company. However, risks that may pose a concern, are explained under Management Discussion and Analysis which forms part of this Annual Report.

32. OTHER MATTERS

Your Directors state that during the financial year under review -

i. Neither the Managing Director nor the Whole-time Director of the Company received any remuneration or commission from any of its subsidiaries.

ii. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and the Companyâs operations in future.

33. ANNUAL RETURN

The extract of Annual Report, as on March 31, 2018, forms a part of this Report and is annexed as Annexure G.

34. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

There were no complaints reported during the financial year 2017-18.

35. MATERIAL CHANGES/EVENTS AFTER BALANCE SHEET DATE

There were no material changes and commitments affecting the financial position during the period since the end of the financial year till the date of this report.

36. ACKNOWLEDGMENTS

Your Board places on record the help and the sincere support received from the from the shareholders, end users, dealers, distributors, business partners, regulatory bodies and other business constituents during the year under review. The Board also places on record its appreciation for the cooperation received from the employees. The Board also wish to thank the support received from various government and regulatory authorities.

For and on the behalf of the Board of Directors

Kailash Katkar

Managing Director & CEO

(DIN: 00397191)

Sanjay Katkar

Joint Managing Director & CTO

(DIN: 00397277)

Place: Pune

Date: May 10, 2018

Mar 31, 2017

Dear Members,

The Board of Directors of your Company are pleased to present the 22^nd Annual Report along with the audited financial statements, for the financial year ended 31^st March 2017.

1. Financial Highlights

(In Rs. Millions)

Particulars	2016-2017	2015-2016
Revenue from Operations (Net)	2,999.73	3,020.90
Finance Income	244.20	65.41
Other Income	40.31	33.62
Total Income	3,284.24	3,119.93
Profit Before Tax	838.71	881.07
Provision for Tax
Current Tax	316.55	324.71
Deferred Tax	(10.11)	(22.72)
Profit After Tax	532.27	579.08

2. Business Operations and Outlook

Your Company recorded a total income of Rs. 3,284.24 million for the financial year 2016-17 as against Rs. 3,119.93 million in 2015-16 resulting in marginal increase in revenue during the year under review. The Company continued to position itself as one of the leading players in market.

Indian cyber security market is currently valued at $4 billion and is expected to grow to $35 billion by 2025 which is a nine fold increase while the global security market is expected to reach US$ 190 Billion by year 2025 from the approximately US$ 85 billion today. Your Company''s continued investments in innovation and technology has enabled it to undertake a number of diverse projects and adapt to the ever changing needs of consumers.

Your Company also partnered with an ambitious initiative launched by the Government of India, Cyber Swachhta Kendra (CSK), which is a botnet cleaning and malware analysis center. It aims to bring in enhanced security measures to Indian users and secure the cyber ecosystem. This is a huge leap of Government of India, partnered by your Company, in the Digital India Mission. Botnets can cause a wreck in the internet, especially so for India, as it is one of the highly botnet infected countries in the world.

Business Outlook of the business has been discussed in detail in the âManagement Discussion and Analysis" which forms a part of this Annual Report. It is the endeavor of the Company to enhance stakeholder value.

3. Transfer of Profits to Reserves

Your Directors have decided not to transfer any amount to General Reserve and to carry forward the entire surplus under the Statement of Profit & Loss.

4. Dividend

The Board of Directors has recommended a Dividend @ 25 % i.e. Rs. 2.5/- per equity share for the financial year 2016-17.

The payment of aforesaid dividend is subject to the confirmation by the Members at the Annual General Meeting.

5. Public Deposits

6. Report on performance of Subsidiaries

A statement containing salient features of the financial statements of Subsidiary Companies in Form AOC-1, as required under section 129 (3) of the Companies Act, 2013, forms a part of this Annual Report and is annexed as Annexure A. The audited financial statements in respect of each of the subsidiaries shall be kept open for inspection at the Registered Office of the Company on all working days between 11.00 a.m. to 1:00 p.m. upto the date of the forthcoming Annual general Meeting. Further, the Company will make available the audited annual accounts and related information of the subsidiary companies, upon request by any Member of the Company.

7. Consolidated Financial Statements

Consolidated Financial Statements ("CFS") of your Company and its subsidiaries as at 31^st March 2017 are prepared in accordance with the Indian Accounting Standard on ''Consolidated Financial Statements'' issued by the Institute of Chartered Accountants of India and the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the SEBI (LODR) Regulations") form a part of this Annual Report. The Auditors âReport on the CFS is also attached which is unqualified.

8. Management Discussion and Analysis

A detailed review by the Management of the business operations of the Company, future outlook of its business pursuant to the Schedule V of the SEBI (LODR) Regulations is presented under separate section "Management Discussion and Analysis" which forms a part of this Annual Report.

9. Corporate Governance

Your Company firmly believes that Corporate Governance practices constitute strong foundation on which successful organizations last. The Company follows the principles of Corporate Governance in letter and spirit. The Company has fully complied with the Requirements as prescribed under Schedule V of the SEBI (LODR) Regulations. The quarterly Corporate Governance Report, confirming that the Company has complied with statutory provisions, has been filed with the Stock Exchanges, where the shares of the Company are listed. A detailed Report on Corporate Governance and a certificate from M/s J. B. Bhave & Co., Practicing Company Secretary confirming compliance of conditions of the Corporate Governance, forms a part of this Annual Report.

10. Compliance with the Code of Conduct

A declaration signed by the Managing Director & CEO affirming compliance with the Company''s Code of Conduct by the Directors and Senior Management Personnel, for the financial year 2016- 17,as required under Schedule V of the SEBI (LODR) Regulations, forms a part of this Annual Report.

11. Directors & Key Managerial Personnel

Mr. Kailash Sahebrao Katkar (DIN: 00397191), Managing Director & CEO, retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for reappointment. A Profile of Mr. Kailash S. Katkar, as required by Regulation 36(3) of the SEBI (LODR) Regulations are given in the Notice convening the forthcoming Annual General Meeting.

The Company regularly conducts the Familiarization Program for Independent Directors about their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc., through various initiatives. The details of the same can be found at: http://www.quickheal. com/investors.

Mr. Kailash S. Katkar, Managing Director & CEO, Mr. Sanjay S. Katkar, Managing Director & CTO, Mr. Rajesh Ghonasgi, Chief Financial Officer and Mr. Vijay Shirode, Company Secretary are the Key Managerial Personnel of the Company within the meaning of sections 2(51) and 203 of the Companies Act, 2013 read together with the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.

12. Board Meetings

During the financial year 2016-17, 6 (Six) Board meetings were held on 22^nd April, 2016, 11^th May, 2016, 5^th August, 2016, 11^th November, 2016 & 3^,d February, 2017 and 24^th March, 2017 The maximum time gap between any two meetings did not exceed prescribed period of one hundred twenty days.

13. Directorsâ Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, Directors of your Company hereby state and confirm that:

a) in the preparation of the annual accounts for the year ended 31^st March, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls in the company that are adequate and were operating effectively;

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and these are adequate and are operating effectively.

14. Declaration of Independence by Independent Directors

The Board confirms that all Independent Directors of the Company have given a declaration to the Board that they continue to meet the criterion of independence as prescribed under Section 149 of the Companies Act, 2013.

15. Performance Evaluation of the Board, its Committees and Directors

The Board has established a comprehensive process to evaluate the performance of the Directors, Committee and the Board. The performance evaluation matrix defining the criteria of evaluation for each of the above has been put in place. The performance evaluation of the Independent Directors was carried out by the Board (excluding the Director being evaluated). A meeting of the Independent Directors was also held to review the performance of Non-Independent Directors and the Board as a whole. The Directors were updated by the Chairman about the outcome of the process.

17. Secretarial Audit Report

The Secretarial Auditors have provided an unqualified Secretarial Audit Report which forms part of this Annual Report.

The Board has re-appointed M/s. J B Bhave & Co., Practicing Company Secretaries, Pune, as the Secretarial Auditors of the Company for the financial year(s) 2017-18 and 2018-19.

18. Statutory Auditors

The Members of the Company at the Annual General Meeting of the Company held on 5^th August, 2016 had ratified the appointment of M/s SRBC & CO LLP, (Firm Registration No. 324982E), Chartered Accountants as the Statutory Auditors of the Company to hold such office till the conclusion of the ensuing the Annual General Meeting.

M/s SRBC & CO LLP, have confirmed their eligibility and willingness to accept office, if appointment is ratified by the Members of the Company.

16. Committees of the Board

During the year under report, the Board of Directors of your Company re-constituted the Committees of the Board. The present composition of different Committees is given hereunder:

Sr. No	Committee	Chairperson	Member	Member	Member
1	*Audit Committee	Mr. Sunil Sethy	Mr. Kailash Katkar	Mr. Pradeep Vasudeo Bhide	Ms. Apurva Joshi
2	Nomination and Remuneration Committee	Mr. Mehul Savla	Mr. Sunil Sethy	Mr. Pradeep Vasudeo Bhide	-----
3	Stakeholders Relationship Committee	Mr. Pradeep Vasudeo Bhide	Mr. Sunil Sethy	Mr. Kailash Katkar	Mr. Mehul Savla
4	CSR Committee	Ms. Apurva Joshi	Mr. Kailash Katkar	Mr. Sanjay Katkar	-----

* Audit Committee performs the functions of Risk Management Committee.

19- Audit Observations

Auditors'' observations are suitably explained in notes to the Accounts and are self-explanatory.

20. Cost Auditors

Pursuant to the provisions of Section 148(3) of the Companies Act, 2013, the Board has appointed M/s. Bhavesh Marolia & Associates, as the Cost Auditors of the Company to conduct an audit of cost records maintained by the Company for the financial year(s) 2017-18, 2018-19 at the remuneration of Rs. 47,250/- plus applicable government taxes and out of pocket expenses. The remuneration payable to the Cost Auditors is subject to the approval of the Members at the ensuing Annual General Meeting.

21. Internal Auditors

The Board of Directors of your Company has appointed M/s. Pipalia Singhal & Associates, Chartered Accountants (Firm Registration No.114665W) as Internal Auditors of the Company for the period of two financial years i.e. 2016-17 and 2017-18.

22. Particulars of Employees Remuneration

During the year under review, the Company continued to focus on talent conservation and talent development.

23. Employee Stock Option Scheme

Your Company has two Employee Stock Option Plans namely. Employees Stock Option Scheme 2010 and Employees Stock Option Scheme 2014 for granting Term based and performance based Stock Options to Employees.

During the year under report, no employee has been granted stock options, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of your Company.

The details of activities under the scheme have been summarized in the Notes forming part of Financial Statements and annexed as Annexure D.

24. Deposits

During the year under review, the Company has not accepted any deposits.

25. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Particulars required to be furnished under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are as under:

Energy Conservation

The operations of the Company involve low energy consumption. Adequate measures have been taken to conserve energy.

Technology Absorption, Adaptation and Innovation

The Company continues to use the latest technologies for improving the productivity and quality of its products and services. The company continues to focus on innovation and protect consumers around the world with latest technology. With its continued focus on R&D, the company aims at releasing newer features as well as newer products in retail as well as enterprise segment.

The company has intensified its efforts on unique opportunity the small and mid-size businesses are projecting with the digitization of India. Understanding the cyber security challenges the small and medium size business will be going through when adopting to new digitization. Developing products that will address the cyber threats to these businesses and protecting their valuable data. In coming years more investment will go into R&D of several technologies targeted towards products for enterprise segment.

- Benefits derived from the R&D Activities:

- Foreign Exchange earnings and outgo

Total foreign exchange earnings and outgo for the financial year were as follows:

(In Rs.)

Particulars	For the year ended 31^st March 2017	For the year ended 31^st March 2016
Total Foreign Exchange Outgo	13,05,62,227	8,73,55,410
Total Foreign Exchange Earnings	8,32,25,009	5,89,83,286

26. Particulars of Loans, Guarantees and Investments

Particulars of Loans, Guarantees and Investments as on 31^st March, 2017, are given under Notes to the financial statements.

27. Related Party Transactions

The above transactions with related parties were approved by the Board of Directors. The particulars of contracts entered during the year are given in Form AOC-2 enclosed as Annexure E.

28. Corporate Social Responsibility (CSR)

The Company believes that the society, at large, is the prime enabler for the Company''s growth and success and that the Company is committed to return it''s due to the society as a Corporate Citizen. This idea inspires your Company to be a trustworthy partner in building our nation and an ethical business player with this inspiration, your Company had formed a public charitable trust âQuick Heal Foundation''

Your Company selects one or more CSR activities as specified under Schedule VII of the Companies Act, 2013 for implementation in the area of its operation. The Company strives to promote cyber awareness and internet security and is dedicated towards promoting environment sustainability

The Board of Directors of your Company has constituted a CSR Committee to help the Company to frame, monitor and execute the CSR activities of the Company under its CSR scope. The Committee defines the parameters and observes them for effective discharge of the social responsibility of your Company. The Directors have further approved the CSR Policy of the Company to provide a guideline for CSR activities of the Company

During the year under review, the Company has spent Rs.1,40,00,000/- on CSR activities, out of the total amount of Rs.1,87,89,594/- mandated as per law.

Your Company was in the process of further identifying worthwhile avenues for CSR expenditure during the year and in its absence, there was unspent of Rs.47,89,594/-. The Company continues to commit undertaking CSR activities for the welfare of the society.

A Report on CSR activities of your Company under the provisions of the Companies Act, 2013 during the financial year 2016-17 is given as Annexure ''F''.

29. Adequacy of Internal Financial Controls

The Board has laid down policies and procedures for strengthening its Internal Financial Controls which are commensurate to the nature and size of the Company''s operations and they are operating effectively. The Internal Financial Controls covered the policies and procedures adopted by the Company for ensuring orderly and efficient conduct of business including adherence to the Company''s policies, safeguarding of the assets of the Company, prevention and detection of fraud and errors, accuracy and completeness of accounting records and the timely preparation of reliable financial information.

30. Vigil Mechanism (Whistle Blower Policy)

The Company has a well laid down Vigil Mechanism (Whistle Blower Policy), details of which are given in the Report on Corporate Governance forming a part of this Annual Report. The Company has also uploaded the said Whistle Blower Policy on its website at http://www. quickheal.com/investors/whistle-blower-policy.

31. Risk Management Policy

The Audit Committee also functions as the Risk Management Committee. The Company has put in place a robust Risk Management Policy which facilitates identification of risks and also mitigation thereof. There are no risks which in the opinion of your Directors, threaten the existence of the Company. However, risks that may pose a concern, are explained under Management Discussion and Analysis which forms part of this Annual Report.

32. Other matters

Your Directors state that during the financial year under review-

i. Neither the Managing Director nor the Whole-time Director of the Company received any remuneration or commission from any of its subsidiaries.

ii. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company''s operations in future.

37. Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT-9, is annexed herewith as Annexure G.

38. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

There were no complaints reported during the financial year 2016-17.

39 Material Changes/Events after balance sheet date

There were no material changes and commitments affecting the financial position during the period since the end of the financial year till the date of this report.

40 Acknowledgments

Your Board places on record the help and the sincere cooperation received from the from the shareholders, end users, employees, dealers, distributors, business partners, bankers, regulatory bodies and other business constituents during the year under review. The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff, resulting in the successful performance of the Company during the year.

For and on the behalf of the Board of Directors

Kailash Katkar Sanjay Katkar

(DIN: 00397191) (DIN: 00397277)

Managing Director & CEO Managing Director & CTO

Pune, 12^th May 2017

Mar 31, 2016

Dear Members,

The Directors of Quick Heal Technologies Limited are pleased to present the 21st Annual Report and the audited accounts for the
financial year ended 31st March 2016.

1. Business Operations and Prospects

Your Company continues to be among the leading Software Security Solution Company and continues to retain its leadership position
in the Indian Security Software Solution Industry. The Company has been growing at a substantial pace.

Your Company has recorded total income of Rs.347.87 Cr in the current year as against Rs.294.34 Cr in the previous financial
year. The Company''s exports have also shown commendable growth.

Your Company''s continued investments in innovation and technology has enabled it to undertake a number of diverse projects and
adapt to the ever changing needs of consumers.

2. New Branches

During the period under report, your Company has expanded its operations in Pune, through its office at Marvel Edge and also at
its branch at Bangalore as Support Office.

3. Awards, Recognitions and Certifications during the Financial Year 2015-2016

Sr. Award/Recognition/
Certification Company/Management/ Date of Award/
Recognition/
No. Solutions/ Features Certification

CERTIFICATIONS

1 PCSL Certification-
Android QH Mobile Security
App December 2015
Security
Recommended 2015

2 AV-TEST Corporate
Endpoint Seqrite EPSv16 February 2016.April
& August 2015
Protection
Certification

3 AV-TEST Certification
for Windows QH Total Security for
Windows February 2016. April
& August2015
v16

4 AV-TEST Certification
for Android QH Total Security for
Android March 2015. May,
July September &
v2.01 November 2015

5 VBIOO Certification QH Anti virus for
Server March 2016

6 VBIOO Certification Seqrite Antivirus
for Server March 2016

AWARDS

Sr. Award/Recognition/ Company/Management/
Solutions/Features Date of Award/
No. Certification Recognition/
Certification

1 12th Annual lnfo
Security 1. SanjayKatkar,
GoldWinner-Product
Development/ February 2016
PG''s 2015 Global Management Executive
of the Year.

Excellence Awards 2. Quick Heal
Technologies Limited.
Silver Winner-
Security Products and
Solution for Small
Businesses and SOHO

2 ICSA Labs-Excellence in Quick Heal
Technologies Limited February 2016
Information Security
Testing Award

4. Financial Results

In Rupees

Particulars 2015-2016 2014-2015

Revenue from operations(Net) 3,380,696,142 2,861,155,041

Other Income 98,042,769 82,216,138

Total Income 3,478,738,911 2,943,371,179

Total expenditure, excluding
Depreciation and Tax 2,356,055,882 1,943,111,507

Depreciation and Amortization 237,111,239 202,003,527

Profit/ (Loss) before Tax 885,571,790 798,256,145

Less: Tax Expense

Current Tax 324,712,208 269,444,239

Deferred Tax charge (23,137,421) (9,231,885)

Profit/ (Loss) After Tax 583,997,003 538,043,791

5. Transfer of Profits to Reserves

Your Company has transferred NIL amounts to General Reserve and the balance is proposed to be retained in the Profit & Loss
Account.

6. Dividend

Board of Directors of the Company at their meeting held on 11th May, 2016 have recommended Final Dividend @ 25% i.e.2.50/- per
equity share for the financial year 2015-2016, after considering the profits ofthe Company,

The payment of final dividend is subject to the confirmation bythe shareholders.

7. Institutional Holding

As on 31st March 2016, the total institutional holding in your Company stood at 13.77% ofthe total paid up share capital.

8. Particulars required as per Section 134 of the Companies Act, 2013

As per Section 134 of the Companies Act, 2013, your Company has provided the Consolidated Financial Statements as on 31st March
2016. Your Directors believe that the consolidated financial statements presents more comprehensive picture as compared to
standalone financial statements. These documents will also be available for inspection during the business hours at the
Registered Office of your Company and the respective subsidiary companies. A statement showing financial highlights of the
subsidiary companies is attached to the consolidated financial statements.

The Annual Report of your Company, though does not contain full financial statements ofthe subsidiary companies, your Company
will make available the audited annual accounts and related information of the subsidiary companies, upon request by any Member
of your Company.

9. Consolidated financial statements

Consolidated financial statements of your Company and its subsidiaries as at 31st March 2016 are prepared in accordance with the
Accounting Standard 21 (AS - 21) on ''Consolidated Financial Statements'' issued by the Institute of Chartered Accountants of
India, and form part of this Annual Report.

10. Particulars of Employees Remuneration

In terms ofthe Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the
names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided
in the Annexure A ofthe Directors'' Report.

11. Employee Stock Option Scheme

Your Company has two stock option plans for its employees i.e. Employees Stock Option Scheme 2010 and Employees Stock Option
Scheme 2014 for granting Term based and performance based Stock Options to Employees.

During the year under report, no employee has been granted stock options, equal to or exceeding 1% of the issued capital
(excluding outstanding warrants and conversions) ofyour Company.

The details of activities under the scheme have been summarized in the Notes forming part of Financial Statements and annexed as
Annexure B.

12. FixedDeposits

The Company has not accepted any fixed deposit during the year under review.

13. Secretarial Audit Report

Pursuant to Section 204 of the Companies Act, 2013, the Board of Directors had appointed M/s. J B Bhave & Co. Practising Company
Secretaries as the Secretarial Auditors of the Company for the financial year 2015-16.

Accordingly, the Secretarial Auditors have given their report, which is annexed hereto as Annexure C. The comments of the Board
on the observations of the Secretarial Auditors are given after Annexure C above.

The Board has re-appointed M/s. J B Bhave & Co., Practising Company Secretaries as the Secretarial Auditors of the Company for
the financial year 2016-17.

14. Board Meetings

During the financial year 2015-16, 9 (Nine) Board meetings were held on 08th April, 2015, 24th April, 2015, 27th July, 2015, 17th
August, 2015, 21st August, 2015, 4th September, 2015, 24th September, 2015, 3rd November, 2015 & 4th January, 2016. The maximum
time gap between any two meetings did not exceed one hundred twenty days.

15. Directors

- Mr. Shailesh Lakhani (DIN: 03567739) who retires by rotation and, being eligible, offers himselffor re-appointment.

- Mr. Sanjay Katkar (DIN: 00397277) who retires by rotation and, being eligible, offers himself for re- appointment.

ln terms of the LODR, 2015, the Company conducts the Familiarisation Program for Independent Directors about their roles, rights,
responsibilities in the Company, nature of the industry in which the company operates, business model of the company, etc.,
through various initiatives. The details of the same can be found at: http://www.quickheal.com/ investors

16. Committees of the Board

During the year under report, the Board of Directors of your Company reconstituted the Committees of the Board. The details of
the powers, functions, composition and meetings of the Committees of the Board held during the year are given in the Report on
Corporate Governance section forming part of this Annual Report. Your Company has constituted following committees ofthe Board as
under:

S. Committee Chairperson Member Member
No

1 *Audit Committee Sunil Sethy Kailash Katkar Apurva Joshi

2 Nomination and
Remuneration Committee Mehul Savla Sunil Sethy Apurva Joshi

3 Stakeholders
Relationship Committee P V Bhide Mehul Savla Kailash
Katkar

4 CSR Committee Apurva Joshi Kailash Katkar Sanjay Katkar

* Audit Committee performs the functions of Risk Management Committee.

17. Declaration of Independence by Independent Director

The Board confirms that all Independent Directors of the Company have given a declaration to the Board that they meet the
criterion of independence as prescribed under Section 149 of the Companies Act, 2013.

18. Statutory Auditors

The Members of the Company at the Annual General Meeting of the Company held on 24th September 2015 have ratified the appointment
of M/s SRBC & CO LLP, (Firm Registration No. 324982E), Chartered Accountants as the Statutory Auditors of the Company to hold
such office till the conclusion ofthe 24th Annual General Meeting to beheld in the calendar year 2019.

M/s SRBC & CO LLP, have confirmed their eligibility and willingness to accept office, if appointment is ratified by the Members
ofthe Company.

The ratification of appointment of Statutory Auditors is subject to the approval of the Members of the Company.

Your Directors propose ratification of appointment of M/s SRBC & CO LLP as the Statutory Auditors of your Company.

19. Cost Auditors

As per the Companies (Cost Records and Audit) Rules, 2014, the Cost Records to be maintained by the Company for applicable
products manufactured by the Company.

As per the Captioned Rules, Mr. Bhavesh Marolia, Practitioner Cost accountant, proprietor of M/s Bhavesh Marolia & Associates,
was appointed as the Cost Auditors for the Financial Year 2016-2017 in the Board Meeting held on 11th May 2016, at the
remuneration of Rs.45,000/-. Subject to approval of members.

20. Internal Auditor

Your Company has received an eligibility and willingness letter from M/s Pipalia Singhal & Associates, Chartered Accountants
(Firm Registration No.H4665W) to conduct internal audit of the Company. Your Directors in their meeting held on 11th May 2016
have appointed M/s Pipalia Singhal & Associates, Chartered Accountants (Firm Registration No.H4665W) as an Internal Auditor for
the period of two financial years i.e. 2016-17 & 2017- 18.

21. Corporate governance

A separate section on Corporate Governance with a detailed compliance report as stipulated under the LODR, 2015 and any other
applicable law for the time being in force forms an integral part of this Report.

22. Management discussion and analysis

Report on Management Discussion and Analysis as stipulated under the Listing Agreement and any other applicable law for the time
being in force based on audited, consolidated financial statements for the financial year 2015-16 forms part of this Annual
Report.

23. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Particulars required to be furnished under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 are as under:

- Energy Conservation

The operations of the Company involve low energy consumption. Adequate measures have been taken to conserve energy.

- Technology Absorption, Adaptation and Innovation

The Company continues to use the latest technologies for improving the productivity and quality of its products and services. The
Company aims to inspire consumers around the world with innovation through its unique technology. The Company continues to give
utmost importance to R & D. The Company focuses on developing existing technologies and product engineering innovation. With
Solution Architecture choices available through such new innovative approaches we continue to address current as well as future
business needs of our customers and potential markets. R&D activities includes studying/analyzing end users demands and changing
needs and designing/ developing products suitable for Indian customers as well as same for Export market. In the coming years,
the Company will invest in R & D in several software, technologies and systems.

- Benefits derived from the R&D Activities:

Development of highly innovative product providing software security solutions and also fulfilling various added demands of
consumers. The expenditure incurred in the same is detailed in the notes to Accounts annexed herewith.

- Foreign Exchange earnings and outgo

Total foreign exchange earnings and outgo for the financial year are as follows:

in Rupees

Particulars For the year For the year
ended 31st ended 31st
March 2016 March 2015

Total Foreign Exchange 87,355,410 69,742,515
Expenditure

Total Foreign Exchange 58,983,286 49,093,058
Earnings

24. Subsidiaries

The details ofthe subsidiaries ofyour Company as on 31st March 2016 are as under:

Name of the
Subsidiary Date of Registration Investment in Equity Capital

As on As on
31st March 2016 31st March 2015

Quick Heal
Technologies
Africa Limited 2nd December 2011 KES 17,800,000 KES 17,800,000

Quick Heal
Technologies
America, Inc 2nd January2012 USD 1,30,000 USD 30,000

Quick Heal
Technologies
Japan KK 2nd April 2012 JPY 90,350,000 JPY 42,600,000

Quick Heal
Technologies
(MENA) FZE 25th December 2013 AED 28,00,000 AED 28,00,000

Financial Results

Name of the
Subsidiary Total Income Profit / Loss Before
Tax Profit / Loss
After Tax

Mar 16 Marl5 Marl6 Marl5 Marl6 Marl5

Quick Heal
Technologies
Africa 33,780,282 19,227
,545 (4,050
,881) (9,309
,948) (2,855
,319) (5,524,841)
Limited
Amt in KES

Quick Heal
Technologies 48,428 29,582 (4,09
,279) (55,483) (4,11
,173) (55,381)
America, Inc
Amt in USD

Quick Heal
Technologies 67,294,793 35,114
,904 (25,481
,531) (21,033
,096) (25,661,
631) (21,213,096)
Japan KK
Amt in Yen

Quick Heal
Technologies 619,504 524,101 (1,08,
539) (91,799) (1,08,
539) (91,799)
(MENA) FZE
Amt in AED

25. Particulars of Loans given, Guarantees given and Investments made

Loans, guarantees and investments covered under Section 185 ofthe Companies Act, 2013 form part of the notes to the financial
statements provided in this Annual Report.

26. Related Party Transactions

Related party transactions that were entered during the financial year were on an arm''s length basis and were in the ordinary
course of business. There were no materially significant related party transactions with the Company''s Promoters, Directors,
Management or their relatives, which could have had a potential conflict with the interests ofthe Company.

Transactions with related parties entered by the Company in the normal course of business are approved by the Board of Directors
held on 11th May 2016. The particulars of contracts entered during the year as per Form AOC-2 is enclosed as Annexure-D.

27. Corporate Social Responsibility (CSR)

- CSR activities undertaken by the company reflect the core values and achievements of how Quick Heal does business as an
employer, a software provider and a corporate citizen a necessity that demands that Quick Heal be trustworthy, an ethical
business partner that customers can count on.

- To institutionalise the CSR initiative of your Company, your Company formed a Public Charitable Trust by the name ''Quick Heal
Foundation'' on 20th August 2014.

- Your Company will select one or more ofthe CSR activities as per Schedule VII of the Companies Act, 2013 for implementation in
the area of its operation.

- The Board of Directors of your Company has constituted the CSR Committee to help the Company to frame, monitor and execute the
CSR activities of the Company under its CSR scope. The Committee defines the parameters and observes them for effective discharge
of the social responsibility of your Company. The Board of Directors of your Company has further approved the CSR Policy of the
Company to provide a guideline for CSR activities of the Company.

- During the year under review, the Company has donated Rs.105,40,000/- on CSR activities, out of the total amount of
Rs.199,95,325/- mandated as per law.

- Your Company was in the process of further identifying worthwhile avenues for CSR expenditure during the year and in its
absence, there was unspent ofRs.93,55,325/-. The Company is committed to CSR activities and shall strive to spend the amount as
provided in law.

- Report on CSR activities of your Company under the provisions of the Companies Act, 2013 during the financial year 2015-15 is
given as Annexure E.

28. Adequacy of Internal Financial Controls

The Board is responsible for establishing and maintaining adequate internal financial control as per section 134 ofthe Companies
Act, 2013.

The Board has laid down policies and processes in respect of internal financial controls and such internal financial controls
were adequate and were operating effectively. The internal financial controls covered the policies and procedures adopted by the
Company for ensuring orderly and efficient conduct of business including adherence to the Company''s policies, safeguarding of the
assets of the Company, prevention and detection offraud and errors, accuracy and completeness of accounting records and the
timely preparation of reliable financial information

29. Vigil Mechanism (Whistle Blower Policy)

The details of the vigil mechanism (whistle blower policy) are given in the Report on Corporate Governance forming part of this
Annual Report. The Company has uploaded the policy on its website at http://www.quickheal.com/investors/ whistle-blower-policy

30. Risk Management Policy

Report on Risk Management based on the risk management policy developed and implemented at the Company for the financial year
2015-16 forms part of this Annual Report.

31. Performance Evaluation ofthe Board, its Committees and Directors

Your Company conducted the annual performance evaluation of the Board, its various Committees and the Directors individually.
This was conducted as per the Performance Evaluation Policy of Board and KMP.

32. Listing with the stock exchanges

The Equity Shares of the Company are listed on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE) since
18th February 2016.

Listing fees for 2015-16 have been paid to both BSE and NSE.

33. Other matters

Your Directors state that no disclosure or reporting is required in respect ofthe following items as there were no transactions
on these items during the year under report:

i. Neither the Managing Director nor the Whole- time Director of the Company receive any remuneration or commission from any of
its subsidiaries.

ii. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status
and the Company''s operations in future.

34. Directors'' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, Directors of your Company hereby state and confirm that:

a) in the preparation of the annual accounts for the year ended 31st March, 2016, the applicable accounting standards have been
followed along with proper explanation relating to material departures;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the
profit of the company for the same period;

c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other
irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls in the company that are adequate and were operating effectively.

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and these are adequate and
are operating effectively.

35. Audit Observations:

Auditors'' observations are suitably explained in notes to the Accounts and are self-explanatory.

37 Extract ofAnnual Return :

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure-F.

38 Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Anti Sexual Harassment Policy in line with requirements of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are
covered under this policy. Internal Complaints Committee(s) (ICC) has been set up across all its location in India to redress
complaints received regarding sexual harassment.

During the year under review, there were no cases reported to such Committee(s).

39 Material Events occurred after balance sheet date

There were no material changes and commitments affecting the financial position between the end ofthe financial year and the date
of this report.

40 Acknowledgments

Your Board places on record the help and the sincere cooperation received from the from the shareholders, end users, dealers,
distributors, business partners, bankers, regulatory bodies and other business constituents during the year under review. The
Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers
and staff, resulting in the successful performance of the Company during the year.

For and on the behalf of the Board of Directors

Kailash Katkar Sanjay Katkar

(DIN: 00397191) (DIN:00397277)

Managing Director & CTO Managing Director & CTO

Pune, 11th May 2016

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