Quick Heal Technologies Ltd

Dear Members,

Quick Heal Technologies Limited

The Board of Directors of your Company is pleased to present the 29th Annual Report along with the audited financial statements, for the financial year ended March 31, 2024.

1. FINANCIAL RESULTS:

( in Crores)

The abovementioned figures are extracted from financial statements prepared in accordance with the Indian accounting standards (IND AS).

The Standalone and Consolidated Financial Statements of the Company for the financial year 2023-24 are prepared in compliance with the applicable provisions of the Companies Act 2013 (the ‘Act') including Indian Accounting Standards specified under section 133 of the Act. The audited Standalone and Consolidated Financial Statements together with the Auditors' Report thereon forms part of the Annual Report of the financial year 2023-24. The Auditors' Report on Standalone and Consolidated financials is unmodified.

2. COMPANY PERFORMANCE OVERVIEW AND OUTLOOK

Your Company recorded a total income of 313.14. Crores for the financial year 2023-24 as against

300.22 Crores in 2022-23, resulting in an increase of 4.30% in the total income during the year under review on consolidated basis. The Profit after Tax of the Company was increased by 278.8% from 6.40 Crores in the year 2022-23 to 24.24 Crores 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 final Dividend @ 30% i.e. 3/- per fully paid up equity shares of 10 each, for the financial year

2023-24. The payment of aforesaid Dividend is subject to the approval of the Members at the ensuing Annual General Meeting.

The total dividend for the financial year 2023-24 would involve a total outflow of 16.05 crores resulting in a dividend pay-out ratio of 66.68.% of the standalone profits of the Company.

In view of the changes made under the Income Tax Act, 1961, by the Finance Act, 2020, the dividends paid or distributed by the Company shall be taxable in the hands of the shareholders. The Company shall, accordingly, make the payment of the final dividend after deduction of tax at source.

The dividend recommended for the financial year 2023- 24, is in compliance with the Dividend Distribution Policy in terms of regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR). The Dividend Distribution Policy of the Company is also hosted on the website of the Company and can be viewed at https://www.quickheal.co.in/documents/ investors/Dividend-Distribution-Policy-21.pdf.

4. TRANSFER OF PROFITS TO RESERVES

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

5. PUBLIC DEPOSITS

During the year under review, your Company did not accept any deposits under section 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014, as amended from time to time.

6. REPORT ON PERFORMANCE OF SUBSIDIARIES

The Company has two subsidiaries as of March 31, 2024. There are no associates or joint venture companies within meaning of Section (2)(6) of the Companies Act, 2013. There has been no material change in the nature of the business of the 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 Board's 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 AGM. Further, the Company will make available the audited annual accounts and related information about the subsidiary companies, upon request by any Member of the Company.

7. MANAGEMENT DISCUSSION AND ANALYSIS (MD&A)

As per the provisions of Regulation 34 of the SEBI LODR a detailed review by the Management of the business operations of the Company is presented under separate section "Management Discussion and Analysis" (MD&A) which forms a part of this Annual Report. The MD&A Report captures your Company's performance, industry trends and other material changes with respect to your Company.

8. CORPORATE GOVERNANCE REPORT

Your Company believes in adopting the best practices of corporate governance. The Company has complied with the regulatory provisions for Corporate Governance as prescribed under Schedule V of SEBI LODR. The quarterly Corporate Governance Reports are submitted to the stock exchanges in compliance with the regulatory provisions. A certificate from M/s

J. B. Bhave & Co., Practicing Company Secretaries, confirming compliance with the conditions of the Corporate Governance, forms a part of this Annual Report.

9. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

A Business Responsibility and Sustainability Report as per Regulation 34 of the SEBI LODR, detailing the various initiatives taken by the Company on the environmental, social and governance front forms an integral part of this Annual Report.

10. INTERGATED REPORT

The Company has provided an Integrated Report which encompasses both financial and non-financial information to enable the Members to take well- informed decisions and have a better understanding of the Company's long-term perspective. The Report also touches upon aspects such as organization's strategy, governance framework, performance and prospects of value creation based on the six forms of capital viz. financial, service, intellectual, human, social & relationship and natural capital.

11. RISK MANAGEMENT

The Company hasput in place a robust risk management framework which facilitates the identification of risks and also mitigation thereof. The Audit Committee and Risk Management Committee are updated on the risks on a quarterly basis. There are no risks which in the opinion of your board 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.

12. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT

There have been no other material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.

13. LISTING ON STOCK EXCHANGES

The Company's shares are listed on BSE Limited and

the National Stock Exchange of India Limited.

14. COMPLIANCE WITH THE CODE OF CONDUCT

A declaration signed by the Managing Director affirming compliance with the Company's Code of Conduct by the Directors and Senior Management Personnel, for the financial year 2023-24, as required under Schedule V of the SEBI LODR forms a part of this Annual Report.

a. Composition of Board & Details of KMPs

As on March 31, 2024, the Board comprised of two Executive Directors, four Non-Executive Independent Directors and one Non-Executive Director. The Board is well diversified and consists of one Women Independent Director.

Mr. Kailash Katkar, Managing Director, Mr. Sanjay Katkar, Joint Managing Director, Mr. Vishal Salvi, Chief Executive Officer (CEO), Mr. Ankit Maheshwari, Chief Financial Officer (CFO) and Mr. Sarang Deshpande, Company Secretary (CS) 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.

b. Appointment & Cessation during the year:

Mr. Sanjay Katkar (DIN: 00397277, Joint Managing Director of the Company, retires by rotation at the ensuing AGM and, being eligible, offers himself for re- appointment. A Profile of Mr. Sanjay Katkar, as required by Regulation 36(3) of the SEBI LODR will be given in the Notice convening the forthcoming AGM.

The term of appointment of Mr. Amitabha Mukhopadhyay as an independent non executive director is expiring on June 9, 2024, however Board of Directors in their meeting held on April 25, 2024 had appointed him as an additional director and renewed his term as an independent director for another period of 5 years i.e. up to June 10, 2029 subject to approval through special resolution at the ensuing annual general meeting.

Mr. Kailash Katkar resigned as CEO and continued as Managing Director w.e.f. July 3, 2023

Mr. Vishal Salvi appointed as CEO of the Company

w.e.f. July 3, 2023.

Mr. Navin Sharma resigned as CFO w.e.f. April 18, 2023 and Mr. Ankit Maheshwari appointed as CFO

w.e.f. April 26, 2023

Mr. Srinivas Rao resigned as Company Secretary

w.e.f. July 17, 2023 and Mr. Sarang Deshpande appointed as Company Secretary w.e.f. October 26, 2023.

Mr. Vinav Agarwal resigned as Compliance officer w.e.f. September 15, 2023 and Mr. Vikram Dhanani appointed as Compliance Officer w.e.f. October 26, 2023.

Remuneration

The details including the composition and terms of reference of the Nomination and Remuneration Committee and the meetings thereof held during the Financial Year and the Remuneration Policy of the Company and other matters provided in Section 178(3) of the Act are given in the Report on Corporate Governance section forming part of this Annual Report.

The Policy for appointment of a new director on the board is available on Company's website at https://www.quickheal.co.in/ documents/investors/policies/Nomination_and_ Remuneration_Policy.pdf

16. BOARD AND ITS COMMITTEE'S MEETINGS

During the financial year 2023-24, six Board meetings were held. The maximum time gap between any two meetings did not exceed the prescribed period of one hundred twenty days. The details of the attendance of Directors at the Board Meetings and Committees Meetings such as Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee and Corporate Social Responsibility Committee are given in the Corporate Governance Report which forms part of this Report.

17. DIRECTORS' RESPONSIBILITY STATEMENT

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

a) In the preparation of the annual accounts for the year ended March 31, 2024, 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) They 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) The annual accounts have been prepared on a going concern basis;

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

f) Proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems are adequate and are operating effectively.

18. 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 fulfils the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI LODR.

The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act and the Code of Conduct for Directors and senior management personnel of the Company.

Based on the confirmations/disclosures received from the Directors under Section 149(7) of the Companies Act 2013 and on evaluation of the relationships disclosed, the following Non-Executive Directors are considered as Independent Directors:

a. Mr. Amitabha Mukhopadhyay

b. Ms. Apurva Joshi

c. Mr. Bhushan Gokhale

d. Mr. Richard Stiennon

19. BOARD EVALUATION

The Board has established a comprehensive process to evaluate the performance of the Board, its Committees and of individual directors. 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 other members of the Board (excluding the Director being evaluated). A meeting of the Independent Directors was held on March 26, 2024, to review the performance of Non-Independent Directors and the Board as a whole. The Chairperson of the Nomination & Remuneration Committee had updated the other members of the Board about the outcome of the evaluation process.

20. SUCCESSION PLANNING

Your Company have an effective mechanism for succession planning which focuses on orderly succession of board members and other senior management team. The Nomination and Remuneration Committee implements this mechanism, with the help of P&C and in concurrence with the Board.

This process for senior management was initiated by defining the unique roles by differentiating competencies. The next step was key role identification and succession planning design where certain key business roles were identified which will enhance organizational performance and provides long term competitive advantage. Now we are in the completing stage of final step i.e identification of successors and by providing required training to those successors so as to build leadership capabilities across all business units and mitigating risk of loss of experienced leadership.

21. COMMITTEES OF THE BOARD

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

22. 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., Practicing Company Secretaries, Pune as the Secretarial Auditors of the Company for the financial year 2023-24. There are no qualifications/ observations/ remarks in the Secretarial Audit Report for the year ended March 31, 2024. The Secretarial Auditor has not reported any fraud during the financial year.

EXPLANATION ON SECRETARIAL AUDITORS REPORT.

The Secretarial Auditors Report are self-explanatory and therefore do not call for any separate or further comments or explanations.

The Secretarial Auditor's Report forms part of this

Annual Report, annexed as Annexure B.

23. STATUTORY AUDITORS

M/s MSKA & Associates, Chartered Accountants (Firm Registration No. 105047W), were appointed by the Shareholders at the 24th AGM held on July 15, 2019, as Statutory Auditors for a term of five consecutive years to hold office until conclusion of ensuing 29th AGM. The Board of directors in its meeting held on April 25, 2024, has recommended re-appointment of M/s MSKA & Associates, Chartered Accountants (Firm Registration No. 105047W) for term of 5 years accordingly, the Notice of ensuing 29th AGM would include the proposal for re-appointment of Statutory Auditors.

EXPLANATION ON AUDITORS REPORT STATUTORY AUDITOR.

The notes to the accounts referred to in the Auditors Report are self-explanatory and therefore do not call for any separate or further comments or explanations.

24. INTERNAL AUDITORS

The Board has appointed M/s. Protiviti India Member Private Limited, as Internal Auditors of the Company for the financial year 2024-25.

25. REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSOANNEL AND SENIOR MANAGEMENT

As required under Section 197 (12) of the Act read with 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 ‘Annexure C' to this Boards' Report. The Statement containing names of top ten employees, in terms of remuneration drawn and the particulars of employees as required under section 197 (12) of the act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is provided in a separate statement. In terms of proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the members excluding the aforesaid Annexure. The said Statement is also open for inspection at the registered office up to the date of the ensuing Annual General Meeting. Any Member interested in obtaining a copy of the same may write to the Company Secretary.

The managerial remuneration paid to Executive Directors for the financial year 2023-24 is in excess of the limits prescribed under the Act and SEBI LODR. Accordingly, the Board of Directors have recommended the same for approval of the shareholders.

26. EMPLOYEE STOCK OPTION SCHEME

Your Company has two Employee Stock Option Plans namely, Employees Stock Option Scheme 2014 and Employees Stock Option Scheme 2021 for granting Term based and performance-based Stock Options to Employees.

The above schemes are in line with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulation, 2021 ("SBEB Regulations"). The Company has obtained a certificate from the Secretarial Auditors of the Company stating that the Schemes have been implemented in accordance with the SBEB Regulations and the resolutions passed by the members. The certificates are available for inspection by members in electronic mode. The details as required to be disclosed under the SBEB Regulations can be accessed at https://www. quickheal.co.in/investors.

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.

27. SECRETARIAL STANDARDS

During the financial year under review, the Company has followed the applicable Secretarial Standards.

28. 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:

( in Crores)

a. Energy Conservation

Company installed 45KW solar plant at its R&D centre located at Thube Park, Shivaji Nagar, Pune. The plant generated 6.42% of its total energy requirement for said R&D centre.

Policy benefits:- Company is availing lower electricity tariff & electricity duty exemption under Maharashtra IT policy.

b. 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 the latest technology. Few of the steps taken are provided below:

1) Conduct Innovation Week involving team members across locations.

2) Promote and fund team members to represent & participate in Technology Summits, research conferences and hackathons.

3) Induct interns from IITs and other top tier

academic institutes to explore new areas

4) Enable team members with AI/ML, GenAI, etc trainings from new generation companies such as AWS, Microsoft, etc

5) Provide lab environment to explore use

cases on Gen AI

c. Foreign Exchange earnings and outgo:

Total foreign exchange earnings and outgo for the

financial year were as follows:

There are no Loans, Guarantees and Investments

provided by the Company as on March 31, 2024.

30. RELATED PARTY TRANSACTIONS

All related party transactions carried out during the year were carried out on an arm's length basis and 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 of the Company.

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

31. CORPORATE SOCIAL RESPONSIBILITY (‘'CSR'')

Your Company has a strong commitment to the society we live in. Your Company has chosen ‘Quick Heal Foundation' and implements its CSR objects through the Foundation. The Company strives to promote Cybersecurity awareness, promotion of education and community development. The Company's CSR policy is available on our website at https://www.quickheal. co.in/investors/company-policies.

During the year under review, the Company spent a total of 1.82 Crores on CSR activities, vis-?-vis 1.71 Crores i.e. 2% as per provisions of the Section 135 of the Companies Act, 2013. The Company continues to remain committed towards undertaking CSR activities for the welfare of society.

A detailed report on CSR activities of your Company under the provisions of the Companies Act, 2013 during the financial year 2023-24 is given as Annexure F.

32. 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 are adequate and are operating efficiently and effectively. The Company's IFC policies are commensurate with its requirements and are operating effectively. The IFC 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.

33. 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/investors/company-policies.

34. INVESTOR EDUCATION AND PROTECTION FUND

In accordance with the provisions of Sections 124 and 125 of the Act and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), dividends of a company which remain unpaid or unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account shall be transferred by the company to the Investor Education and Protection Fund ("IEPF"). In terms of the foregoing provisions of the Act, 1,32,095 dividend amount and 1719 number of shares were transferred to the IEPF by the Company during FY 2023-24.

35. 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.

iii. No fraud has been reported by the Auditors to the Audit Committee or the Board under section 134(3).

iv. There is no change in the nature of the business of the Company.

v. There is no proceeding pending under Insolvency and Bankruptcy Code, 2016

vi. There is no instance of one-time settlement with any Bank or Financial Institution.

vii. Change in name of premises wherein registered office of the Company is situated from "Marvel Edge" to " Solitaire Business Hub"

36. ANNUAL RETURN

Pursuant to Section 92(3) of the Act, the Annual Return as on March 31, 2023 is available on Companies website on https://www.quickheal.co.in/documents/ investors/quick-heal-annual-returnt-2023.pdf

37. 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 Committee(s) has been set up across all its required locations in India to address complaints received regarding sexual harassment. There were no complaints reported during the financial year 2023-24.

38. APPRECIATION

Your Board places on record sincere gratitude and appreciation for all the employees, customers, vendors, investors, bankers, end users, dealers, distributors, business partners and other business constituents during the year under review. We also thank the support received from various government and regulatory authorities.