Directors Report

Dear Members

The Directors of Quick Heal Technologies Private Limited are pleased to present the 19th Annual Report and the audited accounts for the financial year ended 31st March 2014

1.       Business Operations

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 25375 Cr in the current year as against 21463 Cr in the previous financial year The Companys exports have also shown commendable growth Your Companys 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 established new branch offices in Rajasthan Assam and Uttarakhand to expand business presence as a part of your Companys growth strategy to diversify and to support customers

Your Company has also incorporated a wholly owned subsidiary in RAK Free Trade Zone in Ras Al Khaimah namely Quick Heal Technologies MENA FZE

3.       Financial Results

                                                                                                                                        In Rupees

4.       Transfer of Profits to Reserves

Your Company proposes to transfer 10% of Net profits to General Reserve and the balance is proposed to be retained in the Profit and Loss Account

5.       Dividend

Your Directors have paid an interim dividend of Rs 750 per share on Face Value of Rs 10and per share 75% for the financial year 20132014 in their meeting held on 19th August 2014

The payment of interim dividend is subject to the confirmation by the shareholders

6.       Employee Stock Option Scheme

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

The details of activities under the scheme have been summarized in the Notes forming part of Financial Statements There was no exercise of options during the year 

7.       Fixed Deposits

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

8.       Directors

Mr Kailash Katkar and Mr Sanjay Katkar are permanent directors and are not liable to retire by rotation

During the period under report Mr Sumir Chadha Nominee Director of Investor has resigned from the Directorship of your Company because of increase in professional commitments The Board places on record its appreciation and thanks to Mr Sumir Chadha for the immense contribution made by him during his tenure of directorship at the Company The Company was in receipt of letter from the Investors about appointing Mr Shailesh Lakahni as a nominee of Sequoia on the Board of Directors of the Company 

Mr Shaliesh Lakhani was appointed as the Nominee Director of Sequoia Capital on the Board of the Company in the Board meeting held on 28th April 2014 and is not liable to retire by rotation

Mr Mehul Savla retires by rotation and being eligible offers himself for reappointment

9.       Statutory Auditor and Audit Report

Mands S V Ghatalia and Associates LLP Chartered Accountants the present statutory Auditors of the Company and who hold office upto the conclusion of Annual General Meeting are eligible for reappointment In view of internal process of realignment of network of firms of EY Mands S V Ghatalia and Associates LLP has expressed their inability to continue as the statutory Auditors of the Company 

Your Directors propose the appointment of Mands S R B C and Co LLP Chartered Accountants Pune a member of group of network of firms of EY as statutory auditors of the Company

In view of the above the members are requested to appoint Mands S R B C and Co LLP Firm Registration No 324982E Chartered Accountants as the Auditors of the Company from the conclusion of this Annual General Meeting AGM until the conclusion of 24th AGM of the Company to be held in the calendar year 2019 subject to ratification of the appointment by the Members at every Annual General Meeting to be held during their tenure at such remuneration plus service tax out of pocket and travelling expenses etc as may be mutually agreed between the Board of Directors of the Company and the Auditors

The Company has received letter from Mands S R B C and Co LLP Chartered Accountants Pune to the effect that their appointment if made would be within the prescribed limits under the Companies Act 2013 and the conditions prescribed read with the Rules framed thereunder and that they are eligible for such appointment

The observations and comments given by the Statutory Auditors in their report read together with notes thereon are selfexplanatory and hence do not call for any further comments

10.    Cost Auditors

As per General Circular No 67and2011 dated 30th November 2011 issued by Cost Audit Branch of Ministry of Corporate Affairs it was mentioned that The Companies Cost Accounting records Rules 2011 is not applicable to Certain Industries like IT and IT enabled services  But as per Notification No F No 52and26andCABand2010 dated 24th January 2012 under certain exceptional situations Quick Heal was covered  for one product namely UTM network security device as it falls under industrial product Engineering machinery Incl Electrical and Electronic products

The matter was under discussion on applicability of Cost Audit and Company was in receipt of expert opinion on applicability and hence appointment of Mands Bhavesh Marolia and Associates Practitioner Cost Accountant were appointed as the Cost Auditors for the Financial Year 20132014 in the Board Meeting held on 6th February 2014

11.    Internal Auditor

Mands PricewaterhouseCoopers PWC Chartered Accountants Pune are the Internal Auditors of the Company  As there contracted period was over Board of Directors decided to appoint new internal auditors for the next term of Internal Audit

Your Company has received an eligibility and willingness letter from Mands Pipalia Singhal and Associates Chartered Accountants Firm Registration No114665W to conduct internal audit of the Company  Your Directors in their meeting held on 19th August 2014 have approved their appointment for the Financial Year 20142015

12.    Particulars of Employees

In terms of the provisions of Section 2172A of the Companies Act 1956 read with the Companies Particulars of Employees Rules 1975 and the Companies Particular of Employees Amendment Rules 2011 the names and other particulars of employees are set out in the Annexure to the  Directors Report

13.    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 and 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 and D activities includes studyingandanalyzing end users demands and changing needs and designingand developing products suitable for Indian customers as well as same for Export market In the coming years the Company will invest in R and D in several software technologies and systems 

·         Benefits derived from the R and 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

14.    Subsidiaries

The details of the subsidiaries of your Company as on 31st March 2014 are as under

15.    Voluntary secretarial compliance certificate

Your Company has obtained a certificate from a whole time Practicing Company Secretary on a voluntary basis for compliance of the provisions of the Companies Act 1956 for the Financial Year 20132014

16.    Corporate Social Responsibility CSR

As per the Companies Act 2013 all companies having net worth of Rs 500 crore or more or turnover of Rs 1000 crore or more or a net profit of Rs 5 crore or more during any financial year will be required to constitute a Corporate Social Responsibility CSR committee of the Board of directors comprising three or more directors  CSR activities as per the Companies Act 2013 can be taken by the Company through a registered trust   Your Company has made an application on 30th June 2014 to Charity Commissioner Pune for formation of registered trust namely Quick Heal Foundation and received Certificate of Registration of Trust on 20th August 2014

17.    Directors Responsibility Statement

Pursuant to the requirements under Section 217 2AA of the Companies Act 1956 with respect to Directors Responsibility Statement it is hereby confirmed

         i.            that in the preparation of the accounts for financial year ended 31st March 2014 the applicable Accounting Standards have been followed along with proper explanation relating to material departures

        ii.            that the Directors had 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 as at 31st March 2014 and of the profit of the Company for that period

      iii.            that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and

      iv.            that the Directors had prepared the accounts for financial year ended 31st March 2014 on a going concern basis

18.    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 DIN 00397191                                                        Sanjay Katkar DIN 00397277

Managing Director and CEO                                                         Managing Director and CTO

B 101 Omkar Puru Hsg Soc Air Port Road                                     S 4 1 Siddeshwar Nagar Tingrenagar Road

Pune 411032                                                                                       Vishrantwadi Pune 411015

Pune 26th September 2014                                                               Pune 26th September 2014
Annexure 1

Information as per section 2172A of the Companies Act 1956 read with the Companies Particulars of Employees Rules 1975 and forming part of the Directors Report for the year ended 31st March 2014

 For the period  02092013   31032014

Notes

1 Total Remuneration includes salary allowances bonus and perquisites

2 Designation denotes nature of duties also