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Quick Heal Technologies Ltd.

BSE: 539678 Sector: IT
NSE: QUICKHEAL ISIN Code: INE306L01010
BSE LIVE 15:46 | 17 Nov 217.15 -6.20
(-2.78%)
OPEN

225.90

HIGH

225.90

LOW

215.10

NSE 15:59 | 17 Nov 217.65 -6.10
(-2.73%)
OPEN

225.75

HIGH

225.95

LOW

216.25

OPEN 225.90
PREVIOUS CLOSE 223.35
VOLUME 70891
52-Week high 295.85
52-Week low 172.75
P/E 27.80
Mkt Cap.(Rs cr) 1,525
Buy Price 217.15
Buy Qty 4.00
Sell Price 0.00
Sell Qty 0.00
OPEN 225.90
CLOSE 223.35
VOLUME 70891
52-Week high 295.85
52-Week low 172.75
P/E 27.80
Mkt Cap.(Rs cr) 1,525
Buy Price 217.15
Buy Qty 4.00
Sell Price 0.00
Sell Qty 0.00

Quick Heal Technologies Ltd. (QUICKHEAL) - Auditors Report

Company auditors report

To the Members of Quick Heal Technologies Limited

Report on the Standalone Ind AS financial statements

We have audited the accompanying standalone Ind AS financial statementsof Quick Heal Technologies Limited ("the Company") which comprise thestandalone Balance Sheet as at March 31 2017 the standalone Statement of Profit andLoss including the standalone Other Comprehensive Income the standalone Cash FlowStatement and the standalone Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information (hereinafterreferred to as "the standalone Ind AS financial statements").

Management's Responsibility for the Ind AS financial statements

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone Ind AS financial statements that give a true and fair viewof the financial position financial performance including other comprehensive incomecash flows and changes in equity of the Company in accordance with accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 and the Companies(Indian Accounting Standards) Rules 2015 as amended. This responsibility includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and the design implementationand maintenance of adequate internal financial control that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Ind AS financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind ASfinancial statements based on our audit. We have taken into account the provisions of theAct the accounting and auditing standards and matters which are required to be includedin the audit report under the provisions of the Act and the Rules made thereunder. Weconducted our audit in accordance with the Standards on Auditing issued by the Instituteof Chartered Accountants of India as specified under Section 143(10) of the Act. ThoseStandards require that we comply with ethical requirements and plan and perform the auditto obtain reasonable assurance about whether the standalone Ind AS financial statementsare free from material misstatement.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and disclosures in the standalone Ind AS financial statements. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor error. In making those risk assessments the auditor considers internal financialcontrol relevant to the Company's preparation of the standalone Ind AS financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made by theCompany's Directors as well as evaluating the overall presentation of the standalone IndAS financial statements. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the standalone Ind ASfinancial statements.

Opinion

In our opinion and to the best of our information and according to theexplanations given to us the standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2017 its results including other comprehensive income its cashflows and the changes in equity for the year ended on that date.

Emphasis of Matter

We draw attention to Note 33(c) of the standalone Ind AS financialstatements wherein it is stated that the Company has received statements of demand ofservice tax under the provisions of Finance Act 1994 for INR 846.06 million (excludingpenalty of INR 589.26 million) for the period from March 01 2011 to March 31 2015 and asmore fully discussed therein and based on the matter stated therein including legalopinion obtained by the Company no provision has been considered by the management inthese financial statements including similar liability for the subsequent period tillMarch 31 2017.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of Section 143 of the Act we give in the Annexure 1 a statement on the mattersspecified in paragraphs 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act we report that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet Statement of Profit and Loss including theStatement of Other Comprehensive Income the Cash flow statement and Statement of Changesin Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone Ind AS financialstatements comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014 and the Companies (IndianAccounting Standards) Rules 2015 as amended;

(e) On the basis of written representations received from the directorsas on March 31 2017 and taken on record by the Board of Directors none of the directorsis disqualified as on March 31 2017 from being appointed as a director in terms ofSection 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure 2" to this report;

(g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone Ind AS financial statements - Refer Note 33(c) to thestandalone Ind AS financial statements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company; and

iv. The Company has provided requisite disclosures in Note 47(b) tothese standalone Ind AS financial statements as to the holding of Specified Bank Notes(SBNs) on November 8 2016 and December 30 2016 as well as dealings in Specified BankNotes during the period from November 8 2016 to December 30 2016. Based on auditprocedures performed and relying on the management representations except for the detailsregarding nature of payments made through SBNs and other denomination notes as more fullydescribed in Note 47(b) to these standalone Ind AS financial statements upon which we areunable to comment on in the absence of specific information which as represented to usis in the process of being compiled by the management we report that these disclosuresare in accordance with the books of account maintained by the Company and as produced tous by the Management.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Tridevlal Khandelwal

Partner

Membership Number: 501160

Place of Signature: Pune

Date: May 12 2017

Independent Auditor's Report

Annexure 1 referred to in paragraph 1 under the heading "Reportingon Other Legal and Regulatory Requirements" of our report of even date Re: Quick HealTechnologies Limited ('the Company')

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by themanagement during the year but there is a regular programme of verification once in twoyears which in our opinion is reasonable having regard to the size of the Company andthe nature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given by themanagement the title deeds of immovable properties included in property plant andequipment are held in the name of the Company.

(ii) The management has conducted physical verification of inventory atreasonable intervals during the year and no material discrepancies were noticed on suchphysical verification.

(iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under Section189 of the Act. Accordingly the provisions of clause 3(iii)(a) (b) and (c) of the Orderare not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanationsgiven to us the Company has not advanced loans to directors / to a company in which theDirector is interested to which provisions of Section 185 of the Act apply and hence notcommented upon. In our opinion and according to the information and explanations given tous provisions of Section 186 of the Act in respect of loans and advances giveninvestments made have been complied with by the company. Further the Company has notgiven guarantee or provided security to which the provisions of Section 186 of the Actapply.

(v) The Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) To the best of our knowledge and as explained the CentralGovernment has not specified the maintenance of cost records under Section 148(1) of theAct for the products and services of the Company.

(vii) (a) Undisputed statutory dues including provident fundemployees' state insurance income-tax sales-tax service tax duty of custom duty ofexcise value added tax cess and other material statutory dues have generally beenregularly deposited with the appropriate authorities though there has been a slight delayin few cases with respect to value added tax.

(b) According to the information and explanations given to us noundisputed amounts payable in respect of provident fund employees' state insuranceincome- tax service tax sales-tax duty of custom duty of excise value added taxcess and other statutory dues were outstanding at the year end for a period of more thansix months from the date they became payable.

(c) According to the records of the Company the dues outstanding ofincome-tax sales-tax service tax duty of custom duty of excise value added tax andcess on account of any dispute are as follows:

Name of the statute Nature ofthe dues Amount (INR in millions) Period to which the amount relates Forum where the dispute is pending
The Finance Act 1994 Service tax on supply of licences to end customers** 560.71 March 1 2011 to March 312014 Additional Director General (Adjudication) New Delhi
The Finance Act 1994 Service tax on supply of licences to end customers** 285.35 FY2014-15 Commissioner Service tax audit Commissionerate Pune
The Kerala Value Added Tax Act 2003 Value added tax on stock transfer 0.11 (net of 0.05 paid under protest) FY2012-13 Deputy Commissioner of Appeals (Commercial Tax) Kochi
Income-tax Act 1961 Tax on account of disallowance of expenses on 14A 1.83* FY2013-14 Commissioner of Income Tax (Appeals)
Income-tax Act 1961 Tax on account of disallowance of expenses on 14A 0.89* FY2011-12 Commissioner of Income Tax (Appeals)

* The amount of tax is calculated using the tax rates applicable duringthe relevant assessment year based on the amount of disallowances / adjustments underdispute.

** excludes interest and penalty if any thereon.

(viii) In our opinion and according to the information and explanationsgiven by the management the Company did not have any outstanding dues in respect offinancial institution bank government or debenture holders during the year.

(ix) In our opinion and according to the information and explanationsgiven by the management monies raised by the Company by way of initial public offer wereapplied for the purpose for which they were raised though idle funds which were notrequired for immediate utilization have been gainfully invested in liquid investmentspayable on demand. The maximum amount of idle funds invested during the year was INR2317.16 million of which INR 1886.42 million was outstanding at the end of the year.According to the information and explanations given by the management the Company has notraised any money by way of term loans.

(x) Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to theinformation and explanations given by the management we report that no fraud by theCompany or no fraud on the Company by the officers and employees of the Company has beennoticed or reported during the year.

(xi) According to the information and explanations given by themanagement the managerial remuneration has been paid / provided in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

(xii) In our opinion the Company is not a nidhi Company. Thereforethe provisions of clause 3(xii) of the Order are not applicable to the Company and hencenot commented upon.

(xiii) According to the information and explanations given by themanagement transactions with the related parties are in compliance with Section 177 and188 of the Act where applicable and the details have been disclosed in the notes to thefinancial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and onan overall examination of the balance sheet the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review and hence reporting requirements under clause 3(xiv) of the Orderare not applicable to the Company and hence not commented upon.

(xv) According to the information and explanations given by themanagement the Company has not entered into any non-cash transactions with directors orpersons connected with him as referred to in Section 192 of the Act.

(xvi) According to the information and explanations given to us theprovisions of Section 45-IA of the Reserve Bank of India Act 1934 are not applicable tothe Company.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Tridevlal Khandelwal

Partner

Membership Number: 501160

Place of Signature: Pune

Date: May 12 2017

Annexure 2 referred to in paragraph 2 (f) under the heading"Report on Other Legal and Regulatory Requirements" of our report on even date

Report on the Internal Financial Controls under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ("the Act")

To the Members of Quick Heal Technologies Limited

We have audited the internal financial controls over financialreporting of Quick Heal Technologies Limited ("the Company") as of March 312017 in conjunction with our audit of the standalone Ind AS financial statements of theCompany for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing as specified underSection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the Company's assets thatcould have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2017 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Tridevlal Khandelwal

Partner

Membership Number: 501160

Place of Signature: Pune

Date: May 12 2017