About the Company

Standalone Balance Sheet of Quick Heal Limited

1. Property, Plant and Equipment

The net amount of property, plant and equipment has declined from 1569 millions in FY
2018-19 to 1484 millions on FY 2019-20. The reduction was mainly on account of
depreciation charged for the year and some additions to fixed assets during the year.

2. Investments (Non-current Financial Assets)

 The investment under non-current financial assets as on March 31, 2020 stood at ₹
353.32 Million as compared to ₹ 296.23 Million as on March 31, 2019. The increase was
mainly on account of investments in mutual funds and an investment of ₹ 21.80 Million
made by Company in L7 defence during the year.

3. Trade Receivables (Current Assets)

Trade receivables is the amount that the company is entitled to receive from customers on
behalf of supplying goods and services on credit.
Quick Heal’s trade receivables have overall decreased from 1248.55 million in 2018-19 to
1132.26 million in FY 2019-20. The receivables days remained at 136 days as on March 31,
2020 as compared to 138 days as on March 31, 2019. Quick Heal continues to focus on
collection however considering the fact that retail business is stock and sale mode, the
receivable days are expected to remain in this higher range going forward. Other Current
Asset

4. Cash and Cash Equivalents

Cash and Cash equivalents comprise cash at banks and on hand along with short term
deposits with high liquidity, subject to an insignificant change in the values.
Quick Heal’s cash and cash equivalents amounted to ₹ 35.57 Million as of March 31 ,
2020, as compared to ₹ 79.63 Million as on March 31, 2019. In the last year, the
Company had paid a higher amount of advances to its suppliers of goods and services in
the last month of the year.

5. Equity Share Capital

Equity Share Capital is the money that company owners and investors direct towards a
company’s capital and use to develop or expand the operations of their venture.
Total equity decreased to ₹ 642.03 Million on March 31, 2020, as against ₹ 705.63
Million as on March 31, 2019. This decrease reflects share buyback of 63.64 Million
shares which was completed in June 2019.

6. Reserves and Surplus

 a) Securities Premium Reserve- The balance in this reserve has reduced from 2343.38
Million in FY 19 to 593.84 Million in FY 20 as an amount og 1686.38 Million was
utilised in the buyback of shares.
b) General Reserve- Under the erstwhile Companies Act 1956, general reserve was
created through an annual transfer of net income at a specified percentage in accordance
with applicable regulations. Consequent to introduction of Companies Act 2013, the
requirement to mandatorily transfer a specified percentage of the net profit to general
reserve has been withdrawn. The Directors decided not to transfer any amount to
General Reserve and to carry forward the entire surplus under the Statement of Profit &
Loss.
c) Capital Redemption Reserve - As per section 69 of the Companies Act, 2013, Quick
Heal has created Capital Redemption Reserve of ` 63.64 Million which is equal to the
nominal value of the shares bought back as an appropriation from Securities Premium
Reserve.
.

7. Trade Payables

Trade payables includes both amount due to creditors and bills payables. While we
analyse Quick Heal’s Trade payables there hasn’t been any significant change from FY
19 to FY 20.
8. Revenue from Operations

The retail and enterprises & government segments accounted for 80% and 20% of Quick
Heal’s revenue respectively
In the FY 2019-20, the company reported a decline in sales despite selling to a higher number
of customers. This is because the prices of the products of the company declined. Revenue
from operations, which stood at ₹ 2,861 Million, down 9.1% compared to ₹ 3,149 Million in
FY 2020.
The lockdown imposed from March 2020 due to COVID-19 pandemic severely impacted the
business of the Company. The Company was not able to physically despatch the products to
its retailers since transportation of goods was not possible and this affected the revenue of the
Company in the last quarter of the year.
9. Cost of Materials Consumed

The inventory turnover is the major reason for fall in the cost of materials consumed.
The inventory has come down from 29.33 Million at the beginning of FY 19 to 8.75 in
FY 20. This shows the product is fast selling and is of small ticket size. As the
management has stated that their major revenue contribution is from retail.

10. Employee Benefit Expenses

 Quick Heal’s Employee benefits expenses amounted to ₹ 999.90 Million in FY 2020 as
compared to ₹ 971 Million in FY 2019, an increase of 2.98%. The total number of
employees declined to 971 as at the end of FY 2020 compared to 1,037 as at the end of
FY 2019. The resources were aligned with the growing needs of overall business which
has resulted in marginal reduction in the overall employee count. There was also higher
usage of outsourced services to take care of the changing business requirements.

11. Depreciation and Amortization Expenses

Depreciation is the reduction in the value of an asset over time, due in particular to wear
and tear.
Depreciation expense amounted to ₹ 216.77 Million for FY 2020 as compared to ₹
235.49 Million for FY 2019, a decline of 7.9%. The reduction was mainly on account of
no major addition during the year and the written down value depreciation method
followed by the Company.

Items from Notes to Accounts

12. Contingent Liabilities

A contingent liability is a possible obligation that arises from past events whose existence
will be confirmed by the occurrence or non-occurrence of one or more uncertain future
events.
The company had provided 1610.50 Million for service tax in 2019 in relation to the
similar notice of demands in relation to service tax by the Parent Company in earlier
years under the provisions of Finance Act, 1994.
13. Utilization of money raised through public issue

During the year ended March 31, 2016, the Company has raised ` 4,512.53 through public
issue, specifically to meet the following objects of the Offer. The utilisation of IPO
proceeds during the year ended March 31, 2020 and March 31, 2019 against the following
objects of the Offer is as follows:

a) While the company utilised 496.52 Million in FY19 as against of allocated amount of
1110 Million for advertising and promotion, the balance was utilised in FY2020.
b) Quick Heal being a company in the field of providing security solutions in the world of
technology has to face a lot of global competition. Hence a robust Research and
Development unit is must for the company. The company spent 391.69 Million in FY19
while the balance of 0.33 million was put to use in FY2020.
c) The company also made expenditure for purchase as well as renovation of Office
premises in Kolkata, Pune and Delhi.
d) General corporate purposes- An amount of 537.6 million was allocated to this purpose out
of which 285.64 Million were utilized in 2019.

ACCOUNTING STANDARDS
The standalone financial statements of the Company have been prepared in accordance with
Indian Accounting Standards (“Ind AS”) notified under Section 133 of the Companies Act,
2013 read with Indian Accounting Standards Rules, 2015, as amended and other relevant
provisions of the Act. The standalone financial statements have been prepared on a historical
cost basis, except for certain financial assets which have been measured at fair value. The
standalone financial statements are presented in ` millions; except when otherwise indicated.