Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 20-F (Mark One)¨REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934OR xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended March 31, 2016OR ¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934OR ¨SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report: Not applicableFor the transition period from to Commission file number 001-36622 MIMECAST LIMITED(Exact name of Registrant as specified in its charter) Bailiwick of Jersey(Jurisdiction of incorporation or organization)CityPoint, One Ropemaker Street, MoorgateLondon EC2Y 9AWUnited Kingdom(Address of principal executive offices)Peter Campbell, Chief Financial OfficerTel: +1 781 996 5340Mimecast North America, Inc.480 Pleasant StreetWatertown, MA 02472(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registeredOrdinary Shares, nominal value $0.012 per share NASDAQ Stock Market LLCSecurities registered or to be registered pursuant to Section 12(g) of the Act:None(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:None(Title of Class) Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.Ordinary shares, nominal value $0.012 per share: 54,216,738Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No xIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of1934. Yes ¨ No xNote—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligationsunder those Sections.Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and postedpursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post suchfiles). Yes x No ¨Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” inRule 12b-2 of the Exchange Act. (Check one):Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer xIndicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP x International Financial Reporting Standards as issuedby the International Accounting Standards Board ¨ Other ¨If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ¨ Item 18 ¨If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x Table of ContentsTABLE OF CONTENTS Page Non-GAAP Financial Measures 3 Special Note Regarding Forward-Looking Statements 4 Item 1. Identity of Directors, Senior Management and Advisors 5 A. Directors and Senior Management B. Advisers C. Auditors Item 2. Offer Statistics and Expected Timetable 5 A. Offer Statistics B. Method and Expected Timetable Item 3. Key Information 5 A. Selected Consolidated Financial and Other Data 5 B. Capitalization and Indebtedness 8 C. Reasons for the Offer and Use of Proceeds 8 D. Risk Factors 8 Item 4. Information About the Company 28 A. History and Development of the Company 28 B. Business Overview 28 C. Organizational Structure 48 D. Property, Plant and Equipment 48 E. Section 219 Disclosure 48 Item 4A. Unresolved Staff Comments 49 Item 5. Operating and Financial Review and Prospects 49 A. Operating Results 56 B. Liquidity and Capital Resources 63 C. Research and Development, Patents and Licenses 71 D. Trend Information 71 E. Off-Balance Sheet Arrangements 71 F. Tabular Disclosure of Contractual Obligations 71 G. Safe Harbor 71 Item 6. Directors, Senior Management and Employees 72 A. Directors and Senior Management 72 B. Compensation 74 C. Board Practices 74 D. Employees 84 E. Share Ownership 84 Item 7. Major Shareholders and Related Party Transactions 84 A. Major Shareholders 84 B. Related Party Transactions 87 C. Interests of Experts and Counsel Item 8. Financial Information 88 A. Consolidated Statements and Other Financial Information 88 B. Significant Changes 89 Item 9. The Offer and Listing 89 A. Offering and Listing Details 89 B. Plan of Distribution 89 C. Markets 89 D. Selling Shareholders 90 E. Dilution 90 F. Expenses of the Issue 90 1 Table of Contents Page Item 10. Additional Information 90 A. Share Capital 90 B. Memorandum and Articles of Association 91 C. Material Contracts 99 D. Exchange Controls 99 E. Taxation 99 F. Dividends and Paying Agents 107 G. Statements by Experts 107 H. Documents on Display 107 I. Subsidiary Information 108 Item 11. Quantitative and Qualitative Disclosures about Market Risk 108 Item 12. Description of Securities Other than Equity Securities 110 A. Debt Securities 110 B. Warrants and Rights 110 C. Other Securities 110 D. American Depositary Shares 110 Item 13. Defaults, Dividend Arrearages and Delinquencies 110 Item 14. Material Modifications to the Rights of Securityholders and Use of Proceeds 110 Item 15. Controls and Procedures 111 Item 16A. Audit Committee Financial Expert 111 Item 16B. Code of Ethics 111 Item 16C. Principal Accountant Fees and Services 111 Item 16D. Exemption from the Listing Standards for Audit Committees 112 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers 113 Item 16F. Change in Registrant’s Certifying Accountant 113 Item 16G. Corporate Governance 113 Item 16H. Mine Safety Disclosure 113 Item 17. Financial Statements 113 Item 18. Financial Statements 113 Item 19. Exhibits 113 Index to Consolidated Financial Statements F-1 References in this Annual Report on Form 20-F to “Mimecast Limited,” “we,” “our,” “us” and the “Company” refer to Mimecast Limited and itsconsolidated subsidiaries. Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the UnitedStates, or U.S. GAAP, and are expressed in U.S. dollars. References to “dollars” or “$” are to U.S. dollars. Our fiscal year ends on March 31 of each calendaryear. References to any specific fiscal year refer to the year ended March 31 of the calendar year specified. For example, we refer to the fiscal year endingMarch 31, 2016 as “fiscal 2016.”The trademarks, trade names and service marks appearing in this Annual Report on Form 20-F are the property of their respective owners.Certain amounts and percentages that appear in this Annual Report on Form 20-F have been subject to rounding adjustments. As a result, certainnumerical figures shown as totals, including in tables, may not be exact arithmetic aggregations of the figures that precede or follow them. 2 Table of ContentsNon-GAAP Financial MeasuresRevenue Constant Currency Growth Rate. In order to determine how our business performed exclusive of the effect of foreign currency fluctuations, wecompare the percentage change in our revenue from one period to another using a constant currency. To determine the revenue constant currency growth ratefor the fiscal years below, revenue from entities reporting in foreign currencies was translated into U.S. dollars using the comparable prior period’s foreigncurrency exchange rates. For example, the average rates in effect for the year ended March 31, 2015 were used to convert revenue for the year endedMarch 31, 2016 and the revenue for the comparable prior period ended March 31, 2015, rather than the actual exchange rates in effect during the respectiveperiod. Revenue constant currency growth rate is a non-GAAP financial measure. A reconciliation of this non-GAAP measure to its most directly comparableU.S. GAAP measures for the respective periods can be found in “Item 3—Key Information—A. Selected Consolidated Financial and Other Data” below.The impact of foreign exchange rates is highly variable and difficult to predict. We use revenue constant currency growth rate to show the impact fromforeign exchange rates on the current period revenue growth rate compared to the prior period revenue growth rate using the prior period’s foreign exchangerates. In order to properly understand the underlying business trends and performance of our ongoing operations, we believe that investors may find it usefulto consider the impact of excluding changes in foreign exchange rates from our revenue growth rate.We believe that presenting this non-GAAP financial measure in this report provides investors greater transparency to the information used by ourmanagement for financial and operational decision-making and allows investors to see our results “through the eyes” of management. We also believe thatproviding this information better enables our investors to understand our operating performance and evaluate the methodology used by management toevaluate and measure such performance.However, this non-GAAP measure should not be considered in isolation or as a substitute for our financial results prepared in accordance with U.S.GAAP. For example, revenue constant currency growth rates, by their nature, exclude the impact of foreign exchange, which may have a material impact onU.S. GAAP revenue. Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and therefore other companiesmay calculate similarly titled non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial measure that we define as net (loss) income, adjusted to exclude: depreciation andamortization, share-based compensation expense, restructuring expense, interest income and interest expense, the provision for income taxes and foreigncurrency exchange income (expense). A reconciliation of this non-GAAP measure to its most directly comparable U.S. GAAP measures for the respectiveperiods can be found in “Item 3—Key Information—A. Selected Consolidated Financial and Other Data” below.We believe that Adjusted EBITDA provides investors and other users of our financial information consistency and comparability with our pastfinancial performance, facilitates period-to-period comparisons of operations and facilitates comparisons with our peer companies, many of which use asimilar non-GAAP financial measure to supplement their GAAP results.We use Adjusted EBITDA in conjunction with traditional GAAP operating performance measures as part of our overall assessment of our performance,for planning purposes, including the preparation of our annual operating budget, to evaluate the effectiveness of our business strategies and to communicatewith our board of directors concerning our financial performance.We do not place undue reliance on Adjusted EBITDA as a measure of operating performance. This non-GAAP measure should not be considered as asubstitute for other measures of financial performance reported in accordance with GAAP. There are limitations to using a non-GAAP financial measure,including that other companies may calculate this measure differently than we do, that it does not reflect our capital expenditures or future requirements forcapital expenditures and that it does not reflect changes in, or cash requirements for, our working capital. 3 Table of ContentsSPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTSThis Annual Report on Form 20-F contains forward-looking statements within the meaning of the federal securities laws, which statements involvesubstantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In somecases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,”“intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similarterms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Annual Report on Form 20-Finclude, but are not limited to, statements about: • our expectations regarding our revenue, expenses and other results of operations; • our plans to invest in sales and marketing efforts and expand our channel partnerships; • our ability to attract and retain customers; • our spending of the net proceeds from our initial public offering; • our plans to continue to invest in the research and development of technology for both existing and new products; • the growth rates of the markets in which we compete; • our liquidity and working capital requirements; • our anticipated strategies for growth; • our ability to anticipate market needs and develop new and enhanced solutions to meet those needs; • anticipated trends and challenges in our business and in the markets in which we operate; • our ability to compete in our industry and innovation by our competitors; • our ability to adequately protect our intellectual property; and • our plans to pursue strategic acquisitions.We caution you that the foregoing list may not contain all of the forward-looking statements made in this Annual Report on Form 20-F.You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in thisAnnual Report on Form 20-F primarily on our current expectations and projections about future events and trends that we believe may affect our business,financial condition, operating results and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertaintiesand other factors described in the “Item 3—Key Information—D. Risk Factors.” Moreover, we operate in a very competitive and rapidly changingenvironment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have animpact on the forward-looking statements contained in this Annual Report on Form 20-F. We cannot assure you that the results, events and circumstancesreflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those describedin the forward-looking statements.The forward-looking statements made in this Annual Report on Form 20-F relate only to events as of the date on which the statements are made. Weundertake no obligation to update any forward-looking statements made in this Annual Report on Form 20-F to reflect events or circumstances after the dateof this Annual Report on Form 20-F or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actuallyachieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-lookingstatements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investmentswe may make. 4 Table of ContentsPART IITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORSNot required.ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLENot applicable.ITEM 3. KEY INFORMATIONA. Selected Consolidated Financial and Other DataOur historical consolidated financial statements are prepared in accordance with U.S. GAAP and presented in U.S. dollars. The selected historicalconsolidated financial information set forth below has been derived from our historical consolidated financial statements for the years presented. Historicalinformation as of and for the three years ended March 31, 2016 is derived from our consolidated financial statements, which have been audited by Ernst &Young LLP, our independent registered public accounting firm. Historical information as of and for the year ended March 31, 2013 is derived from ourunaudited consolidated financial statements for such period. You should read the information presented below in conjunction with those auditedconsolidated financial statements, the notes thereto and the discussion under “Item 5. Operating and Financial Review and Prospects” included elsewhere inthis Annual Report. Year Ended March 31, 2016 2015 2014 2013 (in thousands, except per share data) Consolidated Statements of Operations Data: Revenue $141,841 $116,085 $88,315 $66,750 Cost of revenue (1) 41,809 36,821 28,673 21,165 Gross profit 100,032 79,264 59,642 45,585 Operating expenses Research and development (1) 17,663 14,461 12,844 11,019 Sales and marketing (1) 65,187 51,224 46,971 35,635 General and administrative (1) 19,756 15,806 11,187 13,666 Restructuring — 1,203 — — Total operating expenses 102,606 82,694 71,002 60,320 Loss from operations (2,574) (3,430) (11,360) (14,735) Other income (expense) Interest income 74 62 86 77 Interest expense (690) (703) (542) (844) Foreign exchange income (expense) 811 4,508 (5,055) 1,188 Total other income (expense), net 195 3,867 (5,511) 421 (Loss) income before income taxes (2,379) 437 (16,871) (14,314) Provision for income taxes 865 152 19 15 Net (loss) income $(3,244) $285 $(16,890) $(14,329) Net (loss) income per share applicable to ordinary shareholders: (2) Basic $(0.08) $0.01 $(0.53) $(0.46) Diluted $(0.08) $0.01 $(0.53) $(0.46) Weighted-average number of ordinary shares used in computing net (loss) income per share applicableto ordinary shareholders: Basic 40,826 32,354 31,719 31,060 Diluted 40,826 36,075 31,719 31,060 5 Table of Contents At March 31, 2016 2015 2014 2013 (in thousands) Consolidated Balance Sheet Data: Cash and cash equivalents $106,140 $32,890 $19,158 $36,458 Property and equipment, net 24,806 23,159 24,974 14,563 Total assets 175,127 88,829 75,783 73,453 Debt, current and long-term 6,891 12,364 9,092 8,669 Deferred revenue, current and long-term 70,040 53,308 46,131 35,222 Convertible preferred shares — 59,305 59,305 59,305 Total shareholders’ equity (deficit) 78,074 (53,851) (56,750) (44,700) Year Ended March 31, 2016 2015 2014 (dollars in thousands) Supplemental Financial and Other Data: Revenue constant currency growth rate (3) 30% 33% 37% Revenue retention rate (4) 109% 107% 105% Total customers (5) 18,000 13,800 10,300 Adjusted EBITDA (6) $15,839 $14,227 $(1,170) (1)Share-based compensation expense included in these line items was as follows: Year Ended March 31, 2016 2015 2014 2013 (in thousands) Cost of revenue $633 $151 $151 $239 Research and development 1,711 544 291 174 Sales and marketing 3,180 1,684 395 2,663 General and administrative 2,362 3,047 395 3,600 Total share-based compensation expense $7,886 $5,426 $1,232 $6,676 (2)Basic and diluted net (loss) income per share applicable to ordinary shareholders is computed based on the weighted net-average number of ordinaryshares outstanding during each period. For additional information, see Note 2 to the notes to our consolidated financial statements included elsewherein this Annual Report.(3)In order to determine how our business performed exclusive of the effect of foreign currency fluctuations, we compare the percentage change in ourrevenue from one period to another using a constant currency. To determine the revenue constant currency growth rate for the fiscal years below,revenue from entities reporting in foreign currencies was translated into U.S. dollars using the comparable prior period’s foreign currency exchangerates. For example, the average rates in effect for the fiscal year ended to March 31, 2015 were used to convert revenue for the year ended March 31,2016 and the revenue for the comparable prior period ended March 31, 2015, rather than the actual exchange rates in effect during the respectiveperiod. Revenue constant currency growth rate is a non-GAAP financial measure. A reconciliation of this non-GAAP measure to its most directlycomparable U.S. GAAP measures for the respective periods can be found in the table below. Year Ended March 31, 2016 2015 2014 (dollars in thousands) Reconciliation of Revenue Constant Currency Growth Rate: Revenue, as reported $141,841 $116,085 $88,315 Revenue year-over-year growth rate, as reported 22% 31% 32% Estimated impact of foreign currency fluctuations 8% 2% 5% Revenue constant currency growth rate 30% 33% 37% 6 Table of ContentsThe impact of foreign exchange rates is highly variable and difficult to predict. We use revenue constant currency growth rate to show the impact fromforeign exchange rates on the current period revenue growth rate compared to the prior period revenue growth rate using the prior period’s foreignexchange rates. In order to properly understand the underlying business trends and performance of our ongoing operations, we believe that investorsmay find it useful to consider the impact of excluding changes in foreign exchange rates from our revenue growth rate.We believe that presenting this non-GAAP financial measure in this report provides investors greater transparency to the information used by ourmanagement for financial and operational decision-making and allows investors to see our results “through the eyes” of management. We also believethat providing this information better enables our investors to understand our operating performance and evaluate the methodology used bymanagement to evaluate and measure such performance.However, this non-GAAP measure should not be considered in isolation or as a substitute for our financial results prepared in accordance with U.S.GAAP. For example, revenue constant currency growth rates, by their nature, exclude the impact of foreign exchange, which may have a materialimpact on U.S. GAAP revenue. Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and thereforeother companies may calculate similarly titled non-GAAP financial measures differently than we do, limiting the usefulness of those measures forcomparative purposes. (4)We calculate our revenue retention rate by annualizing revenue on a constant currency basis recorded on the last day of the measurement period foronly those customers in place throughout the entire measurement period. We include add-on, or upsell, revenue from additional employees andservices purchased by existing customers. We divide the result by revenue on a constant currency basis on the first day of the measurement period forall customers in place at the beginning of the measurement period. The measurement period is based on the trailing twelve months. The revenue on aconstant currency basis is based on the average exchange rates in effect during the respective period.(5)Rounded up to the nearest hundred customers.(6)Adjusted EBITDA is a non-GAAP financial measure that we define as net (loss) income, adjusted to exclude: depreciation and amortization, share-based compensation expense, restructuring expense, interest income and interest expense, the provision for income taxes and foreign currencyexchange income (expense).We believe that Adjusted EBITDA provides investors and other users of our financial information consistency and comparability with our pastfinancial performance, facilitates period-to-period comparisons of operations and facilitates comparisons with our peer companies, many of which use asimilar non-GAAP financial measure to supplement their GAAP results.We use Adjusted EBITDA in conjunction with traditional GAAP operating performance measures as part of our overall assessment of our performance,for planning purposes, including the preparation of our annual operating budget, to evaluate the effectiveness of our business strategies and tocommunicate with our board of directors concerning our financial performance.We do not place undue reliance on Adjusted EBITDA as a measure of operating performance. This non-GAAP measure should not be considered as asubstitute for other measures of financial performance reported in accordance with GAAP. There are limitations to using a non-GAAP financial measure,including that other companies may calculate this measure differently than we do, that it does not reflect our capital expenditures or futurerequirements for capital expenditures and that it does not reflect changes in, or cash requirements for, our working capital. 7 Table of ContentsThe following table presents a reconciliation of net (loss) income to Adjusted EBITDA: Year Ended March 31, 2016 2015 2014 (in thousands) Reconciliation of Adjusted EBITDA: Net (loss) income $(3,244) $285 $(16,890) Depreciation and amortization 10,527 11,028 8,958 Interest expense, net 616 641 456 Provision for income taxes 865 152 19 Restructuring — 1,203 — Share-based compensation expense 7,886 5,426 1,232 Foreign exchange (income) expense (811) (4,508) 5,055 Adjusted EBITDA $15,839 $14,227 $(1,170) B. Capitalization and IndebtednessNot applicable.C. Reasons for the Offer and Use of ProceedsNot applicable.D. Risk FactorsRisks Related to Our Business and Our IndustryWe have incurred losses in the past, and we may not be able to achieve or sustain profitability for the foreseeable future.We have incurred significant losses in each period since our inception in 2003 up through our fiscal year ended March 31, 2014. In our fiscal yearended March 31, 2016, we incurred a net loss of $3.2 million. In our fiscal year ended March 31, 2015 we generated net income of $0.3 million. In our fiscalyear ended March 31, 2014, we incurred a net loss of $16.9 million. As of March 31, 2016, we had an accumulated deficit of $88.6 million. We have beengrowing rapidly, and, as we do so, we incur significant sales and marketing, support and other related expenses. Our ability to achieve and sustainprofitability will depend in significant part on our obtaining new customers, expanding our existing customer relationships and ensuring that our expenses,including our sales and marketing expenses and the cost of supporting new customers, does not exceed our revenue. We also expect to make significantexpenditures and investments in research and development to expand and improve our services and technical infrastructure. In addition, as a publiccompany, we will incur significant legal, accounting and other expenses that, prior to our initial public offering in November 2015, we have not historicallyincurred as a private company. These increased expenditures may make it harder for us to achieve and maintain profitability and we cannot predict when wewill achieve sustained profitability, if at all. We also may incur losses in the future for a number of other unforeseen reasons. Accordingly, we may not be ableto maintain profitability, and we may incur losses in the foreseeable future.Failure to manage our growth effectively could increase our expenses, decrease our revenue and prevent us from implementing our business strategy.We have been rapidly growing our revenue and number of customers, and we will seek to do the same for the foreseeable future. This rapid growth putsstrain on our business, requires significant capital expenditures and increases our operating expenses. To manage this growth effectively, we must attract,train and retain a significant number of qualified sales, implementation, customer service, software development, information 8 Table of Contentstechnology and management personnel. In addition, as we grow our revenue and customer base, we will need to maintain and enhance our technologyinfrastructure, in particular, our data center capacity. If we fail to effectively manage our growth or we over-invest or under-invest in our business, ourbusiness and results of operations could suffer from the resulting weaknesses in our infrastructure, systems or controls. We could also suffer operationalmistakes, loss of business opportunities and employee losses. If our management is unable to effectively manage our growth, our expenses might increasemore than expected, our revenue could decline or grow more slowly than expected, and we might be unable to implement our business strategy.The markets in which we participate are highly competitive, with several large established competitors, and our failure to compete successfully wouldmake it difficult for us to add and retain customers and would reduce or impede the growth of our business.Our market is large, highly competitive, fragmented and subject to rapidly evolving technology, shifting customer needs and frequent introductions ofnew products and services. We currently compete with companies that offer products that target email and data security, continuity and archiving, as well aslarge providers such as Google Inc. and Microsoft Corporation, which offer functions and tools as part of their core mailbox services that may be, or beperceived to be, similar to ours. Our current and potential future competitors include: Barracuda Networks, Inc., Google Apps for Work, Microsoft ExchangeServer, Exchange Online Protection, Proofpoint, Inc. and Symantec Corporation, in security, MessageOne, in continuity, and Barracuda, HP Autonomy,Microsoft Office 365, Proofpoint and Symantec, in archiving. We expect competition to increase in the future from both existing competitors and newcompanies that may enter our markets. Additionally, some potential customers, particularly large enterprises, may elect to develop their own internalproducts. If two or more of our competitors were to merge or partner with one another, the change in the competitive landscape could reduce our ability tocompete effectively. Our continued success and growth depends on our ability to out-perform our competitors at the individual service level as well asincreasing demand for a unified service infrastructure. We cannot guarantee that we will out-perform our competitors at the product level or that the demandfor a unified service technology will increase.Some of our current competitors have, and our future competitors may have, certain competitive advantages such as greater name recognition, longeroperating history, larger market share, larger existing user base and greater financial, technical and other resources. Some competitors may be able to devotegreater resources to the development, promotion and sale of their products and services than we can to ours, which could allow them to respond more quicklythan we can to new technologies and changes in customer needs. We cannot assure you that our competitors will not offer or develop products or services thatare superior to ours or achieve greater market acceptance.Failure to effectively expand our sales and marketing capabilities could harm our ability to acquire new customers and achieve broader marketacceptance of our services.Acquiring new customers and expanding sales to existing customers will depend to a significant extent on our ability to expand our sales andmarketing operations. We generate approximately one-third of our revenue from direct sales and we expect to continue to rely on our sales force to obtainnew customers and grow revenue from our existing customer base. We expect to expand our sales force in all of our regions and we face a number ofchallenges in achieving our hiring goals. For instance, there is significant competition for sales personnel with the sales skills and technical knowledge thatwe require. In addition, training and integrating a large number of sales and marketing personnel in a short time requires the allocation of significant internalresources. Our ability to achieve projected growth in revenue in the future will depend, in large part, on our success in recruiting, training and retainingsufficient numbers of sales personnel. We invest significant time and resources in training new sales personnel to understand our solutions and growthstrategy. In general, new hires require significant training and substantial experience before becoming productive. Our recent hires and planned hires may notbecome as productive as we require, and we may be unable to hire or retain sufficient numbers of qualified 9 Table of Contentsindividuals in the future in the markets where we currently operate or where we seek to conduct business. Our growth may be materially and adverselyimpacted if the efforts to expand our sales and marketing capabilities are not successful or if they do not generate a sufficient increase in revenue.If we are unable to maintain successful relationships with our channel partners, our ability to acquire new customers could be adversely affected.In order to grow our business, we anticipate that we will continue to depend on our relationships with our channel partners who we rely on, in additionto our direct sales force, to sell and support our services. In our fiscal year ended March 31, 2016, while no individual channel partner accounted for 10% ormore of our sales, in the aggregate, our channel partners accounted 63% of our sales, and we expect that sales to channel partners will continue to account fora substantial portion of our revenue for the foreseeable future. We utilize channel partners to efficiently increase the scale of our marketing and sales efforts,increasing our market penetration to customers which we otherwise might not reach on our own. Our ability to achieve revenue growth in the future willdepend, in part, on our success in maintaining successful relationships with our channel partners.Our agreements with our channel partners are generally non-exclusive, meaning our channel partners may offer customers competitive services fromdifferent companies. If our channel partners do not effectively market and sell our services, choose to use greater efforts to market and sell their own productsor services or those of others, or fail to meet the needs of our customers, our ability to grow our business, sell our services and maintain our reputation may beadversely affected. Our contracts with our channel partners generally allow them to terminate their agreements for any reason upon 90 days’ notice. The lossof key channel partners, our possible inability to replace them, or the failure to recruit additional channel partners could materially and adversely affect ourresults of operations. If we are unable to maintain our relationships with these channel partners, our business, results of operations, financial condition or cashflows could be adversely affected.We provide service level commitments under our subscription agreements and service disruptions could obligate us to provide refunds and we could facesubscription terminations, which could adversely affect our revenue.Our subscription agreements with customers provide certain service level commitments. If we are unable to meet the stated service level commitmentsor suffer extended periods of downtime that exceed the periods allowed under our customer agreements, we could be required to pay refunds or facesubscription terminations, either of which could significantly impact our revenue.To date, we have suffered two significant service disruptions. The first occurred in 2013 and was a result of an equipment failure. Many of ourcustomers in the United Kingdom experienced service disruptions for several hours. More recently, we experienced a service disruption on September 21,2015 as a result of an external network distributed denial of service, or DDoS attack. Customers using our Secure Email Gateway service in the United Statesexperienced downtime related to the delivery and receipt of external emails for several hours. The scope of the incident was limited to network traffic and nocustomer data was lost or compromised. We incurred costs and expenses related to this service disruption, including the voluntary payment of credits in theaggregate amount of $0.4 million. While we have undertaken substantial remedial efforts to prevent future incidents like these, we cannot guarantee thatfuture attacks or service disruptions will not occur. Any future attacks or service disruptions could adversely affect our reputation, our relationships with ourexisting customers and our ability to attract new customers, all of which would impact our future revenue and operating results.Our customers depend on our customer support team to resolve technical issues relating to our services. We may be unable to respond quickly enoughto accommodate short-term increases in customer demand for support services. Increased customer demand for these services, without corresponding revenue,could increase costs and adversely affect our operating results. In addition, our sales process is highly dependent on the ease of use of our services, on ourreputation and on positive recommendations from our existing customers. Any failure to 10 Table of Contentsmaintain high-quality customer support, or a market perception that we do not maintain high-quality support, could adversely affect our reputation and ourability to sell our services to existing and prospective customers.Our business depends substantially on customers renewing their subscriptions with us. A decline in our customer renewals would harm our futureoperating results.In order for us to maintain or improve our operating results, it is important that our customers renew their subscriptions with us when the existingsubscription term expires. Although the majority of our customer contracts include auto-renew provisions, our customers have no obligation to renew theirsubscriptions upon expiration, and we cannot provide assurance that customers will renew subscriptions at the same or higher level of service, if at all. Foreach of the fiscal years ended March 31, 2016, 2015 and 2014, our customer retention rate has been consistently greater than 90%. We calculate customerretention rate as the percentage of paying customers on the last day of the relevant period in the prior year who remain paying customers on the last day of therelevant period in the current year. The rate of customer renewals may decline or fluctuate as a result of a number of factors, including our customers’satisfaction or dissatisfaction with our solutions, the effectiveness of our customer support services, our pricing, the prices of competing products or services,mergers and acquisitions affecting our customer base, or reductions in our customers’ spending levels. If our customers do not renew their subscriptions, orrenew on less favorable terms, our revenue may decline, and we may not realize improved operating results from our customer base.If we are unable to sell additional services and features to our existing customers, our future revenues and operating results will be harmed.A significant portion of our revenue growth is generated from sales of additional services and features to existing customers. Our future successdepends, in part, on our ability to continue to sell such additional services and features to our existing customers. We devote significant efforts todeveloping, marketing and selling additional services and features and associated support services to existing customers and rely on these efforts for aportion of our revenue. These efforts require a significant investment in building and maintaining customer relationships, as well as significant research anddevelopment efforts in order to provide upgrades and launch new services and features. The rate at which our existing customers purchase additional servicesand features depends on a number of factors, including the perceived need for additional security, continuity and archiving, the efficacy of our currentservices, the perceived utility of our new offerings, our customers’ IT budgets and general economic conditions. If our efforts to sell additional services andfeatures to our customers are not successful, our future revenues and operating results will be harmed.If we are not able to provide successful updates, enhancements and features to our technology to, among other things, keep up with emerging threats andcustomer needs, our business could be adversely affected.Our industry is marked by rapid technological developments and demand for new and enhanced services and features to meet the evolving IT needs oforganizations. In particular, cyber-threats are becoming increasingly sophisticated and responsive to the new security measures designed to thwart them. If wefail to identify and respond to new and increasingly complex methods of attack and update our products to detect or prevent such threats, our business andreputation will suffer. The success of any new enhancements, features or services that we introduce depends on several factors, including the timelycompletion, introduction and market acceptance of such enhancements, features or services. We may not be successful in either developing thesemodifications and enhancements or in bringing them to market in a timely fashion. Furthermore, modifications to existing technologies will increase ourresearch and development expenses. If we are unable to successfully enhance our existing services to meet customer requirements, increase adoption andusage of our services, or develop new services, enhancements and features, our business and operating results will be harmed. 11 Table of ContentsData security and integrity are critically important to our business, and breaches of our information and technology networks and unauthorized access toa customer’s data could harm our business and operating results.We have experienced, and will continue to experience, cyber-attacks and other malicious internet-based activity, which continue to increase insophistication, frequency and magnitude. Because our services involve the storage of large amounts of our customers’ sensitive and proprietary information,solutions to protect that information from cyber-attacks and other threats, data security and integrity are critically important to our business. Despite all of ourefforts to protect this information, we cannot provide assurance that systems that access our services and databases will not be compromised or disrupted,whether as a result of criminal conduct, DDoS attacks, such as the one we experienced in September 2015, or other advanced persistent attacks by maliciousactors, including hackers, nation states and criminals, breaches due to employee error or malfeasance, or other disruptions during the process of upgrading orreplacing computer software or hardware, power outages, computer viruses, telecommunication or utility failures or natural disasters or other catastrophicevents. Any breach of security, unauthorized access to or disclosure of confidential information, disruption, including DDoS attacks, or the perception thatthe confidential information of our customers is not secure, could result in a material loss of business, substantial legal liability or significant harm to ourreputation.We must continually monitor and develop our information technology networks and infrastructure to prevent, detect, address and mitigate the risk ofunauthorized access. However, we may fail to identify these new and complex methods of attack, or fail to invest sufficient resources in security measures. Inaddition, as we increase our customer base and our brand becomes more widely known and recognized, we may become more of a target for malicious thirdparties. Any breach of our security measures as a result of third-party action, employee negligence and/or error, malfeasance, defects or otherwise thatcompromises the confidentiality, integrity or availability of our data or our customers’ data could result in: • severe harm to our reputation or brand, or materially and adversely affect the overall market perception of the security and reliability of ourservices; • individual and/or class action lawsuits, which could result in financial judgments against us and which would cause us to incur legal fees andcosts; • legal or regulatory enforcement action, which could result in fines and/or penalties and which would cause us to incur legal fees and costs;and/or • additional costs associated with responding to the interruption or security breach, such as investigative and remediation costs, the costs ofproviding individuals and/or data owners with notice of the breach, legal fees, the costs of any additional fraud detection activities, or the costsof prolonged system disruptions or shutdowns.Any of these events could materially adversely impact our business and results of operations.Because we recognize revenue from subscriptions for our services over the term of the agreement, downturns or upturns in new business may not beimmediately reflected in our operating results and may be difficult to discern.We generally recognize subscription revenue from customers ratably on a straight-line basis over the terms of their subscription agreements, which istypically one year in duration. As a result, most of the revenue we report in each quarter is derived from the recognition of deferred revenue relating tosubscription agreements entered into during the previous fiscal year or quarter. Consequently, a decline in new or renewed subscriptions with yearly terms inany one quarter may have a small impact on our operating revenue results for that quarter. However, such decline will negatively affect our revenue in futurequarters. Accordingly, the effect of significant downturns in sales and market acceptance of our services, and potential changes in our pricing policies, rate ofexpansion or retention rate may not be fully reflected in our operating results until future periods. Shifts in the 12 Table of Contentsmix of annual versus monthly subscription billings may also make it difficult to assess our business. We may also be unable to reduce our cost structure inline with a significant deterioration in sales. In addition, a significant majority of our costs are expensed as incurred, while revenue is recognized over the lifeof the agreement with our customer. As a result, increased growth in the number of our customers could continue to result in our recognition of more coststhan revenue in the earlier periods of the terms of our agreements. Our subscription model also makes it difficult for us to rapidly increase our revenuethrough additional sales in any period, as revenue from new customers is recognized over the applicable subscription term.Fluctuations in currency exchange rates could adversely affect our business.Our functional currency and that of our subsidiaries is the local currency of each entity and our reporting currency is the U.S. dollar. In our fiscal yearended March 31, 2016, 37% of our revenue was denominated in British pounds, 44% in U.S. dollars, 16% in South African rand and 3% in other currencies.Given that our functional currency and that of our subsidiaries is the local currency of each entity, but our reporting currency is the U.S. dollar, fluctuations incurrency exchange rates between the U.S. dollar, the British pound the South African rand and the Australian dollar could materially and adversely affect ourbusiness. There may be instances in which costs and revenue will not be matched with respect to currency denomination. We estimate that a 10% increase ordecrease in the value of the British pound against the U.S. dollar would have decreased or increased our loss from operations by approximately $1.2 millionin our fiscal year ended March 31, 2016 and that a 10% increase or decrease in the value of the South African rand against the U.S. dollar would haveincreased or decreased our loss from operations by approximately $1.3 million in our fiscal year ended March 31, 2016. To date, we have not entered into anycurrency hedging contracts. As a result, to the extent we continue our expansion on a global basis, we expect that increasing portions of our revenue, cost ofrevenue, assets and liabilities will be subject to fluctuations in currency valuations. We may experience economic loss and a negative impact on earnings ornet assets solely as a result of currency exchange rate fluctuations.We are dependent on the continued services and performance of our two founders, the loss of either of whom could adversely affect our business.Our future performance depends upon contributions from our senior management team and, in particular, our two founders, Peter Bauer, our Chairmanand Chief Executive Officer, and Neil Murray, our Chief Technology Officer. If our senior management team, including any new hires that we may make, failsto work together effectively and to execute on our plans and strategies on a timely basis, our business could be harmed. The loss of one or more of ourexecutive officers or key employees could have an adverse effect on our business. The loss of services of either Mr. Bauer or Mr. Murray could significantlydelay or prevent the achievement of our development and strategic objectives.We depend on highly skilled personnel to grow and operate our business, and if we are unable to hire, retain and motivate qualified personnel, we may notbe able to grow effectively.Our success depends largely upon our continued ability to identify, hire, develop, motivate and retain highly skilled personnel, including seniormanagement, engineers, software developers, sales representatives and customer support representatives. Our growth strategy also depends, in part, on ourability to continue to attract and retain highly skilled personnel. Identifying, recruiting, training and integrating qualified individuals requires significanttime, expense and attention of management. Competition for these personnel is intense, especially for engineers experienced in designing and developingsoftware and software as a service, or SaaS, applications, and for experienced sales professionals. We have, from time to time experienced, and we expect tocontinue to experience, difficulty in hiring and retaining employees with appropriate qualifications. Many of the companies with which we compete forexperienced personnel have greater resources than we have. If we hire employees from competitors or other companies, their former employers may assert thatthese employees or we have breached their legal obligations, resulting in a diversion of our time and resources. In addition, prospective and existingemployees often consider the value of the equity awards they receive in connection with their 13 Table of Contentsemployment. If the actual or perceived value of our equity awards declines, or experiences significant volatility, it may adversely affect our ability to recruitand retain key employees. If we are not able to effectively recruit and retain qualified employees, our ability to achieve our strategic objectives will beadversely impacted, and our business will be harmed.We are subject to a number of risks associated with global sales and operations.We operate a global business with offices located in the United States, the United Kingdom, South Africa and Australia. In the fiscal year endedMarch 31, 2016, we generated 39% of our revenue from the United Kingdom, 43% from the United States, 16% from South Africa and 2% from the rest of theworld. As a result, our sales and operations are subject to a number of risks and additional costs, including the following: • fluctuations in exchange rates between currencies in the markets where we do business; • risks associated with trade restrictions and additional legal requirements, including the exportation of our technology that is required in some ofthe countries in which we operate; • greater risk of unexpected changes in regulatory practices, tariffs and tax laws and treaties; • compliance with multiple anti-bribery laws, including the U.S. Foreign Corrupt Practices Act and the U.K. Anti-Bribery Act; • heightened risk of unfair or corrupt business practices in certain geographies, and of improper or fraudulent sales arrangements that may impactfinancial results and result in restatements of, or irregularities in, financial statements; • limited or uncertain protection of intellectual property rights in some countries and the risks and costs associated with monitoring and enforcingintellectual property rights abroad; • greater difficulty in enforcing contracts and managing collections in certain jurisdictions, as well as longer collection periods; • management communication and integration problems resulting from cultural and geographic dispersion; • social, economic and political instability, terrorist attacks and security concerns in general; and • potentially adverse tax consequences.These and other factors could harm our ability to generate future global revenue and, consequently, materially impact our business, results ofoperations and financial condition.Any serious disruptions in our services caused by defects in our software or otherwise may cause us to lose revenue and market acceptance.Our customers use our services for the most critical aspects of their business, and any disruptions to our services or other performance problems with ourservices however caused could hurt our brand and reputation and may damage our customers’ businesses. We provide regular updates, which may containundetected errors when first introduced or released. In the past, we have discovered software errors, failures, vulnerabilities and bugs in our services after theyhave been released and new errors in our existing services may be detected in the future. Real or perceived errors, failures, system delays, interruptions,disruptions or bugs could result in negative publicity, loss of or delay in market acceptance of our services, loss of competitive position, delay of payment tous, lower renewal rates, or claims by customers for losses sustained by them. In such an event, we may be required, or may choose, for customer relations orother reasons, to expend additional resources in order to mitigate or correct the problem. We seek to cap the liability to which we are exposed in the event oflosses or harm to our customers, but we cannot be certain that we will obtain these caps or that these caps, if obtained, will be respected in all instances. Wecarry insurance; however, the amount of such insurance may be insufficient to compensate us for any losses that may result from claims arising from defects ordisruptions in our services. As a result, we could lose future sales and our reputation and our brand could be harmed. 14 Table of ContentsIf the prices we charge for our services are unacceptable to our customers, our operating results will be harmed.As the market for our services matures, or as new or existing competitors introduce new products or services that compete with ours, we may experiencepricing pressure and be unable to renew our agreements with existing customers or attract new customers at prices that are consistent with our pricing modeland operating budget. If this were to occur, it is possible that we would have to change our pricing model or reduce our prices, which could harm our revenue,gross margin and operating results. Pricing decisions may also impact the mix of adoption among our subscription plans and negatively impact our overallrevenue. Moreover, large enterprises, which may account for a larger portion of our business in the future, may demand substantial price concessions. If weare, for any reason, required to reduce our prices, our revenue, gross margin, profitability, financial position and cash flow may be adversely affected.Our research and development efforts may not produce new services or enhancements to existing services that result in significant revenue or other benefitsin the near future, if at all.We invested 12% of our revenue in research and development in our fiscal year ended March 31, 2016, 12% in our fiscal year ended March 31, 2015and 15% in our fiscal year ended March 31, 2014. We expect to continue to dedicate significant financial and other resources to our research anddevelopment efforts in order to maintain our competitive position. However, investing in research and development personnel, developing new services andenhancing existing services is expensive and time-consuming, and there is no assurance that such activities will result in significant new marketable services,enhancements to existing services, design improvements, cost savings, revenue or other expected benefits. If we spend significant time and effort on researchand development and are unable to generate an adequate return on our investment, our business and results of operations may be materially and adverselyaffected.We may acquire other businesses, which could require significant management attention, disrupt our business, dilute shareholder value and adverselyaffect our results of operations.As part of our business strategy and in order to remain competitive, we may acquire, or make investments in, complementary companies, products ortechnologies. We have limited acquisition experience to date, and as a result, our ability as an organization to acquire and integrate other companies,products or technologies in a successful manner is unproven. We may not be able to find suitable acquisition targets, and we may not be able to completesuch acquisitions on favorable terms, if at all. If we do complete acquisitions, we may not ultimately strengthen our competitive position or achieve ourgoals, and any acquisitions we complete could be viewed negatively by our customers, analysts and investors. In addition, if we are unsuccessful atintegrating such acquisitions or the technologies associated with such acquisitions, our revenue and results of operations could be adversely affected. Inaddition, while we will make significant efforts to address any information technology security issues with respect to any acquisitions, we may still inheritsuch risks when we integrate the acquired products and systems. Any integration process may require significant time and resources, and we may not be ableto manage the process successfully. We may not successfully evaluate or utilize the acquired technology or personnel, or accurately forecast the financialimpact of an acquired business, including accounting charges. We may have to pay cash, incur debt or issue equity securities to pay for any suchacquisitions, each of which could adversely affect our financial condition or the value of our ordinary shares. The sale of equity or issuance of debt to financeany such acquisitions could result in dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could alsoinclude covenants or other restrictions that would impede our ability to manage our operations.If the market for SaaS business software applications develops more slowly than we expect or declines, our business would be adversely affected.The expansion of the SaaS business applications market depends on a number of factors, including the cost, performance and perceived valueassociated with SaaS, as well as the ability of SaaS providers to address data 15 Table of Contentssecurity and privacy concerns. Additionally, government agencies have adopted, or may adopt, laws and regulations regarding the collection and use ofpersonal information obtained from consumers and other individuals, or may seek to access information on our platform, either of which may reduce theoverall demand for our platform. If we or other SaaS providers experience data security incidents, loss of customer data, disruptions in delivery, or otherproblems, the market for SaaS business applications, including our services, may be negatively affected.If we are unable to effectively increase sales of our services to large enterprises while mitigating the risks associated with serving such customers, ourbusiness, financial position and results of operations may suffer.As we seek to increase our sales to large enterprise customers, we may face longer sales cycles, more complex customer requirements, substantialupfront sales costs and less predictability in completing some of our sales than we do with smaller customers. In addition, our ability to successfully sell ourservices to large enterprises is dependent on us attracting and retaining sales personnel with experience in selling to large organizations. Also, becausesecurity breaches of larger, more high-profile enterprises are likely to be heavily publicized, there is increased reputational risk associated with serving suchcustomers. If we are unable to increase sales of our services to large enterprise customers while mitigating the risks associated with serving such customers,our business, financial position and results of operations may suffer.Natural disasters, power loss, telecommunications failures and similar events could cause interruptions or performance problems associated with ourinformation and technology infrastructure that could impair the delivery of our services and harm our business.We currently store our customers’ information within ten third-party data center hosting facilities located in ten locations around the world. As part ofour current disaster recovery arrangements, our production environment and all of our customers’ data is currently replicated in near real-time in a facilitylocated in a different location. We cannot assure you that the measures we have taken to eliminate single points of failure will be effective to prevent orminimize interruptions to our operations. Our facilities are vulnerable to interruption or damage from a number of sources, many of which are beyond ourcontrol, including floods, fires, power loss, telecommunications failures and similar events. They may also be subject to break-ins, sabotage, intentional actsof vandalism and similar misconduct. Any damage to, or failure of, our systems generally could result in interruptions in our service. Interruptions in ourservice may reduce our revenue, cause customers to terminate their subscriptions and adversely affect our renewal rate and our ability to attract newcustomers. Our business and reputation will also be harmed if our existing and potential customers believe our service is unreliable. The occurrence of anatural disaster, an act of terrorism, a decision to close the facilities without adequate notice or other unanticipated problems at these facilities could result inlengthy interruptions in our service. Even with the disaster recovery arrangements, our service could be interrupted. As we continue to add data centers andadd capacity in our existing data centers, we may move or transfer our data and our customers’ data. Any unsuccessful data transfers may impair the deliveryof our service. Further, as we continue to grow and scale our business to meet the needs of our customers, additional burdens may be placed on our hostingfacilities.Our existing credit agreement contains operating and financial covenants that may adversely impact our business and the failure to comply with suchcovenants could prevent us from borrowing funds and could cause any outstanding debt to become immediately payable.Our existing credit agreement with Silicon Valley Bank contains operating and financial restrictions and covenants, including the prohibition of theincurrence of further indebtedness and liens, the prohibition of certain investments, the prohibition against paying dividends and redeeming or repurchasingcapital stock, restrictions against merger and consolidation transactions and restrictions against the disposition of assets. This agreement requires us tomaintain a minimum liquidity ratio and a minimum annual recurring revenue amount during its term, and is subject to acceleration upon a material change incontrol (as defined therein). These restrictions and covenants, as well as those contained in any future financing agreements that we may enter into, mayrestrict our 16 Table of Contentsability to finance our operations and to engage in, expand or otherwise pursue our business activities and strategies. Our ability to comply with thesecovenants may be affected by events beyond our control, and breaches of these covenants could result in a default under the credit agreement and any futurefinancial agreements that we may enter into. If not waived, defaults could cause our outstanding indebtedness under our credit agreement and any futurefinancing agreements that we may enter into to become immediately due and payable.We employ third-party licensed software for use in or with our services, and the inability to maintain these licenses or errors in the software we licensecould result in increased costs, or reduced service levels, which would adversely affect our business.Our services incorporate and rely on certain third-party software obtained under licenses from other companies. We anticipate that we will continue torely on such third-party software and development tools in the future. Although we believe that there are commercially reasonable alternatives to the third-party software we currently license, this may not always be the case, or it may be difficult or costly to replace. In addition, integration of the software used inour services with new third-party software may require significant work and require substantial investment of our time and resources and delays in the releaseof our services until equivalent technology is either developed by us, or, if available, is identified, obtained and integrated, which could harm our business. Alicensor may have difficulties keeping up with technological changes or may stop supporting the software or other intellectual property that it licensed to us.Also, to the extent that our services depend upon the successful operation of third-party software in conjunction with our software, any undetected errors ordefects in this third-party software could prevent the deployment or impair the functionality of our services, delay new services introductions, result in afailure of our services, and injure our reputation. Our use of additional or alternative third-party software would require us to enter into additional licenseagreements with third parties on terms that may not be favorable to us.Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand.Our success and ability to compete depend in part on our intellectual property. We primarily rely on copyright, trade secret and trademark laws, tradesecret protection and confidentiality or license agreements with our employees, customers, partners and others to protect our intellectual property rights.However, the steps we take to protect our intellectual property rights may be inadequate. As of March 31, 2016, we had three patents and 11 patentapplications in the United States. We also have one patent issued and five applications pending for examination in non-U.S. jurisdictions, and four pendingPatent Cooperation Treaty patent applications, all of which are counterparts of our U.S. applications. We may not be able to obtain any further patents, andour pending applications may not result in the issuance of patents. We have issued patents and pending patent applications outside the United States, and wemay have to expend significant resources to obtain additional patents as we expand our international operations due to the cost of monitoring and protectingour rights across multiple jurisdictions.In order to protect our intellectual property rights, we may be required to spend significant resources to monitor and protect these rights. Litigationbrought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management and could result in theimpairment or loss of portions of our intellectual property. Failure to adequately enforce our intellectual property rights could also result in the impairment orloss of those rights. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking thevalidity and enforceability of our intellectual property rights. Patent, copyright, trademark and trade secret laws offer us only limited protection and the lawsof many of the countries in which we sell our services do not protect proprietary rights to the same extent as the United States and Europe. Accordingly,defense of our trademarks and proprietary technology may become an increasingly important issue as we continue to expand our operations and solutiondevelopment into countries that provide a lower level of intellectual property protection than the United States or Europe. Policing 17 Table of Contentsunauthorized use of our intellectual property and technology is difficult and the steps we take may not prevent misappropriation of the intellectual propertyor technology on which we rely. For example, in the event of inadvertent or malicious disclosure of our proprietary technology, trade secret laws may nolonger afford protection to our intellectual property rights in the areas not otherwise covered by patents or copyrights. Accordingly, we may not be able toprevent third parties from infringing upon or misappropriating our intellectual property. Our failure to secure, protect and enforce our intellectual propertyrights could materially adversely affect our brand and our business.We may elect to initiate litigation in the future to enforce or protect our proprietary rights or to determine the validity and scope of the rights of others.That litigation may not be ultimately successful and could result in substantial costs to us, the reduction or loss in intellectual property protection for ourtechnology, the diversion of our management’s attention and harm to our reputation, any of which could materially and adversely affect our business andresults of operations.We may be sued by third parties for alleged infringement of their proprietary rights.There is considerable patent and other intellectual property development activity in our industry. Our success depends, in part, on our not infringingupon the intellectual property rights of others. Our competitors, as well as a number of other entities, including non-practicing entities, and individuals, mayown or claim to own intellectual property relating to our industry.From time to time, certain third parties have claimed that we are infringing upon their intellectual property rights. In the future, we may be found to beinfringing upon such rights. We closely monitor all such claims and none of the claims by the third parties have resulted in litigation, but legal actions bysuch parties are still possible. In addition, we cannot assure you that actions by other third parties alleging infringement by us of third-party patents or otherintellectual property will not be asserted or prosecuted against us. In the future, others may claim that our services and underlying technology infringe orviolate their intellectual property rights. We may also be unaware of the intellectual property rights that others may claim cover some or all of our technologyor services. Any claims or litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantialdamages or ongoing royalty payments, prevent us from offering our services, or require that we comply with other unfavorable terms. Under all of our salescontracts, we are obligated to indemnify our customers and channel partners against third-party infringement claims, and we may also be obligated to paysubstantial settlement costs, including royalty payments, in connection with any such claim or litigation and to obtain licenses, modify services or refundfees, any of which could be costly. Even if we were to prevail in such a dispute, any litigation regarding intellectual property could be costly and time-consuming and divert the attention of our management and key personnel from our business operations.Confidentiality arrangements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information.We have devoted substantial resources to the development of our technology, business operations and business plans. In order to protect our tradesecrets and proprietary information, we rely in significant part on confidentiality arrangements with our employees, licensees, independent contractors,advisers, channel partners, resellers and customers. These arrangements may not be effective to prevent disclosure of confidential information, including tradesecrets, and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, if others independentlydiscover trade secrets and proprietary information, we would not be able to assert trade secret rights against such parties. Effective trade secret protection maynot be available in every country in which our services are available or where we have employees or independent contractors. The loss of trade secretprotection could make it easier for third parties to compete with our solutions by copying functionality. In addition, any changes in, or unexpectedinterpretations of, the trade secret and employment laws in any country in which we operate may compromise our ability to enforce our 18 Table of Contentstrade secret and intellectual property rights. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietaryrights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.We may be subject to damages resulting from claims that our employees or contractors have wrongfully used or disclosed alleged trade secrets of theirformer employers or other parties.We could in the future be subject to claims that employees or contractors, or we, have inadvertently or otherwise used or disclosed trade secrets or otherproprietary information of our competitors or other parties. Litigation may be necessary to defend against these claims. If we fail in defending against suchclaims, a court could order us to pay substantial damages and prohibit us from using technologies or features that are essential to our solutions, if suchtechnologies or features are found to incorporate or be derived from the trade secrets or other proprietary information of these parties. In addition, we may losevaluable intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent our ability to develop, market andsupport potential solutions or enhancements, which could severely harm our business. Even if we are successful in defending against these claims, suchlitigation could result in substantial costs and be a distraction to management.The use of open source software in our offerings may expose us to additional risks and harm our intellectual property.Open source software is typically freely accessible, usable and modifiable. Certain open source software licenses require a user who intends todistribute the open source software as a component of the user’s software to disclose publicly part or all of the source code to the user’s software. In addition,certain open source software licenses require the user of such software to make any derivative works of the open source code available to others onunfavorable terms or at no cost. This can subject previously proprietary software to open source license terms.We monitor and control our use of open source software in an effort to avoid unanticipated conditions or restrictions on our ability to successfullycommercialize our products and solutions and believe that our compliance with the obligations under the various applicable licenses has mitigated the risksthat we have triggered any such conditions or restrictions. However, such use may have inadvertently occurred in the development and offering of ourproducts and solutions. Additionally, if a third-party software provider has incorporated certain types of open source software into software that we havelicensed from such third-party, we could be subject to the obligations and requirements of the applicable open source software licenses. This could harm ourintellectual property position and have a material adverse effect on our business, results of operations and financial condition.The terms of many open source software licenses have not been interpreted by U.S. or foreign courts, and there is a risk that those licenses could beconstrued in a manner that imposes unanticipated conditions or restrictions on our ability to successfully commercialize our products and solutions. Forexample, certain open source software licenses may be interpreted to require that we offer our products or solutions that use the open source software for nocost; that we make available the source code for modifications or derivative works we create based upon, incorporating or using the open source software (orthat we grant third parties the right to decompile, disassemble, reverse engineer, or otherwise derive such source code); that we license such modifications orderivative works under the terms of the particular open source license; or that otherwise impose limitations, restrictions or conditions on our ability to use,license, host, or distribute our products and solutions in a manner that limits our ability to successfully commercialize our products.We could, therefore, be subject to claims alleging that we have not complied with the restrictions or limitations of the applicable open source softwarelicense terms or that our use of open source software infringes the intellectual property rights of a third-party. In that event, we could incur significant legalexpenses, be subject 19 Table of Contentsto significant damages, be enjoined from further sale and distribution of our products or solutions that use the open source software, be required to pay alicense fee, be forced to reengineer our products and solutions, or be required to comply with the foregoing conditions of the open source software licenses(including the release of the source code to our proprietary software), any of which could adversely affect our business. Even if these claims do not result inlitigation or are resolved in our favor or without significant cash settlements, the time and resources necessary to resolve them could harm our business,results of operations, financial condition and reputation.Additionally, the use of open source software can lead to greater risks than the use of third-party commercial software, as open source software does notcome with warranties or other contractual protections regarding indemnification, infringement claims or the quality of the code.We are a multinational organization faced with increasingly complex tax issues in many jurisdictions, and we could be obligated to pay additional taxesin various jurisdictions.As a multinational organization, we may be subject to taxation in several jurisdictions around the world with increasingly complex tax laws, theapplication of which can be uncertain. The amount of taxes we pay in these jurisdictions could increase substantially as a result of changes in the applicabletax principles, including increased tax rates, new tax laws or revised interpretations of existing tax laws and precedents, which could have a material adverseeffect on our liquidity and results of operations. In addition, the authorities in these jurisdictions could review our tax returns and impose additional tax,interest and penalties, and the authorities could claim that various withholding requirements apply to us or our subsidiaries or assert that benefits of taxtreaties are not available to us or our subsidiaries. Furthermore, one or more jurisdictions in which we do not believe we are currently subject to tax payment,withholding, or filing requirements, could assert that we are subject to such requirements. Any of these claims or assertions could have a material impact onus and the results of our operations.We are subject to governmental export controls and funds dealings restrictions that could impair our ability to compete in certain international marketsand subject us to liability if we are not in full compliance with applicable laws.Our software and services may be subject to export controls and we may also be subject to restrictions or prohibitions on transactions with, or ondealing in funds transfers to/from, certain embargoed jurisdictions and sanctioned persons and entities, pursuant to the U.K. Export Control Organisation’srestrictions, the U.K. Treasury’s restrictions, the European Council (EU) Regulations, the U.S. Department of Commerce’s Export Administration Regulations,the economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls and U.S. Department of State,and similar laws that may apply in other jurisdictions in which we operate or sell or distribute our services. Export control and economic sanctions lawsinclude prohibitions on the sale or supply of certain products and services to certain embargoed or sanctioned countries, regions, governments, persons andentities, as well as restrictions or prohibitions on dealing in funds to/from those countries, regions, governments, persons and entities. In addition, variouscountries regulate the import of certain encryption items and technology through import permitting and licensing requirements, and have enacted laws thatcould limit our ability to distribute our services or could limit our customers’ ability to implement our services in those countries.The exportation, re-exportation, and importation of our software and services, including by our channel partners, must comply with applicable laws orelse we may be adversely affected, through reputational harm, government investigations, penalties, and/or a denial or curtailment of our ability to export ourservices. Although we take precautions to prevent our services from being provided in violation of such laws, our services may have been in the past, andcould in the future be, provided in violation of such laws.In 2008, an order was placed by a third-party U.K. reseller of Mimecast Services Limited (“MSL”), our U.K. operating company, for ongoing emailarchiving services to Persia International Bank (“PIB”), which is 20 Table of Contentsbased in London, United Kingdom. On July 27, 2010, PIB was named as a designated person on the EU Council Regulation against Iran. In March 2015, wedetermined that the provision of services after July 26, 2010 by MSL to PIB may have constituted an indirect breach by us of EU Council Regulation267/2012. We terminated the PIB account with the U.K. reseller in April 2015 and also determined that no payments had been received by us from ourchannel partner related to this account since April 2014 and that the total revenue recognized by us over the life of the account was less than £12,500. OnOctober 25, 2007, PIB had previously been included on the U.S. List of Specially Designated Nationals and Blocked Persons under Executive Order 13382.The designation was amended on August 16, 2010 to add a designation under the Iranian Financial Sanctions Regulations. In January 2016, the EU lifted thesanctions on PIB and its shareholder banks, Bank Mellat and Bank Tejarat. However, based on our review to date, because of the U.K. nexus to the activities,we believe this sale did not constitute a violation of U.S. trade sanctions administered by OFAC. However, we may experience reputational harm as a result ofthe transaction by our U.K. operating company. We have since implemented additional export control compliance management oversight and haveundertaken remedial measures and additional screenings to reduce the risk of similar events occurring in the future.If we are found to be in violation of U.S. sanctions or export control laws, it could result in substantial fines and penalties for us and for the individualsworking for us, including civil penalties of up to $250,000 or twice the value of the transaction, whichever is greater, per violation, and in the event ofconviction for a criminal violation, fines of up to $1 million and possible incarceration for responsible employees and managers for willful and knowingviolations. Under the terms of applicable regulations, each instance in which a company provides goods or services may be considered a separate violation. Ifwe are found to be in violation of U.K. sanctions or export controls, it could also result in unlimited fines for us and responsible employees and managers, aswell as imprisonment of up to two years for responsible employees and managers.Changes in our software or services, or changes in export, sanctions or import laws, may delay the introduction and sale of our services in internationalmarkets, prevent our customers with international operations from deploying our software or services or, in some cases, prevent the export or import of oursoftware or services to certain countries, regions, governments, persons or entities altogether, which could adversely affect our business, financial conditionand operating results.Our quarterly results may fluctuate for a variety of reasons and may not fully reflect the underlying performance of our business.Our quarterly operating results, including the levels of our revenue, gross margin, profitability, cash flow and deferred revenue, may vary significantlyin the future, and period-to-period comparisons of our operating results may not be meaningful. Accordingly, the results of any one quarter should not berelied upon as an indication of future performance. Our quarterly financial results may fluctuate as a result of a variety of factors, many of which are outside ofour control and, as a result, may not fully reflect the underlying performance of our business. Fluctuations in quarterly results may negatively impact thevalue of our ordinary shares. Factors that may cause fluctuations in our quarterly financial results include, but are not limited to: • foreign exchange rates; • our ability to attract new customers; • our revenue retention rate; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure; • network outages or security breaches; • general economic, industry and market conditions; • increases or decreases in the number of features in our services or pricing changes upon any renewals of customer agreements; 21 Table of Contents • changes in our pricing policies or those of our competitors; • new variations in sales of our services, which has historically been highest in the fourth quarter of a given fiscal year; and • the timing and success of new services and service introductions by us and our competitors or any other change in the competitive dynamics ofour industry, including consolidation among competitors, customers or strategic partners.If we need to raise additional capital to expand our operations and invest in new technologies in the future and cannot raise it on acceptable terms or atall, our ability to compete successfully may be harmed.We believe that our existing cash and cash equivalents will be sufficient to meet our anticipated cash requirements for at least the next twelve months.However, unforeseen circumstances may arise which may mean that we may need to raise additional funds, and we may not be able to obtain additional debtor equity financing on favorable terms, if at all. If we raise additional equity financing, our security holders may experience significant dilution of theirownership interests and the value of our ordinary shares could decline. If we engage in debt financing, we may be required to accept terms that restrict ourability to incur additional indebtedness, force us to maintain specified liquidity or other ratios or restrict our ability to pay dividends or make acquisitions. Ifwe need additional capital and cannot raise it on acceptable terms, if at all, we may not be able to, among other things: • develop and enhance our services; • continue to expand our research and development, sales and marketing organizations; • hire, train and retain key employees; • respond to competitive pressures or unanticipated working capital requirements; or • pursue acquisition opportunities.Our inability to do any of the foregoing could reduce our ability to compete successfully and harm our results of operations.We are an “emerging growth company” and we cannot be certain whether the reduced requirements applicable to emerging growth companies will makeour ordinary shares less attractive to investors.We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 effective on April 5, 2012, or the JOBS Act, andwe may take advantage of certain exemptions from various requirements that are applicable to other public companies that are not emerging growthcompanies. Most of such requirements relate to disclosures that we would only be required to make if we cease to be a foreign private issuer in the future.Nevertheless, as a foreign private issuer that is an emerging growth company, we will not be required to comply with the auditor attestation requirements ofSection 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, for up to five fiscal years after the date of our initial public offering whichoccurred in November 2015. We will remain an emerging growth company until the earliest of: (a) the last day of our fiscal year during which we have totalannual gross revenue of at least $1.0 billion; (b) the last day of our fiscal year following the fifth anniversary of our initial public offering which occurred inNovember 2015; (c) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (d) the dateon which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the Exchange Act. When we are nolonger deemed to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above. We cannot predict ifinvestors will find our ordinary shares less attractive as a result of our reliance on exemptions under the JOBS Act. If some investors find our ordinary sharesless attractive as a result, there may be a less active trading market for our ordinary shares and our share price may be more volatile. 22 Table of ContentsRisks Related to Our Ordinary Shares and Our Organization in JerseyOur share price may be volatile, and you may lose all or part of your investment.The market price of our ordinary shares could be highly volatile and may fluctuate substantially as a result of a number of factors, many of which wecannot control, including: • actual or anticipated fluctuations in our results of operations; • variance in our financial performance from the expectations of market analysts; • announcements by us or our competitors of significant business developments, changes in service provider relationships, acquisitions orexpansion plans; • changes in the prices of our services or those of our competitors; • our involvement in litigation; • our sale of ordinary shares or other securities in the future; • market conditions in our industry; • changes in key personnel; • the trading volume of our ordinary shares; • changes in the estimation of the future size and growth rate of our markets; and • general economic and market conditions.In addition, the stock markets have experienced extreme price and volume fluctuations. Broad market and industry factors may materially harm themarket price of our ordinary shares, regardless of our operating performance. In the past, following periods of volatility in the market price of a company’ssecurities, securities class action litigation has often been instituted against that company. If we were involved in any similar litigation we could incursubstantial costs and our management’s attention and resources could be diverted.If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and tradingvolume could decline.The trading market for our ordinary shares depends in part on the research and reports that securities or industry analysts publish about us or ourbusiness. If one or more of the analysts who covers us downgrades our shares or publishes inaccurate or unfavorable research about our business, our shareprice would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our shares coulddecrease, which could cause our share price and trading volume to decline.We do not expect to pay dividends and investors should not buy our ordinary shares expecting to receive dividends.We do not anticipate that we will declare or pay any dividends in the foreseeable future, and our ability to do so may be constrained by restrictions inour current and future debt arrangements and by Jersey law. Consequently, you will only realize an economic gain on your investment in our ordinary sharesif the price appreciates. You should not purchase our ordinary shares expecting to receive cash dividends. Since we do not pay dividends, and if we are notsuccessful in establishing an orderly trading market for our shares, then you may not have any manner to liquidate or receive any payment on yourinvestment. Therefore our failure to pay dividends may cause you to not see any return on your investment even if we are successful in our businessoperations. In addition, because we do not pay dividends we may have trouble raising additional funds which could affect our ability to expand our businessoperations. 23 Table of ContentsThe market price of our ordinary shares could be negatively affected by future sales of our ordinary shares.Sales by us or our shareholders of a substantial number of ordinary shares in the public market, or the perception that these sales might occur, couldcause the market price of our ordinary shares to decline or could impair our ability to raise capital through a future sale of, or pay for acquisitions using, ourequity securities.As of March 31, 2016, the holders of 29,366,099 of our ordinary shares are entitled to demand that we register their shares under the Securities Act forresale into the public markets. All shares sold pursuant to an offering covered by such registration statement will be freely transferable.In addition to our current shareholders’ registration rights, as of March 31, 2016, we had outstanding options to purchase 8,069,866 shares under ourequity incentive plans and had an additional 5,999,375 shares available for future grant.As a foreign private issuer, we are permitted to follow certain home country corporate governance practices instead of otherwise applicable SEC andNASDAQ Stock Market, or NASDAQ, requirements, which may result in less protection than is accorded to investors under rules applicable to domesticU.S. issuers.As a foreign private issuer, in reliance on the listing rules of NASDAQ, which permit a foreign private issuer to follow the corporate governancepractices of its home country, we are permitted to follow certain Jersey corporate governance practices instead of those otherwise required under the corporategovernance standards for U.S. domestic issuers. We currently do not intend to take advantage of any such exemptions. We may in the future elect to followJersey home country practices with regard to matters such as the formation and composition of our board of directors, the compensation and nominating andcorporate governance committees, separate sessions of independent directors and the requirement to obtain shareholder approval for certain dilutive events(such as for the establishment or amendment of certain equity-based compensation plans, issuances that will result in a change of control of the company,certain transactions other than a public offering involving issuances of a 20% or more interest in the company and certain acquisitions of the stock or assetsof another company).Accordingly, our shareholders may not be afforded the same protection as provided under NASDAQ corporate governance rules that apply to U.S.domestic issuers. Following our home country governance practices as opposed to the requirements that would otherwise apply to a United States companylisted on NASDAQ may provide less protection than is accorded to investors of domestic issuers.As a foreign private issuer, we will not be subject to the provisions of Regulation FD or U.S. proxy rules and will be exempt from filing certain ExchangeAct reports.As a foreign private issuer, we are exempt from a number of requirements under U.S. securities laws that apply to public companies that are not foreignprivate issuers. In particular, we are exempt from the rules and regulations under the Exchange Act related to the furnishing and content of proxy statements,and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of theExchange Act. In addition, we are not required under the Exchange Act to file annual and current reports and financial statements with the SEC as frequentlyor as promptly as U.S. domestic companies whose securities are registered under the Exchange Act and we are generally exempt from filing quarterly reportswith the SEC under the Exchange Act. We are also exempt from the provisions of Regulation FD, which prohibits the selective disclosure of materialnonpublic information to, among others, broker-dealers and holders of a company’s securities under circumstances in which it is reasonably foreseeable thatthe holder will trade in the company’s securities on the basis of the information. Even though we intend to comply voluntarily with Regulation FD, theseexemptions and leniencies will reduce the frequency and scope of information and protections to which you are entitled as an investor. 24 Table of ContentsWe are not required to comply with the proxy rules applicable to U.S. domestic companies, including the requirement applicable to emerging growthcompanies to disclose the compensation of our Chief Executive Officer and the other two most highly compensated executive officers on an individual,rather than an aggregate, basis.We would lose our foreign private issuer status if a majority of our directors or executive officers are U.S. citizens or residents and we fail to meetadditional requirements necessary to maintain foreign private issuer status. Although we have elected to comply with certain U.S. regulatory provisions, ourloss of foreign private issuer status would make such provisions mandatory. The regulatory and compliance costs to us under U.S. securities laws as a U.S.domestic issuer may be significantly higher. If we are not a foreign private issuer, we will be required to file periodic reports and registration statements onU.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer. We would also berequired to follow U.S. proxy disclosure requirements, including the requirement to disclose more detailed information about the compensation of our seniorexecutive officers on an individual basis. We may also be required to modify certain of our policies to comply with good governance practices associatedwith U.S. domestic issuers. Such conversion and modifications will involve additional costs. In addition, we would lose our ability to rely upon exemptionsfrom certain corporate governance requirements on U.S. stock exchanges that are available to foreign private issuers.We expect to lose our foreign private issuer status, which would then require us to comply with the Exchange Act’s domestic reporting regime and cause usto incur significant legal, accounting and other expenses.We are currently a foreign private issuer and, therefore, we are not required to comply with all of the periodic disclosure and current reportingrequirements of the Exchange Act applicable to U.S. domestic issuers. In order to maintain our current status as a foreign private issuer, either (a) a majority ofour ordinary shares must be either directly or indirectly owned of record by non-residents of the United States or (b) (i) a majority of our executive officers ordirectors may not be United States citizens or residents, (ii) more than fifty-percent (50%) of our assets cannot be located in the United States and (iii) ourbusiness must be administered principally outside the United States. A foreign private issuer must determine its status on the last business day of its mostrecently completed second fiscal quarter, and a change in status (if any) would take effect as of the first day of the following fiscal year. We expect to lose ourstatus as a foreign private issuer following the fiscal year ending March 31, 2017. If a foreign private issuer no longer satisfies these requirements, it willbecome subject to U.S. domestic reporting requirements on the first day of its fiscal year immediately succeeding such determination. If we lose this status, wewould be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed andextensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordancewith various SEC and NASDAQ rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reportingrequirements applicable to a U.S. domestic issuer may be significantly higher than the cost we would incur as a foreign private issuer. As a result, we expectthat a loss of foreign private issuer status would increase our legal and financial compliance costs and would make some activities highly time consumingand costly. We also expect that if we were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would make it moredifficult and expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantiallyhigher costs to obtain coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified members to our board ofdirectors.We have not yet determined whether our existing internal controls over financial reporting systems are compliant with Section 404 of the Sarbanes-OxleyAct, and we cannot provide any assurance that there are no material weaknesses or significant deficiencies in our existing internal controls.Pursuant to Section 404 of the Sarbanes-Oxley Act and the related rules adopted by the SEC and the Public Company Accounting Oversight Board,starting with the second annual report that we file with the SEC after our 25 Table of Contentsinitial public offering, our management will be required to report on the effectiveness of our internal control over financial reporting. In addition, once we nolonger qualify as an “emerging growth company” under the JOBS Act and lose the ability to rely on the exemptions related thereto discussed above, ourindependent registered public accounting firm will also need to attest to the effectiveness of our internal control over financial reporting under Section 404.We have not yet commenced the process of determining whether our existing internal controls over financial reporting systems are compliant withSection 404 and whether there are any material weaknesses or significant deficiencies in our existing internal controls. This process will require theinvestment of substantial time and resources, including by our chief financial officer and other members of our senior management. In addition, we cannotpredict the outcome of this determination and whether we will need to implement remedial actions in order to implement effective control over financialreporting. The determination and any remedial actions required could result in us incurring additional costs that we did not anticipate. Irrespective ofcompliance with Section 404, any failure of our internal controls could have a material adverse effect on our stated results of operations and harm ourreputation. As a result, we may experience higher than anticipated operating expenses during and after the implementation of these changes. If we are unableto implement any of the required changes to our internal control over financial reporting effectively or efficiently or are required to do so earlier thananticipated, it could adversely affect our operations, financial reporting and/or results of operations and could result in an adverse opinion on internalcontrols from our independent registered public accounting firm.A change in our tax residence could have a negative effect on our future profitability.Although we are organized under the laws of Jersey, our affairs are, and are intended to continue to be, managed and controlled in the United Kingdomfor tax purposes and therefore we are resident in the United Kingdom for U.K. and Jersey tax purposes. It is possible that in the future, whether as a result of achange in law or the practice of any relevant tax authority or as a result of any change in the conduct of our affairs or for any other reason, we could become,or be regarded as having become, a resident in a jurisdiction other than the United Kingdom. If we cease to be a U.K. tax resident, we may be subject to acharge to U.K. corporation tax on chargeable gains on our assets and to unexpected tax charges in other jurisdictions on our income. Similarly, if the taxresidency of any of our subsidiaries were to change from their current jurisdiction for any of the reasons listed above, we may be subject to a charge to localcapital gains tax on the assets.Taxing authorities could reallocate our taxable income among our subsidiaries, which could increase our consolidated tax liability.We conduct operations world-wide through subsidiaries in various tax jurisdictions pursuant to transfer pricing arrangements between our companyand its subsidiaries. If two or more affiliated companies are located in different countries, the tax laws or regulations of each country generally will requirethat transfer prices be the same as those between unrelated companies dealing at arms’ length and that appropriate documentation is maintained to supportthe transfer pricing. While we believe that we operate in compliance with applicable transfer pricing laws and intend to continue to do so, our transfer pricingprocedures are not binding on applicable tax authorities. If tax authorities in any of these countries were to successfully challenge our transfer prices as notreflecting arms’ length transactions, they could require us to adjust our transfer prices and thereby reallocate our income to reflect these revised transferprices, which could result in a higher tax liability to us. In addition, if the country from which the income is reallocated does not agree with the reallocation,both countries could tax the same income, resulting in double taxation. If tax authorities were to allocate income to a higher tax jurisdiction, subject ourincome to double taxation or assess interest and penalties, it would increase our consolidated tax liability, which could adversely affect our financialcondition, results of operations and cash flows. Double taxation should be mitigated in these circumstances where the affiliated parties that are subject to thetransfer pricing adjustments are able to benefit from any applicable double taxation agreement.Our ability to use our U.S. net operating loss carry forwards may be subject to limitation.As of March 31, 2016, we had U.S. federal net operating losses of approximately $31.5 million, U.S. state net operating losses of approximately$24.4 million, and non-U.S. net operating losses of approximately $18.0 26 Table of Contentsmillion. As of March 31, 2016, we also had a U.K. income tax credit carryforward of $0.2 million. Also, each jurisdiction in which we operate may have itsown limitations on our ability to utilize net operating losses or tax credit carryovers generated in that jurisdiction. These limitations may increase our U.S.federal, state, and/or foreign income tax liability.U.S. holders of our ordinary shares could be subject to material adverse tax consequences if we are considered a Passive Foreign Investment Company, orPFIC, for U.S. federal income tax purposes.We do not believe that we were a PFIC for U.S. federal income tax purposes during the 2015 tax year and do not expect to be a PFIC for U.S. federalincome tax purposes in the 2016 tax year. We also do not expect to become a PFIC in the foreseeable future, but the possible status as a PFIC must bedetermined annually and therefore may be subject to change. If we are at any time treated as a PFIC, such treatment could result in a reduction in the after-taxreturn to U.S. holders of our ordinary shares and may cause a reduction in the value of such shares. Furthermore, if we are at any time treated as a PFIC, U.S.holders of our ordinary shares could be subject to greater U.S. income tax liability than might otherwise apply, imposition of U.S. income tax in advance ofwhen tax would otherwise apply and detailed tax filing requirements that would not otherwise apply. For U.S. federal income tax purposes, “U.S. holders”include individuals and various entities. A corporation is classified as a PFIC for any taxable year in which (i) at least 75% of its gross income is passiveincome or (ii) at least 50% of the average quarterly value of all its total gross assets is attributable to assets that produce or are held for the production ofpassive income. For this purpose, passive income includes certain dividends, interest, royalties and rents that are not derived in the active conduct of a tradeor business. The PFIC rules are complex and a U.S. Holder of our ordinary shares is urged to consult its own tax advisors regarding the possible application ofthe PFIC rules to it in its particular circumstances. For information on the U.S. federal tax implications on U.S. holders, see “Item 10.—Additional Information—E. Taxation.”U.S. shareholders may not be able to enforce civil liabilities against us.A number of our directors and executive officers are not residents of the U.S., and all or a substantial portion of the assets of such persons are locatedoutside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforceagainst them judgments obtained in U.S. courts predicated upon the civil liability provisions of the federal securities laws of the United States.There is also a doubt as to the enforceability in England and Wales and Jersey, whether by original actions or by seeking to enforce judgments of U.S.courts, of claims based on the federal securities laws of the U.S. In addition, punitive damages in actions brought in the U.S. or elsewhere may beunenforceable in England and Wales and Jersey.The rights afforded to shareholders are governed by Jersey law. Not all rights available to shareholders under English law or U.S. law will be available toshareholders.The rights afforded to shareholders will be governed by Jersey law and by the Articles of Association, and these rights differ in certain respects from therights of shareholders in typical English companies and U.S. corporations. In particular, Jersey law significantly limits the circumstances under whichshareholders of companies may bring derivative actions and, in most cases, only the corporation may be the proper claimant or plaintiff for the purposes ofmaintaining proceedings in respect of any wrongful act committed against it. Neither an individual nor any group of shareholders has any right of action insuch circumstances. In addition, Jersey law does not afford appraisal rights to dissenting shareholders in the form typically available to shareholders of a U.S.corporation. 27 Table of ContentsITEM 4. INFORMATION ABOUT THE COMPANYA. History and Development of the CompanyMimecast Limited was incorporated under the laws of the Bailiwick of Jersey with company number 119119 on July 28, 2015 as a public companylimited by shares. On November 4, 2015, Mimecast Limited became the holding company of Mimecast UK, a private limited company incorporated in 2003under the laws of England and Wales, and its subsidiaries by way of a share-for-share exchange in which the shareholders of Mimecast UK exchanged theirshares in Mimecast UK for an identical number of shares of the same class in Mimecast Limited. Following the exchange, the historical consolidated financialstatements of Mimecast UK became the historical consolidated financial statements of Mimecast Limited, of which the consolidated financial statements asof and for the three years ended March 31, 2016 are included in this Annual Report. On November 19, 2015, we completed our initial public offering, or IPO,in which we issued and sold 7,750,000 ordinary shares at a public offering price of $10.00 per share. Our ordinary shares are traded on the NASDAQ GlobalSelect Market under the symbol “MIME”.B. Business OverviewWe are a leading provider of next generation cloud security and risk management services for corporate information and email. Our fully-integratedsuite of proprietary cloud services protects customers of all sizes from the significant business and data security risks to which their email system exposesthem. We protect customers from today’s rapidly changing threat landscape where email has become a powerful attack vector and data leak concern. We alsomitigate the significant business disruption that email failure or downtime causes. In addition, our archiving services secure, store and manage criticalcorporate communications and information to address growing compliance and e-discovery requirements and enable customers to use this increasing archiveof information to improve employee productivity.Email is a critical tool for organizations of all sizes. Protecting and managing email has become more complicated due to expanding security andcompliance requirements and the rapid increase in both the volume and the importance of the information transmitted via email. Organizations areincreasingly at risk from security breaches of sensitive data as sophisticated email-based attacks or data leaks have become more common. Additionally,organizations are not just using email for communication, they are also increasing their use of email archives as an active repository of vital corporateinformation needed to meet compliance requirements and support employee productivity. As a result, email represents one of the highest concentrations ofbusiness risk that organizations may face.Traditional approaches to addressing these risks have left customers managing disparate point products from multiple vendors that are often hard touse, costly to manage, difficult to scale, can fail to fully address today’s increasing and rapidly changing threats, and limit the use of corporate information toenhance productivity. These approaches also suffer from inefficient over-provisioning because of the need to resource for occasional peak demand. Theresulting infrastructure complexity caused by disparate products and legacy architectures also makes it difficult to move more IT workloads to the cloud,which continues to be an increasing priority of organizations of all sizes.We developed our proprietary cloud architecture to offer customers comprehensive email security, continuity and archiving capabilities in a singleservice that makes it easier for them to protect themselves effectively in a worsening and rapidly changing security and risk environment. Providing a fully-integrated service also simplifies ongoing management and service deployment. Customers can then decommission the often costly and complex pointproducts and on-premises technology they have traditionally used to tackle these risks. We also make it easier for customers to move more of their ITworkloads to the cloud.We serve approximately 18,000 customers and protect millions of their employees across the world. Our service scales effectively to meet the needs ofcustomers of all sizes and we have optimized our sales 28 Table of Contentsorganization and channel to address each segment effectively. We have more than 675 employees in 9 offices in the United States, the United Kingdom,Australia and South Africa. For the fiscal years ended March 31, 2016, 2015 and 2014, our revenues were $141.8 million, $116.1 million and $88.3 million,respectively, representing year-over-year growth of 22% for 2016 and 31% for 2015. Revenue growth on a constant currency basis was 30% and 33% for thefiscal years ended March 31, 2016 and 2015, respectively. Our net loss was $3.2 million in the fiscal year ended March 31, 2016. Our net income was $0.3million in the fiscal year ended March 31, 2015. Our net loss was $16.9 million in the fiscal year ended March 31, 2014.Industry BackgroundEmail is a critical tool for organizations of all sizes. Email also captures a comprehensive history of corporate activity, knowledge and data vital forday-to-day business operations and employee productivity, the full potential of which is only beginning to be realized. Consequently, email needsprotection and the technology needed to do this has extended well beyond the mailbox itself to include additional security, continuity and archivingservices, all of which have typically been offered by separate vendors with different approaches.Email is Critical to all OrganizationsEmail continues to be the primary way organizations exchange information and communicate externally and internally. According to a 2015 report byThe Radicati Group, employees spend 2.38 hours of their work day on email. They also predict that the number of business emails sent each day worldwidewill grow from 112.5 billion in 2015 to 128.8 billion in 2019, and the number of business email users will grow from 922 million to over 1 billion in thesame period. Every customer segment and region will experience growth.Email is also a productivity tool highly valued by employees as evidenced by a December 2014 survey by Pew Research where corporate internet usersranked email as more important than any other communication tool, including the internet itself.In addition, many other critical IT systems depend on email to operate effectively. For example, sales, customer relationship management, humanresources, finance and marketing systems typically rely on email for workflow management, important notifications and other functions, making emailcontinuity and disaster recovery technologies particularly vital to the overall operations of an organization.The Amount of Critical and Sensitive Data in Email Archives is Growing RapidlyThe Radicati Group report also predicts that the average email storage per business user will grow by 65% in the next four years. The value of thisarchive of sensitive corporate data contained in email grows with every email or file exchanged. Traditionally, protecting and storing this archive has been apriority for compliance or risk officers, but the email archive is increasingly being used by employees as their primary repository to save and access importantinformation. A 2014 report by Gartner estimates that by 2019, 75% of organizations will treat archive data, including email, as an active data source and notsimply as a separate repository to be viewed or searched periodically, up from less than 10% today.Actively managing these dramatically expanding email archives with traditional on-premises storage technology is costly, so organizations are turningto cloud-based services to meet their archiving needs. A 2014 report by Gartner states that archiving as a service (a.k.a. cloud archiving) has rapidly surpassedon-premises archiving as the preferred deployment model for most organizations. Gartner sees that 60% to 70% of new or replacement email archivingimplementations as being cloud-based. Moreover, organizations are increasingly requiring more powerful capabilities to search their email archive in supportof e-discovery and employee productivity. 46% of respondents to Forrester’s 2013 Foresights Security Survey of enterprise IT architects, and other ITdecision makers, stated e-discovery was a high or critical priority over the next year. 29 Table of ContentsEmail is a Primary Security Target for Advanced Cyber-AttacksIn recent years, there has been an increase in the number of high profile security breaches, data leaks, extortion and fraud attacks using email. Wellorganized and funded, including state-backed, hackers and cyber-criminals are targeting organizations to disrupt their operations, steal money and sensitivecorporate data and gain access to valuable intellectual property. Email is often the primary target for these external attacks as well as the source of damagingdata leaks from insiders, whether accidental or malicious. According to the monitoring service breachlevelindex.com, there have been over three billionreported lost data records since 2013 globally.Spear-phishing and other social engineering attacks using email have become a widespread and effective attack technique against organizations of allsizes. These attacks are designed to trick the recipient into sharing sensitive data or wiring funds as well as opening a malicious link or attachment leading toa malware infection. Many of the highest profile data breaches have been the result of phishing attacks, including the Home Depot breach in 2014, the Targetattack in 2013 and the RSA attack in 2011. More recently business email compromise attacks (also known as CEO fraud or whaling) are becoming common.According to the FBI, there were $2.3 billion in losses from these types of attacks reported from October 2013 to February 2016. These attacks are not limitedto large enterprises. In 2015, Endurance International reported that 71% of small businesses have been the victim of phishing attacks.In addition to advanced and targeted threats, spam and other email-based cyber scams remain a significant problem for organizations, especially as thevolume of emails continues to increase. A 2015 report by Kaspersky stated that spam represented 67% of all email flows in 2014.As a result of the widespread impact of phishing attacks, the disruption of spam and the magnitude of recent data breaches, organizations are elevatingthe priority of IT security projects.Data Protection, Cybersecurity and Data Privacy are Key Compliance and Regulatory Concerns for all OrganizationsGovernments, regulators and industry groups globally continue to enact or amend legislation and standards regarding data protection, cybersecurityand data privacy. Examples of such laws in the United States include the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Graham-Leach-Bliley Act of 1999 (GLBA) and the Sarbanes-Oxley Act of 2002. Countries in Europe have each adopted their own laws under the Data ProtectionDirective adopted in 1995, which is expected to be superseded in the next two years by a single law under the European Data Protection Regulation. Theselaws place growing obligations on organizations of all sizes, particularly those in regulated industries, to store, protect, process, share and transmit datasafely, or risk significant sanctions as well as the threat of civil litigation. In addition, email communications, and the data they contain, may need to beproduced as evidence in litigation or may be necessary to address legal, regulatory or internal queries that may arise in the future. This makes secure emailarchiving and the ability to access and search data an increasingly critical requirement.Restrictions IT Teams Put on Email Create New Security RisksAs employees seek to become more productive, exchange files and collaborate, email usage and archive sizes continue to grow, placing greaterdemands on email resources. Meanwhile, IT teams are under pressure to reduce storage costs and improve infrastructure performance, and this often leadsthem to take steps to limit unfettered usage of email. This can include blocking large file sending to avoid choking network traffic and putting a file sizelimit on inboxes to reduce storage infrastructure, which makes it difficult for employees to use the email archive as their primary communication and filestore. The frustration this creates can cause employees to seek solutions outside the secure corporate network, such as Dropbox and other web-based filesharing sites, increasing the risk of data leakage and making it difficult for the compliance department to monitor data traffic within and outside theorganization. 30 Table of ContentsEmail Downtime is Disruptive to Employee ProductivityGiven the critical nature of email for business communication and the importance of the information archive, email outages have become increasinglydisruptive and costly because of the resulting impact on employee productivity. Employees are accustomed to being “always on” and accessing their emailand data from mobile phones, tablets and other handheld devices, in addition to desktop devices. According to a report by Osterman Research, email systemsexperience a 53-minute mean of unplanned downtime each month, or 10.6 hours each year. Osterman estimates that employees become 25% less productivewhen their email system is down. This impact is not only felt in an outage, since organizations also must plan for regular maintenance and scheduledowntime usually after hours at higher cost given overtime wages.IT Workloads, Including Business Productivity Tools, are Moving to the CloudOrganizations of all sizes are adopting cloud-based technologies to reduce the cost and complexity of their IT infrastructure and increase performanceand flexibility. Gartner reports that 75% of organizations use public cloud services today, although sparingly, and 78% plan to increase their investment incloud services in the next three years. 91% of organizations across all industries plan to use external providers to help with cloud adoption. IT spending onpublic cloud infrastructure as a service (IaaS), platform as a service (PaaS), software as a service (SaaS) and business process as a service (BPaaS) is growing ata five-year compound annual growth rate of 18% through 2018, more than six times the growth rate of IT spending generally—2.7%—over the same timeperiod. This trend is a continuation of the disruptive shift that is seen elsewhere in the application market as a number of high growth SaaS vendors likeSalesforce.com, NetSuite, ServiceNow and Workday continue to attract critical IT workloads from on-premises technologies to the cloud. Leading cloudinfrastructure vendors such as Amazon Web Services and Microsoft Azure are also seeing significant growth as organizations of all sizes adopt their offerings.As organizations consider which workloads to move to the cloud, IT teams are looking beyond moving infrastructure and looking to shift traditionalproductivity tools to Microsoft’s Office 365 or Google Apps for Work. Gartner states that “the proportion of business users provisioned, in whole or in part,with office system capabilities from the cloud will grow from approximately 15% in 2015 to 60%, or approximately 700 million users by 2022.”Business Email Mailboxes are Moving to the Cloud, but this Creates New Risks to MitigateWhile business email continues to grow, the number of on-premises mailboxes will decline as organizations put them into the cloud. Organizationsthat move their primary email service to Office 365 or Google face significant risks from their single vendor exposure as they depend on one company for areliable service, comprehensive threat protection and guaranteed data integrity.These risks will only increase as services like Office 365 become more popular over time. With more organizations relying on the same hostinginfrastructure, any outage or downtime can cause severe industry-wide disruption. Also attacking Office 365 or Google is increasingly attractive for cybercriminals because they know they only have to find a way to attack the single security stack used by these hosting providers to access multiple targets. Thisattack scenario is easier and more efficient than targeting organizations one at a time.As a result, most organizations prefer to have third-party security, continuity and archiving providers in place to reduce their risk posture and provideadditional layers of redundancy and enhanced service quality. As organizations adopt cloud infrastructure services, they have also increased spending onsecuring these workloads with cloud-based security products. 31 Table of ContentsTraditional Email Security, Continuity and Archiving Alternatives can be Inadequate and do not Address Increasing Customer Requirements and ProtectAgainst Next Generation Security ThreatsAs the threat landscape becomes more dynamic and complex, and customers want to put more critical IT workloads into the cloud, we believe the pointproducts and traditional architectures that address email security, continuity and archiving will not be able to adequately address increasing customerrequirements.Point Products are Inflexible and only Address Part of the ProblemTo address their security, continuity and archiving needs, many organizations have deployed a complex array of disparate or point products on-premises, or cloud-based versions hosted by the vendor.These technologies are typically from multiple vendors, sometimes developed in-house or use features that shipped with the mail server and onlyaddress narrow uses and problems. They can be difficult to integrate, inflexible, unreliable, complex and expensive to manage, particularly as email and datavolumes grow. The growing complexity associated with broader IT risks and the escalation of security threats requires a solution that is integrated and agile,and increasingly cloud-based as organizations move more IT workloads there. As a result, organizations who rely on traditional point products will struggleto adapt their infrastructure cost-effectively for today’s email requirements.Traditional On-Premises or Hosted Architectures have Performance Limitations and are ExpensiveExisting technologies, whether on-premises or hosted, are typically built on a single-tenant architecture, which requires extra provisioning to plan foroccasional peak volumes and unplanned circumstances for each customer. This approach is inefficient and expensive as it requires a higher minimuminvestment for each implementation than a native cloud approach that utilizes pooled provisioning across multiple tenants. Hosted “cloud” versions of anon-premises approach rely on the same single-tenant IT architecture as the on-premises version that limits scalability, is inflexible, hard to update rapidly andmore expensive to deploy and manage.Large enterprises that have invested heavily in traditional on-premises technology to address their mounting email risks are increasingly findingthemselves exposed as these systems are not adequate or agile enough to adapt to the evolving threat landscape. Smaller and mid-market organizations arealso at risk and often more vulnerable as they lack the same level of IT resources or budgets to counter these threats with many having purchased limitedsecurity technology. In a recent survey by Endurance, only 42% of small business owners had recently invested resources into any form of securityprotection, which may not be sufficient given the hostile threat landscape.Organizations Need a New Approach to Email Security and ManagementThe limitations of traditional security and archiving technologies mean customers need to rethink their approach to protecting email and corporateinformation. Customers need to mitigate the risks they face from email, and want to reduce the cost and complexity, and move more of their workloads to thecloud.We believe organizations are ultimately looking to implement a cyber resilience strategy that delivers protection of users, data and operations from therisks arising from technological failure, human error and malicious intent. The risks also increase with organizations migrating to Office 365 as it is acomplex email solution that is a high value and high profile target. A multi-layered cyber security and resilience approach is needed in order to address thediverse threats and diverse data classifications within a single data environment. Organizations also need robust continuity options to solve for unpredictableevents that cause an outage to email and disruption to business. 32 Table of ContentsMeeting this growing customer demand requires an email and data security cloud service that meets the following requirements: • Integrated Offering. By bringing multiple requirements into one unified service, the next-generation email service would help the organizationreduce the complexity and cost of managing point technologies from disparate vendors and bring additional benefits from new capabilities madepossible due to unification. • Strong Technology. As organizations substitute specialized products provided by different vendors with a unified email service, it is imperativethat the individual products are as good, or better, than those being replaced. Organizations are not willing to compromise on performance orsecurity at a product level. • Native Cloud. As organizations shift workloads to the cloud, and move away from retaining on-premises or single tenant hosted cloudinfrastructure, today’s email security and information management technology must be natively cloud-based eliminating the need for localsoftware and hardware, virtual machines and device hosting. • Built for Scale. As email traffic and data storage continues to increase dramatically, the risk of threats escalates and the need for real-time, on-demand email access becomes more prominent, organizations cannot compromise on email performance and availability. The ideal solutionmust be easily scalable to match customer demand and be able to handle large volumes. • Easy to Deploy and Manage. A cloud platform should simplify the process of service updates, new product deployments and on-boarding.System improvements should also be handled centrally, reducing this burden for the customers’ own IT team. A unified service also means itshould be managed from a single administration console. • Adaptable to Customer Needs. With the rapidly shifting threat landscape and other IT requirements, customer email needs are continuouslyevolving, and it is important that email and information management solutions adapt quickly to help organizations keep pace with changingrisks and enhance productivity. • Lower Total Cost of Ownership. The new approach for corporate email security, continuity and archiving should solve the current problems ofintegration, performance and scalability while simplifying the IT email infrastructure, reducing the initial capital outlay, recurring maintenancecosts and the growing storage costs that many companies face as their volumes scale. 33 Table of ContentsOur Market OpportunityThe growing need of organizations to mitigate the risks of email and data security, continuity and archiving has already established a significantindustry beyond the mail server. According to 451 Research, an information technology research company, there were approximately 194 million activemobile email users alone worldwide in businesses with 10—499 employees in 2015. 451 Research projects this number to increase to 311 million by 2019,representing a compound annual growth rate of 12.5%. In addition, according to the U.S. Small Business Administration, there are approximately 5.7 millionorganizations employing 113.4 million employees in the United States. Among them, there are over 570,000 small and mid-size organizations, which aredefined as those organizations employing 20 to 4,999 employees that together have approximately 55 million employees. Based on recent Gartner reports,combined spending in markets catering to enterprise information and email security, continuity and archiving, which include Secure Email Gateway, Backupand Recovery Software, E-Discovery Software and Data Loss Prevention, was $9.4 billion in 2014 and will grow to $11.8 billion in 2017. We believe there isa considerable need for a comprehensive integrated cloud solution that can address the needs of customers in these markets. Our immediate opportunity is to replace incumbent email security, continuity and archiving vendors. As we extend our products into adjacent areas,we anticipate this will open up additional opportunities beyond this to take further market share in a wider range of enterprise security and data managementmarkets. We also expect to benefit from the growing popularity of cloud email services, specifically Office 365 and Google, and the customer need forcomplementary security, archiving, back-up and continuity services.The Gartner Reports described herein (the “Gartner Reports”) represent research opinion or viewpoints published, as part of a syndicated subscriptionservice, by Gartner, Inc., and are not representations of fact. Each Gartner Report speaks as of its original publication date (and not as of the date of this 20-F)and the opinions expressed in the Gartner Reports are subject to change without notice. 34 Table of ContentsOur SolutionOur fully-integrated suite of cloud services for security, continuity and archiving is designed to protect email and deliver comprehensive email riskmanagement beyond the primary mail server. We protect customers from the growing threat from email and to the corporate data it contains from malware,spam, data leaks and advanced threats like spear-phishing. We also help organizations securely and cost effectively archive their growing email and filerepositories to support employee productivity, compliance and e-discovery. Our continuity services ensure email and corporate information remain availablein the event of a primary system failure or scheduled maintenance downtime.Our customers benefit from: • Comprehensive Email and Data Risk Management in a Single, Unified Cloud Service. Our services integrate a range of technologies into acomprehensive service that would otherwise require an array of individual devices or services from multiple vendors. We enable customers todecommission these technologies, reduce the cost and complexity of their infrastructure, redeploy IT resources, and improve the security and riskmanagement of their corporate email environment. • Best-of-Breed Security, Continuity and Archiving Services. We believe our customers should not have to compromise on the quality of theiremail security, continuity or archiving services in order to benefit from integration. Our strategy is to develop best-of-breed capabilities withinour integrated service to compete successfully with industry-leading point products in three critical areas: • Email and Data Security: We protect customers from a comprehensive range of email and data related threats that include, but arenot limited to, spam, viruses, phishing and spear phishing, identity theft, advanced persistent threats, malicious attachments,known and unknown malware, outbound spam outbreaks and malicious inbound URLs, extortion and fraud. We combine ourproprietary cloud-based scanning, detection and real-time intelligence gathering technologies with third-party threat data andmalware libraries to deliver comprehensive and overlapping protection reflective of a best-of-breed security service. • Email Service Continuity: Our continuity service enables customers to send, receive and view emails and calendars during emailgateway failures or planned maintenance downtime, without the need to build or host their own replicated email environment. Ourservice has immediate fail-over and fail-back capabilities, and is fully-integrated into Microsoft Outlook. Employees can continueto access their email and data using their preferred mobile, tablet or desktop device, or via our web-based portal, so there is limitedinterruption to how they normally operate. • Data Archiving: We enable organizations to archive rapidly growing volumes of email and associated data safely and centrally inthe cloud to support their need to archive data cost effectively to meet long term storage, compliance, governance, risk mitigationand regulatory obligations. We also provide powerful search tools that can increase employee productivity, and enable them toutilize their archive as a live file store. Key features of our service include, unlimited and perpetual legal hold, discovery and earlylegal case assessment, onsite and cloud-linked retention management, administrator and employee-led retention controls, onsiteand metadata synchronization and record destruction policies and services. • Web Scale Performance for Organizations of All Sizes. Our cloud service is built to address the most demanding scale, performance andavailability requirements of large enterprises but delivers this as a subscription-based cloud service that puts these capabilities within the reachof small and mid-market organizations too. Our data centers process approximately 210 million emails per day, and store over 130 billion emailsand approximately 18 petabytes of customer data. We achieve demanding continuity service commitments with data centers that are replicatedin each geography and operate in active-active mode enabling fast failover and fail-back as required. 35 Table of Contents • Compelling Return on Investment. Our unified, cloud-based service enables our customers to decommission a range of legacy and disparatetechnologies that support their email server and recover this cost. We utilize cost-efficient commodity hardware, and share a single instance ofthe operating software as well as storage and processing hardware securely across the whole customer base within each data center, allowing us todeliver cloud-scale economic and performance benefits to our customers. Customers also benefit from the continuous improvement of our servicewithout the need to pay for service packs or updates. Our service bundles and subscription-based pricing also enable customers to pay peremployee and select their desired services making costs easy to predict and affordable. • Easy to Deploy and Manage. Our service is designed to be easier to deploy than alternative technologies. Customers simply route their emailtraffic through our cloud and can be up and running in a matter of days and sometimes less. We then enable our customers to add or delete newservices and employees, and manage all security and other policies centrally via a single web-based administration console that significantlysimplifies the ongoing management of their email and data environment. • Highly Agile and Adaptable Service. We are continually improving our cloud architecture and services. Our common code base and multi-tenant cloud architecture enables us to perform maintenance updates and add new features or products by updating our core code base once.Continuous service development and multi-tenant rapid deployment also means we can keep pace with emerging threats to protect and respondquickly to changing customer needs. • An Easier Move of Additional Critical Workloads to the Cloud. For those customers that want to put more workloads into the cloud, ourtechnology facilitates the migration of email in particular by removing the complexity that has stalled many customers to date. Ourinteroperability with cloud-based email servers, such as Office 365, makes this easier to achieve and helps to mitigate remaining concerns aboutthe single-vendor security, data integrity and continuity risk of such a move. Our data ingestion services also allow customers to bring legacydata into their new cloud archive to ensure it is a complete record of current and historic data.Our Growth StrategyWe will continue to invest in extending our leadership in cloud security and risk management services, and as more organizations move IT workloadssuch as email to the cloud, we believe we are well positioned to continue capitalizing on this growing opportunity globally.Our growth strategy is focused on the following: • Grow Revenue From Our Existing Customer Base. We serve approximately 18,000 customers of all sizes. We provide a high level of servicethat results in our customers staying with us year over year. This large and loyal customer base provides us with the opportunity to sell additionalservices and add more employees to their subscriptions. As a result, we have achieved a revenue retention rate of 109% and 107% for the fiscalyears ended March 31, 2016 and 2015, respectively. As of March 31, 2016, 28% of our customers subscribed to one of our services, 20% of ourcustomers subscribed to two of our services, 29% of our customers subscribed to three of our services, and 23% of our customers subscribed tofour or more of our services. As of March 31, 2016, approximately 17,100 of our customers subscribed to our Email Security service,approximately 12,000 subscribed to our Mailbox Continuity service, and approximately 9,500 subscribed to our Enterprise InformationArchiving service. As a result, we believe we have significant upsell potential in our existing customer base with current and new services. Weintend to continue proactively broadening our reach with our existing customers and sell additional services. • Acquire New Customers. We have built our global cloud architecture to offer best-of-breed capabilities and to be highly scalable and affordablefor organizations of any size, ranging from small and mid-market customers to the largest global enterprises. Moreover, we offer our security,continuity and 36 Table of Contents archiving email services as bundles and in a modular fashion, enabling us to win new customers by addressing a variety of initial needs and usecases that we expand over time as we cross sell other offerings. We will continue to invest in a direct sales force combined with a focused channelstrategy designed to serve the various requirements of small, mid-market and large enterprises and to bring new customers onto our cloudarchitecture. • Actively Invest in Our Channel Partner Network. The majority of our sales are through a reseller channel designed specifically to meet therequirements of each of our target customer segments. In the large enterprise market, we are building on existing relationships with leadingsystems integrators such as Hewlett Packard, Dimension Data and Avanade. In small and mid-market organizations, we are extending our networkof leading IT resellers like Softcat, SHI, CDW and Softchoice. We expect to expand our channel strategy over time to incorporate additionalsecurity or cloud specialists, as well as resellers focusing on supporting customers with the transition to Office 365. We intend to further invest inour network of channel partners to further extend our global sales, service and support capabilities. • Develop Our Technology and Release New Services. We regularly update and improve our software and architecture and seamlessly deploythese updates to our customers. In the fiscal year ended March 31, 2016, we launched Impersonation Protect, the first service of its kind to protectagainst the growing threat from business email compromise (also known as CEO fraud or whaling) attacks. We will continue to build on ourcurrent capabilities and exploit additional opportunities in adjacent areas to those we serve today. This will extend the value our customers cangain from our architecture and enable them to consolidate additional email and data services to our integrated cloud service working seamlesslywith Microsoft Exchange, Office 365 and Google Apps for Work. • Continue to Expand Our Geographic Presence. We were founded outside the United States and, consequently, 57% and 62% of our sales infiscal years 2016 and 2015, respectively, were derived from non-U.S. locations. Revenue from the United States grew at 40% from the fiscal yearended March 31, 2015 to the fiscal year ended March 31, 2016, and 47% from the fiscal year ended March 31, 2014 to the fiscal year endedMarch 31, 2015. We view this as our most significant growth market. Since founding our U.S. business in 2008, we have established a successfuldirect sales, channel and service infrastructure to exploit this opportunity. We have also established a presence in Australia and expect expansionin that geography as our data centers there are now operational. We plan to investigate additional international expansion from our regionalbases in the United States (for North America), the United Kingdom (for Europe), South Africa (for Africa and the Middle East) and Australia (forAsia-Pacific). • Target Organizations Moving Workloads to the Cloud. Given the compelling cost benefits and improved agility of cloud-based solutions,organizations are increasingly moving critical workloads to the cloud. As these IT workloads move to the cloud, we believe we are well-positioned to take advantage of growth opportunities that exist from augmenting services, including Office 365 and Google Apps for Work.Our TechnologyWe have developed a native cloud architecture, including our own proprietary SaaS operating system and customer-facing services, to address thespecific risks and functional limitations of business email and data. Our innovative cloud-based approach requires no on-premises or hosted appliances. Webelieve we are one of only a few cloud architects that have fully committed to native cloud development.We have a proven record of performing successfully at considerable scale and addressing rapidly growing customer demands. We processapproximately 210 million emails per day with over 130 billion under management. We archive approximately 18 petabytes of customer data and add morethan 200 terabytes of customer data per month and employee queries of their Mimecast email archive have grown from approximately 700,000 to over1,000,000 per week in just one year. 37 Table of ContentsWe are able to provision customer email flows and onboard massive amounts of email data from legacy archives rapidly and efficiently. This drivescustomer adoption and makes the cloud transition easier than our customers typically expect. Once a customer is live on our service, adding new products totheir subscription only requires activating it from within their single administration console. This can be done with as little as one click and the new serviceis available across their business.Our Proprietary Native Cloud Architecture—Mime | OSWe developed a proprietary operating system called Mime | OS for native cloud services. Mime | OS enables secure multi-tenancy and takes advantageof the cost and performance benefits of using industry-standard hardware and resource sharing specifically for the secure management of email and data. Thisenables us to provision efficiently and securely across our customer base, minimizing the impact of spare or over-provisioned processing and storagecapacity, reducing the cost of providing our services.Mime | OS utilizes a common code base to control the hardware, and the storage, indexing, processing, services, administrator and user interface layersof our cloud environment. It has been specifically designed to enable us to scale our storage, processing and services to meet large enterprise-level email anddata demands, while retaining the cost and performance benefits of a native cloud environment.Mime | OS also streamlines our customer application development and enables strong integration across our services. All of our customer applicationsor services, use Mime | OS to interact with our single data stores and processing technology, as well as interoperate effectively with each other.As set forth below, Mime | OS is our proprietary operating system that controls the interface, services, processing, indexing and storage layers ofMimecast’s cloud architecture.The Mimecast Cloud Architecture 38 Table of ContentsContinuous Development Methodology and Multi-Tenancy AdvantageAs we enhance and expand our technology, we can update services centrally with little or no intervention required by the customer as everyone sharesthe same core operating and application software. Improvements, upgrades, new products or patches are applied once and are available immediately acrossour whole service to customers. It also means we have only one, up-to-date version of our service to maintain and support, as well as a single, common datastore for all customers that simplifies management, support and product development.Our services already process and manage large volumes of customer data and this is growing daily. Our commitment to continual improvement inMime | OS, our customer applications and hardware infrastructure mean we are constantly strengthening the performance of our service as we scale. Theseimprovements include faster archive search times and data ingestion, greater storage density, improved processing and extended security coverage. Eachweek, we roll out updates and enhancements centrally that benefit our customers without the need for additional infrastructure investment on their part.Additionally, when new threats emerge, we act once by making changes to our service and all customers benefit immediately. We can also identify and act onthreats to one customer and quickly prevent them from impacting others by changing our core system.How Our Services WorkMimecast Email SecurityWe protect inbound and outbound email from malware, spam, advanced persistent threats, email DoS and DDoS, data leaks and other security threats.Inbound email is directed through Mimecast Email Security, which performs comprehensive security checks before the email is delivered to thecustomer’s infrastructure, e.g. Exchange, Office 365 or Google. This prevents unwanted email even reaching the customer in the first place and clutteringtheir infrastructure unlike on-premises services from competitors. Each day, we monitor approximately 460 million messages delivering, on average, less than50% to the customer.Outbound email sent from the customer also passes through us and is checked before being sent on to prevent it from presenting a security threat to therecipient. Outbound email can also be encrypted, and scanned by our comprehensive content controls to prevent confidential documents or data leaving thebusiness. Data leak prevention is a key consideration for all organizations.Mimecast Mailbox ContinuityEmail is a 24x7 tool and, traditionally, customers who want to ensure their email does not experience downtime as a result of an inevitable outage ormaintenance have had to replicate their own infrastructure in a second location, doubling their email-related costs. The cost and management burden ofdoing this is prohibitive for many, particularly small or mid-market organizations.We are a cost effective alternative as there is no need for additional infrastructure. As all customer outbound and inbound email is coming through usanyway, when the customer’s primary email service fails, our Mimecast Mailbox Continuity service takes over the delivery and sending of email in real timeor at the request of the administrator, offering immediate fail-over and fail-back. When the primary service is re-established, the customer is reassured thatthere has been no loss of data and that the archive is maintained. For employees the process is virtually invisible—they continue to work as before in theirMicrosoft Outlook desktop email client, their Mimecast mobile app or their Mac Desktop App.Mimecast Enterprise Information ArchivingEmail, and the data it contains, needs to be safely archived to meet growing compliance, regulatory and legal obligations. Also, employees areincreasingly using their email archive as their primary information store so this is further reason to ensure it is protected and archived effectively. 39 Table of ContentsAs email, file attachments, and associated critical metadata that identifies activity is sent or received, it can be saved in a secure, tamper-proof archivein the single Mimecast cloud automatically and indefinitely. Our employee mobile and desktop search tools, and administration console, then allow fordetailed investigation of the archive. We also enable customers with legacy archive data to put this into their single Mimecast archive, which improvesadherence to data compliance obligations and gives employees access to a complete historical view of their archive.Our Mimecast Enterprise Information Archiving service offers secure lifetime storage of email, files and instant messaging conversations paid for on aper-employee not data basis. Expensive and ineffective onsite archives can be decommissioned, reducing the data load on the primary email service too. Oursearch tools make it easy for legal staff and employees themselves to quickly find data without the need to turn to the IT team. Finally, our archive can alsoinclude legacy data that would otherwise be held in additional storage. This can be ingested over-the-wire or via physical drives sent encrypted from thecustomer to us.Our Global Data Center NetworkWe have built a network of ten data centers in five locations around the world to deliver our services. This gives customers geographic andjurisdictional control over data location, which enables them to address data privacy concerns. Each region operates two identical data centers that functionin active-active mode in different locations, and have N+1 set-ups to meet our continuity of service commitments. Because of this redundancy, we are able toswitch operations from one data center to another to maintain our customers’ email and data services. We have developed a modular approach toprovisioning a new data center and can transition amongst data centers as needed in existing or new geographies.Mimecast’s ten co-located data centers, which are illustrated below, are replicated and operate in active-active mode to allow for continuity of servicein the event of downtime or maintenance. Our ServicesOur cloud security, continuity and archiving services protect email and data, giving customers comprehensive email risk management in a single,fully-integrated subscription service.Mimecast Email Security protects against malware, spam, advanced phishing attacks including business email compromise, and other emergingattacks, while also preventing data leaks. Mimecast Mailbox Continuity 40 Table of Contentsensures employees can continue using email during unexpected and planned outages such as system maintenance. Mimecast Enterprise InformationArchiving unifies email, file and Lync Instant Messaging data to support e-discovery, and gives employees fast access to their personal archive via PC, Macand mobile apps.Mimecast Email SecurityEmail security is a critical defense against hackers seeking to capture and exploit valuable corporate information and disrupt business operations. OurMimecast Email Security service provides comprehensive email security. It prevents spam, viruses, advanced threats, bulk mail and defined content fromreaching inboxes, and protects the security and integrity of outbound email communications. It gives administrators granular security and content policycontrol for all inbound and with additional services, outbound email traffic to prevent risks including data leaks. Integration into Outlook and mobile appsprovides employees the freedom to be self-sufficient and have the ability to manage their quarantines.Customers can also benefit from the purchase of the following security services: • Targeted Threat Protection: Highly sophisticated targeted attacks, including spear-phishing, are using email to successfully infiltrateorganizations, exploit users and steal valuable IP, customer data and money. Mimecast Targeted Threat Protection extends traditional gatewaysecurity to protect organizations against these advanced and highly targeted attacks. Also a threat dashboard and notification system providesreal-time data, including audit and reporting, and enables administrators and security specialists to monitor and report attempted attacks. Welaunched Targeted Threat Protection URL Protect in April 2014, Attachment Protect in July 2015, and Impersonation Protect in March 2016. • URL Protect tackles the threat from emails containing malicious links. It automatically checks links each time they are clicked,preventing employees from visiting compromised websites regardless of what email client or device they are using. It also includesinnovative user awareness capabilities so IT teams can raise the security awareness of employees. Once enabled, a percentage of links inemails clicked by an employee will open a warning screen. This will provide them more information about the email and destination,prompting them to consider whether the page is safe. If they choose to continue, the choice is logged and URL Protect scans the link andblocks access if the destination is unsafe. IT administrators can adjust the frequency of these awareness prompts to ensure employeecaution is maintained. Repeat offenders that click bad links will automatically receive more frequent prompts until their behaviorchanges. The IT team can track employee behavior from the Mimecast administration console and target additional security training asrequired. • Attachment Protect reduces the threat from weaponized or malware-laden attachments used in spear-phishing and other advancedattacks. It includes pre-emptive sandboxing to automatically security check email attachments before they are delivered to employees.Attachments are opened in a virtual environment or sandbox, isolated from the corporate email system, security checked and passed onto the employee only if no threat is detected. It also includes the option of an innovative transcription service that automaticallyconverts attachments into a safe file format, neutralizing malware as it does so. The attachment is delivered to the employee in read-onlyformat without any delay. As most attachments are read rather than edited, this is often sufficient. Should the employee need to edit theattachment, they can request it is sandboxed on-demand and delivered in the original file format. • Impersonation Protect is the first to market service that gives instant and comprehensive protection from the latest malware-less socialengineering attacks, often called CEO fraud, whaling or business email compromise. These attacks are designed to trick key users, oftenin an organization’s finance team, into making wire transfers or other financial transactions to cyber-criminals by pretending to be theCEO or CFO in a spoofed email. Some also target those responsible for sensitive employee data, such as payroll information, which couldbe used for identity theft. Impersonation Protect detects and prevents these types of attack by identifying 41 Table of Contents combinations of key indicators in an email to determine if the content is likely to be suspicious, even in the absence of a URL orattachment. Impersonation Protect blocks suspicious email by using advanced scanning techniques to identify elements commonly usedby criminals, including employee and domain names, and other keywords like ‘wire transfer,’ ‘tax form’ or ‘urgent.’ • Secure Messaging: Email containing sensitive or confidential information requires appropriate security and control to prevent inadvertent ordeliberate data leaks and to protect its information while in transit. Mimecast Secure Messaging is a secure and private channel to share sensitiveinformation with external contacts via email without the need for additional client or desktop software. Sensitive information is retained withinthe Mimecast cloud service strengthening information security, data governance and compliance, without the added IT overhead and complexityof traditional email encryption solutions. We launched Secure Messaging in April 2015. • Large File Send: Employees can create security and compliance risks when they turn to large file sharing tools to overcome email size limitsimposed by their IT team or email infrastructure. Mimecast Large File Send enables PC and Mac users to send and receive large files directly fromOutlook or a native Mac app. It protects attachments in line with security and content policies by utilizing encryption, optional access key andcustom expiration dates; supports audit, e-discovery and compliance by archiving all files and notifications according to email retentionpolicies; and protects email system performance from the burden of large file traffic. We launched Large File Send in July 2013. • Data Leak Prevention: Customers can prevent the inadvertent or malicious loss of sensitive corporate data with advanced data leak preventionand content controls. Policies using keywords, pattern matching, file hashes and dictionaries actively scan all email communications includingfile attachments to stop data leakage and support compliance. Suspect emails can be blocked, quarantined for review by administrators or sentsecurely.Mimecast Mailbox ContinuityEmail continuity protects email and data against the threat of downtime as a result of system failure, natural disasters and the impact of plannedmaintenance, system upgrades and migrations. Mimecast Mailbox Continuity services significantly reduce the cost and complexity of mitigating these risksand provides uninterrupted access to live and historic email and calendar information. During an outage our service provides real-time inbound, outboundand internal email support. The continuity service can be activated and deactivated directly and instantly from our administration console by administratorsfor the complete organization or for specific groups affected by limited outages. All outage events are fully logged and we also support email top-up servicesfor customers who have to recover their Exchange environments from backups. The continuity service is capable of reliably and securely supportingcustomers during short or long-term continuity events. Integration with Microsoft Outlook, a native app for Mac users and a full suite of mobile apps meansemployees have seamless access to their email in the event of an outage.Mimecast Enterprise Information ArchivingOur cloud archive consolidates into one store all inbound, outbound and internal email, files and instant messaging in a perpetual, indexed and securearchive. Using our Mimecast Enterprise Information Archiving service, customers can also incorporate legacy data from additional archives into the samesearchable store.All data is encrypted and preserved within a Write Once Read Many (WORM) state. Proprietary indexing and retrieval solutions allow customers tosearch individual mailboxes or the entire corporate archive in seconds. Our mobile, tablet, desktop and web applications ensure that employees can searchand make the best use of their entire corporate archive in a fast, reliable and informative way. Intensive logging services cover the use of the archive, androles and permissions govern what employees can see in the archive based on their role. Our purpose-built ingestion and export services support rapid high-volume extraction, scrubbing and loading of 42 Table of Contentssignificant quantities of data. Our archive solution retains metadata that arises from gateway and continuity operations and we preserve both received andaltered variants of emails that pass through our secure email gateway. Retention options for customers range from individual retentions, to data retained foran entire customer on a perpetual basis.Customers can also purchase the following additional services as part of our Mimecast Enterprise Information Archiving offering: • Cloud Archive for Files: Mimecast consolidates files from network shares and folders alongside email data in a single, secure and fully-indexedcloud archive. Administrators also benefit from comprehensive search, e-discovery and compliance capabilities. • Cloud Archive for Lync: Customers protect important IP, strengthen compliance and reduce cost by retaining Microsoft Lync IM conversationsand content in a secure, indexed and unified archive. Powerful search capabilities deliver rapid results from IM, email and file archives. • Archive Power Tools: This is a series of advanced archiving tools including: • Mimecast Storage Management for Exchange: This enables active mailbox size management, so administrators can optimize emailsystem performance, control costs and support archive policy enforcement. • Mailbox and Folder Tools for Exchange: In an email continuity event or when searching for archived content, access to folder structuresand shared mailbox content is key to productivity. This tool makes it easy to replicate individual and shared mailbox folders. • Granular Retention Management: Managing email retention policies can be complex and time-consuming, because different businessgroups and individuals have requirements that vary how long email should, or is required to be retained. Mimecast Granular RetentionManagement enables IT teams to centrally apply policies to manage the retention of email content and related metadata.Service BundlesMany of our customers are attracted by the ability to combine our services and capabilities into a unified service managed from a single administrationconsole. Most customers purchase the bundles from the outset, but some prefer to start with specific packages, then upgrade to additional products over time.In 2016, we changed our service bundles in response to the changing threat landscape and to reflect customers’ requests for combinations of servicesacross security, archiving and continuity and additional advanced security features. We will continue to have certain of our existing customers subscribed toour historic bundles, but will be transitioning them to the new service bundles over the next few months.Our recently introduced service bundles: • M2A: Cyber Security and Resiliency with Archiving. This bundle includes Email Security with Targeted Threat Protection; ComplianceSecurity; Continuity services and a 99 year archive. • M2: Cyber Security and Resiliency. This bundle includes Email Security plus Targeted Threat Protection; Compliance Security and Continuitywith 58 day email retention for recovery purposes.Customers with specific projects or pre-defined business projects can also purchase the following additional services: • S1: Advanced Threat Security. This service is designed to protect the organization against advanced threats such as whaling and spear-phishingwith real-time URL blocking, attachment scanning and domain checking, as well as anti-malware and leading spam protection to shieldemployees and enhance productivity. 43 Table of Contents • D1: DLP and Content Security. This service is designed to lock down sensitive corporate information with advanced data leak prevention, dataleak detection, document and policy controls. • C1: Mailbox Continuity. Our customers use this service to ensure that their email works even when the primary mail server is down. We continuesending and receiving email with a 100% uptime SLA with coverage for all mobile devices and web access. • A1: Email Archiving. This service archives email and attachments in a fully-encrypted, independent, cloud data store separate from the mailenvironment.Mimecast Mobile and Desktop AppsMobile, PC and Mac users get self-service access to security features, including spam reporting and managed sender lists, the ability to send andreceive email during a primary email system outage, and access to their personal email archive to run searches on its content. Employee productivity does notcome at the expense of centralized control. Administrators can use granular permissions to activate functions for individual employees or groups of users,while centralized security and policy management means IT teams can retain control over default settings.Sales and MarketingOur sales and marketing teams work together to build a strong sales pipeline, cultivate and retain customers and drive market awareness of our currentand future products and services.SalesWe sell our services through direct sales efforts and through our channel partners. Our sales model is designed to meet the needs of small and mid-market organizations and large enterprises across a wide range of industries and in over 100 countries. Our approach has played an important role in thegrowth of our customer base to date. Our sales team is based in offices in Boston, Chicago, Dallas and San Francisco, United States; London, UnitedKingdom; Johannesburg and Cape Town, South Africa; and Melbourne and Sydney, Australia. We maintain a highly-trained sales force of approximately200 employees as of March 31, 2016, which is responsible for acquiring and developing new business.We also have an experienced sales team focused on developing and strengthening our channel partner relationships. Many organizations work withthird-party IT channel partners to meet their security, IT and cloud service needs, so we have formed relationships with a variety of the leading partners totarget large enterprises, mid-market and small organizations. For large enterprises, we work with international partners including Avanade, Hewlett-Packardand Dimension Data. In the mid-market, we work with leading national partners, including Softchoice, SHI, CDW and Softcat. The small business market isprimarily served by the reseller community and also by Managed Service Providers, who typically provide or host email services. We work closely with all ofthese channel partners to offer cooperative marketing, deal registration, as well as support and technical resources. We believe these partners view ourservices as a key source of additional revenue and a way for them to add significant value to their customers as they can support their desire to move to thecloud without compromising their security position.Sales to our channel partners are generally subject to our standard, non-exclusive channel partner agreement, meaning our channel partners may offercustomers the products of several different companies. These agreements are generally for a term of one year with a one year renewal term and can beterminated by us or the channel partner. Payment to us from the channel partner is typically due within 30 calendar days of the date we issue an invoice forsuch sales.Our sales cycle varies by size of customer, the number of products purchased and the complexity of the project, ranging from several days forincremental sales to existing customers, to many months for sales to new customers or large deployments. 44 Table of ContentsWe plan to invest in our sales organization to support both the growth of our direct sales organization and our channel partners.MarketingOur marketing strategy is designed to meet the specific needs of each of our customer segments. We are focused on building our brand and productawareness, increasing customer adoption of our products, communicating the advantages of our solution and its benefit to organizations, and generatingleads for our channel partners and direct sales force. We execute our marketing strategy by using a combination of internal marketing professionals and anetwork of global channel partners. We invest in field, channel, product and brand marketing and have increased our investment in digital marketing to drivegreater lead generation volume and efficiency. Our local marketing teams support the conversion of these leads into qualified opportunities for inside salesand are responsible for branding, content generation and product marketing.Customer Service and SupportWe maintain our strong customer retention rate through the strength and quality of our products, our commitment to our customers’ success and ouraward-winning local customer service and support team, which consists of more than 180 employees worldwide dedicated to ensuring a superior experiencefor our customers. For each of the fiscal years ended March 31, 2016, 2015 and 2014, our customer renewal rate has been consistently greater than 90%. Wecalculate our annual customer retention rate as the percentage of paying customers on the last day of the prior year who remain paying customers of the lastday of the current year.We have designed a comprehensive monitoring methodology that tracks and evaluates the interactions we have with our customers from sales and on-boarding to support and renewal. Our cross-functional teams, under the supervision of our Chief of Customer Operations, work together to ensure the bestcustomer experience is achieved and to address customer needs as they arise.A key aspect of our customer on-boarding process is our Legacy Data Migration services. Our customers often have legacy email archives that theywant to move to the cloud. Our data migration service helps solve the problems customers face when extracting that data and getting it into the right formatfor importing to the cloud, which can be expensive, time-consuming and involve interactions with multiple vendors.In addition, we offer a full range of support services to our global customer base, including comprehensive online resources and 24x7 email supportwith no outsourcing of support or account management to third parties. We also offer a range of additional services that include options for 24x7 telephonesupport and a dedicated technical account manager. These support services are priced and tiered to meet specific customer requirements.We also have a dedicated training team and resources designed to enable customers to get the full benefit from their Mimecast investment. Ourcomprehensive education and consultancy resources include administrator training and certification, end user training and e-discovery training forcompliance teams, all of which are available in-person and online.Beyond customer support and training, we also provide a range of services that are designed to provide additional support to some customers,especially larger enterprises with more complex email infrastructure and legacy data. Our professional services team works with the customer, or supports ourpartners to assist them, in planning, migration and service activation.We also offer a standard service level agreement as part of our standard contract that contains commitments regarding the delivery of email messages toand from our servers, the speed at which our archive can produce search results, and our ability to correctly identify and isolate spam and viruses. In the eventthat we do not 45 Table of Contentsachieve these levels, the customer can request a credit. Payment of the credit will be made subject to verification of the problem. These credits are tieredaccording to the extent of the service issued. The amount of credits provided to date has been immaterial in all historical periods.CustomersAs of March 31, 2016, we had approximately 18,000 customers and protected millions of their employees in over 100 countries. Our diverse globalfootprint is evidenced by the fact that in the fiscal year ended March 31, 2016, we generated 39% of our revenue from the United Kingdom, 43% from theUnited States, 16% from South Africa and 2% from the rest of the world. Our customers range from large enterprises with over 7,500 employees to smallorganizations with less than 500 employees and represent a diverse set of industries. For example, in the fiscal year ended March 31, 2016, we generated 16%of our revenue from customers in the legal services industry, 15% from customers in the professional, scientific and technical services industry, 13% fromcustomers in the manufacturing industry and 12% from customers in the finance and insurance industry. Our business is not dependent on any particularcustomer. No single customer represented more than 1% of our annual revenues in the fiscal years ended March 31, 2016, 2015 or 2014.Research and DevelopmentOur engineering, operations, product and development teams work together to enhance our existing products, technology infrastructure andunderlying Mime | OS cloud architecture, as well as develop our new product pipeline. Our research and development team interacts with our customers andpartners to address emerging market needs, counter developing threats and drive innovation in risk management and data protection. We operate acontinuous delivery model for improvements to our infrastructure and products to ensure customers benefit from regular updates in protection andfunctionality without the need for significant intervention on their part.Our research and development efforts give prominence to services that enhance our unification commitment and allow customers to displace point oron-premises products. We also prioritize a “build rather than acquire” approach to ensure that we combine best-of-breed functionality with effectiveintegration to maintain our commitment to the delivery of a superior experience to our customers and their employees.Our research and development expenses were $17.7 million, $14.5 million and $12.8 million for the fiscal years ended March 31, 2016, 2015 and2014, respectively.CompetitionOur market is large, highly competitive, fragmented, and subject to rapidly evolving technology and security threats, shifting customer needs andfrequent introductions of new products and services. We do not believe that any specific competitor offers the fully unified service and integrated technologythat we do. However, we do compete with companies that offer products that target email and data security, continuity and archiving, as well as largeproviders such as Google Inc. and Microsoft Corporation, who offer functions and tools as part of their core mailbox services that may be, or be perceived tobe, similar to ours. Our current and potential future competitors include: Barracuda Networks, Inc., Google, Microsoft Exchange Server, Exchange OnlineProtection, Proofpoint, Inc. and Symantec Corporation, in security, MessageOne, in continuity, and Barracuda, HP Autonomy, Microsoft Office 365,Proofpoint and Symantec in archiving. Some of our current and future competitors may have certain competitive advantages such as greater namerecognition, longer operating history, larger market share, larger existing user base and greater financial, technical and other resources. Some competitors maybe able to devote greater resources to the development, promotion and sale of their products than we can to ours, which could allow them to respond morequickly than we can to new technologies and changes in customer needs. We cannot provide any assurance that our competitors will not offer or developproducts or services that are superior to ours or achieve greater market acceptance. 46 Table of ContentsThe principal competitive factors in our market include: • reliability and effectiveness in protecting, detecting and responding to cyber-attacks; • scalability and multi-tenancy of our system; • breadth and unification of our services; • cloud-only delivery; • total cost of ownership; • speed, availability and reliability; • integration into office productivity, desktop and mobile tools; • speed at which our services can be deployed; • ease of user experience for IT administrators and employees; and • superior customer service and commitment to customer success.We believe that we compete favorably on the basis of these factors. Our ability to remain competitive will depend to a great extent upon our ongoingperformance in the areas of product and cloud architecture development, core technical innovation, channel management and customer support.Intellectual PropertyOur success is dependent, in part, on our ability to protect our proprietary technologies and other intellectual property rights. We primarily rely on acombination of trade secrets, copyrights and trademarks, as well as contractual protections to establish and protect our intellectual property rights. As ofMarch 31, 2016, we had three patents and 11 patent applications in the United States. We also have one patent issued and five applications pending forexamination in non-U.S. jurisdictions, and four pending Patent Cooperation Treaty patent applications, all of which are counterparts of our U.S. applications.We intend to pursue additional patent protection to the extent that we believe it would be beneficial and cost effective.We have registered “Mimecast” and certain other marks as trademarks in the United States and several other jurisdictions. We also have a number ofregistered and unregistered trademarks in the United States and certain other jurisdictions, and will pursue additional trademark registrations to the extent webelieve it would be beneficial and cost effective. We are the registered holder of a variety of domestic and international domain names that include“mimecast.com,” “mimecast.co.uk,” “mimecast.co.za,” and similar variations.In addition to the protection provided by our intellectual property rights, as part of our confidentiality procedures, all of our employees andindependent contractors are required to sign agreements acknowledging that all inventions, trade secrets, works of authorship, developments and otherprocesses generated by them on our behalf are our property, and they assign to us any ownership that they may claim in those works. We also generally enterinto confidentiality agreements with our employees, consultants, partners, vendors and customers, and generally limit access to and distribution of ourproprietary information.Despite our precautions, it may be possible for unauthorized third parties to copy our products and use information that we regard as proprietary tocreate products and services that compete with ours.Some license provisions protecting against unauthorized use, copying, transfer and disclosures of our products may be unenforceable under the laws ofcertain jurisdictions and foreign countries. In addition, the laws of some countries do not protect proprietary rights to as great of an extent as the laws of theUnited States, and many foreign countries do not enforce these laws as diligently as government agencies and private parties in the 47 Table of ContentsUnited States. Our exposure to unauthorized copying and use of our products and misappropriation of our proprietary information may increase as a result ofour foreign operations.We expect that software and other solutions in our industry may be increasingly subject to third-party infringement claims as the number ofcompetitors grows and the functionality of products in different industry segments overlap. Moreover, many of our competitors and other industryparticipants have been issued patents or filed patent applications, and have asserted claims and related litigation regarding patent and other intellectualproperty rights. Third parties, including non-practicing patent holders, have from time to time claimed, and could claim in the future, that our technologiesinfringe patents they now hold or might obtain or be issued in the future. See “Item 3. Key Information—D. Risk Factors—We may be sued by third partiesfor alleged infringement of their proprietary rights”.C. Organizational StructureMimecast Limited has seven subsidiaries. Our principal operating companies are Mimecast Limited, a UK company, Mimecast Services Ltd, a UKcompany, and Mimecast North America Inc., a Delaware corporation, each of which is a wholly-owned subsidiary of Mimecast Limited.D. Property, Plant, and EquipmentOur corporate headquarters is located in London, United Kingdom where we currently lease approximately 40,993 square feet of space under a leaseexpiring in December 2019. Our U.S. headquarters is located in Watertown, Massachusetts in an office consisting of approximately 44,170 square feet ofspace under a lease expiring in October 2020. We also occupy space in Johannesburg, South Africa consisting of 22,722 square feet under a lease expiring inOctober 2016. We also maintain additional leased facilities in Cape Town, South Africa, Melbourne and Sydney, Australia, as well as in Chicago, Dallas andSan Francisco in the United States.We lease all of our facilities and do not own any real property. We intend to procure additional space as we add employees and expand geographically.We believe that our facilities are adequate for our current needs and that suitable additional or substitute space will be available as needed to accommodateplanned expansion of our operations.E. Section 219 DisclosureSection 219 of the Iran Threat Reduction and Syria Human Rights Act of 2010 added Section 13(r) to the Securities Exchange Act of 1934, as amended(the “Exchange Act”). Section 13(r) requires an issuer to disclose in its annual or quarterly reports, as applicable, whether it or any of its affiliates knowinglyengaged in certain activities, transactions, or dealings relating to Iran or with designated natural persons or entities involved in terrorism or the proliferationof weapons of mass destruction during the period covered by the report. Disclosure is required even when the activities, transactions or dealings areconducted outside of the United States by non-U.S. affiliates in compliance with applicable law, and whether or not the activities are subject to sanctionsunder U.S. law.As of the date of this report, the Company is unaware of any activity, transaction, or dealings by us or any of our affiliates during the period endedMarch 31, 2016, that requires disclosure in this report under Section 13(r) of the Exchange Act, except as set forth below.In October 2008, an order was placed by a third-party U.K. reseller of Mimecast Services Ltd. (“MSL”), our U.K. operating company, for ongoing emailarchiving services to be provided to Persia International Bank PLC (“PIB”), which is based in London, United Kingdom. The services included cloud-hostedemail security, archiving, and continuity management. MSL fulfilled the order and it was automatically renewed in November 2009, December2010, December 2011, December 2012, December 2013, and December 2014. 48 Table of ContentsWe do not believe that these transactions by the U.K. operating subsidiary of what was then a U.K. parent company were subject to regulation underU.S. sanctions against Iran. But MSL’s provision of services to PIB after July 26, 2010 may have breached EU Council Regulation 267/2012, pursuant towhich PIB was named as a designated person on the EU Council Regulation against Iran. The Company terminated the PIB account with the U.K. reseller andstopped processing email for PIB on or about April 24, 2015. On January 16, 2016, the EU lifted the sanctions on PIB and its shareholder banks, Bank Mellatand Bank Tejarat.From the third-party U.K. reseller and related to the PIB account, MSL collected £2,545.64 in 2009; £2,093.00 in 2010; £2,138.50 in 2011; £2,002.00in 2012; £2,183.97 in 2013; and £1,455.97 in 2014. On June 10, 2015, MSL credited £575.35 back to the third-party U.K. reseller relating to the balance ofthe December 2014 invoice for cancelled services. That same day, MSL also wrote off bad debt of £1,608.62 for all outstanding invoice amounts relating tounpaid PIB receivables as of March 31, 2015. MSL has not received payment from the third-party reseller related to this account since August 2014.The below table shows the calendar year, amount invoiced, amount collected, amount credited, amount written off, and remaining balance (allinclusive of VAT taxes): Calendar Year Invoiced Collected Credited Written Off Balance2008 £ 2,545.64 £2,545.642009 £ 2,093.00 (£ 2,545.64) £2,093.002010 £ 2,138.50 (£ 2,093.00) £2,138.502011 £ 182.00 (£ 2,138.50) £ 182.002012 £ 2,183.97 (£ 2,002.00) £ 363.972013 £ 2,183.97 (£ 2,183.97) £ 363.972014 £ 2,183.97 (£ 1,455.97) £ 1091.972015 £ 1,092.00 (£575.35) (£1,608.62) £ 0Total £14,603.05 (£12,419.08) (£575.35) (£1,608.62) — The gross revenue inclusive of VAT tax (i.e., the sum of all payments, including VAT taxes, collected from the third-party U.K. reseller and related tothe PIB account) is thus £12,419.08. VAT taxes accounted for £1,910.96 of the £12,419.08; considering this and the credit of £575.35, net revenue is thus£9,932.77. Using the Company’s average Net Profit rate of 0.25% of net revenue, the Company believes that its net profit related to the PIB account isapproximately £24.83 during the life of the relationship.Since terminating the PIB account in April, 2015, the Company has implemented additional export control compliance management oversight and hasundertaken remedial measures to reduce the risk of similar events occurring in the future.ITEM 4A. UNRESOLVED STAFF COMMENTSNone.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSThe following discussion and analysis of our financial condition and results of our operations should be read in conjunction with our audited consolidatedfinancial statements and the related notes included elsewhere in this Annual Report on Form 20-F. This discussion contains forward-looking statementsthat involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result ofnumerous factors, including, but not limited to, the risks discussed in “Item 3. Key Information—D. Risk Factors.” Our audited consolidated financialstatements included elsewhere in this Annual Report on Form 20-F are prepared in accordance with accounting principles generally accepted in the UnitedStates. 49 Table of ContentsOverviewWe are a leading provider of next generation cloud security and risk management services for corporate information and email. Our fully-integratedsuite of proprietary cloud services protects customers of all sizes from the significant business and data security risks to which their email system exposesthem. We protect customers from today’s rapidly changing threat landscape where email has become a powerful attack vector and data leak concern. We alsomitigate the significant business disruption that email failure or downtime causes. In addition, our archiving services secure, store and manage criticalcorporate communications and information to address growing compliance and e-discovery requirements and enable customers to use this increasing archiveof information to improve employee productivity.We operate our business on a SaaS model with renewable annual subscriptions. Customers enter into annual and multi-year contracts to utilize variouscomponents of our services. Our subscription fee includes the use of the selected service and technical support. We believe our technology, subscription-based model, and customer support have led to our high revenue retention rate, which has helped us drive our strong revenue growth. We have historicallyexperienced significant revenue growth from our existing customer base as they renew our services and purchase additional products.We market and sell our services to organizations of all sizes across a broad range of industries. As of March 31, 2016, we provided our services toapproximately 18,000 customers and protected millions of their employees across the world. We generate sales through our network of channel partners aswell as through our direct sales force. Our growth and future success depends on our ability to expand our customer base and to sell additional services to ourexisting customers. The total number of our customers increased by 30% from March 31, 2015 to March 31, 2016.In the fiscal year ended March 31, 2016, we generated 57% of our revenue outside of the United States, with 39% generated from the United Kingdom,16% from South Africa and 2% from the rest of the world. In the fiscal year ended March 31, 2015, we generated 62% of our revenue outside of the UnitedStates, with 42% generated from the United Kingdom, 19% from South Africa and 2% from the rest of the world. Our most significant growth market is theUnited States. We also believe that there is significant opportunity in our other existing markets. We intend to make significant investments in sales andmarketing to continue expanding our customer base in our target markets.The majority of our revenue is generated from annual subscriptions. Our services are implemented, configured and operated without the need forsubstantial training or professional services. For customers that choose to develop increased proficiency in our service or who require assistance for morecomplex configurations and for those that wish to import historical data, we offer additional services.We were founded in 2003 with a mission to make email safer and better, and to transform the way organizations protect, store and access their emailand corporate information. Our first service, Mimecast Email Security, which we launched in late 2003 and was quickly followed by Mimecast EmailContinuity. In 2004, we added Mimecast Enterprise Information Archiving. These three services generate a large proportion of our revenue today. In 2006,we started the development of our proprietary cloud architecture, which we refer to as Mime | OS™. We believed early on that investing in the developmentof our own cloud operating system was a strategic requirement that would enable us to integrate and scale our services. Mimecast Large File Send wasreleased in 2013 and was followed by Mimecast Targeted Threat Protection in 2014, our advanced persistent threat protection service. In 2014, we alsoreleased comprehensive risk mitigation technologies specifically for Office 365, and in 2015, we released Mimecast Secure Messaging. In 2016, weannounced the newest aspect of our Targeted Threat Protection service, Impersonation Protect.In November 2015, we completed our initial public offering, or IPO, in which we issued and sold 7,750,000 ordinary shares at a public offering price of$10.00 per share. We received net proceeds of $68.3 million after deducting underwriting discounts and commissions of $5.4 million and other offeringexpenses of $3.8 million. 50 Table of ContentsWe have achieved significant revenue growth in recent periods. Our revenue grew 22% from $116.1 million in the year ended March 31, 2015 to$141.8 million in the year ended March 31, 2016. Revenue grew 31% from $88.3 million in the year ended March 31, 2014 to $116.1 million in the yearended March 31, 2015.We incurred a net loss of $3.2 million in the year ended March 31, 2016 and had net income of $0.3 million in the year ended March 31, 2015. Weincurred a net loss of $16.9 million in the year ended March 31, 2014.Service DisruptionOn September 21, 2015, we experienced a service disruption that resulted in service downtime for many of our U.S. customers for several hours. As aresult of the service disruption, we voluntarily provided service credits to affected customers in the year ended March 31, 2016, totaling approximately $0.4million, all of which were paid as of March 31, 2016.Key Factors Affecting Our PerformanceWe believe that the growth of our business and our future success are dependent upon a number of key factors, including the following:Acquisition of New Customers. We employ a sales strategy that focuses on acquiring new customers through our direct sales force and network ofchannel partners, and selling additional products to existing customers. Acquiring new customers is a key element of our continued success, growthopportunity and future revenue. We have invested in and intend to continue to invest in our direct sales force and channel partners. During the year endedMarch 31, 2016, our customer base increased by approximately 4,200 organizations.Further Penetration of Existing Customers. Our direct sales force, together with our channel partners and dedicated customer experience team seek togenerate additional revenue from our existing customers by adding more employees and selling additional services. We believe a significant opportunityexists for us to sell additional services to current customers as they experience the benefits of our services and we address additional business use cases.Investment in Growth. We are expanding our operations, increasing our headcount and developing software to both enhance our current offerings andbuild new features. We expect our total operating expenses to increase, particularly as we continue to expand our sales operations, marketing activities andresearch and development team. We intend to continue to invest in our sales, marketing and customer experience organizations to drive additional revenueand support the growth of our customer base. Investments we make in our sales and marketing and research and development organizations will occur inadvance of experiencing any benefits from such investments. For the year ending March 31, 2017, we plan to continue increasing the size of our direct salesforce and to invest in the development of additional marketing content. We also expect to significantly increase the size of our research and developmentteam.Currency Fluctuations. We conduct business in the United States, the United Kingdom and other countries in Europe, South Africa and other countriesin Africa, and also Australia. As a result, we are exposed to risks associated with fluctuations in currency exchange rates, particularly between the U.S. dollar,the British pound and the South African rand. In the year ended March 31, 2016, 37% of our revenue was denominated in British pounds, 44% in U.S. dollars,16% in South African rand and 3% in other currencies. Given that our functional currency and that of our subsidiaries is the local currency of each entity butour reporting currency is the U.S. dollar, devaluations of the British pound, South African rand and other currencies relative to the U.S. dollar impacts ourprofitability. 51 Table of ContentsKey Performance IndicatorsIn addition to traditional financial metrics, such as revenue and revenue growth trends, we monitor several other key performance indicators to help usevaluate growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts and assess operational efficiencies. The keyperformance indicators that we monitor are as follows: Year Ended March 31, 2016 2015 2014 (dollars in thousands) Gross profit percentage 71% 68% 68% Revenue constant currency growth rate (1) 30% 33% 37% Revenue retention rate 109% 107% 105% Total customers (2) 18,000 13,800 10,300 Adjusted EBITDA (1) $15,839 $14,227 $(1,170) (1)Adjusted EBITDA and revenue constant currency growth rate are non-GAAP financial measures. For a reconciliation of Adjusted EBITDA and revenueconstant currency growth rate to the nearest comparable GAAP measures, see “Item 3—Key Information—A. Selected Consolidated Financial andOther Data.”(2)Rounded up to the nearest hundred customers.Gross Profit Percentage. Gross profit percentage is calculated as gross profit divided by revenue. Our gross profit percentage has remained relativelyconstant over the past three years. We provide our services in each of the regions in which we operate. Costs related to supporting and hosting our productofferings and delivering our services are incurred in the region in which the related revenue is recognized. As a result, our gross profit percentage in actualterms is the same as it would be on a constant currency basis.Revenue Constant Currency Growth Rate. We believe revenue constant currency growth rate is a key indicator of our operating results. We calculaterevenue constant currency growth rate by translating revenue from entities reporting in foreign currencies into U.S. dollars using the comparable foreigncurrency exchange rates from the prior fiscal year. For further explanation of the uses and limitations of this measure and a reconciliation of our revenueconstant currency growth rate to revenue, as reported, the most directly comparable GAAP measure, please see “Item 3—Key Information—A. SelectedConsolidated Financial and Other Data.” As our total revenue grew over the past three years, our revenue constant currency growth rate has declined slightlyover the same period, as the incremental growth from period to period represented a smaller percentage of total revenue as compared to the prior period.Revenue Retention Rate. We believe that our ability to retain customers is an indicator of the stability of our revenue base and the long-term value ofour customer relationships. Our revenue retention rate is driven by our customer renewals and upsells. For each of the fiscal years ended March 31, 2016,2015 and 2014, our customer retention rate has been consistently greater than 90%. We calculate our revenue retention rate by annualizing constant currencyrevenue recorded on the last day of the measurement period for only those customers in place throughout the entire measurement period. We include add-on,or upsell, revenue from additional employees and services purchased by existing customers. We divide the result by revenue on a constant currency basis onthe first day of the measurement period for all customers in place at the beginning of the measurement period. The measurement period is the trailing twelvemonths. The revenue on a constant currency basis is based on the average exchange rates in effect during the respective period. Our revenue retention rate hasincreased over the past three years.Total Customers. We believe the total number of customers is a key indicator of our financial success and future revenue potential. We define acustomer as an entity with an active subscription contract as of the measurement date. A customer is typically a parent company or, in a few cases, asignificant subsidiary that works with us directly. We expect to continue to grow our customer base through the addition of new customers in each of ourmarkets. 52 Table of ContentsAdjusted EBITDA. We believe that Adjusted EBITDA is a key indicator of our operating results. We define Adjusted EBITDA as net (loss) income,adjusted to exclude: depreciation and amortization, share-based compensation expense, restructuring expense, interest income and interest expense, theprovision for income taxes and foreign currency exchange income (expense). For further explanation of the uses and limitations of this measure and areconciliation of our Adjusted EBITDA to the most directly comparable GAAP measure, net (loss) income, please see “Item 3. —Key Information—A.Selected Consolidated Financial and Other Data.” We expect that our Adjusted EBITDA will decrease in the near term as we focus on growing our researchand development capabilities as well as expand our sales and marketing teams.Components of Consolidated Statements of OperationsRevenueWe generate substantially all of our revenue from subscription fees paid by customers accessing our cloud services and by customers purchasingadditional support beyond the standard support that is included in our basic subscription fees. A small portion of our revenue consists of related professionalservices and other revenue, which consists primarily of set-up, ingestion fees and training fees.We generally license our services on a price per employee basis under annual contracts. Some services, such as ingestion services, are invoiced upfrontand recognized on a straight-line basis over the longer of the contract term or the average customer life.We serve thousands of customers in multiple industries, and our revenue is not concentrated with any single customer or industry. For the years endedMarch 31, 2016, 2015 and 2014, no single customer accounted for more than 1% of our revenue, and our largest ten customers accounted for less than 10% ofour revenue in aggregate.Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenuerecognition criteria have been met. At March 31, 2016, deferred revenue was $70.0 million. Estimated future recognition from deferred revenue at March 31,2016 was $60.9 million in 2017, $3.9 million in 2018, $2.8 million in 2019 and $2.4 million thereafter.We have continued to expand our customer base, and have recently signed on more customers with monthly, instead of annual, billing terms. Theproportion of aggregate contract value reflected on our balance sheet as deferred revenue may decrease if this trend continues.We recognize revenue ratably on a straight-line basis over the subscription term, which is typically one year in duration, provided that an enforceablecontract has been signed by both parties, we have given the customer access to our SaaS solutions, collection of the fee is probable, and the fee is fixed ordeterminable. Our subscription service arrangements do not contain refund-type provisions.Our professional services contracts are on a time and material basis. When these services are not combined with subscription revenues as a single unitof accounting, as discussed in the section below entitled “—Critical Accounting Policies and Estimates,” these revenues are recognized as the services arerendered.Cost of RevenueCost of revenue primarily consists of expenses related to supporting and hosting our product offerings and delivering our professional services. Thesecosts include salaries, benefits, bonuses and share-based compensation expense related to the management of our data centers, our customer support team andour professional services team. In addition to these expenses, we incur third-party service provider costs such as data center and networking expenses,allocated overhead costs and depreciation expense. We allocate overhead costs, 53 Table of Contentssuch as rent and facility costs, information technology costs and employee benefit costs to all departments based on headcount. As such, general overheadexpenses are reflected in cost of revenue and each operating expense category.We currently expect our cost of revenue to increase in absolute dollars due to expenditures related to expansion and support of our data centeroperations and customer support teams. We also expect that cost of revenue as a percentage of revenue will decrease over time as we are able to achieveeconomies of scale in our business, although it may fluctuate from period to period depending on the timing of significant expenditures. To the extent thatour customer base grows, we intend to continue to invest additional resources in expanding the delivery capability of our products and other services. Thetiming of these additional expenses could affect our cost of revenue, both in terms of absolute dollars and as a percentage of revenue in any particularquarterly or annual period.Research and Development ExpensesResearch and development expenses consist primarily of personnel and related costs, including salaries, benefits, bonuses, share-based compensation,costs of server usage by our developers and allocated overhead costs. We expense all research and development costs as they are incurred. We have focusedour efforts on developing new versions of our SaaS technology with expanded features. Our technology is constantly being refined and, as such, we do notcapitalize development costs. We believe that continued investment in our technology is important for our future growth. As a result, we expect research anddevelopment expenses to increase in absolute dollars as we invest in further developing our Mime | OS platform, improving our existing services and creatingnew features that will increase the functionality of our new and existing products. Research and development expenses as a percentage of total revenue mayfluctuate on a quarterly basis but we expect it to increase in the near-term as a result of the substantial expected investments noted above.Sales and Marketing ExpensesSales and marketing expenses consist primarily of personnel and related costs, including salaries, benefits, bonuses, commissions and share-basedcompensation. Other costs included are those relating to marketing and promotional events, online marketing, product marketing and allocated overheadcosts. We expense all costs as they are incurred, including sales commissions. We expect that our sales and marketing expenses will continue to increasesubstantially in the year ending March 31, 2017 as we expand our sales and marketing efforts globally, and particularly in the United States. New salespersonnel require training and may take several months or more to achieve productivity; as such, the costs we incur in connection with the hiring of new salespersonnel in a given period are not typically offset by increased revenue in that period and may not result in new revenue if these sales personnel fail tobecome productive. We expect to increase our investment in sales and marketing as we add new services, which will increase these expenses in absolutedollars. Over the long term, we believe that sales and marketing expenses as a percentage of revenue will decrease, but will vary depending upon the mix ofrevenue from new and existing customers, as well as changes in the productivity of our sales and marketing programs.General and Administrative ExpensesGeneral and administrative expenses consist primarily of personnel and related expenses for executive, legal, finance, information technology andhuman resources functions, including salaries, benefits, incentive compensation and share-based compensation, in addition to the costs associated withprofessional fees, insurance premiums, other corporate expenses and allocated overhead costs. In future periods, we expect general and administrativeexpenses to increase in absolute dollars as we continue to incur additional personnel and professional services costs in order to meet the compliancerequirements of operating as a public company, including those costs incurred in connection with Section 404 of the Sarbanes-Oxley Act. Over the long term,we believe that general and administrative expenses as a percentage of revenue will decrease. 54 Table of ContentsRestructuringRestructuring consist of severance, outplacement, and other separation benefits.Other Income (Expense)Other income (expense) is comprised of the following items:Interest incomeInterest income includes interest income earned on our cash and cash equivalents balance. We expect interest income to vary each reporting perioddepending on our average cash and cash equivalents balance during the period and market interest rates.Interest expenseInterest expense consists primarily of interest expense associated with our credit facility and our outstanding debt.Foreign exchange income (expense)Foreign exchange income (expense) consists primarily of foreign exchange fluctuations related to short-term intercompany accounts and foreigncurrency exchange gains and losses related to transactions denominated in currencies other than the functional currency for each of our subsidiaries. Weexpect our foreign currency exchange gains and losses to continue to fluctuate in the future as foreign currency exchange rates change.Provision for Income TaxesWe operate in several tax jurisdictions and are subject to taxes in each country or jurisdiction in which we conduct business. We account for incometaxes in accordance with the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based on temporary differencesbetween the financial reporting and income tax bases of assets and liabilities using statutory rates. In addition, this method requires a valuation allowanceagainst net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.To date, we have incurred cumulative net losses in all jurisdictions except for South Africa and maintain a full valuation allowance on our net deferred taxassets. Our tax expense for the fiscal years ended March 31, 2016, 2015 and 2014 primarily relates to our foreign subsidiaries, primarily our South Africanjurisdiction. 55 Table of ContentsA.Operating ResultsThe following table sets forth selected consolidated statements of operations data for each of the periods indicated: Year Ended March 31, 2016 2015 2014 (in thousands) Revenue $141,841 $116,085 $88,315 Cost of revenue 41,809 36,821 28,673 Gross profit 100,032 79,264 59,642 Operating expenses Research and development 17,663 14,461 12,844 Sales and marketing 65,187 51,224 46,971 General and administrative 19,756 15,806 11,187 Restructuring — 1,203 — Total operating expenses 102,606 82,694 71,002 Loss from operations (2,574) (3,430) (11,360) Other income (expense) Interest income 74 62 86 Interest expense (690) (703) (542) Foreign exchange income (expense) 811 4,508 (5,055) Total other income (expense), net 195 3,867 (5,511) (Loss) income before income taxes (2,379) 437 (16,871) Provision for income taxes 865 152 19 Net (loss) income $(3,244) $285 $(16,890) The following table sets forth our consolidated statements of operations data as a percentage of revenue for each of the periods indicated: Year Ended March 31, 2016 2015 2014 Revenue 100% 100% 100% Cost of revenue 29 32 32 Gross profit 71 68 68 Operating expenses Research and development 12 12 15 Sales and marketing 46 44 53 General and administrative 14 14 13 Restructuring — 1 — Total operating expenses 72 71 81 Loss from operations (1) (3) (13) Other income (expense) Interest income — — — Interest expense — (1) (1) Foreign exchange income (expense) 1 4 (5) Total other income (expense), net 1 3 (6) (Loss) income before income taxes — — (19) Provision for income taxes 1 — — Net (loss) income (1)% —% (19)% 56 Table of ContentsWe have operations in jurisdictions other than the United States and generate revenue and incur expenditures in currencies other than the U.S. dollar.The following information shows the effect on certain components of our consolidated statements of operations data for each of the periods indicated basedon a 10% decrease in foreign currency exchange rates: Year ended March 31, 2016 2015 2014 (in millions) Cost of Revenue $2.5 $2.3 $1.8 Research and development 1.6 1.3 1.0 Sales and marketing 3.0 3.0 2.4 General and administrative 0.8 0.8 0.7 Comparison of Years Ended March 31, 2016 and 2015Revenue Year ended March 31, Period-to-period change 2016 2015 Amount % Change (dollars in thousands) Revenue $141,841 $116,085 $25,756 22% Revenue increased $25.8 million in the year ended March 31, 2016 compared to the year ended March 31, 2015. The increase in revenue was primarilyattributable to increases in new customers, including the 4,200 new customers added since March 31, 2015 and a full year of revenue related to newcustomers added in fiscal 2015. To a lesser extent revenue increased in fiscal 2016 as compared to 2015 due to additional revenue from existing customers.Our revenue for the year ended March 31, 2016, was negatively impacted by approximately $9.5 million as a result of the strengthening of the U.S. dollarrelative to the foreign currencies in which we operate.Cost of Revenue Year ended March 31, Period-to-period change 2016 2015 Amount % Change (dollars in thousands) Cost of revenue $41,809 $36,821 $4,988 14% Cost of revenue increased $5.0 million in the year ended March 31, 2016 compared to the year ended March 31, 2015 which was primarily attributableto increases in data center costs of $1.8 million, professional services costs of $1.3 million, personnel-related costs of $1.3 million, information technologyand facilities costs of $0.6 million and share-based compensation expense of $0.5 million, partially offset by a decrease in depreciation expense of $0.5million. Cost of revenue for the year ended March 31, 2016 as compared to the year ended March 31, 2015 was positively impacted by approximately $2.6million as a result of the strengthening of the U.S. dollar relative to the foreign currencies in which we operate. Data center costs increased as a result of theincrease in our customer base, professional services costs increased primarily as a result of an increase in vendor fulfillment costs, personnel-related costincreased primarily as a result of salaries and benefits associated with increased headcount, and share-based compensation expense increased primarily as aresult of expense related to share-based awards that became exercisable upon the closing of the IPO. Depreciation decreased primarily as a result of the impactof foreign exchange rates.As a result of changes in foreign exchange rates, gross profit decreased in absolute dollars by approximately $6.8 million for the year ended March 31,2016 as compared to the year ended March 31, 2015. Excluding the impact of changes in foreign currency exchange rates, gross profit as a percentage ofrevenue remained consistent as costs related to supporting and hosting our product offerings and delivering our services are incurred in the region in whichthe related revenue is recognized. 57 Table of ContentsOperating Expenses Year ended March 31, Period-to-period change 2016 2015 Amount % Change (dollars in thousands) Operating expenses: Research and development $17,663 $14,461 $3,202 22% Sales and marketing 65,187 51,224 13,963 27% General and administrative 19,756 15,806 3,950 25% Restructuring — 1,203 (1,203) nm Total operating expenses $102,606 $82,694 $19,912 24% nm—not meaningfulResearch and development expensesResearch and development expenses increased $3.2 million in the year ended March 31, 2016 compared to the year ended March 31, 2015, which wasprimarily attributable to increases in share-based compensation expense of $1.2 million, personnel-related costs of $1.0 million, professional services costs of$0.5 million, and information and technology and facility costs of $0.4 million. Total research and development expenses for the year ended March 31, 2016as compared to the year ended March 31, 2015 were positively impacted by approximately $1.2 million as a result of the strengthening of the U.S. dollarrelative to the foreign currencies in which we operate. Share-based compensation expense increased primarily as a result of expense related to share-basedawards that became exercisable upon the closing of the IPO, as well as an increase in share option modification charges. Personnel-related cost increasedprimarily as a result of salaries and benefits associated with increased headcount throughout the year, primarily in the third and fourth quarter of fiscal 2016.Professional services costs increased primarily as a result of the use of research and development contractors.Sales and marketing expensesSales and marketing expenses increased $14.0 million in the year ended March 31, 2016 compared to the year ended March 31, 2015, which wasprimarily attributable to increases in marketing costs of $5.7 million, personnel-related costs of $4.7 million, share-based compensation expense of $1.5million, information technology and facilities costs of $1.4 million, and professional services of $0.7 million. Total sales and marketing expenses for the yearended March 31, 2016 as compared to the year ended March 31, 2015 were positively impacted by approximately $3.2 million as a result of thestrengthening of the U.S. dollar relative to the foreign currencies in which we operate. Marketing costs increased primarily as a result of increased leadgeneration, online marketing, and brand development costs, with a focus on the expansion of our presence in the US market. Personnel-related costs increasedprimarily as a result of commissions, salaries and benefits associated with increased headcount. Share-based compensation expense increased primarily as aresult of expense related to new hire grants and share-based awards that became exercisable upon the closing of the IPO, partially offset by a decrease in shareoption modification charges. Professional services increased primarily due to an increase in recruiting costs.General and administrative expensesGeneral and administrative expenses increased $4.0 million in the year ended March 31, 2016 compared to the year ended March 31, 2015 which wasprimarily attributable to increases in personnel-related costs of $2.0 million, professional services costs of $1.3 million, information technology and facilitiescosts of $0.5 million, and travel and other costs of $0.8 million, partially offset by a decrease in share-based compensation expense of $0.8 million.Personnel-related costs increased primarily as a result of salaries and benefits associated with increased headcount 58 Table of Contentsand compensation. Professional service costs increased primarily due to legal, accounting and consulting services in connection with the IPO and operatingas a public company. Share-based compensation expense decreased primarily due to a decrease in share option modification charges partially offset byincreases primarily as a result of expense related to share-based awards that became exercisable upon the closing of the IPO.Restructuring expensesWe recorded restructuring expenses of $1.2 million in the year ended March 31, 2015 in connection with the termination of employees in the UnitedStates and the United Kingdom. Restructuring expenses consisted of employee severance charges, outplacement, and other separation benefits. We did notincur restructuring expenses in the year ended March 31, 2016.Other Income (Expense) Year ended March 31, Period-to-period change 2016 2015 Amount % Change (dollars in thousands) Other income (expense): Interest income $74 $62 $12 19% Interest expense (690) (703) 13 (2) Foreign exchange income 811 4,508 (3,697) (82) Total other income (expense) $195 $3,867 $(3,672) nm nm—not meaningfulOther income (expense) decreased $3.7 million in the year ended March 31, 2016 compared to the year ended March 31, 2015, primarily attributable toa $3.7 million decrease in foreign exchange income associated with the re-measurement of short-term intercompany asset and liability balances denominatedin currencies other than the functional currency of our operating units. In the years ended March 31, 2016 and 2015, we recognized foreign exchange income,primarily attributable to the re-measurement of short-term intercompany asset and liability balances as a result of the U.S. dollar strengthening compared tothe British pound. The decrease in foreign exchange income is a result of the U.S. dollar strengthening compared to the British pound to a lesser extent infiscal 2016 as compared to fiscal 2015.Provision for Income Taxes Year ended March 31, Period-to-period change 2016 2015 Amount % Change (dollars in thousands) Provision for income taxes $865 $152 $713 469% Provision for income taxes increased $0.7 million in the year ended March 31, 2016 compared to the year ended March 31, 2015, which was primarilyattributable to taxes related to our foreign subsidiaries, primarily our South African jurisdiction. 59 Table of ContentsComparison of Years Ended March 31, 2015 and 2014Revenue Year ended March 31, Period-to-period change 2015 2014 Amount % Change (dollars in thousands) Revenue $116,085 $88,315 $27,770 31% Revenue increased $27.8 million in the year ended March 31, 2015 compared to the year ended March 31, 2014. The increase in revenue was primarilyattributable to increases in new customers, including the 3,500 new customers added since March 31, 2014 and a full year of revenue related to newcustomers added in fiscal 2014. To a lesser extent revenue increased in fiscal 2015 as compared to 2014 due to additional revenue from existing customers.Cost of Revenue Year ended March 31, Period-to-period change 2015 2014 Amount % Change (dollars in thousands) Cost of revenue $36,821 $28,673 $8,148 28% Cost of revenue increased $8.1 million in the year ended March 31, 2015 compared to the year ended March 31, 2014 which was primarily attributableto personnel-related costs of $3.1 million, increased data center costs of $2.2 million, increased depreciation expense of $1.9 million, and increasedinformation technology and facilities costs of $0.7 million. Personnel-related cost increases were primarily attributable to salaries and benefits associatedwith increased headcount. Data center costs increased in line with the increase in revenue.Operating Expenses Year ended March 31, Period-to-period change 2015 2014 Amount % Change (dollars in thousands) Operating expenses: Research and development $14,461 $12,844 $1,617 13% Sales and marketing 51,224 46,971 4,253 9% General and administrative 15,806 11,187 4,619 41% Restructuring 1,203 — 1,203 nm Total operating expenses $82,694 $71,002 $11,692 16% nm—not meaningfulResearch and development expensesResearch and development expenses increased $1.6 million in the year ended March 31, 2015 compared to the year ended March 31, 2014 which wasprimarily attributable to personnel-related costs of $1.0 million, increased share-based compensation of $0.3 million, and increased information andtechnology and facility costs of $0.2 million. Personnel-related cost increases were primarily attributable to salaries and benefits associated with increasedcompensation, including bonuses.Sales and marketing expensesSales and marketing expenses increased $4.3 million in the year ended March 31, 2015 compared to the year ended March 31, 2014 which wasprimarily attributable to personnel-related costs of $3.2 million, additional 60 Table of Contentsshare-based compensation expense of $1.3 million, increased information and technology costs of $0.3 million, and increased third-party commissions of$0.4 million. These increases were partially offset by a decrease in personnel training costs of $0.5 million. Personnel-related cost increases were primarilyattributable to increased commissions.General and administrative expensesGeneral and administrative expenses increased $4.6 million in the year ended March 31, 2015 compared to year ended March 31, 2014 which wasprimarily attributable to increased share-compensation expense of $2.7 million, increased personnel-related costs of $2.0 million, increased informationtechnology and facilities costs $0.5 million, and increased insurance costs of $0.3 million. These increases were partially offset by decreases in professionalservices costs of $0.6 million.Restructuring expensesWe recorded restructuring expenses of $1.2 million in the year ended March 31, 2015 in connection with the termination of employees in the UnitedStates and United Kingdom. Restructuring expenses consisted of employee severance charges outplacement, and other separation benefits. We did not incurrestructuring expenses in the year ended March 31, 2014.Other Income (Expense) Year ended March 31, Period-to-period change 2015 2014 Amount % Change (dollars in thousands) Other income (expense): Interest income $62 $86 $(24) (28)% Interest expense (703) (542) (161) 30 Foreign exchange income (expense) 4,508 (5,055) 9,563 (189) Total other income (expense) $3,867 $(5,511) $9,378 (170)% Other income (expense) increased $9.4 million in 2015 compared to 2014 attributable primarily to changes in foreign exchange (expense) income. Inthe year ended March 31, 2014, we recognized foreign exchange expense, primarily attributable to the re-measurement of short-term intercompany asset andliability balances as a result of the U.S. dollar weakening compared to the British pound.In the year ended March 31, 2015, we recognized foreign exchange income attributable primarily to the re-measurement of short-term intercompanyasset and liability balances as a result of the U.S. dollar strengthening compared to the British pound. The increase in interest expense was attributableprimarily to higher weighted-average principal outstanding in the year ended March 31, 2015 as compared to the year ended March 31, 2014.Provision for Income Taxes Year ended March 31, Period-to-period change 2015 2014 Amount % Change (dollars in thousands) Provision for income taxes $152 $19 $133 700% Provision for income taxes increased $0.1 million in 2015 compared to 2014 attributable primarily to taxes related to our foreign jurisdictions. 61 Table of ContentsQuarterly Results of OperationsThe following tables set forth our unaudited quarterly consolidated statements of operations for each of the eight quarters in the period endedMarch 31, 2016. We have prepared the quarterly consolidated statements of operations data on a basis consistent with the audited consolidated financialstatements, including, in the opinion of management, all normal and recurring adjustments, which we consider necessary for a fair presentation of this data.This information should be read in conjunction with the audited consolidated financial statements and related notes included elsewhere in this AnnualReport on Form 20-F. The results of historical periods are not necessarily indicative of the results to be expected for any future period. Quarter ended Jun 30,2014 Sep 30,2014 Dec 31,2014 Mar 31,2015 Jun 30,2015 Sep 30,2015 Dec 31,2015 Mar 31,2016 (in thousands, except per share data) Revenue $26,943 $28,603 $29,824 $30,715 $33,328 $34,507 $37,130 $36,876 Cost of revenue (1) 8,925 9,137 9,584 9,175 9,876 10,193 10,651 11,089 Gross profit 18,018 19,466 20,240 21,540 23,452 24,314 26,479 25,787 Operating expenses Research and development (1) 3,954 3,956 3,407 3,144 3,530 3,933 5,464 4,736 Sales and marketing (1) 12,775 13,726 11,642 13,081 13,121 14,856 17,607 19,603 General and administrative (1) 3,940 5,588 2,632 3,646 4,691 4,022 5,546 5,497 Restructuring — 1,263 (60) — — — — — Total operating expenses 20,669 24,533 17,621 19,871 21,342 22,811 28,617 29,836 (Loss) income from operations (2,651) (5,067) 2,619 1,669 2,110 1,503 (2,138) (4,049) Other income (expense) Interest income 20 13 14 15 17 12 13 32 Interest expense (133) (178) (207) (185) (177) (168) (227) (118) Foreign exchange (expense) income (1,246) 1,886 1,676 2,192 (3,841) 741 1,204 2,707 Total other income (expense), net (1,359) 1,721 1,483 2,022 (4,001) 585 990 2,621 (Loss) income before provision for income taxes (4,010) (3,346) 4,102 3,691 (1,891) 2,088 (1,148) (1,428) Provision for (benefit from) income taxes 38 38 38 38 358 (80) 51 536 Net (loss) income $(4,048) $(3,384) $4,064 $3,653 $(2,249) $2,168 $(1,199) $(1,964) Net (loss) income applicable to ordinary shareholders—basic $(4,048) $(3,384) $2,920 $2,630 $(2,249) $1,572 $(1,199) $(1,964) Net (loss) income applicable to ordinary shareholders—diluted $(4,048) $(3,384) $3,003 $2,705 $(2,249) $1,612 $(1,199) $(1,964) Net (loss) income per share applicable to ordinary shareholders: (Note 2) Basic $(0.13) $(0.10) $0.09 $0.08 $(0.07) $0.05 $(0.03) $(0.04) Diluted $(0.13) $(0.10) $0.08 $0.07 $(0.07) $0.04 $(0.03) $(0.04) Weighted-average number of ordinary shares used in computing net (loss)income per share applicable to ordinary shareholders: Basic 31,884 32,230 32,505 32,802 33,066 33,673 42,514 54,172 Diluted 31,884 32,230 36,146 36,449 33,066 36,991 42,514 54,172 62 Table of Contents(1)Share-based compensation expense included in these line items was as follows: Quarter ended Jun 30,2014 Sep 30,2014 Dec 31,2014 Mar 31,2015 Jun 30,2015 Sep 30,2015 Dec 31,2015 Mar 31,2016 (in thousands) Cost of revenue $30 $80 $22 $19 $22 $107 $350 $154 Research and development 34 118 116 276 29 45 1,293 344 Sales and marketing 349 1,068 151 116 83 768 1,481 849 General and administrative 99 2,448 229 271 709 216 826 610 Total share-based compensation expense $512 $3,714 $518 $682 $843 $1,136 $3,950 $1,957 Quarter ended As a % of Revenue Jun 30,2014 Sep 30,2014 Dec 31,2014 Mar 31,2015 Jun 30,2015 Sep 30,2015 Dec 31,2015 Mar 31,2016 Revenue 100% 100% 100% 100% 100% 100% 100% 100% Cost of revenue (1) 33 32 32 30 30 30 29 30 Gross profit 67 68 68 70 70 70 71 70 Operating expenses Research and development (1) 15 14 11 10 11 11 15 13 Sales and marketing (1) 47 48 39 43 39 43 47 53 General and administrative (1) 15 20 9 12 14 12 15 15 Restructuring — 4 — — — — — — Total operating expenses 77 86 59 65 64 66 77 81 (Loss) income from operations (10) (18) 9 5 6 4 (6) (11) Other income (expense) Interest income — — — — — — — — Interest expense — (1) (1) (1) (1) — (1) — Foreign exchange (expense) income (5) 7 6 7 (12) 2 3 7 Total other income (expense), net (5) 6 5 6 (13) 2 2 7 (Loss) income before provision for income taxes (15) (12) 14 11 (7) 6 (4) (4) Provision for (benefit from) income taxes — — — — 1 — — 1 Net (loss) income (15)% (12)% 14% 11% (8)% 6% (4)% (5)% B.Liquidity and Capital ResourcesOur principal sources of liquidity are cash and cash equivalents, accounts receivable and our credit facility. The following table shows net cashprovided by (used in) operating activities, net cash used in investing activities, and net cash provided by (used in) financing activities for the years endedMarch 31, 2016, 2015 and 2014: Year ended March 31, 2016 2015 2014 (in thousands) Net cash provided by (used in) operating activities $24,643 $23,247 $(967) Net cash used in investing activities (14,234) (12,583) (17,888) Net cash provided by (used in) financing activities 63,801 5,431 (222) Prior to our IPO in November 2015, we financed our operations primarily through private placements of equity and borrowings from our primary banklender. In November 2015, we raised net proceeds of $68.3 million 63 Table of Contentsin our IPO, after deducting underwriting discounts and commissions and offering expenses payable by us. In the year ended March 31, 2016, operating losseswere reduced and we generated operating cash flows. While we expect to generate an operating loss in the year ending March 31, 2017, we expect tocontinue to generate cash flows from operating activities. In the year ending March 31, 2017, we plan to continue to invest in the development andexpansion of our Mime | OS platform to improve on our existing solutions in order to provide more capabilities to our customers. Investments in capitalexpenditures in the year ended March 31, 2016 were $14.2 million. We expect this level of investment to increase in the year ending March 31, 2017.As of March 31, 2016 and 2015, we had cash and cash equivalents of $106.1 million and $32.9 million, respectively. Based on our current operatingplan, we believe that our current cash and cash equivalents and cash to be received from existing and new customers will be sufficient to fund our operationsfor at least the next twelve months. Our future capital requirements may vary materially from those planned and will depend on certain factors, such as, ourgrowth and our operating results. If we require additional capital resources to grow our business or to acquire complementary technologies and businesses inthe future, we may seek to sell additional equity or raise funds through debt financing or other sources. We may also seek to invest in or acquirecomplementary businesses, applications or technologies, any of which could also require us to seek additional equity or debt financing. We cannot provideassurance that additional financing will be available at all or on terms favorable to us. We had no material commitments for capital expenditures as ofMarch 31, 2016 or 2015.Borrowings and Credit FacilitySince January 2012, we have entered into various term loan borrowings with Silicon Valley Bank. The term loans have fixed interest rates of 4.5% andprincipal repayment periods of 36 equal monthly installments with various maturities through January 2018. As of March 31, 2016, the aggregate principalbalance of the term loans was $6.9 million, of which $4.9 million is payable in the year ending March 31, 2017. As of March 31, 2016 and 2015, there wereno amounts available for future borrowings under the term loans.In January 2013, we entered into a loan and security agreement with Silicon Valley Bank providing for a revolving credit facility. In July 2014, weamended and restated that agreement to increase the borrowing capacity under the facility from £7.5 million to £10.0 million (or, in each case, the equivalentamount in either U.S. dollars or Euros). This facility has £5.0 million in immediately available credit and another £5.0 million upon completion of anadditional equity financing, which occurred upon completion of our IPO. The credit facility bears interest at the greater of (i) the Bank of England base rateplus 3.5% or (ii) 4.0% and has a term of 24 months. As of March 31, 2016 and 2015, the effective rate on the line of credit was 4.0%. The line of credit iscollateralized by substantially all of our assets, and we are required to meet certain financial covenants, including recurring revenue and adjusted quick ratiocovenants. The agreement also contains the following negative covenants: • a commitment not to pay dividends or make distributions or payments or to redeem, retire or repurchase our share capital; and • negative pledges by us and our subsidiaries, including with respect to: • limitations on dissolution, any subordinated debt arrangement, mergers, acquisitions, investments, dispositions and transactions withaffiliates not in the ordinary course of business; • limitations on assigning, mortgaging, pledging, granting a security interest or encumbering any of our property (other than permittedliens identified in the agreement); and • restrictions on changes in business, management, ownership, business locations or organizational structure.Failure to meet these financial and other covenants would enable the bank to demand immediate repayment of all outstanding balances under thefacility. We were in compliance with the terms of the credit facility as of 64 Table of ContentsMarch 31, 2016 and 2015. On November 13, 2015, we amended the loan and security agreement to reflect the change in reporting entity due to ourredomiciliation from a U.K. company to a Jersey company in connection with our IPO, to make available the additional £5.0 million in available credit underthe facility that became accessible upon the completion of the IPO, and to adjust certain financial covenants, including recurring revenue and adjusted quickratio covenants. As of March 31, 2016 and 2015, there was no balance outstanding under the line of credit. As of March 31, 2016, £10.0 million wasavailable for future borrowing under the line of credit.Operating ActivitiesFor the year ended March 31, 2016, cash provided by operating activities was $24.6 million. The primary factors affecting our operating cash flowsduring the period were our net loss of $3.2 million, adjusted for non-cash items of $10.5 million for depreciation and amortization of our property andequipment, $7.9 million of share-based compensation, and $1.0 million in net foreign currency gains. The primary drivers of the changes in operating assetsand liabilities were an $18.6 million increase in deferred revenue and a $4.7 million increase in accrued expenses and other liabilities, partially offset by a$9.8 million increase in accounts receivable, a $2.2 million increase in prepaid expenses and other current assets, a $0.5 million decrease in accounts payableand a $0.4 million increase in other assets.For the year ended March 31, 2015, cash provided by operating activities was $23.2 million. The primary factors affecting our operating cash flowsduring the period were our net income of $0.3 million, adjusted for non-cash charges of $11.0 million for depreciation and amortization of our property andequipment, $5.4 million of share-based compensation, and $4.1 million in net foreign currency gains. The primary drivers of the changes in operating assetsand liabilities were an $11.4 million increase in deferred revenue, a $2.8 million increase in accrued expenses and other liabilities, and a $0.7 milliondecrease in prepaid expenses and other current assets, partially offset by a $4.3 million increase in accounts receivable due primarily to overall growth in ourbusiness.For the year ended March 31, 2014, cash used in operating activities was $1.0 million. The primary factors affecting our operating cash flows duringthis period were our net loss of $16.9 million, adjusted for non-cash charges of $9.0 million for depreciation and amortization of our property and equipment,$1.2 million of share-based compensation and $2.3 million in net foreign currency losses. The primary drivers of the changes in operating assets andliabilities were an $8.8 million increase in deferred revenue and a $2.9 million increase in accrued expenses and other liabilities, partially offset by a $6.6million increase in accounts receivable, and a $1.7 million increase in other assets. The increase in accrued expenses and other current liabilities wasattributable primarily to the timing of our cash payments and the increase in accounts receivable attributable primarily to overall growth in our business.Investing ActivitiesCash used in investing activities of $14.2 million, $12.6 million and $17.9 million for the years ended March 31, 2016, 2015 and 2014, respectively,was due to capital expenditures. Our capital expenditures were associated primarily with computer equipment purchased in support of our expandinginfrastructure.Financing ActivitiesCash provided by financing activities of $63.8 million for the year ended March 31, 2016 was due primarily to $68.3 million in proceeds from theinitial public offering, net of issuance costs, and $0.9 million of proceeds from exercises of share options, partially offset by payments on debt of $5.4million.Cash provided by financing activities of $5.4 million for the year ended March 31, 2015 was due primarily to $8.3 million in proceeds from theissuance of debt, net of issuance costs and $0.6 million in proceeds from exercises of share options, partially offset by $3.5 million of payments on debt. 65 Table of ContentsCash used in financing activities of $0.2 million for the year ended March 31, 2014 was due primarily to payments on debt.Net Operating Loss CarryforwardsAs of March 31, 2016, we had net operating loss carryforwards for U.S. federal income tax purposes of approximately $31.5 million. As of March 31,2016, we had net operating loss carryforwards for U.S. state income tax purposes of approximately $24.4 million. These net operating loss carryforwardsexpire at various dates through 2036. In addition, as of March 31, 2016, we had net operating loss carryforwards in the U.K. and our other non-U.S. locationsof approximately $10.3 million and $7.7 million, respectively. The non-U.S. operating loss carryforwards are unlimited in duration.In assessing our ability to realize our net deferred tax assets, we considered various factors including future reversals of existing taxable temporarydifferences, projected future taxable income, tax planning strategies and recent financial operations, to determine whether it is more likely than not that someportion or all of our net deferred tax assets will not be realized. Based upon these factors, we have determined that the uncertainty regarding the realization ofthese assets is sufficient to warrant the need for a full valuation allowance against our net deferred tax assets.Off-Balance Sheet ArrangementsUp to and including the 2016, 2015 and 2014 fiscal years, we have not had any relationships with unconsolidated entities or financial partnerships,such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As a result, we are not exposed to related financing, liquidity, market or creditrisks that could arise if we had engaged in those types of arrangements.Contractual Obligations and CommitmentsThe following table represents our contractual obligations as of March 31, 2016, aggregated by type: Payments due in: Total Less than1 year 1-3 years 3-5years More than 5years (in thousands) Debt obligations principal $6,932 $4,941 $1,991 $— $— Debt obligations interest 253 212 41 — — Operating lease obligations 12,896 3,539 6,540 2,817 — Data center obligations 34,160 10,125 17,788 5,588 659 Total $54,241 $18,817 $26,360 $8,405 $659 We lease our facilities under non-cancelable operating leases with various expiration dates through October 2020. We have outstanding letters ofcredit of $0.5 million related to certain operating leases.Recently Issued and Adopted Accounting PronouncementsFor information on recent accounting pronouncements, see Recently Issued Accounting Pronouncements in the notes to the consolidated financialstatements appearing elsewhere in this Annual Report on Form 20-F.Critical Accounting Policies and EstimatesOur consolidated financial statements and the related notes included elsewhere in this Annual Report are prepared in accordance with accountingprinciples generally accepted in the United States. The preparation of 66 Table of Contentsthese consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosureof contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Webase our estimates on historical experience and on various other assumptions that we believe to be reasonable, the results of which form the basis for makingjudgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Changes in accounting estimates are reasonablylikely to occur from period to period. Accordingly, actual results could differ significantly from our estimates. We evaluate our estimates and assumptions onan ongoing basis. To the extent that there are material differences between our estimates and our actual results, our future financial statement presentation,financial condition, results of operations and cash flows will be affected.We believe that of our significant accounting policies, which are described in Note 2 to the notes to our consolidated financial statements includedelsewhere in this Annual Report, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the policieswe believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of our operations.Under the JOBS Act, an emerging growth company can take advantage of an extended transition period for complying with new or revised accountingstandards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwiseapply to private companies. However, we have irrevocably chosen to “opt out” of such extended transition period, and as a result, we will comply with new orrevised accounting standards on the relevant dates on which adoption is required for non-emerging growth companies.Revenue RecognitionWe derive our revenue from two sources: (1) subscription revenues, which are comprised of subscription fees from customers accessing our cloudservices and from customers purchasing additional support beyond the standard support that is included in the basic subscription fees; and (2) relatedprofessional services and other revenue, which consists primarily of set-up, ingestion and training fees.We recognize revenue when all of the following conditions are satisfied: • there is persuasive evidence of an arrangement; • the service has been or is being provided to the customer; • the collection of the fees is probable; and • the amount of fees to be paid by the customer is fixed or determinable.Our subscription arrangements provide customers with the right to access its hosted software applications. Customers do not have the right to takepossession of our software during the hosting arrangement. Accordingly, we recognize revenue in accordance with ASC 605, Revenue Recognition, and StaffAccounting Bulletin (SAB) No. 104, Revenue Recognition.We sell our products and services directly through our dedicated sales force and also indirectly through third-party resellers. In accordance with theprovisions of ASC 605, we have considered certain factors in determining whether the end-user or the third-party reseller is our customer in arrangementsinvolving resellers. We concluded that in the majority of transactions with resellers, the reseller is our customer. In these arrangements, we considered that itis the reseller, and not us, that has the relationship with the end-user. Specifically, the reseller has the ability to set pricing with the end-user and the creditrisk with the end-user is borne by the reseller. Further, the reseller is not obligated to report its transaction price with the end-user to us, and in the majority oftransactions, we are unable to determine the amount paid by the end-user customer to the reseller in these transactions. As a result of such considerations,revenue for these transactions is presented in the accompanying consolidated statements of operations based upon the amount billed to the reseller. For 67 Table of Contentstransactions where we have determined that the end-user is the ultimate customer, revenue is presented in the accompanying consolidated statements ofoperations based on the transaction price with the end-user.We recognize subscription and support revenue ratably over the term of the contract, typically one year in duration, beginning on the commencementdate of each contract.Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenuerecognition criteria have been met.Our professional services contracts are on a time and material basis. When these services are not combined with subscription revenues as a single unitof accounting, as discussed below, we recognize these revenues as the services are rendered.Revenue is presented net of any taxes collected from customers.We may enter into arrangements with multiple-deliverables that generally include multiple subscriptions, premium support and professional services.For arrangements with multiple deliverables, we evaluate each deliverable to determine whether it represents a separate unit of accounting based on thefollowing criteria: (a) whether the delivered item has value to the customer on a stand-alone basis; and (b) if the contract includes a general right of returnrelative to the delivered item, whether delivery or performance of the undelivered items is considered probable and substantially within our control.If the deliverables are determined to qualify as separate units of accounting, consideration is allocated to each unit of accounting based on the units’relative selling prices. We determine the relative selling price for a deliverable based on its vendor-specific objective evidence of fair value (VSOE), ifavailable, or its best estimate of selling price (BESP), if VSOE is not available. We have determined that third-party evidence of selling price (TPE) is not apractical alternative due to differences in its service offerings compared to other parties and the availability of relevant third-party pricing information. Theamount of revenue allocated to delivered items is limited by contingent revenue, if any.Subscription services have standalone value as such services are often sold separately. In determining whether professional services sold together withthe subscription services have standalone value, we consider the following factors for each professional services agreement: availability of the services fromother vendors, the nature of the professional services, the determination that customers cannot resell the services that Mimecast provides, the timing of whenthe professional services contract was signed in comparison to the subscription service start date and the contractual dependence of the subscription serviceon the customer’s satisfaction with the professional services work. Professional services sold at the time of the multiple-element subscription arrangementtypically include customer set-up and ingestion services. To date, we have concluded that all of these professional services included in executed multiple-deliverable arrangements do not have standalone value and are therefore not considered separate units of accounting. These professional services arepurchased by customers only in contemplation of, or in concert with, purchasing one of our core subscription services and, therefore, are not considered asubstantive service, such that the provision of such service does not reflect the culmination of the earnings process. Mimecast does not sell these serviceswithout the related underlying primary subscription as there would be no practical interest or need on the behalf of a customer to buy these services withoutthe underlying subscription. We do not have any knowledge of other vendors selling these services on a stand-alone basis and there is no way for an end-userto resell the deliverable. Accordingly, the deliverables within the arrangement including both subscription services and other professional services areaccounted for as a single unit of accounting. On these occasions, revenue for the professional services deliverables in the arrangement is recognized on astraight-line basis over the contractual term or the average customer life, as further described below.Deferred revenue primarily consists of billings or payments received in advance of revenue recognition from subscription services described above andis recognized as the revenue recognition criteria are met. In 68 Table of Contentsaddition, deferred revenue consists of amounts paid by customers related to upfront set-up or ingestion fees. Revenue related to such services is recognizedover the contractual term or the average customer life, whichever is longer. The estimated customer life has been determined to be five years.Deferred revenue that is expected to be recognized during the succeeding twelve month period is recorded as current deferred revenue and theremaining portion is recorded as non-current in the accompanying consolidated balance sheets.Income TaxesWe are subject to income tax in the United Kingdom, the United States and other international jurisdictions, and we use estimates in determining ourprovision for income taxes. We account for income taxes in accordance with ASC 740, Income Taxes. ASC 740 is an asset and liability approach that requiresrecognition of deferred tax assets and liabilities for the expected future tax consequences attributable to differences between the carrying amounts of assetsand liabilities for financial reporting purposes and their respective tax basis, and for net operating loss and tax credit carryforwards. ASC 740 requires avaluation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assetswill not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxabletemporary differences, projected future taxable income, tax planning strategies and recent financial operations. Realization of deferred tax assets is dependentupon future earnings, if any, the timing and amount of which are uncertain. Accordingly, the net deferred tax assets have been fully offset by a valuationallowance.We recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by thetax authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such position are thenmeasured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. At March 31, 2016 and 2015, we did not haveany uncertain tax positions that would impact our net tax provision.Accounting for Share-Based Compensation AwardsWe account for share-based compensation awards in accordance with the provisions of ASC 718, Compensation—Stock Compensation, which requiresthe recognition of expense related to the fair value of share-based compensation awards in the statements of operations. For share options issued under ourshare-based compensation plans to employees and members of our Board of Directors for their services on the Board, the fair value of each option grant isestimated on the date of grant, and an estimated forfeiture rate is used when calculating share-based compensation expense for the period. For restricted shareawards and restricted share units issued under our share-based compensation plans, the fair value of each grant is calculated based on the fair value of ourordinary shares on the date of grant. For service-based awards, we recognize share-based compensation expense on a straight-line basis over the requisiteservice period of the award. For awards subject to both performance and service-based vesting conditions, we recognize share-based compensation expenseusing an accelerated recognition method when it is probable that the performance condition will be achieved. Forfeitures are required to be estimated at thetime of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. For share-based awards classified as liabilities,we account for such liability such that the compensation expense will be remeasured at each reporting date until such award is settled.Certain awards granted by us are subject to service-based vesting conditions and a performance-based vesting condition based on a liquidity event,defined as either a change of control or an initial public offering. As a result, no compensation cost related to share-based awards with these performanceconditions had been recognized through the date of the Company’s IPO, as the Company had determined that a liquidity event was not probable. Uponclosing of the IPO, share-based compensation expense for these equity-awards is recognized using the accelerated attribution method over the remainingservice period. 69 Table of ContentsWe estimate the fair value of employee share options on the date of grant using the Black-Scholes option-pricing model, which requires the use ofhighly subjective estimates and assumptions. We estimate the expected term of options for service-based awards utilizing the “Simplified Method,” as theCompany does not have sufficient historical share option exercise information on which to base its estimate. The Simplified Method is based on the averageof the vesting tranches and the contractual life of each grant. In addition, the expected term for certain share-based awards which are subject to service-basedand performance-based vesting conditions, is based on management’s estimate of the period of time for which the instrument is expected to be outstanding,factoring in certain assumptions such as the vesting period of the award, length of service and/or the location of the employee. The risk-free interest rate isbased on a treasury instrument whose term is consistent with the expected life of the share option. Since there was no public market for its ordinary sharesprior to the IPO and as our shares have been publicly traded for a limited time, we determined the expected volatility for options granted based on an analysisof reported data for a peer group of companies that issue options with substantially similar terms. The expected volatility of options granted has beendetermined using an average of the historical volatility measures of this peer group of companies. We use an expected dividend rate of zero as we currentlyhave no history or expectation of paying dividends on our ordinary shares. In addition, we have estimated expected forfeitures of share options based on ourhistorical forfeiture rate and used these rates in developing a future forfeiture rate. If our actual forfeiture rate varies from our historical rates and estimates,additional adjustments to compensation expense may be required in future periods.Prior to the IPO, in the absence of an active market for our ordinary shares, the Board, the members of which we believe have extensive business,finance, and venture capital experience, were required to estimate the fair value of the our ordinary shares at the time of each grant of a share-based award. Weand the Board utilized various valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants’Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation , to estimate the fair value of its ordinary shares.Each valuation methodology included estimates and assumptions that required our judgment. These estimates and assumptions include a number ofobjective and subjective factors, in determining the value of our ordinary shares at each grant date, including the following factors: (1) prices paid for ourconvertible preferred shares, which we had sold to outside investors in arm’s-length transactions, and the rights, preferences, and privileges of our convertiblepreferred shares and ordinary shares; (2) valuations performed by an independent valuation specialist; (3) our stage of development and revenue growth;(4) the fact that the grants of share-based awards involved illiquid securities in a private company; and (5) the likelihood of achieving a liquidity event forthe ordinary shares underlying the share-based awards, such as an IPO or sale of the Company, given prevailing market conditions.We believe this methodology to be reasonable based upon our internal peer company analyses, and further supported by several arm’s-lengthtransactions involving the convertible preferred shares. As our ordinary shares were not actively traded prior to the IPO, the determination of fair valueinvolves assumptions, judgments and estimates. If different assumptions were made, share-based compensation expense, consolidated net (loss) income andconsolidated net (loss) income per share could have been significantly different.Since the IPO, the fair value of our ordinary shares at the time of each grant of a share-based award have been based on the market value at the time ofeach grant.The following table presents the weighted-average assumptions used to estimate the fair value of options granted to employees during each of theperiods indicated below: Year ended March 31, 2016 2015 2014 Expected term (in years) 6.2 6.3 6.4 Risk-free interest rate 2.0% 3.1% 2.5% Expected volatility 42.7% 52.6% 53.0% Expected dividend yield — % — % — % Estimated grant date fair value per ordinary share $9.80 $7.20 $3.00 70 Table of ContentsJOBS ActIn April 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements foran “emerging growth company.” As an “emerging growth company,” we have irrevocably elected not to take advantage of the extended transition periodafforded by the JOBS Act for the implementation of new or revised accounting standards, and as a result, we will comply with new or revised accountingstandards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act providesthat our decision to not take advantage of the extended transition period for complying with new or revised accounting standards is irrevocable. In addition,we are in the process of evaluating the benefits of relying on the other exemptions and reduced reporting requirements provided by the JOBS Act.Subject to certain conditions set forth in the JOBS Act, if as an “emerging growth company” we choose to rely on such exemptions, we may not berequired to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory auditfirm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion andanalysis), or (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance andcomparisons of our chief executive officer’s compensation to median employee compensation.These exemptions will apply for a period of five years following the completion of our initial public offering in November 2015 or until we no longermeet the requirements of being an “emerging growth company,” whichever is earlier. C.Research and Development Expenses, Patents and LicensesSee “Item 4. Information on the Company—Business Overview—Intellectual Property” and “Item 5. Operating and Financial Review and Prospects.” D.Trend InformationSee “Item 5. Operating and Financial Review and Prospects.” E.Off-Balance Sheet ArrangementsAs of the date hereof, and during the periods presented herein, we did not have any off-balance sheet arrangements. F.Tabular Disclosure of Contractual ObligationsSee “Item 5. Operating and Financial Review and Prospects.” G.Safe HarborSee “Special Note Regarding Forward-Looking Statements.” 71 Table of ContentsITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A.Directors and Senior ManagementThe following table sets forth the names, ages and positions of our executive officers and directors. Unless otherwise indicated, the business address ofall of our executive officers and directors is CityPoint, One Ropemaker Street, Moorgate, London, EC2Y 9AW, United Kingdom. Name Age PositionExecutive Officers and Employee Directors: Peter Bauer 42 Chief Executive Officer and ChairmanPeter Campbell 51 Chief Financial OfficerNeil Murray 48 Chief Technology Officer and DirectorEd Jennings 46 Chief Operating OfficerNon-Employee Directors: Christopher FitzGerald (1)(3) 70 DirectorBernard Dallé (1)(3) 48 DirectorNorman Fiore (2) 45 DirectorJeffrey Lieberman (2)(3) 42 DirectorHagi Schwartz (1)(2) 53 Director (1)Member of the audit committee.(2)Member of the compensation committee.(3)Member of the nominating and corporate governance committee.The following sets forth biographical information regarding our executive officers and directors. There are no family relationships among the executiveofficers or between any executive officer or director.Executive OfficersPeter Bauer has served as our Chief Executive Officer and a member of our board of directors since co-founding our company in 2003. Prior to that,Mr. Bauer was a Managing Director at Idion Solutions Pty in Cape Town, South Africa, a software integration and development company that acquired FABTechnology (Pty), a company that he co-founded in 1997. We believe Mr. Bauer is qualified to serve on our board of directors because of his extensiveknowledge and experience as the chief executive officer of our company, as well as the industry in which we compete.Peter Campbell has served as our Chief Financial Officer since 2006, and from 2007 to 2016, Mr. Campbell served as a member of our board ofdirectors. Prior to joining Mimecast, Mr. Campbell served as the chief financial officer of SR Telecom Inc. where he was employed from 2002 to 2006. From1998 to 2002, Mr. Campbell was an auditor at Ernst & Young in Montreal, Canada. Mr. Campbell holds a Bachelor of Commerce and a Graduate Diploma inaccounting from Concordia University.Neil Murray has served as our Chief Technology Officer and a member of our board of directors since co-founding our company in 2003. Prior to that,Mr. Murray served as the Chief Technical Officer of Global Technology Services, a South African provider of business information solutions that acquiredPro Solutions (Prosol Group Pty), a software development company that he co-founded in 1992. We believe Mr. Murray is qualified to serve on our board ofdirectors because of his extensive knowledge and experience with our company and its technologies, as well as the industry in which we compete.Ed Jennings has served as our Chief Operating Officer since August 2015. From January 2014 to August 2015, Mr. Jennings was the Chief MarketingOfficer of Veracode, a provider of cloud-based application security, where he also served as Executive Vice President of Sales and Services from February2012 to December 2013. 72 Table of ContentsPrior to that, from February 2011 to January 2012, Mr. Jennings was General Manager at ADP (NASDAQ: ADP), a provider of business outsourcing solutions.From August 2008-December 2010, Mr. Jennings was the Chief Executive Officer of Copanion, where he also served as Senior Vice President of Sales andMarketing from July 2007 to July 2008. Mr. Jennings holds a Masters of Business Administration from Northwestern University and a Bachelor of Arts fromBoston College.Non-Executive DirectorsChristopher FitzGerald has served as a member of our board of directors since 2007. Mr. FitzGerald served as a non-executive director of CityMerchants High Yield Trust, a London based investment company (LON: CMHY), and The Intercare Group, a U.K. pharmaceuticals business. Mr. FitzGeraldwas also a member of the Committee of Executive Directors and General Counsel at NatWest Group plc. Before that, Mr. FitzGerald was a partner in theLondon law firm Slaughter and May, where he specialized in advising major financial services businesses. Mr. FitzGerald holds a Master of Arts inJurisprudence from Oxford University. We believe that Mr. FitzGerald is qualified to serve on our board of directors because of his extensive business,financial and legal experience.Bernard Dallé has served as a member of our board of directors since 2009. Mr. Dallé currently serves as the Operating Partner at Index Ventures, aventure capital firm that he joined in 1997. Prior to joining Index, Mr. Dallé was a management consultant at McKinsey & Company from 1996 to 1997, anda project manager at Procter & Gamble from 1990 to 1994. Mr. Dallé currently serves on the board of directors of several private companies. He holds aMaster of Business Administration from the Kellogg School of Management at Northwestern University and a Master of Science in electrical engineeringfrom the Ecole polytechnique fédérale de Lausanne. We believe Mr. Dallé is qualified to serve on our board of directors because of his experience as aseasoned investor in our industry.Norman Fiore has served as a member of our board of directors since 2009. Mr. Fiore currently serves as a General Partner at Dawn Capital, a venturecapital firm that he co-founded in 2007. Prior to co-founding Dawn, Mr. Fiore was a Partner at the Reuters Greenhouse Fund where he co-managed one of thelargest global corporate technology funds. Prior to that, Mr. Fiore worked at Bain & Company in the Telecoms and Private Equity groups. Mr. Fiore currentlyserves on the board of directors of several private companies. Mr. Fiore holds a Bachelor of Science in industrial engineering and a Bachelor of Arts inquantitative economics from Stanford University and a Master of Business Administration from INSEAD Business School. We believe Mr. Fiore is qualifiedto serve on our board of directors because of his experience as a seasoned investor in our industry.Jeffrey Lieberman has served as a member of our board of directors since 2012. Mr. Lieberman is currently a Managing Director of the venture capitalfirm Insight Venture Partners, which he joined in 1998. Prior to joining Insight, Mr. Lieberman was a management consultant at McKinsey & Company,where he focused on strategic and operating issues in the financial services, technology and consumer products industries. Mr. Lieberman currently serves asa director of public companies Shutterstock, Inc. (NYSE: SSTK) and Cvent, Inc. (NSYE: CVT), and as a director of several private companies. Mr. Liebermanholds a Bachelor of Applied Sciences in systems engineering and a Bachelor of Arts degree in economics from the University of Pennsylvania. We believeMr. Lieberman is qualified to serve on our board of directors because of his experience as a seasoned investor in our industry.Hagi Schwartz has served as a member of our board of directors since July 2015. In 2005, Mr. Schwartz founded Magnolia Capital, an investmentadvisory firm, where he served as Managing Director. Mr. Schwartz is also a Venture Partner at Western Technology Investment, which he joined in 2011.Previously, Mr. Schwartz was the Chief Financial Officer of several public and private technology companies including HyperRoll, Inc., ATRICA, Inc.,Noosh, Inc., and Check Point Software Technologies. Mr. Schwartz currently serves on the board of directors of Silicon Graphics International Corp. Inaddition, Mr. Schwartz has served on the board of directors of BigFix, TUI University and two other private companies. Mr. Schwartz has a B.A. in Economicsand Accounting from Bar Ilan University. We believe Mr. Schwartz is qualified to serve on our board of directors 73 Table of Contentsbecause of his financial expertise, his significant audit and financial reporting knowledge, his seasoned business perspective and his prior experience as anexecutive and on boards of other prominent technology companies. B.CompensationDirectors’ and Executive Management CompensationThe aggregate compensation awarded to, earned by and paid to our current directors and executive officers, including share-based compensation, forthe fiscal year ended March 31, 2016, was $8.9 million. The above also includes the estimated fair value of share-based compensation in the amount of $6.4million issued in the fiscal year ended March 31, 2016 in the form of options to purchase an aggregate of 1,253,088 ordinary shares and restricted share unitstotaling 45,000. Share options to purchase ordinary shares were issued in August 2015 and February 2016 and had exercise prices of $9.78 and $9.21 pershare, respectively and expire 10 years after the date of grant. The total amounts accrued to provide severance, retirement, annual leave and recuperation orsimilar benefits or expenses for our directors and officers for the fiscal year ended March 31, 2016 was $0.4 million. C.Board PracticesBoard CompositionWe comply with the rule of the NASDAQ Stock Market that a majority of our directors be independent. Our board of directors has determined that all ofour directors, other than our Chief Executive Officer and Chief Technology Officer, are independent under such rules.Our board of directors is responsible for overall corporate governance and for supervising the general affairs and business of our company and itssubsidiaries.Our board is responsible for the proper management of our company and its subsidiaries and setting the overall direction and strategy of our group,reviewing scientific, operational and financial performance, and advising on management appointments. All key operational and investment decisions aresubject to board approval.Our board of directors currently believes that our company is best served by combining the roles of Chairman of the Board and Chief Executive Officer,coupled with a lead independent director. Our board of directors believes that as Chief Executive Officer, Mr. Bauer is the director most familiar with ourbusiness and industry and most capable of effectively identifying strategic priorities and leading discussion and execution of strategy. Our independentdirectors bring experience, oversight and expertise from outside our company, while our Chief Executive Officer brings company-specific experience andexpertise. Our board of directors believes that the combined role of Chairman and Chief Executive Officer is the best leadership structure for us at the currenttime as it promotes the efficient and effective development and execution of our strategy and facilitates information flow between management and our boardof directors. The board of directors recognizes, however, that no single leadership model is right for all companies at all times. Our corporate governanceguidelines provide that the board of directors should be free to choose a chairperson of the board based upon the board’s view of what is in the best interestsof our company. Accordingly, the board of directors periodically reviews its leadership structure.In August 2015, our board of directors appointed Christopher FitzGerald as lead independent director. As the lead independent director, Mr. FitzGeraldis responsible for coordinating the activities of the independent directors. Among other things, the lead independent director has the following specificresponsibilities: • preside at all meetings of the board of directors at which the chairperson is not present, including executive sessions of the independentdirectors; 74 Table of Contents • call special meetings of the independent directors; • act as the principal liaison between the independent directors and the chairperson of the board; • approve meeting schedules to assure that there is sufficient time for discussion of all agenda items and approve meeting agendas for the board ofdirectors and its committees; • approve information sent to the board; and • perform such other duties as the board of directors may from time to time delegate to the lead independent director.Role of Board in Risk Oversight ProcessRisk assessment and oversight are an integral part of our governance and management processes. Our board of directors encourages management topromote a culture that incorporates risk management into our corporate strategy and day-to-day business operations. Management discusses strategic andoperational risks at regular management meetings, and conducts specific strategic planning and review sessions during the year that include a focuseddiscussion and analysis of the risks facing us. Throughout the year, senior management reviews these risks with the board of directors at regular boardmeetings as part of management presentations that focus on particular business functions, operations or strategies, and presents the steps taken bymanagement to mitigate or eliminate such risks.Corporate Governance and Committees of the BoardCorporate GovernanceThe Sarbanes-Oxley Act of 2002, as well as related rules subsequently implemented by the SEC, requires foreign private issuers, including ourcompany, to comply with various corporate governance practices. In addition, NASDAQ rules provide that foreign private issuers may follow home countrypractice in lieu of the NASDAQ corporate governance standards, subject to certain exceptions and except to the extent that such exemptions would becontrary to U.S. federal securities laws. We currently do not intend to take advantage of any such exemptions.We intend to take all actions necessary for us to maintain compliance as a foreign private issuer under the applicable requirements of the rules adoptedby the SEC, but expect to transition to domestic issuer status following the fiscal year ending March 31, 2017.Because we are a foreign private issuer, our directors and senior management are not subject to short-swing profit and insider trading reportingobligations under Section 16 of the U.S. Securities Exchange Act of 1934, as amended, or Exchange Act. They will, however, be subject to the obligations toreport changes in share ownership under Section 13 of the Exchange Act and related SEC rules.Committees of the BoardWe have established an audit committee, a compensation committee and a nominating and corporate governance committee and have a charter foreach of these committees, current copies of which are available at the Corporate Governance section of our website at investors.mimecast.com.Audit CommitteeThe members of our audit committee are Hagi Schwartz, Christopher FitzGerald and Bernard Dallé. Hagi Schwartz is the chair of the audit committee.Our audit committee’s responsibilities include: • appointing, approving the compensation of, and assessing the independence, objectivity and effectiveness of our registered public accountingfirm; 75 Table of Contents • overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of reports from thatfirm; • monitoring the integrity of our financial statements by reviewing and discussing with management and our independent registered publicaccounting firm our annual and quarterly financial statements and related disclosures; • reviewing and monitoring our internal control over financial reporting, disclosure controls and procedures and code of business conduct; • overseeing our risk assessment and risk management policies; • establishing policies regarding hiring employees from our independent registered public accounting firm and procedures for the receipt andretention of accounting related complaints and concerns; • meeting independently with our internal auditing staff, if any, our independent registered public accounting firm and management; and • reviewing and approving or ratifying any related person transactions.All audit and non-audit services, other than de minimis non-audit services, to be provided to us by our independent registered public accounting firmmust be approved in advance by our audit committee.Our board of directors has determined that Hagi Schwartz is an “audit committee financial expert” as defined in Item 16A of Form 20-F.In order to satisfy the independence criteria for audit committee members set forth in Rule 10A-3 under the Exchange Act, each member of an auditcommittee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other boardcommittee, accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries or otherwisebe an affiliated person of the listed company or any of its subsidiaries. We believe that the composition of our audit committee will meet the requirements forindependence under current NASDAQ and SEC rules and regulations.Compensation CommitteeThe members of our compensation committee are Jeffrey Lieberman, Norman Fiore and Hagi Schwartz. Jeffrey Lieberman is the chair of thecompensation committee. Our compensation committee’s responsibilities include: • reviewing and approving, or making recommendations to our board of directors with respect to, the compensation of our directors and executivemanagement; • overseeing an evaluation of our executive management; and • overseeing and administering our employee share option scheme or equity incentive plans in operation from time to time.In order to satisfy the independence criteria for compensation committee members set forth in Rule 10C-1 under the Exchange Act, all factorsspecifically relevant to determining whether a director has a relationship to such company which is material to that director’s ability to be independent frommanagement in connection with the duties of a compensation committee member must be considered, including, but not limited to: (1) the source ofcompensation of the director, including any consulting advisory or other compensatory fee paid by such company to the director; and (2) whether thedirector is affiliated with the company or any of its subsidiaries or affiliates. We believe the composition of our compensation committee will meet therequirements for independence under current NASDAQ and SEC rules and regulations. 76 Table of ContentsNominating and Corporate Governance CommitteeThe members of our nominating and corporate governance committee are Christopher FitzGerald, Jeffrey Lieberman and Bernard Dallé. ChristopherFitzGerald is the chair of the nominating and corporate governance committee. Our nominating and corporate governance committee’s responsibilitiesinclude: • identifying individuals qualified to become members of our board of directors; • recommending to our board of directors the persons to be nominated for election as directors and to each of our board’s committees; • reviewing and making recommendations to our board with respect to our board leadership structure; • reviewing and making recommendations to our board with respect to management succession planning; and • developing and recommending to our board of directors corporate governance principles.Code of Business Conduct and EthicsWe have adopted a Code of Business Conduct and Ethics applicable to all of our directors, executive officers and employees, including our chiefexecutive officer, chief financial officer, controller or principal accounting officer, or other persons performing similar functions, which is a “code of ethics”as defined in Item 16B of Form 20-F promulgated by the SEC. The full text of the Code of Business Conduct and Ethics is posted on the investor relationssection of our website at www.mimecast.com.If we make any amendment to the Code of Business Conduct and Ethics or grant any waivers, including any implicit waiver, from a provision of theCode of Business Conduct and Ethics, we will disclose the nature of such amendment or waiver on our website to the extent required by the rules andregulations of the SEC. Under Item 16B of Form 20-F, if a waiver or amendment of the Code of Business Conduct and Ethics applies to our principalexecutive officer, principal financial officer, principal accounting officer or controller and relates to standards promoting any of the values described inItem 16B(b) of Form 20-F, we are required to disclose such waiver or amendment on our website in accordance with the requirements of Instruction 4 to suchItem 16B.Employment and Consulting AgreementsExecutive ManagementEach of Peter Bauer and Peter Campbell has entered into an amended and restated employment agreement with Mimecast North America, Inc. and wehave entered into a service agreement with Neil Murray. These agreements each contain customary provisions regarding non-competition, non-solicitation,confidentiality of information and assignment of inventions. The amended and restated employment agreements with each of Messrs. Bauer and Campbellprovide for up to 12 months of base salary continuation and health insurance premiums in the event that the executive’s employment is terminated by uswithout “cause” or the executive resigns for “good reason.” In the event that such termination occurs within 12 months following a “change in control,” theexecutive will be entitled to receive a payment equal to 12 months of his then-current base salary (or his base salary in effect immediately prior to the changein control, if higher) plus his target bonus, up to 12 months of health insurance premiums and full acceleration of all equity awards. Receipt of the severancepayments and benefits described above is conditioned upon the execution and effectiveness of a separation agreement, including a general release of claimsin our favor. In addition, the amended and restated employment agreements provide that upon a change in control, 50% of the shares underlying all equityawards held by each of Messrs. Bauer and Campbell will accelerate and vest. Pursuant to the terms of the service agreement with Mr. Murray, we andMr. Murray are each obligated to provide the other party with four months’ written notice to terminate the employment relationship. Alternatively, in lieu ofproviding four months’ notice, we may elect to pay Mr. Murray a lump sum equal to his base salary, bonus and benefits for the notice period. Such noticeperiod and termination benefits do not apply in the event that Mr. Murray is terminated by us for any one of the reasons enumerated in his service agreement. 77 Table of ContentsNon-Executive DirectorsPrior to our initial public offering, each of the members of our board of directors was elected pursuant to a subscription and shareholders’ agreementamong us and certain of our existing shareholders. See “Major Shareholders and Related Party Transactions—Subscription and Shareholders’ Agreement.”That agreement terminated by its terms upon completion of our initial public offering, and there are no agreements between us and our shareholdersgoverning the election of our directors.Employee Share PlansThe equity incentive plans described in this section are the Mimecast Limited 2007 Key Employee Share Option Plan, or the 2007 Plan, the MimecastLimited 2010 EMI Share Option Scheme, or the 2010 Plan, the Mimecast Limited Approved Share Option Plan, or the Approved Plan, the Mimecast Limited2015 Share Option and Incentive Plan, or the 2015 Plan, and the Mimecast Limited 2015 Employee Share Purchase Plan, or the ESPP. Prior to our initialpublic offering, we granted awards to eligible participants under the 2007 Plan, the 2010 Plan and the Approved Plan. After completion of our initial publicoffering, we have granted and expect to grant awards to eligible participants under the 2015 Plan and the ESPP.2007 PlanOur 2007 Plan was adopted by our board of directors on September 3, 2007. The maximum market value of shares (as of the date of grant) subject tounexercised EMI options granted under the 2007 Plan together with the 2010 Plan may not exceed £3 million. The 2007 Plan provides only for the grantingof options to acquire Class B ordinary shares to our key employees and the key employees of our subsidiaries.The 2007 Plan is administered by the non-executive members of our board of directors or a committee (administrator), who has the full power tointerpret the 2007 Plan and to establish the rules and regulations applying to it and to make all other determinations they deem necessary or useful for theadministration of the 2007 Plan, subject to applicable law. The option price of each option granted under the 2007 Plan was determined by the administratorof the 2007 Plan at the time the option was granted.The 2007 Plan provides that, in the event of a change of control (as defined in the 2007 Plan) by way of trade sale, unless and to the extent that theadministrator determines that the circumstances justify vesting and/or exercisability of a greater proportion of the unvested shares, (i) 75% of the sharesunderlying outstanding unvested options shall vest and the remaining 25% of the unvested option shares shall immediately lapse and (ii) options shall beexercisable to the extent that they have then vested and to the extent that any applicable performance conditions have then been satisfied. In such event,unless the acquirer provides for the replacement of such options, exercisable options may be exercised (a) on the same day as, and immediately prior to, thechange of control becoming effective, (b) if the person making the offer so requests or makes it a condition of the offer that one or more optionholders islocked-in and the board of directors agreed to such request or requirement, in the 12-month period commencing no later than the date on which the acquirergains control of us and any condition subject to which the offer was made has been satisfied or (c) in the absence of any such request or requirement, or if theboard of directors does not agree to such request or requirement, within six months, or such longer period as the board of directors may determine (but in noevent longer than 12 months), following the day on which the acquirer gains control of us and any condition subject to which the offer was made has beensatisfied. Notwithstanding termination of an optionholder’s employment, any options vested at the time of a change of control shall immediately becomeexercisable for such period as the board of directors determined in its absolute discretion and acting fairly and reasonably if the board of directors determinesthat the termination is directly related to the change of control and exercisability is justified in the circumstances. In the event of a listing of our shares on arecognized securities exchange, 100% of the unvested portion of options granted under the 2007 Plan shall vest and, unless the board of directors determinesthat the circumstances justify the exercisability of a greater proportion, 25% of the shares underlying options will become exercisable immediately 78 Table of Contentsupon the listing, 50% of the shares underlying options will become exercisable 12 months following the date of the listing and 25% of the shares underlyingoptions will become exercisable 24 months following the date of the listing.The administrator may amend the 2007 Plan but no such action may adversely affect the terms of outstanding options under the 2007 Plan without theconsent of the holders of 75% of the option shares then outstanding, whether vested or unvested.2010 PlanOur 2010 Plan was approved by our board of directors on March 23, 2010 and was most recently amended on April 28, 2015. The maximum value ofshares subject to unexercised EMI options granted under the 2010 Plan together with the 2007 Plan may not exceed £3 million. The number of shares overwhich an EMI option may be granted to any one eligible employee is limited such that the total value of shares subject to unexercised EMI options grantedby us or any group company does not exceed £1 less than £250,000.The 2010 Plan is administered by our board of directors. The 2010 Plan permits us to make grants of (i) EMI options to our employees and employeesof any qualifying subsidiary (as defined in the 2010 Plan) whose committed time (as defined in the 2010 Plan) amounts to at least 25 hours a week or, if less,75% of his or her working time and who do not have a material interest (as defined in the 2010 Plan) in us or any of our subsidiaries and (ii) unapprovedoptions to our employees and the employees of our subsidiaries. The option price of each option may not be less than the market value of the Class Bordinary shares on the date of grant and, in the case of an option that is a right to subscribe for Class B ordinary shares, may not be less than the nominalvalue of such shares. The term of each option may not exceed 10 years from the date of grant. Options granted under the 2010 Plan generally are notexercisable until the occurrence of an exit event, such as a corporate takeover, reconstruction, liquidation or sale of the business.Under the 2010 Plan, options shall vest in full immediately after our shares are admitted to listing on a recognized securities exchange. Such optionsshall become exercisable as to 25% of the underlying shares immediately following the admission date, 50% of the underlying shares on the first anniversaryof the admission date and 25% of the underlying shares on the second anniversary of the admission date. However, options granted on or after May 13, 2014to U.S. and South African participants shall continue vesting as set forth in the option award agreement.The 2010 Plan provides that, in the event that a person obtains control (as defined in the 2010 Plan) of the company as a result of (i) making an offer toacquire the whole of our issued share capital that is made on a condition such that, if satisfied, the person will have control of the company or (ii) negotiatinga share sale and purchase agreement with our shareholders that contemplates that the person will obtain control of the company upon completion, 75% of theunvested shares underlying options under the 2010 Plan shall vest and the remaining 25% of the option shares will only be exercisable if the directorsdetermine that the circumstances so justify. If replacement options are offered to optionholders under the 2010 Plan by the acquiring company in relation tovested options, and an optionholder does not agree to release the vested options and accept a replacement option, the board of directors shall determinewhether such vested options shall be exercisable or whether they shall lapse. If replacement options are not offered to all optionholders, then vested optionsshall become exercisable in either of the following exercise periods, as determined by the administrator: (i) immediately before a change of control becomingunconditional or (ii) during the one-month exercise period starting at a date to be determined by the administrator (but in any event such period shall takeplace before the 12-month period following the date the change of control becomes unconditional).Options may be exercised, to the extent vested, within 39 days of a court sanctioning a scheme of reconstruction (as defined in the 2010 Plan) or a saleof the business (as defined in the 2010 Plan). 79 Table of ContentsThe number of shares underlying options and the option price thereof shall be adjusted appropriately following any capitalization issue, rights issue,subdivision, consolidation or reduction of share capital. Our board of directors may amend or add rules to the 2010 Plan or impose additional conditions orrequirements on options or the terms on which Class B ordinary shares are acquired; provided, however, no amendments may be made that would have theeffect of causing EMI options to cease to be EMI options and no amendment may be made unless, (i) where the rights are enjoyed by a single optionholderand not by any other optionholder or class of optionholders, such optionholder provides written consent or, (ii) where the rights are enjoyed by alloptionholders or any class of optionholders, with the consent of 75% of the shares underlying outstanding options.The 2010 Plan shall automatically terminate on the tenth anniversary of its adoption date and our board of directors may terminate the 2010 Plan atany earlier time.Approved PlanOur Approved Plan was approved by our board of directors on October 24, 2012 and was approved by HM Revenue & Customs on November 14, 2012.It was most recently amended on April 28, 2015. The number of shares over which an option may be granted to any one eligible employee is limited such thatthe total market value of shares subject to unexercised options held by such person under the Approved Plan or any other share option plan approved by HMRevenue & Customs and adopted by us or any other associated company (as defined in the Approved Plan) shall not exceed £30,000.The Approved Plan is administered by our board of directors and permits us to make grants of options to purchase our Class B ordinary shares to full-time directors or employees of subsidiaries (as defined in the Approved Plan). The term of each option may not exceed 10 years from the date of grant.Except in certain limited circumstances, options under the Approved Plan may not be exercised earlier than the fourth anniversary of the date of grant,may only be exercised while the optionholder is a director or employee of a subsidiary, may only be exercised if any performance conditions have beenfulfilled to the satisfaction of the administrator and may not be exercised at any time when a participant has or had, within the preceding 12 months a materialinterest (as defined in the Approved Plan) in a close company (as defined in the Approved Plan) which is the company or any company that has control of usor is a member of a consortium that owns the company.The Approved Plan provides that, in the event that a person obtains control (as defined in the Approved Plan) of us as a result of (i) making a generaloffer to acquire the whole of our issued share capital that is made on a condition such that, if satisfied, the person will have control of the company or(ii) negotiating a share sale and purchase agreement with our shareholders that contemplates that the person will obtain control of the company uponcompletion, options may be exercised within six months of the date that the person obtains control of us or immediately before such period (i) to the extentvested and if any performance conditions have been satisfied to the satisfaction of the administrator or (ii) to the extent of 75% of the unvested sharesunderlying the option.Under the Approved Plan, options granted before May 13, 2014 shall vest in full immediately after our shares are admitted to listing on a recognizedsecurities exchange. Such options shall become exercisable as to 25% of the underlying shares immediately following the listing date, 50% of the underlyingshares on the first anniversary of the listing date and 25% of the underlying shares on the second anniversary of the listing date. Options granted on or afterMay 13, 2014 shall continue vesting as set forth in the option award agreement.The number of shares underlying options and the option price thereof shall be adjusted appropriately following any capitalization issue, any offermade by way of rights, subdivision, consolidation or reduction of share capital. Our board of directors may amend or add rules to the Approved Plan orimpose additional 80 Table of Contentsconditions or requirements on options or the terms on which Class B ordinary shares are acquired; provided, however, that no amendment may be madeunless the consent of 75% of the shares underlying outstanding options is obtained.2015 PlanOur 2015 Plan was adopted by our board of directors on September 2, 2015 and approved by our shareholders on November 4, 2015 and becameeffective upon the closing of our initial public offering. The 2015 Plan allows the compensation committee to make equity-based incentive awards to ourofficers, employees, non-employee directors and consultants.We have initially reserved a total of 5,500,000 shares, or the Initial Limit, for the issuance of awards under the 2015 Plan. This number is subject toadjustment in the event of a share split, share dividend or other change in our capitalization. The 2015 Plan provides that the number of shares reserved andavailable for issuance under the plan will automatically increase each January 1, beginning on January 1, 2016, by 5% of the outstanding number of ordinaryshares on the immediately preceding December 31 or such lesser number of shares as determined by our board of directors. We refer to such number as theAnnual Increase.The shares we issue under the 2015 Plan will be authorized but unissued shares or shares that we reacquire. Ordinary shares underlying any awards thatare forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by us prior to vesting,satisfied without the issuance of shares, or are otherwise terminated (other than by exercise) under the 2015 Plan will be added back to the ordinary sharesavailable for issuance under the 2015 Plan.Share options and share appreciation rights with respect to no more than 2,500,000 ordinary shares may be granted to any one individual in any onecalendar year. The maximum number of ordinary shares that may be issued as incentive share options may not exceed the Initial Limit cumulativelyincreased on January 1, 2016 and on each January 1 thereafter by the lesser of the Annual Increase or 2,750,000 shares. The value of all awards made underthe 2015 Plan and all other cash compensation paid by us to any non-employee director in any calendar year shall not exceed $1,000,000.The 2015 Plan will be administered by our compensation committee. Our compensation committee has full power to select, from among theindividuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine thespecific terms and conditions of each award, subject to the provisions of the 2015 Plan.The 2015 Plan permits the granting of both options to purchase ordinary shares intended to qualify as incentive stock options under Section 422 of theCode and non-qualified stock options. The exercise price of each option will be determined by our compensation committee at the time of the grant but maynot be less than 100% of the fair market value of our ordinary shares on the date of grant. The term of each option will be fixed by our compensationcommittee and may not exceed ten years from the date of grant. Our compensation committee will determine at what time or times each option may beexercised and may at any time accelerate the exercisability of all or a portion of any option.Our compensation committee may award share appreciation rights subject to such conditions and restrictions as it may determine. Share appreciationrights entitle the recipient to ordinary shares equal to the value of the appreciation in our share price over the exercise price. The exercise price may not beless than 100% of the fair market value of our ordinary shares on the date of grant. The term of each share appreciation right will be fixed by ourcompensation committee and may not exceed ten years from the date of grant. Our compensation committee will determine at what time or times each shareappreciation right may be exercised.Our compensation committee may award restricted ordinary shares and restricted share units to participants subject to such conditions and restrictionsas it may determine. These conditions and restrictions may include the 81 Table of Contentsachievement of certain pre-established performance goals and/or continued employment with us through a specified period. Our compensation committeemay also grant ordinary shares that are free from any restrictions under the 2015 Plan. Unrestricted shares may be granted to participants in recognition of pastservices or for other valid consideration and may be issued in lieu of cash compensation due to such participant.Our compensation committee may grant performance share awards to participants that entitle the recipient to receive awards of ordinary shares uponthe achievement of certain performance goals and such other conditions as our compensation committee shall determine. Our compensation committee maygrant dividend equivalent rights to participants that entitle the recipient to receive credits for dividends that would have been paid if the recipient had held aspecified number of ordinary shares.Our compensation committee may grant cash awards under the 2015 Plan to participants, subject to the achievement of certain performance goals.Our compensation committee may grant awards of restricted shares, restricted share units, performance share awards or cash-based awards under the2015 Plan that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code. Such awards will only vest or becomepayable upon the attainment of pre-determined performance goals that are established by our compensation committee and related to one or moreperformance criteria. The performance criteria that could be used with respect to any such awards include: total shareholder return, expense levels, earningsbefore interest, taxes, depreciation and amortization, or any elements thereof, net (loss) income (either before or after interest, taxes, depreciation and/oramortization), changes in the market price of our ordinary shares, economic value-added, sales or revenue, acquisitions or strategic transactions, operatingincome (loss), cash flow (including, but not limited to, operating cash flow and free cash flow), return on capital, assets, equity, or investment, shareholderreturns, return on sales, gross or net profit levels, productivity, expense, margins, operating efficiency, customer satisfaction, working capital, earnings (loss)per share of our ordinary shares, sales or market shares and number of customers, any of which may be measured either in absolute terms or as compared to anyincremental increase or as compared to results of a peer group. From and after the time that we become subject to Section 162(m) of the Code, the maximumaward that is intended to qualify as “performance-based compensation” under Section 162(m) of the Code that may be made to certain of our officers duringany twelve month period is 2,500,000 ordinary shares with respect to a share-based award and $15,000,000 with respect to a cash-based award.The 2015 Plan provides that upon the effectiveness of a “sale event,” as defined in the 2015 Plan, an acquirer or successor entity may assume, continueor substitute outstanding awards under the 2015 Plan. To the extent that awards granted under the 2015 Plan are not assumed or continued or substituted bythe successor entity, all options and share appreciation rights that are not exercisable immediately prior to the effective time of the sale event shall becomefully exercisable as of the effective time of the sale event, all other awards with time-based vesting, conditions or restrictions, shall become fully vested andnonforfeitable as of the effective time of the sale event and all awards with conditions and restrictions relating to the attainment of performance goals maybecome vested and nonforfeitable in the discretion of the compensation committee and, upon the effective time of the sale event, all outstanding awardsgranted under the 2015 Plan shall terminate. In the event of such termination, individuals holding options and share appreciation rights will be permitted toexercise such options and share appreciation rights (to the extent exercisable) within a specified period of time prior to the sale event. In addition, inconnection with the termination of the 2015 Plan upon a sale event, we may make or provide for a cash payment to participants holding vested andexercisable options and share appreciation rights equal to the difference between the per share cash consideration payable to shareholders in the sale eventand the exercise price of the options or share appreciation rights.Our board of directors may amend or discontinue the 2015 Plan and our compensation committee may amend or cancel outstanding awards forpurposes of satisfying changes in law or any other lawful purpose, but no such action may adversely affect rights under an award without the holder’sconsent. Certain amendments to the 2015 Plan require the approval of our shareholders. 82 Table of ContentsNo awards may be granted under the 2015 Plan after the date that is ten years from the effective date of the 2015 Plan (or, with respect to incentiveshare options, after ten years from the date of the Board’s approval of the 2015 Plan). No awards under the 2015 Plan have been made prior to the date hereof.ESPPThe ESPP was adopted by our board of directors on September 2, 2015 and approved by our shareholders on November 4, 2015. The ESPP initiallyreserves and authorizes for issuance a total of 1,100,000. This number is subject to adjustment in the event of a share split, share dividend or other change inour capitalization.Subject to applicable law, all employees whose customary employment is for more than 20 hours a week are eligible to participate in the ESPP. Anyemployee who owns 5% or more of the voting power or value of our ordinary shares is not eligible to purchase shares under the ESPP.We may make one or more offerings each year to our employees to purchase shares under the ESPP, at the discretion of the administrator of the ESPP.Offerings will usually begin on each January and July and will continue for six-month periods, referred to as offering periods.Each eligible employee may elect to participate in any offering by submitting an enrollment form at least 15 days before the relevant offering date.Each employee who is a participant in the ESPP may purchase shares by authorizing payroll deductions from 1% to 10% of his or her eligiblecompensation during an offering period. Unless a participating employee has previously withdrawn from the offering, his or her accumulated payrolldeductions will be used to purchase ordinary shares on the last business day of the offering period at a price equal to 85 % of the fair market value of theshares on the first business day or the last business day of the offering period, whichever is lower, provided that no more than 550,000 ordinary shares may bepurchased by any one employee during each offering period. Under applicable tax rules, an employee may purchase no more than $25,000 worth of ordinaryshares, valued at the grant date of the option to purchase such shares, under the ESPP in any calendar year.An employee’s rights under the ESPP terminate upon voluntary withdrawal from the plan or when the employee ceases employment with us for anyreason. We will promptly refund accumulated payroll deductions of an employee who has withdrawn from participation in the ESPP.The ESPP may be terminated or amended by our board of directors at any time. An amendment that increases the number of ordinary shares authorizedunder the ESPP and certain other amendments require the approval of our shareholders.Limitations on Liability and Indemnification MattersTo the extent permitted by the Jersey law, we are empowered to indemnify our directors against any liability they incur by reason of their directorship.See “Item 10—Share Capital—Limitation of Liability of Directors and Officers.” In addition, we maintain directors’ and officers’ insurance to insure suchpersons against certain liabilities. 83 Table of ContentsD. EmployeesAs of March 31, 2016, we had 703 employees and subcontractors with 341 located in the United Kingdom, 241 in the United States, 86 in South Africaand 35 in Australia. As of March 31, 2015, we had 524 employees and subcontractors with 271 located in the United Kingdom, 169 in the United States, 72in South Africa and 12 in Australia. The following table shows the breakdown of our global workforce of employees and subcontractors by category ofactivity as of the dates indicated: As of March 31, 2016 2015 2014 Sales and marketing 298 212 256 Research and development 132 88 98 Services and support 182 161 142 General and administrative 91 63 56 Total 703 524 552 None of our employees work under any collective bargaining agreements. We have never experienced labor-related work stoppages or strikes andbelieve that we have good relations with our employees.E. Share OwnershipSee “Item 7—Major Shareholders and Related Party Transactions—A. Major Shareholders.”ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONSA. Major ShareholdersThe following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 31, 2016 of: • each of the members of our board of directors; • each of our other executive officers; and • each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our ordinary shares;The column entitled “Shares Beneficially Owned—Percentage” is based on a total of 54,216,738 ordinary shares outstanding as of March 31, 2016.As of March 31, 2016, we had 45 holders of record of our ordinary shares in the United States. These shareholders held in the aggregate 27,109,372 ofour outstanding ordinary shares, or 50% of our outstanding ordinary shares as of March 31, 2016. The number of record holders in the United States is notrepresentative of the number of beneficial holders nor is it representative of where such beneficial holders are resident since many of these ordinary shareswere held by brokers or other nominees.The amounts and percentages of ordinary shares beneficially owned are reported on the basis of regulations of the SEC governing the determination ofbeneficial ownership of securities. Under the applicable SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or sharesvoting power, which includes the power to vote or direct the voting of such security, investment power, which includes the power to dispose of or to directthe disposition of such security, or has the right to receive the economic benefit of ownership of the security. A person is also deemed to be a beneficial ownerof any securities of which that person has a right to acquire beneficial ownership within 60 days, and such securities are considered outstanding for thepurpose of calculating the percentage ownership of that person but not for the purpose of calculating the 84 Table of Contentspercentage ownership of any other person. Under these rules, more than one person may be deemed beneficial owner of the same securities and a person maybe deemed to be a beneficial owner of securities as to which such person has no economic interest. Except as otherwise indicated, each of the beneficialowners has, to our knowledge, sole voting and investment power with respect to the indicated ordinary shares, subject to community property laws, whereapplicable. Except as otherwise set forth below, the address of each beneficial owner is c/o Mimecast Limited, CityPoint, One Ropemaker Street, Moorgate,London EC2Y 9AW, United Kingdom.A description of any material relationship that our principal shareholders have had with us or any of our predecessors or affiliates since the beginningof our last fiscal year is included under the section titled “Item 7—Major Shareholders and Related Party Transactions—B.—Related Party Transactions.” Shares beneficially owned Name of beneficial owner Number Percentage 5% shareholders Abdiel Capital Management, LLC (1) 2,725,232 5.0% Entities affiliated with Insight Venture Partners (2) 9,507,752 17.5% Entities affiliated with Index Ventures (3) 7,843,911 14.5% Entities affiliated with Dawn Capital (4) 6,687,370 12.3% Executive officers and directors Peter Bauer (5) 5,209,376 9.6% Peter Campbell (6) 548,933 1.0% Neil Murray 4,062,265 7.5% Ed Jennings — — Christopher FitzGerald (7) 20,000 * Bernard Dallé (8) 7,843,911 14.5% Norman Fiore (4) 6,687,370 12.3% Jeffrey Lieberman (2) 9,507,752 17.5% Hagi Schwartz (9) 4,164 * All executive officers and directors as a group (9 persons) (10) 33,883,771 62.5% (*)Represents beneficial ownership of less than 1%.(1)This information is as of December 31, 2015 and is based solely on a Schedule 13G filed by Abdiel Capital Management, LLC (“Abdiel Capital”) withthe SEC on February 25, 2016. The ownership consists of (i) 2,591,731 shares held by Abdiel Qualified Master Fund, LP and (ii) 133,501 shares heldby Abdiel Capital, LP. As reported on the Schedule 13G, Abdiel Capital Management, LLC and Abdiel Capital Advisors, LP serve as the generalpartner and the investment manager, respectively, of Abdiel Qualified Master Fund, LP and Abdiel Capital, LP. Colin T. Moran serves as managingmember of Abdiel Capital Management, LLC and Abdiel Capital Partners, LLC, which serves as the general partner of Abdiel Capital Advisors, LP.The percent owned is based on the calculations provided by the Abdiel Schedule 13G. The address of Abdiel Capital is 410 Park Avenue, Suite 930,New York, NY 10022.(2)Consists of (i) 3,616,953 shares owned by Insight Venture Partners VII, L.P.; (ii) 1,592,260 shares owned by Insight Venture Partners (Cayman) VII,L.P.; (iii) 83,717 shares owned by Insight Venture Partners VII (Co-Investors), L.P.; (iv) 228,783 shares owned by Insight Venture Partners (Delaware)VII, L.P; and (v) 3,986,039 shares owned by Insight Ventures Partners Coinvestment Fund II, L.P. (“Coinvest II”). Insight Holdings Group, LLC(“Holdings”) is the sole shareholder of Insight Venture Associates VII, Ltd. (“IVA Ltd”). IVA Ltd is the general partner of Insight Venture AssociatesVII, L.P. (“IVA LP”), which is the general partner of Insight Venture Partners VII, L.P., Insight Venture Partners (Cayman) VII, L.P., Insight VenturePartners (Delaware) VII, L.P. and Insight Venture Partners VII (Co-Investors), L.P. (collectively, “Fund VII”). Holdings is also the general partner ofInsight Venture Associates Coinvestment II, L.P. (“IVAC”). IVAC is the general partner of Coinvest II. Each of Jeffrey Horing, Deven Parekh, PeterSobiloff, Jeffrey Lieberman and Michael Triplett is a member of the board of managers of Holdings. Because Messrs. Horing, Parekh, Sobiloff,Lieberman and Triplett are members of the board of managers of 85 Table of Contents Holdings, Holdings is the sole shareholder of IVA Ltd and the general partner of IVAC, IVA LP is the general partner of Fund VII and IVAC is thegeneral partner of Coinvest II, Messrs. Horing, Parekh, Sobiloff, Lieberman and Triplett have voting and dispositive power over the shares noted above.The principal address of the entities affiliated with Insight Venture Management, LLC is c/o Insight Venture Partners, 1114 Avenue of the Americas,36th Floor, New York, NY 10036.(3)Consists of (i) 7,683,835 ordinary shares held of record by Index Ventures V (Jersey) L.P.; (ii) 62,019 ordinary shares held of record by Index VenturesV Parallel Entrepreneur Fund (Jersey) L.P. and (iii) 98,057 shares held of record by Yucca (Jersey) SLP. Index Ventures Associates V Limited, or IVA V,is the managing general partner of Index Ventures V (Jersey) L.P. and Index Ventures V Parallel Entrepreneur Fund (Jersey) L.P. Yucca (Jersey) SLP isthe nominee shareholder for participants in the Index co-investment scheme that is contractually required to mirror the Index Funds’ investment.Bernard Dallé, David Hall, Paul Willing, Phil Balderson and Sinéad Meehan are the members of the board of directors of IVA V and may be deemed tohave shared voting, investment and dispositive power with respect to the shares held by the Index Funds. The principal address of the Index Funds andYucca (Jersey) SLP is 44 Esplanade, St Helier, Jersey JE4 9WG, Channel Islands.(4)Consists of (i) 2,789,632 shares held by Dawn Enterprise Capital Fund LP; (ii) 1,057,499 shares held by Dawn Mimecast Holdings Limited;(iii) 328,166 shares held by Dawn Mimecast (II) Holdings Limited; (iv) 2,132,813 shares held by Dawn Mimecast (III) Holdings Limited; (v) 349,346shares held by Dawn Mimecast (IV) Holdings Limited; and (vi) 29,914 shares held by Dawn Mimecast (V) Holdings Limited. Each of Dawn MimecastHoldings Limited, Dawn Mimecast (II) Holdings Limited, Dawn Mimecast (III) Holdings Limited, Dawn Mimecast (IV) Holdings Limited and DawnMimecast (V) Holdings Limited is controlled by the holders of voting shares issued by them, and the majority (over 65%) of all voting shares are heldin equal proportions by two family trusts, which we refer to as the trust for the Fiore family and the trust for the Overli family. Neither Mr. Fiore norMr. Overli, nor any other Dawn employee or director, is a trustee of these trusts, or a director of any of the funds, and thus none of them have voting ordispositive power over the shares held by the trusts or the funds. Voting and dispositive power of the trust for the Fiore family is held by LJ SkyeTrustees Limited, the directors of which are Paul Quirk, Mark Veale and Robert Burton, with an address at Commerce House 1 Bowring Road, RamseyIsle of Man IM8 2LQ British Isles. Voting and dispositive power of the trust for the Overli family is held by Bentley Trust (Malta) Limited, the directorsof which are Nicholas Bryan Bentley, Melody Rooke, Malcolm Keith Becker, Eugene Warrington and Franceso Apap Bologna with an address atLevel 7, Portomaso Business Tower, St Julians, Malta STJ 4011. Voting and dispositive power over the shares held by Dawn Enterprise Capital FundLP are held by Dawn Capital LLP, the designated members of which are Norman Fiore and Haakon Overli. The address of Dawn Enterprise CapitalFund LP is Soho, London W1B 5NE, United Kingdom.(5)Consists of (i) 2,709,376 shares held directly by Mr. Bauer and (ii) 2,500,000 shares held by Rock Trustees Limited as Trustees of the ButterworthTrust, of which Mr. Bauer is a beneficiary. As trustee of the Butterworth Trust, Rock Trustees Limited exercises dispositive power over the shares heldby the Butterworth Trust.(6)Consists of (i) 526,016 shares held directly by Mr. Campbell and (ii) 22,917 shares issuable upon the exercise of share options exercisable within 60days after March 31, 2016.(7)Consists of 20,000 shares issuable upon the vesting of restricted share units within 60 days after March 31, 2016.(8)Mr. Dallé is a partner within the Index Ventures group. Advisors within the Index Ventures group provide advice to Index Ventures V (Jersey) L.P.,Index Ventures V Parallel Entrepreneur Fund (Jersey) L.P., and Yucca (Jersey) SLP (the “Index Funds”) but do not have any voting, investment anddispositive power with respect to the shares held by these entities. Mr. Dallé, who is a member of our board of directors, is a partner within the IndexVentures group.(9)Consists of (i) 2,776 shares held directly by Mr. Schwartz and (ii) 1,388 shares issuable upon vesting of restricted share units within 60 days afterMarch 31, 2016.(10)See footnotes 1 through 9 above. Includes 284,581 shares issuable upon exercise of share options exercisable within 60 days after March 31, 2016. 86 Table of ContentsB. Related Party TransactionsSince April 1, 2015, we have engaged in the following transactions with our directors, executive officers and holders of 5% or more of our ordinaryshares, and affiliates of our directors, executive officers and holders of more than 5% of our ordinary shares. We believe that all of these transactions were onterms as favorable as could have been obtained from unrelated third parties.Our audit committee is responsible for the review, approval and ratification of related-party transactions between us and any related person. The auditcommittee will review these transactions under our Code of Conduct, which governs conflicts of interests, among other matters, and is applicable to ouremployees, officers and directors.Subscription and Shareholders’ AgreementDuring the fiscal year ended March 31, 2016, certain of our shareholders, including entities affiliated with Insight Venture Partners, Index Ventures,and Dawn Capital, each of which is a holder of more than 5% of our outstanding ordinary shares, Peter Bauer, our Chief Executive Officer and a member ofour board of directors and a holder of more than 5% of our outstanding ordinary shares, and Neil Murray, our Chief Technology Officer and another memberof our board of directors and a holder of more than 5% of our outstanding ordinary shares, were parties to a Subscription and Shareholders’ Agreement, datedas of September 18, 2012, which governed, among other things, the election of directors, information rights and certain actions by our company requiring theconsent of our shareholders or our board of directors. The Subscription and Shareholders’ Agreement terminated upon the completion of our initial publicoffering in November 2015.Registration RightsThe holders of an aggregate of 29,366,099 ordinary shares, or their permitted transferees, are entitled to rights with respect to the registration of theseshares under the Securities Act. These rights are provided under the terms of a Registration Rights Agreement between us and the holders of these shares,which was entered into in connection with our convertible preference share financings, and include demand registration rights, short-form registration rightsand piggyback registration rights.Demand Registration RightsUnder the terms of the Registration Rights Agreement, we will be required, upon the written request of the holders of a majority of the shares that areentitled to rights under the Registration Rights Agreement, held by former holders of Series A preferred shares, Series B preferred shares and founder shares,including entities affiliated with each of the Insight Venture Partners, Index Ventures and Dawn Capital, to register all or a portion of these shares for publicresale as soon as reasonably practicable within 60 days of such request. We are not required to effect a registration pursuant to this provision of theRegistration Rights Agreement (i) during the period 60 days before our good faith estimate of a date of filing of, and ending 180 days after the effective dateof, a registration initiated by us; (ii) after we have effected one registration pursuant to this provision of the Registration Rights Agreement at the request offormer holders of Series A preferred shares or founder shares; (iii) after we have effected two registration statements pursuant to this provision of theRegistration Rights Agreement at the request of former holders of Series B preferred shares; or (iv) if the initiating holders propose to dispose of securities thatmay be registered on Form S-3 or Form F-3. If such a registration is to be an underwritten offering, then the holders’ registration rights are conditioned uponsuch holders’ participation in such underwriting. We may defer the filing of a registration statement once during any twelve-month period for a period of notmore than 120 days, if we provide a certificate signed by our chief executive officer stating that, in the good faith judgment of our board of directors, it wouldbe materially detrimental to us and our shareholders for such registration statement to be effected at that time. 87 Table of ContentsShort-Form Registration RightsIf we are eligible to file a registration statement on Form S-3 or Form F-3 and have not effected more than two such registrations within the precedingtwelve-month period, these holders have the right, upon written notice to us of more than 10% of the shares entitled to rights under the Registration RightsAgreement held by former holders of Series A preferred shares, Series B preferred shares, or founder shares, including each of the Insight Venture Partners,Index Ventures and Dawn Capital entities, to have such shares registered by us as soon as reasonably practicable within 45 days of such request, if theproposed aggregate price of the shares to be registered by the holders requesting registration is at least $5.0 million. However, we may defer the filing of aregistration statement once during any twelve-month period for a period of not more than 120 days, if we provide a certificate signed by our chief executiveofficer stating that, in the good faith judgment of our board of directors, it would be materially detrimental to us and our shareholders for such registrationstatement to be effected at that time.Piggyback Registration RightsIf we register any of our securities for our own account, the holders of these shares are entitled to include their shares in the registration. If suchregistration is to be an underwritten offering, then the holders’ registration rights are conditioned on such holders’ participation in such underwriting.Other ObligationsThe registration rights are subject to certain conditions and limitations, including the right of the underwriters of an offering to limit the number ofordinary shares to be included in the registrations. We are generally required to bear the expense of all registrations, except underwriting discounts andcommissions. The Registration Rights Agreement also contains the mutual commitment of us and the holders to indemnify each other for losses attributableto untrue statements or omission of a material fact or violations of the Securities Act or state securities laws incurred by us with registrations under theagreement.TerminationThe registration rights and our obligations thereunder terminate seven years after the closing of our initial public offering or, as to any individualholder, at such earlier time at which all shares held by such holder can be sold in any three-month period without registration in compliance with Rule 144 ofthe Securities Act.Agreements with OfficersWe have entered into written employment agreements with each of Peter Bauer, Peter Campbell and Neil Murray. These agreements each containcustomary provisions regarding non-competition, non-solicitation, confidentiality of information and assignment of inventions. See “Item 6—Directors,Senior Management, and Employees—Employment and Consulting Agreements—Executive Management.”Other ArrangementsWe are party to an arrangement with Dawn Capital, a holder of more than 5% of our outstanding ordinary shares, pursuant to which we pay DawnCapital an amount of £12,000 per annum for the services of Norman Fiore.ITEM 8. FINANCIAL INFORMATIONA. Consolidated Statements and Other Financial InformationSee “Item 18—Financial Statements” and the financial statements referred to therein. 88 Table of ContentsLegal ProceedingsFrom time to time, we may be subject to legal proceedings and claims in the ordinary course of business. We are not currently a party to any materiallitigation. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of managementresources and other factors. For additional information, please see Note 9 to our audited consolidated financial statements beginning on page F-8 of thisAnnual Report on Form 20-F.Dividend PolicyWe have never declared or paid any dividends on our ordinary shares, and we currently do not plan to declare dividends on our ordinary shares in theforeseeable future. Any determination to pay dividends to holders of our ordinary shares will be at the discretion of our board of directors and will dependupon many factors, including our financial condition, results of operations, projections, liquidity, earnings, legal requirements, restrictions in our debtarrangements and other factors that our board of directors deem relevant. Pursuant to the Companies (Jersey) Law 1991, we may only pay a dividend if thedirectors who authorize the dividend make a prior solvency statement in statutory form.B. Significant ChangesNot applicable.C. Interests of Experts and CounselNot applicable.ITEM 9. THE OFFER AND LISTING A.Offering and Listing DetailsNot applicable. B.Plan of DistributionNot applicable. C.MarketsSince November 19, 2015, our ordinary shares have been listed on The NASDAQ Global Select Market under the symbol “MIME.” On May 18, 2016,the closing price of our ordinary shares was $7.77.The following table sets forth the high and low sale prices on The NASDAQ Global Select Market for our ordinary shares for each quarter, the mostrecent six months and the first trading day. High Low (in $) Annual highs and lows Calendar year ended December 31, 2015 (from November 19, 2015) 10.46 9.31 Quarterly highs and lows First quarter calendar 2016 10.76 6.20 Monthly highs and lows November 2015 10.22 10.07 December 2015 10.46 9.31 January 2016 9.06 6.20 February 2016 10.38 8.77 March 2016 10.76 8.66 April 2016 9.97 7.95 First Trading Day November 19, 2015 11.99 9.72 89 Table of ContentsD.Selling ShareholdersNot applicable E.DilutionNot applicable F.Expenses of the IssueNot applicableITEM 10. ADDITIONAL INFORMATIONA. Share CapitalThe following descriptions are summaries of the material terms of our Articles of Association and Memorandum of Association. Reference is made tothe more detailed provisions of the Articles of Association and Memorandum of Association. Please note that this summary is not intended to be exhaustive.For further information please refer to the full version of our Articles of Association and Memorandum of Association which is included as an exhibit to thisAnnual Report.GeneralOur company was established under the laws of Jersey, Channel Islands, on July 28, 2015 with registered number 119119. Our register of members iskept at Queensway House, Hilgrove Street, St. Helier, Jersey JE1 1ES and our U.S. Branch register is held at 250 Royall Street, Canton, MA 02021. Ourregistered office is 22 Grenville Street, St. Helier, Jersey JE4 8PX. Our secretary is Peter Campbell and our assistant secretary is Mourant Ozannes Secretaries(Jersey) Limited. Under our Memorandum and Articles of Association, our authorized share capital consists of 300,000,000 ordinary shares, nominal value$0.012 per share and 5,000,000 preferred shares, nominal value $0.012 per share.Issued Share CapitalOur issued share capital as of May 18, 2016 was 54,241,452 ordinary shares with a nominal value of $0.012 per share. Each issued ordinary share isfully paid. We currently have no deferred shares in our issued share capital.Ordinary SharesThe holders of ordinary shares are entitled to receive dividends in proportion to the number of ordinary shares held by them. Holders of ordinary sharesare entitled, in proportion to the number of ordinary shares held by them, to share in any surplus in the event of our winding up. The holders of ordinaryshares are entitled to receive notice of, attend either in person or by proxy or, being a corporation, by a duly authorized representative, and vote at generalmeetings of shareholders.Preferred SharesPursuant to Jersey law and our Memorandum and Articles of Association, our board of directors by resolution may establish one or more classes ofpreferred shares having such number of shares, designations, dividend rates, relative voting rights, liquidation rights and other relative participation, optionalor other special rights, qualifications, limitations or restrictions as may be fixed by the board without any further shareholder approval. Such rights,preferences, powers and limitations as may be established would be preferential to the rights attaching to our ordinary shares and could also have the effect ofdiscouraging an attempt to obtain control of us. 90 Table of ContentsOptionsAs of May 18, 2016, there were options to purchase 8,043,673 ordinary shares outstanding. B.Memorandum and Articles of AssociationWe incorporate by reference into this Annual Report the description of our amended articles of association contained in our prospectus filed pursuantto Rule 424(b)(4) (File No. 333-207454) filed with the SEC on November 19, 2015.Anti-Takeover Effects of Certain Provisions of Our Articles of AssociationGeneralOur Articles of Association contain provisions that could have the effect of delaying, deterring or preventing another party from acquiring or seekingto acquire control of us. These provisions, as well as our ability to issue preferred shares, are designed to discourage certain types of coercive takeoverpractices and inadequate takeover bids. These provisions are also intended to encourage anyone seeking to acquire control of us to negotiate first with ourboard of directors. However, these provisions may also delay, deter or prevent a change in control or other takeovers of our company that our shareholdersmight consider to be in their best interests, including transactions that might result in a premium being paid over the market price of our ordinary shares andalso may limit the price that investors are willing to pay in the future for our ordinary shares. These provisions may also have the effect of preventing changesin our management. We believe that the benefits of increased protection give us the potential ability to negotiate with the proponent of an unfriendly orunsolicited proposal to acquire or restructure us, and that the benefits of this increased protection outweigh the disadvantages of discouraging thoseproposals, because negotiation of those proposals could result in an improvement of their terms. A description of these provisions is set forth below.Staggered Board of DirectorsOur Articles of Association provide for a staggered board of directors consisting of three classes of directors. Directors of each class are chosen for three-year terms upon the expiration of their current terms and each year one class of our directors will be elected by our shareholders. The terms of the Class I,Class II and Class III directors will expire in 2016, 2017 and 2018, respectively. Beginning in 2016, our shareholders will elect directors for three-year termsupon the expiration of their current terms. Our shareholders will elect only one class of directors each year. We believe that classification of our board ofdirectors will help to ensure the continuity and stability of our business strategies and policies as determined by our board of directors. There is nocumulative voting in the election of directors. As such, this classified board provision could have the effect of making the replacement of incumbent directorsmore time-consuming and difficult. At least two annual meetings of shareholders, instead of one, will generally be required to effect a change in a majority ofour board of directors. Thus, the classified board provision could increase the likelihood that incumbent directors will retain their positions. The staggeredterms of directors also may delay, defer or prevent a tender offer or an attempt to change control of us, even though a tender offer or change in control mightbe believed by our shareholders to be in their best interest.Issuance of Preferred SharesThe ability to authorize and issue preferred shares is vested in our board of directors, which makes it possible for our board of directors to issuepreferred shares with voting or other rights or preferences that could impede the success of any attempt to change control of us. These and other provisionsmay have the effect of deterring hostile takeovers or delaying changes in control or management of our company. 91 Table of ContentsNo Shareholder Action by Written ConsentOur Articles of Association provide that all shareholder actions are required to be taken by a vote of the shareholders at an annual or special meeting,and that shareholders may not take any action by written consent in lieu of a meeting. This limit may lengthen the amount of time required to takeshareholder actions and would prevent the amendment of our Articles of Association or Memorandum of Association or removal of directors by ourshareholders without holding a meeting of shareholders.Advance Notice ProcedureOur Articles of Association provide an advance notice procedure for shareholders to nominate director candidates for election, including proposednominations of persons for election to the board of directors. Subject to the rights of the holders of any series of preferred shares, only persons nominated by,or at the direction of, our board of directors or by a shareholder who has given proper and timely notice to our secretary prior to the meeting, will be eligiblefor election as a director. In addition, any proposed business other than the nomination of persons for election to our board of directors must constitute aproper matter for shareholder action pursuant to the notice of meeting delivered to us. For notice to be timely, it must be received by our secretary not lessthan 90 nor more than 120 calendar days prior to the first anniversary of the previous year’s annual meeting (or if the date of the annual meeting is advancedmore than 30 calendar days or delayed by more than 60 calendar days from such anniversary date, not earlier than the 120th calendar day nor more than 90days prior to such meeting or the 10th calendar day after public announcement of the date of such meeting is first made). These advance notice provisionsmay have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed or may discourage or deter a potentialacquirer from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempt to obtain control of us.Limitation of Liability of Directors and OfficersOur Articles of Association include provisions that indemnify, to the fullest extent allowable under Jersey law, the personal liability of directors orofficers for monetary damages for actions taken as our director or officer, or for serving at our request as a director or officer or another position at anothercorporation or enterprise, as the case may be. However, exculpation does not apply if the directors acted in bad faith, knowingly or intentionally violated thelaw, authorized illegal dividends or redemptions or derived an improper benefit from their actions as directors. We will also be expressly authorized toadvance certain reasonable expenses (including attorneys’ fees and disbursements and court costs) to our directors and officers and to carry directors’ andofficers’ insurance to protect us, our directors, officers and certain employees for some liabilities.We believe that the limitation of liability and indemnification provisions in our Articles of Association and the indemnification agreements willfacilitate our ability to continue to attract and retain qualified individuals to serve as directors and officers.Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the registrantpursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed inthe Securities Act and is therefore unenforceable.Other Jersey, Channel Islands Law ConsiderationsPurchase of Own SharesAs with declaring a dividend, we may not buy back or redeem our shares unless our directors who are to authorize the buyback or redemption havemade a statutory solvency statement that, immediately following the date on which the buyback or redemption is proposed, the company will be able todischarge its liabilities as they fall due and, having regard to prescribed factors, the company will be able to continue to carry on business and 92 Table of Contentsdischarge its liabilities as they fall due for the 12 months immediately following the date on which the buyback or redemption is proposed (or until thecompany is dissolved on a solvent basis, if earlier).If the above conditions are met, we may purchase shares in the manner described below.We may purchase on a stock exchange our own fully paid shares pursuant to a special resolution of our shareholders adopted in November 2015.We may purchase our own fully paid shares otherwise than on a stock exchange pursuant to a special resolution of our shareholders, but only if thepurchase is made on the terms of a written purchase contract which has been approved by an ordinary resolution of our shareholders. The shareholder fromwhom we propose to purchase or redeem shares is not entitled to take part in such shareholder vote in respect of the shares to be purchased.We may fund a redemption or purchase of our own shares from any source. We cannot purchase our shares if, as a result of such purchase, onlyredeemable shares would remain in issue.If authorized by a resolution of our shareholders, any shares that we redeem or purchase may be held by us as treasury shares. Any shares held by us astreasury shares may be cancelled, sold, transferred for the purposes of or under an employee share scheme or held without cancelling, selling or transferringthem. Shares redeemed or purchased by us are cancelled where we have not been authorized to hold these as treasury shares.Mandatory Purchases and AcquisitionsThe Jersey Companies Law provides that where a person has made an offer to acquire a class of all of our outstanding shares not already held by theperson and has as a result of such offer acquired or contractually agreed to acquire 90% or more of such outstanding shares, that person is then entitled (andmay be required) to acquire the remaining shares of such shares. In such circumstances, a holder of any such remaining shares may apply to the Jersey courtfor an order that the person making such offer not be entitled to purchase the holder’s shares or that the person purchase the holder’s shares on terms differentto those under which the person made such offer.Other than as described above and below under “U.K. City Code on Takeovers and Mergers,” we are not subject to any regulations under which ashareholder that acquires a certain level of share ownership is then required to offer to purchase all of our remaining shares on the same terms as suchshareholder’s prior purchase.Compromises and ArrangementsWhere we and our creditors or shareholders or a class of either of them propose a compromise or arrangement between us and our creditors or ourshareholders or a class of either of them (as applicable), the Jersey court may order a meeting of the creditors or class of creditors or of our shareholders orclass of shareholders (as applicable) to be called in such a manner as the court directs. Any compromise or arrangement approved by a majority in numberrepresenting 75% or more in value of the creditors or 75% or more of the voting rights of shareholders or class of either of them (as applicable) if sanctionedby the court, is binding upon us and all the creditors, shareholders or members of the specific class of either of them (as applicable).Whether the capital of the company is to be treated as being divided into a single or multiple class(es) of shares is a matter to be determined by thecourt. The court may in its discretion treat a single class of shares as multiple classes, or multiple classes of shares as a single class, for the purposes of theshareholder approval referred to above taking into account all relevant circumstances, which may include circumstances other than the rights attaching to theshares themselves. 93 Table of ContentsU.K. City Code on Takeovers and MergersThe U.K. City Code on Takeovers and Mergers, or the Takeover Code, applies, among other things, to an offer for a public company whose registeredoffice is in the Channel Islands and whose securities are not admitted to trading on a regulated market or a multilateral trading facility in the United Kingdomor any stock exchange in the Channel Islands or the Isle of Man if the company is considered by the Panel on Takeovers and Mergers, or the Takeover Panel,to have its place of central management and control in the United Kingdom or the Channel Islands or the Isle of Man (in each case, a “Code Company”). Thisis known as the “residency test.” Under the Takeover Code, the Takeover Panel will determine whether we have our place of central management and controlin the United Kingdom, the Channel Islands or the Isle of Man by looking at various factors, including the structure of our board of directors, the functions ofthe directors and where they are resident.The Takeover Code provides a framework within which takeovers of companies subject to it are conducted. In particular, the Takeover Code containscertain rules in respect of mandatory offers for Code Companies. Under Rule 9 of the Takeover Code, if a person: • acquires an interest in shares of a Code Company that, when taken together with shares in which persons acting in concert with such person areinterested, carry 30% or more of the voting rights of the Code Company; or • who, together with persons acting in concert with such person, is interested in shares that in the aggregate carry not less than 30% and not morethan 50% of the voting rights in the Code, acquires additional interests in shares that increase the percentage of shares carrying voting rights inwhich that person is interested,the acquirer, and, depending on the circumstances, its concert parties, would be required (except with the consent of the Takeover Panel) to make a cash offer(or provide a cash alternative) for the Code Company’s outstanding shares at a price not less than the highest price paid for any interests in the shares by theacquirer or its concert parties during the previous 12 months.We currently do not anticipate being subject to the Takeover Code, as we intend to have our place of central management and control outside of theUnited Kingdom, the Channel Islands or the Isle of Man, but may in the future become subject to it due to changes in the board’s composition, changes in theTakeover Panel’s interpretation of the Takeover Code or other events.Rights of Minority ShareholdersUnder Article 141 of the Jersey Companies Law, a shareholder may apply to court for relief on the grounds that the conduct of our affairs, including aproposed or actual act or omission by us, is “unfairly prejudicial” to the interests of our shareholders generally or of some part of our shareholders, includingat least the shareholder making the application. What amounts to unfair prejudice is not defined in the Jersey Companies Law. There may also be commonlaw personal actions available to our shareholders.Under Article 143 of the Jersey Companies Law (which sets out the types of relief a court may grant in relation to an action brought under Article 141of the Jersey Companies Law), the court may make an order regulating our affairs, requiring us to refrain from doing or continuing to do an act complained of,authorizing civil proceedings and providing for the purchase of shares by us or by any of our other shareholders. 94 Table of ContentsDifferences in Corporate LawSet forth below is a comparison of certain shareholder rights and corporate governance matters under Delaware law and Jersey law: Corporate Law Issue Delaware Law Jersey LawSpecial Meetings of Shareholders Shareholders generally do not have the right tocall meetings of shareholders unless that right isgranted in the certificate of incorporation or by-laws. However, if a corporation fails to hold itsannual meeting within a period of 30 days afterthe date designated for the annual meeting, or ifno date has been designated for a period of 13months after its last annual meeting, theDelaware Court of Chancery may order ameeting to be held upon the application of ashareholder. Shareholders holding 10% or more of thecompany’s voting rights and entitled to vote atthe relevant meeting may legally require ourdirectors to call a meeting of shareholders. The Jersey Financial Services Commission, orJFSC, may, at the request of any officer,secretary or shareholder, call or direct thecalling of an annual general meeting. Failureto call an annual general meeting inaccordance with the requirements of the JerseyCompanies Law is a criminal offense on thepart of a Jersey company and its directors andsecretary.Interested Director Transactions Interested director transactions are permissibleand may not be legally voided if: • either a majority of disinterested directors,or a majority in interest of holders of sharesof the corporation’s capital stock entitled tovote upon the matter, approves thetransaction upon disclosure of all materialfacts; or • the transaction is determined to have beenfair as to the corporation as of the time it isauthorized, approved or ratified by theboard of directors, a committee thereof orthe shareholders. An interested director must disclose to thecompany the nature and extent of any interestin a transaction with the company, or one of itssubsidiaries, which to a material extentconflicts or may conflict with the interests ofthe company and of which the director isaware. Failure to disclose an interest entitlesthe company or a shareholder to apply to thecourt for an order setting aside the transactionconcerned and directing that the directoraccount to the company for any profit. A transaction is not voidable and a director isnot accountable notwithstanding a failure todisclose an interest if the transaction isconfirmed by special resolution and the natureand extent of the director’s interest in thetransaction are disclosed in reasonable detailin the notice calling the meeting at which theresolution is passed. 95 Table of ContentsCorporate Law Issue Delaware Law Jersey Law Although it may still order that a directoraccount for any profit, a court will not set asidea transaction unless it is satisfied that theinterests of third parties who have acted ingood faith would not thereby be unfairlyprejudiced and the transaction was notreasonable and fair in the interests of thecompany at the time it was entered into.Cumulative Voting The certificate of incorporation of a Delawarecorporation may provide that shareholders ofany class or classes or of any series may votecumulatively either at all elections or atelections under specified circumstances. There are no provisions in the JerseyCompanies Law relating to cumulative voting.Approval of Corporate Matters by Written Consent Unless otherwise specified in a corporation’scertificate of incorporation, shareholders maytake action permitted to be taken at an annual orspecial meeting, without a meeting, notice or avote, if consents, in writing, setting forth theaction, are signed by shareholders with not lessthan the minimum number of votes that wouldbe necessary to authorize the action at ameeting. All consents must be dated and areonly effective if the requisite signatures arecollected within 60 days of the earliest datedconsent delivered. If permitted by the articles of association of acompany, a written consent signed and passedby the specified majority of members mayeffect any matter that otherwise may bebrought before a shareholders’ meeting, exceptfor the removal of a company’s auditors. Suchconsent shall be deemed effective when theinstrument, or the last of several instruments, issigned by the specified majority of members oron such later date as is specified in theresolution.Business Combinations With certain exceptions, a merger, consolidationor sale of all or substantially all of the assets of aDelaware corporation must be approved by theboard of directors and a majority of theoutstanding shares entitled to vote thereon. A sale or disposal of all or substantially all theassets of a Jersey company must be approvedby the board of directors and, only if thearticles of association of the company require,by the shareholders in general meeting. Amerger involving a Jersey company must begenerally documented in a merger agreementwhich must be approved by special resolutionof that company. 96 Table of ContentsCorporate Law Issue Delaware Law Jersey LawLimitations on Director’s Liability andIndemnification of Directors and Officers A Delaware corporation may include in itscertificate of incorporation provisions limitingthe personal liability of its directors to thecorporation or its shareholders for monetarydamages for many types of breach of fiduciaryduty. However, these provisions may not limitliability for any breach of the duty of loyalty,acts or omissions not in good faith or thatinvolve intentional misconduct or a knowingviolation of law, the authorization of unlawfuldividends, stock purchases or redemptions, orany transaction from which a director derived animproper personal benefit. Moreover, theseprovisions would not be likely to bar claimsarising under U.S. federal securities laws. A Delaware corporation may indemnify adirector or officer of the corporation againstexpenses (including attorneys’ fees), judgments,fines and amounts paid in settlement actuallyand reasonably incurred in defense of an action,suit or proceeding by reason of his or herposition if (i) the director or officer acted ingood faith and in a manner he or she reasonablybelieved to be in or not opposed to the bestinterests of the corporation and (ii) with respectto any criminal action or proceeding, thedirector or officer had no reasonable cause tobelieve his or her conduct was unlawful. The Jersey Companies Law does not containany provision permitting Jersey companies tolimit the liabilities of directors for breach offiduciary duty. However, a Jersey company may exempt fromliability, and indemnify directors and officersfor, liabilities: • incurred in defending any civil orcriminal legal proceedings where: • the person is either acquitted or receives ajudgment in their favor; • where the proceedings are discontinuedother than by reason of such person (orsomeone on their behalf) giving somebenefit or suffering some detriment; or • where the proceedings are settled on termsthat such person (or someone on theirbehalf) gives some benefit or suffers somedetriment but in the opinion of a majorityof the disinterested directors, the personwas substantially successful on the meritsin the person’s resistance to theproceedings; • incurred to anyone other than to thecompany if the person acted in good faithwith a view to the best interests of thecompany; • incurred in connection with anapplication made to the court for relieffrom liability for negligence, default,breach of duty or breach of trust underArticle 212 of the Jersey Companies Lawin which relief is granted to the person bythe court; or • incurred in a case in which the companynormally maintains insurance for personsother than directors. 97 Table of ContentsCorporate Law Issue Delaware Law Jersey LawAppraisal Rights A shareholder of a Delaware corporationparticipating in certain major corporatetransactions may, under certain circumstances,be entitled to appraisal rights under which theshareholder may receive cash in the amount ofthe fair value of the shares held by thatshareholder (as determined by a court) in lieu ofthe consideration the shareholder wouldotherwise receive in the transaction. No appraisal rights.Shareholder Suits Class actions and derivative actions generallyare available to the shareholders of a Delawarecorporation for, among other things, breach offiduciary duty, corporate waste and actions nottaken in accordance with applicable law. In suchactions, the court has discretion to permit thewinning party to recover attorneys’ fees incurredin connection with such action. Under Article 141 of the Jersey CompaniesLaw, a shareholder may apply to court for reliefon the ground that the conduct of a company’saffairs, including a proposed or actual act oromission by a company, is “unfairlyprejudicial” to the interests of shareholdersgenerally or of some part of shareholders,including at least the shareholder making theapplication. There may also be customary law personalactions available to shareholders. UnderArticle 143 of the Jersey Companies Law(which sets out the types of relief a court maygrant in relation to an action brought underArticle 141 of the Jersey Companies Law), thecourt may make an order regulating the affairsof a company, requiring a company to refrainfrom doing or continuing to do an actcomplained of, authorizing civil proceedingsand providing for the purchase of shares by acompany or by any of its other shareholders.Inspection of Books and Records All shareholders of a Delaware corporation havethe right, upon written demand, to inspect orobtain copies of the corporation’s shares ledgerand its other books and records for any purposereasonably related to such person’s interest as ashareholder. The register of shareholders and bookscontaining the minutes of general meetings orof meetings of any class of shareholders of aJersey company must during business hours beopen to the inspection of a shareholder of thecompany without charge. The register ofdirectors and 98 Table of ContentsCorporate Law Issue Delaware Law Jersey Law secretaries must during business hours (subjectto such reasonable restrictions as the companymay by its articles of association or in generalmeeting impose, but so that not less than twohours in each business day be allowed forinspection) be open to the inspection of ashareholder or director of the company withoutcharge.Amendments to Charter Amendments to the certificate of incorporationof a Delaware corporation require the affirmativevote of the holders of a majority of theoutstanding shares entitled to vote thereon orsuch greater vote as is provided for in thecertificate of incorporation. A provision in thecertificate of incorporation requiring the vote ofa greater number or proportion of the directors orof the holders of any class of shares than isrequired by Delaware corporate law may not beamended, altered or repealed except by suchgreater vote. The memorandum of association and articles ofassociation of a Jersey company may only beamended by special resolution (being a two-third majority if the articles of association ofthe company do not specify a greater majority)passed by shareholders in general meeting orby written resolution signed by all theshareholders entitled to vote.C. Material ContractsIn July 2014, we amended our loan agreement with Silicon Valley Bank to increase the amounts available under our revolving credit facility and toenter into a second fixed interest rate term loan. For more information about this agreement, see footnote “5. Debt” in our audited consolidated financialstatements included with this Annual Report.We entered into an underwriting agreement between us and Goldman, Sachs & Co. as representative of the underwriters, on November 18, 2015, withrespect to the ordinary shares sold in our initial public offering. We have agreed to indemnify the underwriters against certain liabilities, including liabilitiesunder the Securities Act, and to contribute to payments the underwriters may be required to make in respect of such liabilities.D. Exchange ControlsNot applicable.E. Taxation 99 Table of ContentsJersey Tax ConsiderationsThe following summary of the anticipated tax treatment in Jersey of the holders of ordinary shares (other than holders of ordinary shares resident inJersey) is based on Jersey taxation law as it is understood to apply at the date of this document. It does not constitute legal or tax advice. Holders ofordinary shares should consult their professional advisers on the implications of acquiring, holding or disposing of ordinary shares under the laws of thejurisdictions(s) in which they may be liable to taxation. Holders of ordinary shares should also be aware that tax laws, rules and practice and theirinterpretation may change.Our affairs are, and are intended to continue to be, managed and controlled in the United Kingdom for tax purposes and therefore we are resident in theUnited Kingdom for U.K. and Jersey tax purposes.We are not regarded as resident for tax purposes in Jersey, Channel Islands. On that basis, we are not subject to income tax in Jersey. However, if wederive any income from the renting or development of land in Jersey or the importation and supply of hydrocarbon oil into Jersey, such income will besubject to tax at the rate of 20%. It is not expected that we will derive any such income.Withholding taxDividends on ordinary shares may be paid by us without withholding or deduction for or on account of Jersey income tax and holders of ordinaryshares (other than residents of Jersey) will not be subject to any tax in Jersey in respect of the holding, sale or other disposition of such ordinary shares.Save as regards Austria, the Taxation (Agreements with European Union Member States)(Jersey) Regulations 2005 (the “Regulations”) were suspendedon 18 January 2016 pursuant to the Taxation (Agreements with European Union Member States)(Suspension of Regulations)(Jersey) Order 2016. TheRegulations continue in effect until 31 December 2016 as regards Austria.A paying agent established in Jersey that makes “interest payments” (as defined in the Regulations) to an individual beneficial owner resident inAustria prior to 1 January 2017 is obliged to communicate details of such payments to the Comptroller of Taxes in Jersey who will pass on such details to thetax authorities in Austria.Goods and Services TaxJersey charges a tax on goods and services supplied in the Island (which we refer to as GST). We are an “international services entity” for the purposesof the Goods and Services Tax (Jersey) Law 2007 (the “GST Law”) and consequently, we are not required to: (i)register as a taxable person pursuant to the GST Law; (ii)charge goods and services tax in Jersey in respect of any supply made by us; or (iii)subject to limited exceptions that are not expected to apply to us, pay goods and services tax in Jersey in respect of any supply made to us.Stamp DutyIn Jersey, no stamp duty is levied on the issue or transfer of the ordinary shares except that stamp duty is payable on Jersey grants of probate and lettersof administration, which will generally be required to transfer ordinary shares on the death of a holder of such ordinary shares to the extent such ordinaryshares are deemed to be movable property in Jersey. In the case of a grant of probate or letters of administration, stamp duty is levied according to the size ofthe estate (wherever situated in respect of a holder of ordinary shares domiciled in Jersey, or situated in Jersey in respect of a holder of ordinary sharesdomiciled outside Jersey) and is payable on a sliding scale at a rate of up to 0.75% of such estate. 100 Table of ContentsJersey does not otherwise levy taxes upon capital, inheritances, capital gains or gifts nor are there other estate duties.U.K. Tax ConsiderationsThe following statements are a general guide to certain aspects of current U.K. tax law and the current published practice of HM Revenue andCustoms, both of which are subject to change, possibly with retrospective effect.The following statements are intended to apply to holders of ordinary shares who are only resident for tax purposes in the U.K., who hold theordinary shares as investments and who are the beneficial owners of the ordinary shares. The statements may not apply to certain classes of holders ofordinary shares, such as dealers in securities and persons acquiring ordinary shares in connection with their employment. Prospective investors in ordinaryshares who are in any doubt as to their tax position regarding the acquisition, ownership and disposition of the ordinary shares should consult their owntax advisers.Withholding taxWe will not be required to deduct or withhold U.K. tax at source from dividend payments we make.Stamp duty and stamp duty reserve taxNo stamp duty reserve tax will be payable on the issue of the ordinary shares or on any transfer of our ordinary shares, provided that the ordinary sharesare not registered in a register kept in the United Kingdom. It is not intended that such a register will be kept in the United Kingdom.No stamp duty will be payable on the issue of the ordinary shares by us. No stamp duty will be payable on a transfer of our ordinary shares providedthat (i) any instrument of transfer is not executed inside the United Kingdom, and (ii) such instrument of transfer does not relate to any property situated, orany matter or thing done or to be done, in the United Kingdom.DividendsIndividualsPlease note that significant changes to the UK taxation of dividends for individual holders have taken effect on April 6, 2016. What follows is asummary of the rules in effect prior to April 6, 2016. Please see the following section titled “Changes to taxation of dividends for individuals” for moreinformation.An individual holder who receives a dividend from us will be entitled to a tax credit which may be set off against his total income tax liability on thedividend. Such an individual holder’s liability to income tax is calculated on the aggregate of the dividend (the “declared dividend”) and the tax credit (suchaggregate being the “gross dividend”) which will be regarded as the top slice of the individual’s income. The tax credit will be equal to 10% (2015/16) of thegross dividend (i.e. the tax credit will be one-ninth of the amount of the dividend).An individual holder who is not liable to income tax in respect of the dividend will not be entitled to reclaim any part of the tax credit. An individualholder who is liable to income tax at the basic rate will be subject to income tax on the dividend at the rate of 10% (2015/16) of the gross dividend so that thetax credit will satisfy in full such holder’s liability to income tax on the dividend.An individual holder liable to income tax at the higher rate will be subject to income tax on the gross dividend at 32.5% (2015/16) of the grossdividend, but will be able to set the tax credit off against part of this liability. The effect of the set off of the U.K. tax credit is that such a holder will have toaccount for additional tax equal to 25% of the declared dividend. 101 Table of ContentsAn individual holder liable to income tax at the additional rate will be subject to income tax on the gross dividend at 37.5% (2015/16) of the grossdividend, but will be able to set the tax credit off against part of this liability. The effect of that set off of the U.K. tax credit is that such a holder will have toaccount for additional tax equal to approximately 30.6% of the declared dividend.Changes to taxation of dividends for individualsOn April 6, 2016, legislation became effective, and was implemented, to abolish the dividend tax credit for individuals. The dividend tax credit hasbeen replaced with a new tax-free allowance of £5,000 in dividend income per tax year. Dividend income in excess of the tax-free allowance will be taxed atthe following rates: (i)7.5% (basic rate taxpayers); (ii)32.5% (high rate taxpayers); and (iii)38.1% (additional rate taxpayers).The new legislation is part of the Finance Bill 2016.Corporate shareholders within the charge to U.K. corporation taxHolders of ordinary shares within the charge to U.K. corporation tax which are “small companies” for the purposes of Chapter 2 of Part 9A of theCorporation Tax Act 2009 (for the purposes of U.K. taxation of dividends) will not be subject to U.K. corporation tax on any dividend received from usprovided certain conditions are met (including an anti-avoidance condition).Other holders within the charge to U.K. corporation tax will not normally be subject to tax on dividends from us.If the conditions for exemption are not met or cease to be satisfied, or such a holder elects for an otherwise exempt dividend to be taxable, the holderwill be subject to U.K. corporation tax on dividends received from us, at the rate of corporation tax applicable to that holder.A corporate holder resident in the U.K. who is not liable to tax on dividends from us will not be entitled to reclaim any part of the tax credit.Capital gainsIndividualsFor individual holders, the principal factors that will determine the U.K. capital gains tax position on a disposal or deemed disposal of ordinary sharesare the extent to which the holder realizes any other capital gains in the U.K. tax year in which the disposal is made, the extent to which the holder hasincurred capital losses in that or earlier U.K. tax years, and the level of the annual allowance of tax-free gains in that U.K. tax year (the “annual exemption”).The annual exemption for the 2015/2016 U.K. tax year is £11,100.If, after all allowable deductions, an individual holder’s taxable income for the year exceeds the basic rate U.K. income tax limit, a taxable chargeablegain accruing on a disposal or deemed disposal of the ordinary shares would be taxed at 28%. Otherwise, such a gain may be taxed at 18% or 28% or acombination of both rates.CompaniesA disposal or deemed disposal of ordinary shares by a holder within the charge to U.K. corporation tax may give rise to a chargeable gain or allowableloss for the purposes of U.K. corporation tax, depending on the 102 Table of Contentscircumstances and subject to any available exemptions or reliefs. Corporation tax is charged on chargeable gains at the rate applicable to that company.Holders within the charge to U.K. corporation tax will, for the purposes of computing chargeable gains, be allowed to claim an indexation allowance whichapplies to reduce capital gains (but not to create or increase an allowable loss) to the extent that such gains arise due to inflation.Certain Material U.S. Federal Income Tax ConsiderationsThe following is a summary of certain material U.S. federal income tax considerations relating to the acquisition, ownership and disposition of ourordinary shares by a U.S. holder (as defined below). This summary addresses only the U.S. federal income tax considerations for U.S. holders that hold suchordinary shares as capital assets. This summary does not address all U.S. federal income tax matters that may be relevant to a particular U.S. holder. Thissummary does not address tax considerations applicable to a holder of ordinary shares that may be subject to special tax rules including, without limitation,the following: • banks, financial institutions or insurance companies; • brokers, dealers or traders in securities, currencies, commodities, or notional principal contracts; • tax-exempt entities or organizations, including an “individual retirement account” or “Roth IRA” as defined in Section 408 or 408A of the Code(as defined below), respectively; • real estate investment trusts, regulated investment companies or grantor trusts; • persons that hold the ordinary shares as part of a “hedging,” “integrated” or “conversion” transaction or as a position in a “straddle” for U.S.federal income tax purposes; • partnerships (including entities classified as partnerships for U.S. federal income tax purposes) or other pass-through entities, or persons that willhold our shares through such an entity; • S corporations; • certain former citizens or long term residents of the United States; • persons that received our shares as compensation for the performance of services; • persons that acquire ordinary shares as a result of holding or owning our preferred shares; • holders that own directly, indirectly, or through attribution 10% or more of the voting power or value our shares; and • holders that have a “functional currency” other than the U.S. dollar.Further, this summary does not address the U.S. federal estate, gift, or alternative minimum tax considerations, or any U.S. state, local, or non-U.S. taxconsiderations of the acquisition, ownership and disposition of our ordinary shares.This description is based on the U.S. Internal Revenue Code of 1986, as amended, or the Code, existing, proposed and temporary U.S. TreasuryRegulations promulgated thereunder and administrative and judicial interpretations thereof, in each case as in effect and available on the date hereof. All theforegoing is subject to change, which change could apply retroactively, and to differing interpretations, all of which could affect the tax considerationsdescribed below. There can be no assurances that the U.S. Internal Revenue Service, or the IRS, will not take a position concerning the tax consequences ofthe acquisition, ownership and disposition of our ordinary shares or that such a position would not be sustained.For the purposes of this summary, a “U.S. holder” is a beneficial owner of ordinary shares that is (or is treated as), for U.S. federal income tax purposes: • a citizen or resident of the United States; 103 Table of Contents • a corporation, or other entity that is treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of theUnited States, any state thereof, or the District of Columbia; • an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or • a trust, if a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have theauthority to control all of the substantial decisions of such trust or has a valid election in effect under applicable U.S. Treasury Regulations to betreated as a United States person.If a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes) holds ordinary shares, the U.S. federal income taxconsequences relating to an investment in our ordinary shares will depend in part upon the status of the partner and the activities of the partnership. Such apartner or partnership should consult its tax advisor regarding the U.S. federal income tax considerations of acquiring, owning and disposing of our ordinaryshares in its particular circumstances.As indicated below, this discussion is subject to U.S. federal income tax rules applicable to a “passive foreign investment company,” or a PFIC.The following summary is of a general nature only and is not a substitute for careful tax planning and advice. Persons considering an investmentin our ordinary shares should consult their own tax advisors as to the particular tax consequences applicable to them relating to the acquisition,ownership and disposition of our ordinary shares, including the applicability of U.S. federal, state and local tax laws and non-U.S. tax laws.Distributions. Subject to the discussion under “Passive Foreign Investment Company Considerations,” below, the gross amount of any distributionactually or constructively received by a U.S. holder with respect to ordinary shares will be taxable to the U.S. holder as a dividend to the extent of our currentand accumulated earnings and profits as determined under U.S. federal income tax principles. Distributions in excess of earnings and profits will be non-taxable to the U.S. holder to the extent of, and will be applied against and reduce, the U.S. holder’s adjusted tax basis in the ordinary shares. Distributions inexcess of earnings and profits and such adjusted tax basis will generally be taxable to the U.S. holder as either long-term or short-term capital gain dependingupon whether the U.S. holder has held our ordinary shares for more than one year as of the time such distribution is received. However, since we do notcalculate our earnings and profits under U.S. federal income tax principles, it is expected that any distribution will be reported as a dividend, even if thatdistribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above. Non-corporate U.S. holders mayqualify for the preferential rates of taxation with respect to dividends on ordinary shares applicable to long-term capital gains (i.e., gains from the sale ofcapital assets held for more than one year) applicable to qualified dividend income (as discussed below).In general, the amount of a distribution paid to a U.S. holder in a foreign currency will be the dollar value of the foreign currency calculated byreference to the spot exchange rate on the day the U.S. holder receives the distribution, regardless of whether the foreign currency is converted into U.S.dollars at that time. Any foreign currency gain or loss a U.S. holder realizes on a subsequent conversion of foreign currency into U.S. dollars will be U.S.source ordinary income or loss. If dividends received in a foreign currency are converted into U.S. dollars on the day they are received, a U.S. holder shouldnot be required to recognize foreign currency gain or loss in respect of the dividend.Sale, Exchange or Other Taxable Disposition of Our Ordinary Shares. Subject to the discussion below under “Passive Foreign Investment CompanyConsiderations,” a U.S. holder will generally recognize gain or loss for U.S. federal income tax purposes upon the sale, exchange or other taxable dispositionof ordinary shares in an amount equal to the difference between the U.S. dollar value of the amount realized from such sale or exchange 104 Table of Contentsand the U.S. holder’s tax basis for those ordinary shares. Subject to the discussion under “Passive Foreign Investment Company Considerations” below, thisgain or loss will generally be a capital gain or loss and will generally be treated as from sources within the United States. The adjusted tax basis in an ordinaryshare generally will be equal to the cost of such ordinary share. Capital gain from the sale, exchange or other taxable disposition of ordinary shares of a non-corporate U.S. holder is generally eligible for a preferential rate of taxation applicable to capital gains, if the non-corporate U.S. holder’s holding perioddetermined at the time of such sale, exchange or other taxable disposition for such ordinary shares exceeds one year (i.e., such gain is long-term taxable gain).The deductibility of capital losses for U.S. federal income tax purposes is subject to limitations under the Code. Any such gain or loss that a U.S. holderrecognizes generally will be treated as U.S. source income or loss for foreign tax credit limitation purposes.Medicare Tax. Certain U.S. holders that are individuals, estates or trusts are subject to a 3.8% tax on all or a portion of their “net investment income,”which may include all or a portion of their dividend income and net gains from the disposition of ordinary shares. Each U.S. holder that is an individual,estate or trust is urged to consult its tax advisors regarding the applicability of the Medicare tax to its income and gains in respect of its investment in ourordinary shares.Passive Foreign Investment Company Considerations. If we are classified as a passive foreign investment company, or PFIC, in any taxable year, a U.S.holder would be subject to special rules generally intended to reduce or eliminate any benefits from the deferral of U.S. federal income tax that a U.S. holdercould derive from investing in a non-U.S. company that does not distribute all of its earnings on a current basis.A corporation organized outside the United States generally will be classified as a PFIC for U.S. federal income tax purposes in any taxable year inwhich, after applying certain look-through rules with respect to the income and assets of its subsidiaries, either: (i) at least 75% of its gross income is “passiveincome” or (ii) at least 50% of the average quarterly value of its total gross assets (which, assuming we are not a CFC for the year being tested, would bemeasured by fair market value of the assets, and for which purpose the total value of our assets may be determined in part by the market value of our ordinaryshares, which is subject to change) is attributable to assets that produce “passive income” or are held for the production of “passive income.”Passive income for this purpose generally includes dividends, interest, royalties, rents, gains from commodities and securities transactions and theexcess of gains over losses from the disposition of assets which produce passive income, and also includes amounts derived by reason of the temporaryinvestment of funds raised in offerings of our ordinary shares. If a non-U.S. corporation owns directly or indirectly at least 25% by value of the stock ofanother corporation, the non-U.S. corporation is treated for purposes of the PFIC tests as owning its proportionate share of the assets of the other corporationand as receiving directly its proportionate share of the other corporation’s income. If we are classified as a PFIC in any year with respect to which a U.S.holder owns our ordinary shares, we will continue to be treated as a PFIC with respect to such U.S. holder in all succeeding years during which the U.S. holderowns our ordinary shares, regardless of whether we continue to meet the tests described above, unless (i) we cease to be a PFIC and (ii) the U.S. holder makes a“deemed sale” election under PFIC rules.We believe that we were not a PFIC during our 2015 taxable year and do not expect to be a PFIC during our 2016 taxable year. Our status for anytaxable year will depend on our assets and activities in each year, and because this is a factual determination made annually after the end of each taxableyear, there can be no assurance that we will not be considered a PFIC for the current taxable year or any future taxable year. The market value of our assetsmay be determined in large part by reference to the market price of our ordinary shares, which is likely to fluctuate. In addition, the composition of ourincome and assets will be affected by how, and how quickly, we use the cash proceeds from our initial public offering and any subsequent offerings in ourbusiness. Further, even if we determine that we are not a PFIC after the close of our taxable year, there can be no assurances that the IRS will agree with ourconclusion. 105 Table of ContentsIf we are a PFIC, then unless a U.S. holder makes one of the elections described below, a special tax regime will apply to both (a) any “excessdistribution” by us to such U.S. holder (generally, the U.S. holder’s ratable portion of distributions in any year which are greater than 125% of the averageannual distribution received by the U.S. holder in the shorter of the three preceding years or the U.S. holder’s holding period for our ordinary shares) and(b) any gain realized on the sale or other disposition of the ordinary shares. Under this regime, any excess distribution and realized gain will be treated asordinary income and will be subject to tax as if (a) the excess distribution or gain had been realized ratably over the U.S. holder’s holding period, (b) theamount deemed realized in each year had been subject to tax in each year of that holding period at the highest marginal rate for such year (other than incomeallocated to the current period or any taxable period before we became a PFIC, which would be subject to tax at the U.S. holder’s regular ordinary income ratefor the current year and would not be subject to the interest charge discussed below), and (c) the interest charge generally applicable to underpayments of taxhad been imposed on the taxes deemed to have been payable in those years. In addition, dividend distributions made to the U.S. holder will not qualify forthe lower rates of taxation applicable to long-term capital gains discussed above under “Distributions.”Certain elections exist that may alleviate some of the adverse consequences of PFIC status and would result in an alternative treatment (such as mark-to-market treatment) of our ordinary shares. If a U.S. holder makes the mark-to-market election, the U.S. holder generally will recognize as ordinary incomeany excess of the fair market value of the ordinary shares at the end of each taxable year over their adjusted tax basis, and will recognize an ordinary loss inrespect of any excess of the adjusted tax basis of the ordinary shares over their fair market value at the end of the taxable year (but only to the extent of thenet amount of income previously included as a result of the mark-to-market election). If a U.S. holder makes the election, the U.S. holder’s tax basis in theordinary shares will be adjusted to reflect these income or loss amounts. Any gain recognized on the sale or other disposition of ordinary shares in a yearwhen we are a PFIC will be treated as ordinary income and any loss will be treated as an ordinary loss (but only to the extent of the net amount of incomepreviously included as a result of the mark-to-market election). The mark-to-market election is available only if we are a PFIC and our ordinary shares are“regularly traded” on a “qualified exchange.” Our ordinary shares will be treated as “regularly traded” in any calendar year in which more than a de minimisquantity of the ordinary shares are traded on a qualified exchange on at least 15 days during each calendar quarter (subject to the rule that trades that have asone of their principle purposes the meeting of the trading requirement are disregarded). The NASDAQ Global Select Market is a qualified exchange for thispurpose and, consequently, if the ordinary shares are regularly traded, the mark-to-market election will be available to a U.S. holder.We do not currently intend to provide the information necessary for U.S. holders to make qualified electing fund elections if we were treated as a PFICfor any taxable year. U.S. holders should consult their tax advisors to determine whether any of these elections would be available and if so, what theconsequences of the alternative treatments would be in their particular circumstances.If we are determined to be a PFIC, the general tax treatment for U.S. holders described in this section would apply to indirect distributions and gainsdeemed to be realized by U.S. holders in respect of any of our subsidiaries that also may be determined to be PFICs.If a U.S. holder owns ordinary shares during any taxable year in which we are a PFIC and the U.S. holder recognizes gain on a disposition of ourordinary shares, receives distributions with respect to our ordinary shares, or has made a mark-to-market election with respect to our ordinary shares the U.S.holder generally will be required to file an IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or QualifiedElecting Fund) with respect to the company, generally with the U.S. holder’s federal income tax return for that year. In addition, in general, a U.S. person whois shareholder of a PFIC is required to file an IRS Form 8621 annually to report information regarding such person’s PFIC shares if on the last day of theshareholder’s taxable year the aggregate value of all stock owned directly or indirectly by the shareholder exceeds $25,000 ($50,000 for joint filers), or forstock owned indirectly through another PFIC exceeds $5,000. If a U.S. person holds an interest in 106 Table of Contentsa domestic partnership (or a domestic entity or arrangement treated as a partnership for U.S. federal income tax purposes) or an S corporation that ownsinterest in a PFIC, as long as the partnership or S corporation itself has filed the form and has made a qualified electing fund or mark-to-market election, themembers of the partnership aren’t required to file the IRS Form 8621. If our company were a PFIC for a given taxable year, then U.S. holders should consulttheir tax advisor concerning their annual filing requirements.The U.S. federal income tax rules relating to PFICs are complex. Prospective U.S. holders are urged to consult their own tax advisers with respectto the acquisition, ownership and disposition of our ordinary shares, the consequences to them of an investment in a PFIC, any elections available withrespect to our ordinary shares and the IRS information reporting obligations with respect to the acquisition, ownership and disposition of our ordinaryshare.Backup Withholding and Information Reporting. U.S. holders generally will be subject to information reporting requirements with respect to dividendson ordinary shares and on the proceeds from the sale, exchange or disposition of ordinary shares that are paid within the United States or through U.S.-relatedfinancial intermediaries, unless the U.S. holder is an “exempt recipient.” In addition, U.S. holders may be subject to backup withholding on such payments,unless the U.S. holder provides a taxpayer identification number and a duly executed IRS Form W-9 or otherwise establishes an exemption. Backupwithholding is not an additional tax, and the amount of any backup withholding will be allowed as a credit against a U.S. holder’s U.S. federal income taxliability and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.Certain Reporting Requirements With Respect to Payments of Offer Price. U.S. holders paying more than $100,000 for our ordinary shares generallymay be required to file IRS Form 926 reporting the payment of the offer price for our ordinary shares to us. Substantial penalties may be imposed upon a U.S.holder that fails to comply. Each U.S. holder should consult its own tax advisor as to the possible obligation to file IRS Form 926.Foreign Asset Reporting. Certain U.S. holders who are individuals are required to report information relating to an interest in our ordinary shares,subject to certain exceptions (including an exception for shares held in accounts maintained by U.S. financial institutions) by filing IRS Form 8938(Statement of Specified Foreign Financial Assets) with their U.S. federal income tax return. An asset with respect to which an IRS Form 8621 has been fileddoes not have to be reported on IRS Form 8938, however, U.S. holders are urged to consult their tax advisors regarding their information reportingobligations, if any, with respect to their ownership and disposition of our ordinary shares.THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT MAY BE OF IMPORTANCE TOA PROSPECTIVE INVESTOR. EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAXCONSEQUENCES TO IT OF AN INVESTMENT IN ORDINARY SHARES IN LIGHT OF THE INVESTOR’S OWN CIRCUMSTANCES.F. Dividends and Paying AgentsNot applicable.G. Statements by ExpertsNot applicable.H. Documents On DisplayWe are subject to the reporting requirements of foreign private issuers under the U.S. Securities Exchange Act of 1934. Pursuant to the Exchange Act,we file reports with the SEC, including this Annual Report on Form 20-F. We also submit reports to the SEC, including Form 6-K Reports of Foreign PrivateIssuers. You may read 107 Table of Contentsand copy such reports at the SEC’s public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may call the SEC at 1-800-SEC-0330 for further information about the Public Reference Room. Such reports are also available to the public on the SEC’s website at www.sec.gov. Some ofthis information may also be found on our website at www.investors.mimecast.com.You may request copies of our reports, at no cost, by writing to or telephoning us as follows:Mimecast LimitedAttention: Robert Sanders480 Pleasant StreetWatertown, MA 02472Telephone: 617-393-7050I. Subsidiary InformationNot applicable.ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKMarket risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our marketrisk exposure is primarily a result of fluctuations in foreign currency rates, although we also have some exposure due to potential changes in inflation orinterest rates. We do not hold financial instruments for trading purposes.Foreign Currency RiskOur results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in theBritish pound and South African rand. Percentage of revenues and expenses in foreign currency is as follows: Year ended March 31, 2016 2015 2014 Revenues generated in locations outside the United States 57% 62% 66% Revenues in currencies other than the United States dollar 56% 61% 65% Expenses in currencies other than the United States dollar 55% 62% 61% Percentage of revenues and expenses denominated in foreign currency for the years ended March 31, 2016, 2015 and 2014: Year ended March 31, 2016 Revenues Expenses British pound 37% 45% South African Rand 16% 6% Other currencies 3% 4% Total 56% 55% Year ended March 31, 2015 Revenues Expenses British pound 40% 50% South African Rand 19% 10% Other currencies 2% 2% Total 61% 62% 108 Table of Contents Year ended March 31, 2014 Revenues Expenses British pound 42% 50% South African Rand 21% 9% Other currencies 2% 2% Total 65% 61% As of March 31, 2016 and 2015, we had $20.9 million and $16.5 million, respectively, of receivables denominated in currencies other than the U.S.dollar. We also maintain cash accounts denominated in currencies other than the local currency, which exposes us to foreign exchange rate movements. As ofMarch 31, 2016 and 2015, we had $17.6 million and $17.1 million, respectively, of cash denominated in currencies other than the U.S. dollar. As ofMarch 31, 2016, cash denominated in British pounds and South African rand was $14.0 million and $2.1 million, respectively. As of March 31, 2015, cashdenominated in British pounds and South African rand was $13.7 million and $2.4 million, respectively.In addition, although our foreign subsidiaries have intercompany accounts that are eliminated upon consolidation, these accounts expose us to foreigncurrency exchange rate fluctuations. Exchange rate fluctuations on short-term intercompany accounts are recorded in our consolidated statements ofoperations under “foreign exchange (expense) income.”Currently, our largest foreign currency exposures are the British pound and South African rand. Relative to foreign currency exposures existing atMarch 31, 2016, significant movements in foreign currency exchange rates would expose us to significant losses in earnings or cash flows or significantlydiminish the fair value of our foreign currency financial instruments. For the year ended March 31, 2016, we estimate that a 10% decrease in foreign currencyexchange rates against the U.S. dollar would have decreased revenue by $7.9 million, decreased expenses by $8.0 million and increased operating income by$0.1 million. For the year ended March 31, 2015, we estimate that a 10% decrease in foreign currency exchange rates against the U.S. dollar would havedecreased revenues by $7.1 million, decreased expenses by $7.5 million and increased operating income by $0.4 million. For the year ended March 31, 2014,we estimate that a 10% decrease in foreign currency exchange rates against the U.S. dollar would have decreased revenues by $5.7 million, decreasedexpenses by $6.0 million and increased operating income by $0.3 million. The estimates used assume that all currencies move in the same direction at thesame time and the ratio of non-U.S. dollar denominated revenue and expenses to U.S. dollar denominated revenue and expenses does not change from currentlevels. Since a portion of our revenue is deferred revenue that is recorded at different foreign currency exchange rates, the impact to revenue of a change inforeign currency exchange rates is recognized over time, and the impact to expenses is more immediate, as expenses are recognized at the current foreigncurrency exchange rate in effect at the time the expense is incurred. All of the potential changes noted above are based on sensitivity analyses performed onour financial results as of March 31, 2016, 2015 and 2014.Inflation RiskInflationary factors, such as increases in our operating expenses, may adversely affect our results of operations, as our customers typically purchaseservices from us on a subscription basis over a period of time. Although we do not believe that inflation has had a material impact on our financial position orresults of operations to date, an increase in the rate of inflation in the future may have an adverse effect on our levels of operating expenses as a percentage ofrevenue if we are unable to increase the prices for our subscription-based services to keep pace with these increased expenses.Interest Rate RiskWe are exposed to market risk related to changes in interest rates. Our investments primarily consist of money market funds. As of March 31, 2016 and2015, we had cash and cash equivalents of $106.1 million and 109 Table of Contents$32.9 million, respectively. The carrying amount of our cash equivalents reasonably approximates fair value, due to the short maturities of these investments.The primary objectives of our investment activities are the preservation of capital, the fulfillment of liquidity needs and the fiduciary control of cash andinvestments. We do not enter into investments for trading or speculative purposes. Our investments are exposed to market risk due to a fluctuation in interestrates, which may affect our interest income and the fair market value of our investments. Due to the short-term nature of our investment portfolio, we believeonly dramatic fluctuations in interest rates would have a material effect on our investments. We do not believe that an immediate 10% increase in interestrates would have a material effect on the fair market value of our portfolio. As such we do not expect our operating results or cash flows to be materiallyaffected by a sudden change in market interest rates.As of March 31, 2016 and 2015, we had an outstanding balance of $6.9 million and $12.4 million, respectively, aggregate principal amount on ourterm loans, which have a fixed interest rate of 4.5%. Since these instruments bear interest at fixed rates, we have no financial statement risk associated withchanges in interest rates. However, the fair value of these instruments fluctuates as interest rate changes.ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIESA. Debt SecuritiesNot applicable.B. Warrants and RightsNot applicable.C. Other SecuritiesNot applicable.D. American Depositary SharesNot applicable.PART IIITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIESNot applicable.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDSE. Use of ProceedsOn November 24, 2015, we closed the sale of 7,750,000 ordinary shares to the public at an initial public offering price of $10.00 per share. The offerand sale of the shares in the IPO was registered under the Securities Act pursuant to registration statements on Form F-1 (File No. 333-207454), which wasfiled with the SEC on October 16, 2015, and amended subsequently and declared effective on November 18, 2015. Following the sale of the shares inconnection with the closing of our IPO, the offering terminated. The offering did not terminate before any of the securities registered in the registrationstatements were sold. Goldman, Sachs & Co. acted as lead book-running manager, Barclays Capital Inc., Jeffries LLC and RBC Capital Markets, LLC acted asbook-running managers, and Oppenheimer & Co. Inc. acted as co-manager for the offering. 110 Table of ContentsWe raised approximately $68.3 million in net proceeds, after deducting underwriting discounts and commissions of approximately $5.4 million andother offering expenses of approximately $3.8 million. No offering expenses were paid directly or indirectly to any of our directors or officers or theirassociates or persons owning ten percent or more of any class of our equity securities or to any other affiliates. As of March 31, 2016, we have not used any ofthe net offering proceeds.ITEM 15. CONTROLS AND PROCEDURESOur chief executive officer (principal executive officer) and chief operating officer (principal financial officer), after evaluating the effectiveness ofour disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of March 31, 2016, have concluded that, as of such date, ourdisclosure controls and procedures were effective and ensured that information required to be disclosed by us in reports that we file or submit under theExchange Act is accumulated and communicated to our management, including our chief executive officer (principal executive officer) and chief operatingofficer (principal financial officer), to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within thetime periods specified by the SEC’s rules and forms.This Annual Report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report ofthe company’s registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.There were no changes in our internal control over financial reporting that occurred during the period covered by this Annual Report that havematerially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERTOur board of directors has determined that Hagi Schwartz is an audit committee financial expert as defined by SEC rules and has the requisite financialsophistication under the applicable rules and regulations of the Nasdaq Stock Market. Mr. Schwartz is independent as such term is defined in Rule 10A-3under the Exchange Act and under the listing standards of the Nasdaq Stock Market.ITEM 16B. CODE OF ETHICSWe have adopted a Code of Business Conduct and Ethics that is applicable to all of our employees, executive officers and directors. The Code ofConduct is available on our website at www.investors.mimecast.com. Our board of directors will be responsible for overseeing the Code of Conduct and willbe required to approve any waivers of the Code of Conduct for employees, executive officers and directors. We expect that any amendments to the Code ofConduct, or any waivers of its requirements, will be disclosed on our website.ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICESThe following table sets forth the fees billed or incurred by Ernst & Young LLP for audit, audit-related, tax and all other services rendered for the yearsended March 31, 2016 and 2015: Fees Billed to or Accrued by the Company Fiscal Year2016 FiscalYear 2015 Audit fees $2,200,802 $659,072 Audit-related fees — — Tax fees — — All other fees 2,790 — Total fees $2,203,592 $659,072 111 Table of ContentsAudit FeesConsist of aggregate fees for professional services provided in connection with the annual audit of our consolidated financial statements, the review ofour quarterly condensed consolidated financial statements, statutory audits, consultations on accounting matters directly related to the audit, and comfortletters, consents and assistance with and review of documents filed with the SEC including those related to our IPO.Audit-Related FeesConsist of aggregate fees for accounting consultations and other services that were reasonably related to the performance of audits or reviews of ourconsolidated financial statements and were not reported above under “Audit Fees”.Tax FeesThere were no tax fees incurred for the years ended March 31, 2016 or 2015.All Other FeesConsist of aggregate fees billed for products and services provided by the independent registered public accounting firm other than those disclosedabove. These fees consisted of an amount paid for the use of an online accounting research tool.All services provided by Ernst & Young to the Company in fiscal 2016 and 2015 were approved by means of specific pre-approvals by the auditcommittee.Pre-Approval Policies for Non-Audit ServicesThe Audit Committee has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by ourindependent registered public accounting firm. These policies generally provide that we will not engage our independent registered public accounting firmto render audit or non-audit services unless the service is specifically approved in advance by the Audit Committee or the engagement is entered intopursuant to the pre-approval procedure described below.The audit committee pre-approves all auditing services and the terms of non-audit services, but only to the extent that the non-audit services are notprohibited under applicable law and the committee determines that the non-audit services do not impair the independence of the independent registeredpublic accounting firm. In situations where it is impractical to wait until the next regularly scheduled quarterly meeting, the chairman of the audit committeehas been delegated authority to approve audit and non-audit services. The chairman is required to report any approvals to the full committee at its nextscheduled meeting.From time to time, the Audit Committee may pre-approve specified types of services that are expected to be provided to us by our independentregistered public accounting firm during the next 12 months. Any such pre-approval is detailed as to the particular service or type of services to be providedand is also generally subject to a maximum dollar amount. Any proposed services exceeding pre-approved amounts will also require separate pre-approval bythe Audit Committee. In fiscal 2016 and 2015, our Audit Committee approved all of the services provided by Ernst & Young.ITEM 16D. EXEMPTION FROM THE LISTING STANDARDS FOR AUDIT COMMITTEESNot applicable. 112 Table of ContentsITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERSNot applicable.ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANTNot applicable.ITEM 16G. CORPORATE GOVERNANCEAs a Jersey company, we are subject to applicable Jersey laws including the Companies (Jersey) Law 1991, as amended. In addition, as a foreign privateissuer listed on the NASDAQ Global Select Market, we are subject to the NASDAQ corporate governance listing standards. However, the NASDAQ GlobalSelect Market’s listing standards provide that foreign private issuers are permitted to follow home country corporate governance practices in lieu of theNASDAQ rules, with certain exceptions. We currently do not intend to take advantage of any such exemptions.ITEM 16H. MINE SAFETY DISCLOSURENot applicable.PART IIIITEM 17. FINANCIAL STATEMENTSFinancial Statements are filed as part of this Annual Report, starting on page F-1.ITEM 18. FINANCIAL STATEMENTSFinancial Statements are filed as part of this Annual Report, starting on page F-1.ITEM 19. EXHIBITSThe exhibits listed on the Exhibit Index hereof are filed herewith in response to this Item. 113 Table of ContentsMIMECAST LIMITEDINDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of March 31, 2016 and 2015 F-3 Consolidated Statements of Operations for the Years Ended March 31, 2016, 2015 and 2014 F-4 Consolidated Statements of Comprehensive Loss for the Years Ended March 31, 2016, 2015 and 2014 F-5 Consolidated Statements of Convertible Preferred Shares and Shareholders’ Equity (Deficit) for the Years Ended March 31, 2016, 2015 and 2014 F-6 Consolidated Statements of Cash Flows for the Years Ended March 31, 2016, 2015 and 2014 F-7 Notes to Consolidated Financial Statements F-8 F-1 Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMThe Board of Directors and Shareholders ofMimecast LimitedWe have audited the accompanying consolidated balance sheets of Mimecast Limited (the Company) as of March 31, 2016 and 2015, and the relatedconsolidated statements of operations, comprehensive loss, convertible preferred shares and shareholders’ equity (deficit) and cash flows for each of the threeyears in the period ended March 31, 2016. These financial statements are the responsibility of the Company’s management. Our responsibility is to expressan opinion on these financial statements based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We werenot engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control overfinancial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on atest basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimatesmade by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of MimecastLimited at March 31, 2016 and 2015, and the consolidated results of its operations and its cash flows for each of the three years in the period endedMarch 31, 2016, in conformity with U.S. generally accepted accounting principles./s/ Ernst & Young LLPBoston, MassachusettsMay 25, 2016 F-2 Table of ContentsMIMECAST LIMITEDCONSOLIDATED BALANCE SHEETS(in thousands, except share and per share amounts) At March 31, 2016 2015 Assets Current assets Cash and cash equivalents $106,140 $32,890 Accounts receivable, net 33,738 25,267 Prepaid expenses and other current assets 7,362 4,982 Total current assets 147,240 63,139 Property and equipment, net 24,806 23,159 Other assets 3,081 2,531 Total assets $175,127 $88,829 Liabilities, convertible preferred shares and shareholders’ equity (deficit) Current liabilities Accounts payable $2,891 $4,674 Accrued expenses and other current liabilities 15,110 10,902 Deferred revenue 60,889 45,267 Current portion of long-term debt 4,910 5,278 Total current liabilities 83,800 66,121 Deferred revenue, net of current portion 9,151 8,041 Long-term debt 1,981 7,086 Other non-current liabilities 2,121 2,127 Total liabilities 97,053 83,375 Commitments and contingencies (Note 9) Convertible preferred shares (Note 7) — 59,305 Shareholders’ equity (deficit) Ordinary shares, $0.012 par value, 300,000,000 and 118,657,039 shares authorized at March 31, 2016 and 2015,respectively; 54,216,738 and 32,928,499 shares issued and outstanding at March 31, 2016 and 2015, respectively 651 395 Additional paid-in capital 169,037 32,417 Accumulated deficit (88,576) (85,332) Accumulated other comprehensive loss (3,038) (1,331) Total shareholders’ equity (deficit) 78,074 (53,851) Total liabilities, convertible preferred shares and shareholders’ equity (deficit) $175,127 $88,829 The accompanying notes are an integral part of these consolidated financial statements. F-3 Table of ContentsMIMECAST LIMITEDCONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share amounts) Year Ended March 31, 2016 2015 2014 Revenue $141,841 $116,085 $88,315 Cost of revenue 41,809 36,821 28,673 Gross profit 100,032 79,264 59,642 Operating expenses Research and development 17,663 14,461 12,844 Sales and marketing 65,187 51,224 46,971 General and administrative 19,756 15,806 11,187 Restructuring — 1,203 — Total operating expenses 102,606 82,694 71,002 Loss from operations (2,574) (3,430) (11,360) Other income (expense) Interest income 74 62 86 Interest expense (690) (703) (542) Foreign exchange income (expense) 811 4,508 (5,055) Total other income (expense), net 195 3,867 (5,511) (Loss) income before income taxes (2,379) 437 (16,871) Provision for income taxes 865 152 19 Net (loss) income $(3,244) $285 $(16,890) Reconciliation of net (loss) income to net (loss) income applicable to ordinary shareholders: Net (loss) income $(3,244) $285 $(16,890) Net (loss) income applicable to participating securities — 80 — Net (loss) income applicable to ordinary shareholders—basic $(3,244) $205 $(16,890) Net (loss) income $(3,244) $285 $(16,890) Net (loss) income applicable to participating securities — 75 — Net (loss) income applicable to ordinary shareholders—diluted $(3,244) $210 $(16,890) Net (loss) income per share applicable to ordinary shareholders: (Note 2) Basic $(0.08) $0.01 $(0.53) Diluted $(0.08) $0.01 $(0.53) Weighted-average number of ordinary shares used in computing net (loss) income per share applicable to ordinaryshareholders: Basic 40,826 32,354 31,719 Diluted 40,826 36,075 31,719 The accompanying notes are an integral part of these consolidated financial statements. F-4 Table of ContentsMIMECAST LIMITEDCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS(in thousands) Year ended March 31, 2016 2015 2014 Net (loss) income $(3,244) $285 $(16,890) Other comprehensive (loss) income: Foreign currency translation adjustment (1,707) (3,537) 3,578 Comprehensive loss $(4,951) $(3,252) $(13,312) The accompanying notes are an integral part of these consolidated financial statements. F-5 Table of ContentsMIMECAST LIMITEDCONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED SHARES ANDSHAREHOLDERS’ EQUITY (DEFICIT)(in thousands) ConvertiblePreferred Shares Ordinary Shares AdditionalPaid-inCapital AccumulatedDeficit AccumulatedOtherComprehensive(Loss) Income TotalShareholders’(Deficit)Equity Number ofShares Amount Number ofShares Amount Balance at March 31, 2013 12,576 $59,305 32,003 $384 $25,015 $(68,727) $(1,372) $(44,700) Net loss — — — — — (16,890) — (16,890) Foreign currency translation adjustment — — — — — — 3,578 3,578 Issuance of ordinary shares upon exercise of shareoptions — — 41 1 29 — — 30 Share-based compensation — — — — 1,232 — — 1,232 Balance at March 31, 2014 12,576 59,305 32,044 385 26,276 (85,617) 2,206 (56,750) Net income — — — — — 285 — 285 Foreign currency translation adjustment — — — — — — (3,537) (3,537) Issuance of ordinary shares upon exercise of shareoptions — — 868 10 622 — — 632 Issuance of ordinary shares upon settlement ofliability awards — — 16 — 93 — — 93 Share-based compensation — — — — 5,426 — — 5,426 Balance at March 31, 2015 12,576 59,305 32,928 395 32,417 (85,332) (1,331) (53,851) Net loss — — — — — (3,244) — (3,244) Foreign currency translation adjustment — — — — — — (1,707) (1,707) Issuance of ordinary shares upon exercise of shareoptions — — 941 12 873 — — 885 Issuance of ordinary shares upon settlement ofliability awards — — 50 — 523 — — 523 Conversion of convertible preferred shares intoordinary shares (12,576) (59,305) 12,576 151 59,154 — — 59,305 Class C ordinary shares lost upon conversion toClass A ordinary shares — — (31) — — — — — Issuance of ordinary shares in relation to IPO, netof public offering issuance costs of $9,172 — — 7,750 93 68,235 — — 68,328 Share-based compensation — — — — 7,835 — — 7,835 Vesting of restricted share units — — 3 — — — — — Balance at March 31, 2016 — $— 54,217 $651 $169,037 $(88,576) $(3,038) $78,074 The accompanying notes are an integral part of these consolidated financial statements. F-6 Table of ContentsMIMECAST LIMITEDCONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands) Year ended March 31, 2016 2015 2014 Operating activities Net (loss) income $(3,244) $285 $(16,890) Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: Depreciation and amortization 10,527 11,028 8,958 Share-based compensation expense 7,886 5,426 1,232 Provision for doubtful accounts 91 133 23 (Gain) loss on disposal of fixed assets (5) (16) 69 Non-cash interest expense 106 110 91 Unrealized currency (gain) loss on foreign denominated intercompany transactions (988) (4,052) 2,264 Changes in assets and liabilities: Accounts receivable (9,820) (4,334) (6,563) Prepaid expenses and other current assets (2,191) 684 (354) Other assets (437) (206) (1,674) Accounts payable (542) (38) 144 Deferred revenue 18,588 11,378 8,786 Accrued expenses and other liabilities 4,672 2,849 2,947 Net cash provided by (used in) operating activities 24,643 23,247 (967) Investing activities Purchases of property and equipment (14,234) (12,583) (17,888) Net cash used in investing activities (14,234) (12,583) (17,888) Financing activities Proceeds from exercises of share options 885 632 30 Payments on debt (5,412) (3,483) (252) Proceeds from issuance of debt, net of issuance costs — 8,282 — Proceeds from initial public offering, net of issuance costs 68,328 — — Net cash provided by (used in) financing activities 63,801 5,431 (222) Effect of foreign exchange rates on cash (960) (2,363) 1,777 Net increase (decrease) in cash and cash equivalents 73,250 13,732 (17,300) Cash and cash equivalents at beginning of period 32,890 19,158 36,458 Cash and cash equivalents at end of period $106,140 $32,890 $19,158 Supplemental disclosure of cash flow information Cash paid during the period for interest $488 $593 $451 Cash paid during the period for income taxes $58 $32 $28 Supplemental disclosure of non-cash investing and financing Unpaid purchases of property and equipment $308 $1,591 $3,345 Conversion of convertible preferred shares to ordinary shares $59,305 $— $— The accompanying notes are an integral part of these consolidated financial statements. F-7 Table of ContentsMIMECAST LIMITEDNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears ended March 31, 2016, 2015 and 2014(in thousands, except share and per share data, unless otherwise noted)1. Organization and Description of BusinessMimecast Limited (Mimecast Jersey) is a public limited company organized under the laws of the Bailiwick of Jersey on July 28, 2015. OnNovember 4, 2015, Mimecast Jersey changed its corporate structure whereby it became the holding company of Mimecast Limited (Mimecast UK), a privatelimited company incorporated in 2003 under the laws of England and Wales, and its wholly-owned subsidiaries by way of a share-for-share exchange inwhich the shareholders of Mimecast UK exchanged their shares in Mimecast UK for an identical number of shares of the same class in Mimecast Jersey. Uponthe exchange, the historical consolidated financial statements of Mimecast UK became the historical consolidated financial statements of Mimecast Jersey.Mimecast Jersey and its subsidiaries (together the Group, the Company, Mimecast or we) is headquartered in London, England. The principal activityof the Group is the provision of email management services. Mimecast delivers a software-as-a-service (SaaS) enterprise email management service forarchiving, continuity, and security. By unifying disparate and fragmented email environments into one holistic solution from the cloud, Mimecast minimizesrisk and reduces cost and complexity while providing total end-to-end control of email. Mimecast’s proprietary software platform provides a single system toaddress key email management issues. Mimecast operates principally in Europe, North America, Africa, and Australia.The Company is subject to a number of risks and uncertainties common to companies in similar industries and stages of development including, butnot limited to, rapid technological changes, competition from substitute products and services from larger companies, customer concentration, managementof international activities, protection of proprietary rights, patent litigation, and dependence on key individuals.2. Summary of Significant Accounting PoliciesThe accompanying consolidated financial statements reflect the application of certain significant accounting policies as described below andelsewhere in these notes to the consolidated financial statements. The Company believes that a significant accounting policy is one that is both important tothe portrayal of the Company’s financial condition and results, and requires management’s most difficult, subjective, or complex judgments, often as theresult of the need to make estimates about the effect of matters that are inherently uncertain.Basis of PresentationThe accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the UnitedStates of America (GAAP). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally acceptedaccounting principles as found in the Accounting Standards Codification (ASC) and Accounting Standards Update (ASU) of the Financial AccountingStandards Board (FASB).Principles of ConsolidationThe consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have beeneliminated in consolidation.Share ConsolidationOn November 3, 2015, a committee of the Company’s Board of Directors approved a 1-for-6 share consolidation of the Company’s shares. The shareconsolidation was approved by our shareholders on November 5, 2015 and became effective on November 5, 2015. All share and per share data shown in theaccompanying consolidated financial statements and related notes have been retroactively revised to reflect the reverse stock split. F-8 Table of ContentsUse of EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reportedamounts of income and expenses during the reporting period.Significant estimates relied upon in preparing these consolidated financial statements include revenue recognition, allowances for doubtful accounts,expected future cash flows used to evaluate the recoverability of long-lived assets, contingent liabilities, expensing and capitalization of research anddevelopment costs for internal-use software, the determination of the fair value of share-based awards issued, share-based compensation expense, and therecoverability of the Company’s net deferred tax assets and related valuation allowance.Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recordedin the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to bereasonable under the circumstances. Actual results may differ from management’s estimates if these results differ from historical experience, or otherassumptions do not turn out to be substantially accurate, even if such assumptions are reasonable when made.Subsequent Events ConsiderationsThe Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provideadditional evidence for certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated as required. SeeNote 13.Cash and Cash EquivalentsThe Company considers all highly liquid instruments purchased with an original maturity date of 90 days or less from the date of purchase to be cashequivalents. Management determines the appropriate classification of investments at the time of purchase, and re-evaluates such determination at eachbalance sheet date.Cash and cash equivalents consist of cash on deposit with banks and amounts held in interest-bearing money market funds. Cash equivalents arecarried at cost, which approximates their fair market value.Revenue RecognitionThe Company derives its revenue from two sources: (1) subscription revenues, which are comprised of subscription fees from customers accessing theCompany’s cloud services and from customers purchasing additional support beyond the standard support that is included in the basic subscription fees; and(2) related professional services and other revenue, which consists primarily of set-up and ingestion fees as well as training fees.The Company recognizes revenue when all of the following conditions are satisfied: • there is persuasive evidence of an arrangement; • the service has been or is being provided to the customer; • the collection of the fees is probable; and • the amount of fees to be paid by the customer is fixed or determinable.The Company’s subscription arrangements provide customers the right to access its hosted software applications. Customers do not have the right totake possession of the Company’s software during the hosting arrangement. Accordingly, the Company recognizes revenue in accordance with ASC 605,Revenue Recognition, and Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition. F-9 Table of ContentsThe Company’s products and services are sold directly by the Company’s sales force and also indirectly by third-party resellers. In accordance with theprovisions of ASC 605, the Company has considered certain factors in determining whether the end-user or the third-party reseller is the Company’s customerin arrangements involving resellers. The Company has concluded that in the majority of transactions with resellers, the reseller is the Company’s customer. Inthese arrangements, the Company considered that it is the reseller, and not the Company, that has the relationship with the end-user. Specifically, the resellerhas the ability to set pricing with the end-user and the credit risk with the end-user is borne by the reseller. Further, the reseller is not obligated to report itstransaction price with the end-user to the Company, and in the majority of transactions, the Company is unable to determine the amount paid by the end-usercustomer to the reseller in these transactions. As a result of such considerations, revenue for these transactions is presented in the accompanying consolidatedstatements of operations based upon the amount billed to the reseller. For transactions where the Company has determined that the end-user is the ultimatecustomer, revenue is presented in the accompanying consolidated statements of operations based on the transaction price with the end-user.Subscription and support revenue is recognized ratably over the term of the contract, typically one year in duration, beginning on the commencementdate of each contract.Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenuerecognition criteria have been met.The Company’s professional services contracts are on a time and material basis. When these services are not combined with subscription revenues as asingle unit of accounting, as discussed below, these revenues are recognized as the services are rendered.Revenue is presented net of any taxes collected from customers.At times, the Company may enter into arrangements with multiple-deliverables that generally include multiple subscriptions, premium support andprofessional services. For arrangements with multiple deliverables, the Company evaluates each deliverable to determine whether it represents a separate unitof accounting based on the following criteria: (a) whether the delivered item has value to the customer on a stand-alone basis; and (b) if the contract includesa general right of return relative to the delivered item, whether delivery or performance of the undelivered items is considered probable and substantiallywithin our control.If the deliverables are determined to qualify as separate units of accounting, consideration is allocated to each unit of accounting based on the units’relative selling prices. The Company determines the relative selling price for a deliverable based on its vendor-specific objective evidence of fair value(VSOE), if available, or its best estimate of selling price (BESP), if VSOE is not available. The Company has determined that third-party evidence of sellingprice (TPE) is not a practical alternative due to differences in its service offerings compared to other parties and the availability of relevant third-party pricinginformation. The amount of revenue allocated to delivered items is limited by contingent revenue, if any.Subscription services have standalone value as such services are often sold separately. In determining whether professional services sold together withthe subscription services have standalone value, the Company considers the following factors for each professional services agreement: availability of theservices from other vendors, the nature of the professional services, the determination that customers cannot resell the services that Mimecast provides, thetiming of when the professional services contract was signed in comparison to the subscription service start date and the contractual dependence of thesubscription service on the customer’s satisfaction with the professional services work. Professional services sold at the time of the multiple-elementsubscription arrangement typically include customer set-up and ingestion services. To date, the Company has concluded that all of these professionalservices included in executed multiple-deliverable arrangements do not have standalone value and are therefore not considered separate units of accounting.These professional services are purchased by customers only in contemplation of, or in concert with, purchasing one of the hosted subscription solutions and,therefore, are not considered a substantive service, such that the provision of such F-10 Table of Contentsservice does not reflect the culmination of the earnings process. Mimecast does not sell these services without the related underlying primary subscription asthere would be no practical interest or need on the behalf of a customer to buy these services without the underlying subscription. The Company does nothave any knowledge of other vendors selling these services on a stand-alone basis and there is no way for an end-user to resell the deliverable. Accordingly,the deliverables within the arrangement including both subscription services and other professional services are accounted for as a single unit of accountingin accordance with the guidance in SAB No. 104. On these occasions, revenue for the professional services deliverables in the arrangement is recognized on astraight-line basis over the contractual term or the average customer life, as further described below.Deferred RevenueDeferred revenue primarily consists of billings or payments received in advance of revenue recognition from subscription services described above andis recognized as the revenue recognition criteria are met. In addition, deferred revenue consists of amounts paid by customers related to upfront set-up oringestion fees. Revenue related to such services is recognized over the contractual term or the average customer life, whichever is longer. The estimatedcustomer life has been determined to be five years.Deferred revenue that is expected to be recognized during the succeeding twelve month period is recorded as current deferred revenue and theremaining portion is recorded as noncurrent in the accompanying consolidated balance sheets.Cost of RevenueCost of revenue primarily consists of expenses related to supporting and hosting the Company’s product offerings and delivering professional services.These costs include salaries, benefits, incentive compensation and share-based compensation expense related to the management of the Company’s datacenters, customer support team and the Company’s professional services team, in addition to third-party service provider costs such as data center andnetworking expenses, allocated overhead and depreciation expense.Concentration of Credit Risk and Off-Balance Sheet RiskThe Company has no off-balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financialinstruments, which potentially subject us to concentrations of credit risk, consist primarily of cash and cash equivalents and accounts receivable. Wemaintain our cash and cash equivalents with major financial institutions of high-credit quality. Although the Company deposits its cash with multiplefinancial institutions, its deposits, at times, may exceed federally insured limits.Credit risk with respect to accounts receivable is dispersed due to our large number of customers. The Company’s accounts receivable are derived fromrevenue earned from customers primarily located in the United Kingdom, the United States, and South Africa. The Company generally does not require itscustomers to provide collateral or other security to support accounts receivable. Credit losses historically have not been significant and the Companygenerally has not experienced any material losses related to receivables from individual customers, or groups of customers. Due to these factors, no additionalcredit risk beyond amounts provided for collection losses is believed by management to be probable in the Company’s accounts receivable. As of March 31,2016 and 2015, no individual customer represented more than 10% of our accounts receivable. During the years ended March 31, 2016, 2015 and 2014, noindividual customer represented more than 10% of our revenue.Allowance for Doubtful AccountsWe make judgments as to our ability to collect outstanding receivables and provide allowances for the portion of receivables when a loss is reasonablyexpected to occur. The allowance for doubtful accounts is established to represent the best estimate of the net realizable value of the outstanding accountsreceivable. The F-11 Table of Contentsdevelopment of the allowance for doubtful accounts is based on a review of past due amounts, historical write-off and recovery experience, as well as agingtrends affecting specific accounts and general operational factors affecting all amounts. In addition, factors are developed utilizing historical trends in baddebts, returns and allowances.We consider current economic trends when evaluating the adequacy of the allowance for doubtful accounts. If circumstances relating to specificcustomers change or unanticipated changes occur in the general business environment, our estimates of the recoverability of receivables could be furtheradjusted. For the years ended March 31, 2016, 2015 and 2014, bad debt expense was $91, $133 and $23, respectively. The allowance for doubtful accountsas of March 31, 2016 and 2015 was not material.Property and EquipmentProperty and equipment are stated at cost, and are depreciated using the straight-line method over the estimated useful life of the assets. Leaseholdimprovements are amortized over the shorter of the lease term or the estimated useful life of the related asset. Upon retirement or sale, the cost of assetsdisposed of, and the related accumulated depreciation, are removed from the accounts, and any resulting gain or loss is included in the determination of net(loss) income in the period of retirement or sale. The estimated useful lives of the Company’s property and equipment are as follows: EstimatedUseful LifeComputer equipment 3 to 5Leasehold improvements Lesser of asset life or lease termFurniture and fixtures 5Office equipment 3Expenditures for maintenance and repairs are charged to expense as incurred, whereas major betterments are capitalized as additions to property andequipment. The Company reviews its property and equipment whenever events or changes in circumstances indicate that the carrying value of certain assetsmight not be recoverable. In these instances, the Company recognizes an impairment loss when it is probable that the estimated cash flows are less than thecarrying value of the asset.Impairment of Long-Lived AssetsThe Company reviews long-lived assets, such as property and equipment, for impairment whenever events or changes in circumstances indicate thatthe carrying value of an asset may not be recoverable. During this review, the Company re-evaluates the significant assumptions used in determining theoriginal cost and estimated lives of long-lived assets. Although the assumptions may vary from asset to asset, they generally include operating results,changes in the use of the asset, cash flows, and other indicators of value. Management then determines whether the remaining useful life continues to beappropriate, or whether there has been an impairment of long-lived assets based primarily upon whether expected future undiscounted cash flows aresufficient to support the assets’ recovery. Recoverability of these assets is measured by comparison of the carrying amount of the asset to the futureundiscounted cash flows the asset is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as thedifference between the carrying value and the fair value of the impaired asset.For the years ended March 31, 2016, 2015 and 2014, the Company did not identify any impairment of its long-lived assets.Disclosure of Fair Value of Financial InstrumentsThe carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, accounts receivable, accounts payable,accrued expenses and borrowings under the Company’s long-term debt F-12 Table of Contentsarrangements, approximated their fair values at March 31, 2016 and 2015 due to the short-term nature of these instruments, and for the long-term debt, theinterest rates the Company believes it could obtain for borrowings with similar terms.The Company has evaluated the estimated fair value of financial instruments using available market information. The use of different marketassumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts. See below for further discussion.Fair Value MeasurementsASC 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for instruments measured at fair value thatdistinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputsare inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company.Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability,and are developed based on the best information available in the circumstances.ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer aliability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-basedmeasurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The Company usesvaluation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs areprioritized as follows: • Level 1 inputs—Unadjusted observable quoted prices in active markets for identical assets or liabilities that the reporting entity has the abilityto access at the measurement date. • Level 2 inputs—Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. • Level 3 inputs—Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about theassumptions that market participants would use in pricing the assets or liabilities.To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair valuerequires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized inLevel 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair valuemeasurement.The Company evaluates assets and liabilities subject to fair value measurements on a recurring and nonrecurring basis to determine the appropriatelevel to classify them for each reporting period.Cash equivalents include money market funds with original maturities of 90 days or less from the date of purchase. The fair value measurement of theseassets is based on quoted market prices in active markets for identical assets and, therefore, these assets are recorded at fair value on a recurring basis andclassified as Level 1 in the fair value hierarchy for all periods presented. As of March 31, 2016 and 2015, cash equivalents held in money market fundstotaled $10.7 million and $10.9 million, respectively.As of March 31, 2016 and 2015, we did not have any assets or liabilities measured at fair value on a recurring basis using significant other observableinputs (Level 2) or on a recurring basis using significant unobservable inputs (Level 3). F-13 Table of ContentsThe Company measures eligible assets and liabilities at fair value, with changes in value recognized in earnings. Fair value treatment may be electedeither upon initial recognition of an eligible asset or liability or, for an existing asset or liability, if an event triggers a new basis of accounting. The Companydid not elect to remeasure any of its existing financial assets or liabilities, and did not elect the fair value option for any financial assets and liabilitiestransacted in the years ended March 31, 2016, 2015 and 2014.Software Development CostsCosts incurred to develop software applications used in the Company’s SaaS platform consist of certain direct costs of materials and services incurredin developing or obtaining internal-use computer software, and payroll and payroll-related costs for employees who are directly associated with, and whodevote time to, the project. These costs generally consist of internal labor during configuration, coding, and testing activities. Research and developmentcosts incurred during the preliminary project stage or costs incurred for data conversion activities, training, maintenance and general and administrative oroverhead costs are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, arecapitalized until the application is substantially complete and ready for its intended use. Qualified costs incurred during the operating stage of theCompany’s software applications relating to upgrades and enhancements are capitalized to the extent it is probable that they will result in addedfunctionality, while costs incurred for maintenance of, and minor upgrades and enhancements to, internal-use software are expensed as incurred. During theyears ended March 31, 2016, 2015 and 2014, the Company believes the substantial majority of its development efforts were either in the preliminary projectstage of development or in the operation stage (post-implementation), and accordingly, no costs have been capitalized during these periods. These costs areincluded in the accompanying consolidated statements of operations as research and development expense.Foreign Currency TranslationThe reporting currency of the Company is the U.S. dollar. We determine the functional currency for our foreign subsidiaries by reviewing the currenciesin which its respective operating activities occur. The functional currency of the Company’s foreign subsidiaries is the local currency of each subsidiary. Allassets and liabilities in the balance sheets of entities whose functional currency is a currency other than the U.S. dollar are translated into U.S. dollarequivalents at exchange rates as follows: (i) asset and liability accounts at period-end rates, (ii) income statement accounts at weighted-average exchangerates for the period, and (iii) shareholders’ equity accounts at historical exchange rates. Foreign exchange transaction gains and losses are included in foreignexchange (expense) income in the accompanying consolidated statements of operations. The effects of foreign currency translation adjustments are includedas a component of accumulated other comprehensive (loss) income in the accompanying consolidated balance sheets.Net (Loss) Income Per ShareNet (loss) income per share information is determined using the two-class method, which includes the weighted-average number of ordinary sharesoutstanding during the period and other securities that participate in dividends (a participating security). The Company considers the convertible preferredshares to be participating securities because they include rights to participate in dividends with the ordinary shares.Under the two-class method, basic net (loss) income per share attributable to ordinary shareholders is computed by dividing the net (loss) incomeattributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding during the period. Diluted net (loss) income per shareattributable to ordinary shareholders is computed using the more dilutive of (1) the two-class method or (2) the if-converted method. The Company allocatesnet income first to preferred shareholders based on dividend rights under the Company’s articles of association and then to preferred and ordinaryshareholders based on ownership interests. Net losses are not allocated to preferred shareholders as they do not have an obligation to share in the Company’snet losses. F-14 Table of ContentsDiluted net (loss) income per share gives effect to all potentially dilutive securities. Potential dilutive securities consist of ordinary shares issuableupon the exercise of share options and ordinary shares issuable upon the conversion of our convertible preferred shares.The following table presents the calculation of basic and diluted net (loss) income per share (in thousands, except per share data): Year Ended March 31, 2016 2015 2014 Numerator: Net (loss) income $(3,244) $285 $(16,890) Net (loss) income applicable to participating securities — 80 — Net (loss) income applicable to ordinary shareholders—basic $(3,244) $205 $(16,890) Net (loss) income $(3,244) $285 $(16,890) Net income (loss) applicable to participating securities — 75 — Net (loss) income applicable to ordinary shareholders—diluted $(3,244) $210 $(16,890) Denominator: Weighted-average number of ordinary shares used in computing net (loss) income per share applicable toordinary shareholders—basic 40,826 32,354 31,719 Dilutive effect of share equivalents resulting from share options and restricted shares — 3,721 — Weighted average number of ordinary shares used in computing net (loss) income per share—diluted 40,826 36,075 31,719 Net (loss) income per share applicable to ordinary shareholders: Basic $(0.08) $0.01 $(0.53) Diluted $(0.08) $0.01 $(0.53) The following potentially dilutive ordinary share equivalents have been excluded from the calculation of diluted weighted-average shares outstandingfor the years ended March 31, 2016, 2015 and 2014 as their effect would have been anti-dilutive for the periods presented (in thousands): Year Ended March 31, 2016 2015 2014 Share options outstanding 6,870 — 6,251 Unvested restricted share units 42 — — Convertible preferred shares 8,144 — 12,576 Advertising and Promotion CostsExpenses related to advertising and promotion of solutions is charged to sales and marketing expense as incurred. We incurred advertising expenses of$5.6 million, $3.7 million and $3.2 million during the years ended March 31, 2016, 2015 and 2014, respectively.Income TaxesWe account for income taxes in accordance with ASC 740, Income Taxes. ASC 740 is an asset and liability approach that requires recognition ofdeferred tax assets and liabilities for the expected future tax consequences F-15 Table of Contentsattributable to differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax basis, and foroperating loss and tax credit carryforwards. ASC 740 requires a valuation allowance against net deferred tax assets if, based upon the available evidence, it ismore likely than not that some or all of the deferred tax assets will not be realized.We recognize the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by thetax authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such position are thenmeasured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. As of March 31, 2016 and 2015, we did nothave any uncertain tax positions that would impact our net tax provision.Share-Based CompensationThe Company accounts for share-based compensation in accordance with the provisions of ASC 718, Compensation—Stock Compensation, whichrequires the recognition of expense related to the fair value of share-based compensation awards in the statements of operations. For share options issuedunder the Company’s share-based compensation plans to employees and members of the Board of Directors (the Board) for their services on the Board, thefair value of each option grant is estimated on the date of grant, and an estimated forfeiture rate is used when calculating share-based compensation expensefor the period. For restricted share awards and restricted share units issued under the Company’s share-based compensation plans, the fair value of each grantis calculated based on the Company’s share price on the date of grant. For service-based awards, the Company recognizes share-based compensation expenseon a straight-line basis over the requisite service period of the award. For awards subject to both performance and service-based vesting conditions, theCompany recognizes share-based compensation expense using an accelerated recognition method when it is probable that the performance condition will beachieved. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from thoseestimates. For share-based awards classified as liabilities, the Company accounts for such liability such that the compensation expense will be remeasured ateach reporting date until such award is settled. Total compensation expense related to liability awards was not material for the years ended March 31, 2016,2015 and 2014.The Company accounts for transactions in which services are received from non-employees in exchange for equity instruments based on the fair valueof such services received, or of the equity instruments issued, whichever is more reliably measured. The Company determines the total share-basedcompensation expense related to non-employee awards using the Black-Scholes option-pricing model. Additionally, in accordance with ASC 505, Equity-Based Payments to Non-Employees, the Company accounts for awards to non-employees prospectively, such that the fair value of the awards will beremeasured at each reporting date until the earlier of (a) the performance commitment date or (b) the date the services required under the arrangement havebeen completed. During the year ended March 31, 2015 the Company issued a share-based award to a non-employee in consideration for consulting services.The Company did not issue any share-based awards to non-employees during the years ended March 31, 2016 and 2014.The fair value of each option grant issued under the Company’s share-based compensation plans was estimated using the Black-Scholes option-pricingmodel that used the weighted-average assumptions presented in the following table: Year ended March 31, 2016 2015 2014 Expected term (in years) 6.2 6.3 6.4 Risk-free interest rate 2.0% 3.1% 2.5% Expected volatility 42.7% 52.6% 53.0% Expected dividend yield — % — % — % Estimated grant date fair value per ordinary share $9.80 $7.20 $3.00 F-16 Table of ContentsThe weighted-average fair value of options granted to employees during the years ended March 31, 2016, 2015 and 2014 was $4.69, $4.02 and $1.56per share, respectively.The expected term of options for service-based awards has been determined utilizing the “Simplified Method,” as the Company does not havesufficient historical share option exercise information on which to base its estimate. The Simplified Method is based on the average of the vesting tranchesand the contractual life of each grant. In addition, the expected term for certain share-based awards which are subject to service-based and performance-basedvesting conditions, is based on management’s estimate of the period of time for which the instrument is expected to be outstanding, factoring in certainassumptions such as the vesting period of the award, length of service and/or the location of the employee. The risk-free interest rate is based on a treasuryinstrument whose term is consistent with the expected life of the share option. Since there was no public market for its ordinary shares prior to completion ofthe Company’s initial public offering (IPO) and as the Company’s shares have been publicly traded for a limited time, the Company determined the expectedvolatility for options granted based on an analysis of reported data for a peer group of companies that issue options with substantially similar terms. Theexpected volatility of options granted has been determined using an average of the historical volatility measures of this peer group of companies. TheCompany has not paid, nor anticipates paying, cash dividends on its ordinary shares; therefore, the expected dividend yield is assumed to be zero.Prior to the IPO, in the absence of an active market for the Company’s ordinary shares, the Board, the members of which the Company believes haveextensive business, finance, and venture capital experience, were required to estimate the fair value of the Company’s ordinary shares at the time of eachgrant of a share-based award. The Company and the Board utilized various valuation methodologies in accordance with the framework of the AmericanInstitute of Certified Public Accountants’ Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, toestimate the fair value of its ordinary shares. Each valuation methodology includes estimates and assumptions that require the Company’s judgment. Theseestimates and assumptions include a number of objective and subjective factors, in determining the value of the Company’s ordinary shares at each grantdate, including the following factors: (1) prices paid for the Company’s convertible preferred shares, which the Company had sold to outside investors inarm’s-length transactions, and the rights, preferences, and privileges of the Company’s convertible preferred shares and ordinary shares; (2) valuationsperformed by an independent valuation specialist; (3) the Company’s stage of development and revenue growth; (4) the fact that the grants of share-basedawards involved illiquid securities in a private company; and (5) the likelihood of achieving a liquidity event for the ordinary shares underlying the share-based awards, such as an IPO or sale of the Company, given prevailing market conditions.The Company believes this methodology to be reasonable based upon the Company’s internal peer company analyses, and further supported byseveral arm’s-length transactions involving the Company’s convertible preferred shares. As the Company’s ordinary shares were not actively traded prior tothe IPO, the determination of fair value involves assumptions, judgments and estimates. If different assumptions were made, share-based compensationexpense, consolidated net (loss) income and consolidated net (loss) income per share could have been significantly different.Since the IPO, the fair value of the Company’s ordinary shares at the time of each grant of a share-based award have been based on the market value atthe time of each grant.See Note 8 for a summary of the share option activity for the years ended March 31, 2016 and 2015.LeasesThe Company categorizes leases at their inception as either operating or capital leases. On certain lease agreements, the Company may receive rentholidays and other incentives. The Company recognizes lease costs on a straight-line basis once control of the space is achieved, without regard to deferredpayment terms, such as rent holidays that defer the commencement date of required payments or escalating payment amounts. The F-17 Table of Contentsdifference between required lease payments and rent expense has been recorded as deferred rent. Additionally, incentives received are treated as a reductionof costs over the term of the agreement, as they are considered an inseparable part of the lease agreement.Comprehensive Income (Loss)Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions, other events, andcircumstances from non-owner sources. Comprehensive income (loss) consists of net (loss) income and other comprehensive income (loss), which includescertain changes in equity that are excluded from net (loss) income. Specifically, cumulative foreign currency translation adjustments are included inaccumulated other comprehensive income (loss). As of March 31, 2016 and 2015, accumulated other comprehensive income (loss) is presented separately onthe consolidated balance sheets and consists entirely of cumulative foreign currency translation adjustments.Recently Issued Accounting PronouncementsFrom time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of thespecified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not havea material impact on its financial position or results of operations upon adoption.In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existingrevenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferredto customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step processto achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process thanrequired under existing U.S. GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to includein the transaction price and allocating the transaction price to each separate performance obligation. This guidance was effective for annual reporting andinterim periods beginning after December 15, 2016 and allows for either full retrospective or modified retrospective application, with early adoption notpermitted. On July 9, 2015 the FASB voted to approve a one-year deferral of the effective date of this guidance. In accordance with the agreed upon delay,the guidance is effective for the Company on April 1, 2018. The Company is currently evaluating the adoption method it will apply and the impact of theadoption of ASU 2014-09 on its consolidated financial statements.In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. ASU 2014-15 requires management to evaluate, at each annual or interim reporting period, whether there are conditions or events that exist that raise substantial doubtabout an entity’s ability to continue as a going concern within one year after the date the financial statements are issued and provide related disclosures. ASU2014-15 is effective for annual periods ending after December 15, 2016 and earlier application is permitted. The Company is currently evaluating the impactof the adoption of ASU 2014-15, but the adoption is not expected to have a material effect on its consolidated financial statements or disclosures.In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810)-Amendments to the Consolidation Analysis, which amends thecriteria for determining which entities are considered variable interest entities, or VIEs, amends the criteria for determining if a service provider possesses avariable interest in a VIE and ends the deferral granted to investment companies for application of the VIE consolidation model. ASU 2015-02 is effective forannual periods, and interim periods therein, beginning after December 15, 2015. The Company is currently evaluating the impact the adoption of ASU 2015-02 will have on its financial statements. F-18 Table of ContentsIn April 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03), which requires the Company topresent such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue tobe reported as interest expense. ASU 2015-03 will be effective for annual reporting periods beginning after December 15, 2015 and interim periods withinfiscal years beginning after December 15, 2016, with early adoption permitted. The new guidance will be applied retrospectively to each prior periodpresented. The Company is currently in the process of evaluating the impact and timing of adoption of the ASU 2015-03, but the adoption is not expected tohave a material effect on its consolidated financial statements or disclosures.In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendmentrequires entities with a classified balance sheet to present all deferred tax assets and liabilities as noncurrent. The ASU is effective for annual periods,including interim periods within those annual periods, beginning after December 15, 2016. Early adoption is permitted. The Company is currently in theprocess of evaluating the impact and timing of adoption of the ASU 2015-17 on its consolidated financial statements.In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting. The ASU amends the codification tosimplify several aspects of the accounting for share-based payment award transactions, including the income tax consequences, classification of awards aseither equity or liabilities, and classification on the statement of cash flows. The ASU is effective for annual periods, including interim periods within thoseannual periods, beginning after December 15, 2016. Early adoption is permitted. The Company is currently in the process of evaluating the impact andtiming of adoption of the ASU 2016-09 on its consolidated financial statements.3. Balance Sheet ComponentsPrepaid expenses and other current assets consists of the following: At March 31, 2016 2015 Research and development investment tax credits $1,758 $2,568 Prepaid expenses 4,342 2,087 Other current assets 1,262 327 Total prepaid expenses and other current assets $7,362 $4,982 Property and equipment consists of the following: At March 31, 2016 2015 Computer equipment $54,935 $46,078 Leasehold improvements 4,096 2,867 Furniture and fixtures 1,837 1,618 Office equipment 253 256 61,121 50,819 Less: Accumulated depreciation and amortization (36,315) (27,660) Property and equipment, net $24,806 $23,159 Depreciation and amortization expense was $10.5 million, $11.0 million, and $9.0 million for the years ended March 31, 2016, 2015 and 2014,respectively. F-19 Table of ContentsAccrued expenses and other current liabilities consists of the following: At March 31, 2016 2015 Accrued payroll and related benefits $8,620 $7,166 Accrued taxes payable 3,491 1,866 Other accrued expenses 2,999 1,870 Total accrued expenses and other current liabilities $15,110 $10,902 Other non-current liabilities consists of the following: At March 31, 2016 2015 Deferred rent $1,476 $1,760 Other non-current liabilities 645 367 Total other non-current liabilities $2,121 $2,127 4. RestructuringDuring the year ended March 31, 2015, the Company recorded a restructuring charge of $1.2 million within the accompanying consolidated statementsof operations. The restructuring charge consisted of employee severance costs in connection with the termination of employees in the United States and theUnited Kingdom. At March 31, 2016 and 2015, all obligations related to the restructuring action were fully paid and the Company does not expect to incurany additional costs related to this action.5. DebtIn January 2012, Mimecast Services Limited and Mimecast North America, Inc., with Mimecast UK as guarantor, entered into a loan agreement with alender (the Loan Agreement) providing for up to a £4.0 million asset based line of credit (the Equipment Line). Under the Equipment Line, the Company canuse the borrowing capacity to finance Eligible Equipment purchases, as defined in the Loan Agreement, in British pounds or U.S. dollars. Outstandingamounts under the Equipment Line accrued interest at a rate equal to the U.K. LIBOR plus 6.00% per annum for advances in British pounds or the greater of(i) 7.50% per annum and (ii) the Prime Rate plus 3.50% per annum for U.S. dollar advances. Advances under the Equipment Line were repayable in 36 equalmonthly payments of principal and interest following the date of the borrowing under the Equipment Line but no later than June 30, 2015.In January 2013, the Company amended the Loan Agreement (the First Amendment) to aggregate the outstanding British pound advances and U.S.dollar advances into two individual Equipment Line advances of £1.7 million (the Sterling Equipment Advances) and $1.6 million (the U.S. DollarEquipment Advances, collectively the Equipment Line Advances) and allowed for no additional advances under the Equipment Line. The First Amendmentamended the interest rate on the Equipment Line Advances to a 4.50% per annum fixed interest rate and also extended the maturity date for the EquipmentLine Advances to February 1, 2017, which includes an interest only period for the first twelve months following the First Amendment date. At March 31,2016 and 2015, the Company had $0.7 million and $1.6 million outstanding, respectively, related to the Sterling Equipment Advances and had $0.5 millionand $1.0 million outstanding, respectively, related to the U.S. Dollar Equipment Advances. There were no amounts available for future borrowings under theEquipment Line as of March 31, 2016 or 2015.As part of the First Amendment, the Company entered into a line of credit of up to the lesser of (i) £7.5 million and (ii) the equivalent of 80% ofEligible Accounts Receivables, as defined, plus £2.5 million (the Revolving Line). Under the Revolving Line, the Company can borrow in British pounds,U.S. dollars or Euros and the Revolving Line had a maturity date of January 31, 2015. Advances under the Revolving Line bore F-20 Table of Contentsinterest at the greater of the Bank of England base rate plus 3.75% per annum, and 4.25% per annum for British pound Advances, the Prime Rate plus1.00% per annum and 4.25% per annum for U.S. dollar Advances, and the Euro LIBOR plus 4.00% per annum and 4.25% per annum for Euro Advances.In July 2014, the Company further amended the Loan Agreement (the Second Amendment) and increased the Revolving Line from up to £7.5 millionto up to £10 million (the Amended Revolving Line). The Amended Revolving Line had £5.0 million available upon the Second Amendment and another£5.0 million upon completion of an additional equity financing, which occurred upon completion of the Company’s IPO. The Second Amendment alsoextended the maturity date of the Amended Revolving Line to July 15, 2016 and decreased the maximum interest rate on any advances to 4.00% per annum.At March 31, 2016 and 2015, the Company had no amounts outstanding under the Amended Revolving Line. At March 31, 2016 and 2015, the Companyhad £10.0 million and £5.0 million available for future borrowing, respectively, under the Amended Revolving Line.With the First Amendment, the Company also entered into a £3.0 million fixed interest rate term loan (the First Term Loan), which is repayable in 36monthly installments starting twelve months following the first business day of the borrowing. Interest on the First Term Loan accrues and is payablemonthly in arrears at 4.50% per annum and the First Term Loan matures on March 1, 2017. With the Second Amendment, the Company entered into a second£5.0 million fixed interest rate term loan (the Second Term Loan), which is repayable in 36 monthly installments starting six months following the firstbusiness day of the borrowing. Interest on the Second Term Loan accrues and is payable monthly in arrears at 4.50% per annum and the Second Term Loanmatures on January 1, 2018. At March 31, 2016, the Company had $1.3 million and $4.4 million outstanding on the First Term Loan and Second Term Loan,respectively. At March 31, 2015, the Company had $2.8 million and $7.0 million outstanding on the First Term Loan and Second Term Loan, respectively.Under the Second Amendment, the Company was required to comply with certain financial covenants, including recurring revenue and adjusted quickratio covenants, as defined within the Second Amendment. The interest rate would increase by 3.00% if the Company was not able to meet the financialcovenants or had any other event of default, until cured. Failure to comply with these covenants, or the occurrence of an event of default, could permit thelender under the Second Amendment to declare all amounts outstanding under the Second Amendment, together with accrued interest and fees, to beimmediately due and payable. In addition, the Second Amendment was secured by substantially all of our assets.In November 2015, the Company further amended the Loan Agreement (the Fourth Amendment) to reflect the change in its reporting entity, to makeavailable the additional £5.0 million in available credit under the facility that became accessible upon the completion of the IPO, and to adjust certainfinancial covenants, including recurring revenue and adjusted quick ratio covenants. Under the Fourth Amendment, the Company must comply with certainfinancial covenants, including recurring revenue and adjusted quick ratio covenants, as defined. The interest rate will increase by 3.00% if the Company isnot able to meet the financial covenants or has any other event of default, until cured. Failure to comply with these covenants, or the occurrence of an eventof default, could permit the lender under the Fourth Amendment to declare all amounts outstanding under the Fourth Amendment, together with accruedinterest and fees, to be immediately due and payable. In addition, the Fourth Amendment is secured by substantially all of our assets. The Company was incompliance with all covenants under the Fourth Amendment and Second Amendment as of March 31, 2016 and 2015, respectively.The weighted-average interest rate for long-term debt was 4.50% per annum at March 31, 2016 and 2015.The Company has assessed these refinancing activities and determined they were modifications and not an extinguishment under ASC 470, Debt. F-21 Table of ContentsFuture minimum principal payment obligations due under the Company’s loan agreements are as follows: Year Ending March 31, 2017 $4,941 2018 1,991 $6,932 6. Related Party TransactionsThree of our current shareholders, who collectively owned more than 40% of our outstanding shares as of March 31, 2016 and 2015, respectively, werecustomers of the Company during the periods included in the consolidated financial statements. Revenue recognized during the years ended March 31, 2016,2015 and 2014 and accounts receivable outstanding as of March 31, 2016 and 2015 related to these transactions was not material. Additionally, two of theseshareholders provide certain services to the Company. Amounts paid to these shareholders in relation to arrangements for these services was not material forthe years ended March 31, 2016, 2015 and 2014.7. Convertible Preferred Shares and Shareholders’ Equity (Deficit)As of March 31, 2015, the authorized share capital of the Company consisted of 1,003,300,000 ordinary shares, £0.000001 par value and 75,458,210convertible preferred shares.In connection with the share-for-share exchange and share consolidation discussed in Note 1, the authorized share capital of the Company wasamended to consist of 118,657,039 ordinary shares, $0.012 par value per share, consisting of 8,107,039 Founder Shares, 70,000,000 Class A Shares,40,000,000 Class B Shares, and 550,000 Class C Shares and 12,576,364 preferred shares, $0.012 par value, consisting of 7,051,814 Series A Preferred Sharesand 5,524,550 Series B Preferred Shares. This transaction was accounted for as a change in reporting entity and the accompanying consolidated financialstatements and related notes have been retroactively revised to reflect this change.Under our Memorandum and Articles of Association that became effective upon the IPO, our authorized share capital was increased to consist of300,000,000 ordinary shares, nominal value $0.012 per share and 5,000,000 preferred shares, nominal value $0.012 per share.As of March 31, 2015, the Company’s convertible preferred shares outstanding were as follows: Original Issue Price per Share Shares LiquidationAmount CarryingValue Authorized Outstanding Series A Convertible Preferred Shares (1) $2.95 7,051,814 7,051,814 $20,816 $20,583 Series B Convertible Preferred Shares $7.24 5,524,550 5,524,550 40,000 38,722 12,576,364 12,576,364 $60,816 $59,305 (1)Translated using the British pound to U.S. dollar exchange rate as of the date of issuance of 1.601.On November 19, 2015, the Company completed its initial public offering, or IPO, in which it issued and sold 7,750,000 ordinary shares at a publicoffering price of $10.00 per share. The Company received net proceeds of $68.3 million after deducting underwriting discounts and commissions and otheroffering expenses of $9.2 million. Immediately prior to the consummation of the IPO, all of the then-outstanding series of ordinary shares were redesignatedas an aggregate of 33,694,703 ordinary shares, and upon consummation of the IPO, all of the then-outstanding convertible preferred shares automaticallyconverted into an aggregate of 12,576,364 ordinary shares. F-22 Table of ContentsUnder our Memorandum and Articles of Association that became effective upon the IPO, each ordinary share entitles the holder to one vote for eachshare on all matters submitted to a vote of our shareholders at all meetings of shareholders and written actions in lieu of meetings. The holders of ordinaryshares are entitled to receive dividends, if and when declared by the Board. No dividends have been declared or paid by the Company through March 31,2016.At March 31, 2016, the Company has reserved the following ordinary shares for future issuance: At March 31,2016 Options outstanding under share option plans 8,069,866 Unvested restricted share units 42,224 Options and awards available for future grant under the 2015 Plan 5,999,375 Shares reserved for issuance under ESPP 1,100,000 Total authorized ordinary shares reserved for future issuance 15,211,465 8. Share-based compensationAt March 31, 2016, the Company has four share-based compensation plans and an employee stock purchase plan, which are more fully describedbelow.Prior to the IPO, the Company granted share-based awards under three share option plans which are the Mimecast Limited 2007 Key Employee ShareOption Plan (the 2007 Plan), the Mimecast Limited 2010 EMI Share Option Scheme (the 2010 Plan), and the Mimecast Limited Approved Share Option Plan(the Approved Plan) (the 2007 Plan, the 2010 Plan and the Approved Plan, collectively, the Historical Plans).Upon the closing of the IPO, the Mimecast Limited 2015 Share Option and Incentive Plan (the 2015 Plan) and the 2015 Employee Stock Purchase Plan(the 2015 ESPP) became effective. Subsequent to the IPO, future grants of share-based awards will be made under the 2015 Plan and no further grants underthe Historical Plans are permitted.The 2015 Plan was adopted by our board of directors on September 2, 2015, approved by our shareholders on November 4, 2015 and became effectiveon the date of the Company’s IPO. The 2015 Plan allows the compensation committee to make equity-based incentive awards to our officers, employees, non-employee directors and consultants. Initially, a total of 5,500,000 ordinary shares were reserved for the issuance of awards under the 2015 Plan. This numberis subject to adjustment in the event of a share split, share dividend or other change in our capitalization. The 2015 Plan provides that the number of sharesreserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2016, by 5% of the outstandingnumber of ordinary shares on the immediately preceding December 31 or such lesser number of shares as determined by our board of directors.In September 2015, our board of directors adopted the Mimecast Limited 2015 Employee Share Purchase Plan (ESPP), which was approved by ourshareholders on November 4, 2015. The ESPP initially reserves and authorizes for issuance a total of 1,100,000 ordinary shares. This number is subject toadjustment in the event of a share split, share dividend or other change in our capitalization. Participating employees of the Company may purchase ordinaryshares during pre-specified purchase periods at a price equal to the lesser of 85% of the fair market value of an ordinary share of the Company at thebeginning of the purchase period or 85% of the fair market value of an ordinary share of the Company at the end of the purchase period. The Board has notdetermined the date on which the initial purchase period will commence under the ESPP.Under the 2015 Plan, the share option price may not be less than the fair market value of the ordinary shares on the date of grant and the term of eachshare option may not exceed 10 years from the date of grant. Share F-23 Table of Contentsoptions typically vest over 4 years, but vesting provisions can vary based on the discretion of the Board. We settle share options exercises under the 2015Plans through newly issued shares. The Company’s ordinary shares underlying any awards that are forfeited, canceled, withheld upon exercise of an option,or settlement of an award to cover the exercise price or tax withholding, or otherwise terminated other than by exercise will be added back to the sharesavailable for issuance under the 2015 Plan.Under the Historical Plans, share-based awards have a term of 10 years from the date of grant and typically vest over 4 years, however, vestingprovisions could vary based on the discretion of the Board. Subsequent to the Company’s IPO, the Company’s ordinary shares underlying any awards issuedunder the Historical Plans that are forfeited, canceled, withheld upon exercise of an option, or settlement of an award to cover the exercise price or taxwithholding, or otherwise terminated other than by exercise will be not be added back to the shares available for issuance.Certain awards granted by the Company under the Historical Plans are subject to service-based vesting conditions and a performance-based vestingcondition based on a liquidity event, defined as either a change of control or an IPO. As a result, no compensation cost related to share-based awards withthese performance conditions had been recognized through the date of the Company’s IPO, as the Company had determined that a liquidity event was notprobable. Upon the IPO, 100% of the unvested portion of options granted under the Historical Plans prior to May 13, 2014 became vested. For options issuedto employees other than those in our US subsidiary, 25% of the vested shares underlying options became exercisable immediately upon the listing, 50% ofthe shares underlying options will become exercisable 12 months following the date of the listing, and 25% of the shares underlying options will becomeexercisable 24 months following the date of the listing. Upon consummation of the IPO, the Company began to record expense for these awards using theaccelerated attribution method over the remaining service period. Options granted on or after May 13, 2014 under the 2010 Plan, and the Approved Planshall continue vesting as set forth in the option award agreements.The number of options available for future grant under the Plans as of March 31, 2016 was 5,999,375.Share-based compensation expense recognized under the Plans in the accompanying consolidated statements of operations was as follows: Year Ended March 31, 2016 2015 2014 (in thousands) Cost of revenue $633 $151 $151 Research and development 1,711 544 291 Sales and marketing 3,180 1,684 395 General and administrative 2,362 3,047 395 Total share-based compensation expense $7,886 $5,426 $1,232 F-24 Table of ContentsShare option activity under the Plans for the year ended March 31, 2016 was as follows: Number ofAwards Weighted AverageExercise Price (3) Weighted AverageRemainingContractual Term(in years) AggregateIntrinsic Value(in thousands)(1) Outstanding at March 31, 2015 5,631,854 $1.84 5.91 $44,591 Options granted 3,726,410 $8.84 Options exercised (940,187) $0.94 Options forfeited and cancelled (348,211) $5.99 Outstanding at March 31, 2016 8,069,866 $5.00 7.16 $38,541 Exercisable at March 31, 2016 2,591,492 $2.27 5.51 $19,340 Exercisable and expected to be exercisable at March 31, 2016(2) 7,884,565 $4.91 7.10 $38,336 (1)As of March 31, 2016, the aggregate intrinsic value was calculated based on the positive difference, if any, between the closing price of our ordinaryshares on the NASDAQ exchange on March 31, 2016 and the exercise price of the underlying options. As of March 31, 2015, the aggregate intrinsicvalue was calculated based on the positive difference, if any, between the estimated fair value of our ordinary shares and the exercise price of theunderlying options.(2)This represents the number of exercisable options plus the number of options expected to become exercisable as of March 31, 2016 based on theoptions outstanding as of March 31, 2016 adjusted for the estimated forfeiture rate.(3)Certain of the Company’s option grants have an exercise price denominated in British pound. The weighted-average exercise price at the end of eachreporting period was translated into U.S. dollars using the exchange rate at the end of the period. The weighted-average exercise price for the optionsgranted, exercised, forfeited and expired was translated into U.S. dollars using the exchange rate at the applicable date of grant, exercise, forfeiture orexpiration, as appropriate.The total intrinsic value of options exercised was $8,198, $5,112 and $234 for the years ended March 31, 2016, 2015 and 2014, respectively. Totalcash proceeds from such option exercises were $885, $632 and $30 for the years ended March 31, 2016, 2015 and 2014, respectively.In 2011, the Company granted its two founders a total of 550,000 restricted share awards, which vest over a period of four years, 25% at the end of yearone and then 6.25% quarterly over the remaining three years. No additional restricted share awards were issued subsequent to this grant. As of March 31,2015, a total of 31,250 awards remained unvested. As of March 31, 2015, the aggregate intrinsic value of unvested shares was $0.3 million. As of March 31,2016, all restricted share awards were fully vested.In November 2015, the Company granted restricted share units (RSUs) to two of its Directors in the amount of 25,000 and 20,000, respectively. TheRSU in the amount of 25,000 vests over three years on a monthly basis. The RSU in the amount of 20,000 cliff vests over a five month period. As ofMarch 31, 2016, a total of 42,224 awards remained unvested and the aggregate intrinsic value of unvested shares was $0.4 million.As of March 31, 2016, there was approximately $13.2 million of unrecognized share-based compensation, net of estimated forfeitures, related tounvested share-based awards subject to service-based vesting conditions, which is expected to be recognized over a weighted-average period of 3.6 years.The total unrecognized share-based compensation cost will be adjusted for future changes in estimated forfeitures.As of March 31, 2016, there was approximately $2.9 million of unrecognized share-based compensation, net of estimated forfeitures, related tounvested share-based awards, subject to both service-based vesting conditions F-25 Table of Contentsand a performance-based vesting condition based on a liquidity event, which occurred upon the Company’s IPO. These awards are expected to be recognizedover a weighted-average period of 1.1 years.9. Commitments and ContingenciesThe Company leases its facilities under non-cancelable operating leases with various expiration dates through October 2020. Rent expense was $3.2million, $2.8 million and $2.6 million for the years ended March 31, 2016, 2015 and 2014, respectively. The Company also has non-cancelablecommitments related to its data centers.Future minimum payments for our operating leases and data centers as of March 31, 2016 are as follows: Year Ending March 31, OperatingLeases DataCenters 2017 $3,539 $10,125 2018 3,381 10,142 2019 3,159 7,646 2020 2,091 4,787 2021 726 801 Thereafter — 659 Total $12,896 $34,160 Certain amounts included in the table above relating to co-location leases for the Company’s servers includes usage based charges in addition to baserent.The Company has outstanding letters of credit of $0.5 million and $0.4 million related to certain operating leases as of March 31, 2016 and 2015,respectively.LitigationThe Company, from time to time, may be party to litigation arising in the ordinary course of its business. The Company was not subject to any materiallegal proceedings during the years ended March 31, 2016, 2015 and 2014, and, to the best of its knowledge, no material legal proceedings are currentlypending or threatened.IndemnificationThe Company typically enters into indemnification agreements with customers in the ordinary course of business. Pursuant to these agreements, theCompany indemnifies and agrees to reimburse the indemnified party for losses suffered or incurred as a result of claims of intellectual property infringement.These indemnification agreements are provisions of the applicable customer agreement. Based on when clients first sign an agreement for the Company’sservice, the maximum potential amount of future payments the Company could be required to make under certain of these indemnification agreements isunlimited. Based on historical experience and information known as of March 31, 2016, the Company has not incurred any costs for the above guaranteesand indemnities.In certain circumstances, the Company warrants that its services will perform in all material respects in accordance with its standard publishedspecification documentation in effect at the time of delivery of the services to the customer for the term of the agreement. To date, the Company has notincurred significant expense under its warranties and, as a result, the Company believes the estimated fair value of these agreements is immaterial.10. Employee Benefit PlansWe maintain a defined contribution savings plan under Section 401(k) of the Internal Revenue Code (the 401(k) Plan) covering all U.S. employeeswho satisfy certain eligibility requirements. The 401(k) Plan allows F-26 Table of Contentseach participant to defer a percentage of their eligible compensation subject to applicable annual limits pursuant to the limits established by the InternalRevenue Service. We may, at our discretion, make contributions in the form of matching contributions or profit-sharing contributions. To date, we have notmade any matching or profit-sharing contributions.In addition, we contribute to a defined contribution savings plan for our employees in the United Kingdom who satisfy certain eligibility requirements.The plan allows each participant to defer a percentage of their compensation, and the Company contributes an additional 1% of all wages for thoseemployees in the scheme on a monthly basis. The Company’s contributions have not been material to any individual year.11. Segment and Geographic InformationDisclosure requirements about segments of an enterprise and related information establishes standards for reporting information regarding operatingsegments in annual financial statements and requires selected information of those segments to be presented in interim financial reports issued toshareholders. Operating segments are defined as components of an enterprise about which separate discrete financial information is available that is evaluatedregularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. Our chiefoperating decision maker is the chief executive officer. The Company and the chief executive officer view the Company’s operations and manage its businessas one operating segment.Geographic DataThe Company allocates, for the purpose of geographic data reporting, its revenue based upon the location of the contracting subsidiary. Total revenueby geographic area was as follows: Year ended March 31, 2016 2015 2014 Revenue: United States $60,970 $43,574 $29,636 United Kingdom 55,276 48,595 37,694 South Africa 22,342 21,817 18,716 Other 3,253 2,099 2,269 Total revenue $141,841 $116,085 $88,315 Property and equipment, net by geographic location consists of the following: At March 31, 2016 2015 United States $11,363 $11,031 United Kingdom 7,677 7,883 Australia 2,886 192 South Africa 2,569 3,736 Other 311 317 Total $24,806 $23,159 F-27 Table of Contents12. Income Taxes(Loss) income before the provision for income taxes consists of the following: Year ended March 31, 2016 2015 2014 United Kingdom $942 $5,955 $(4,033) Foreign (3,321) (5,518) (12,838) (Loss) income before provision for income taxes $(2,379) $437 $(16,871) The provision for income taxes in the accompanying consolidated financial statements is comprised of the following: At March 31, 2016 2015 2014 Current tax expense: Domestic $154 $— $— Foreign 711 152 19 Total current tax expense 865 152 19 Deferred tax expense: Domestic — — — Foreign — — — Total deferred tax expense — — — Total provision for income taxes $865 $152 $19 The reconciliation of the United Kingdom statutory tax rate to the Company’s effective tax rate included in the accompanying consolidated statementsof operations is as follows: Year ended March 31, 2016 2015 2014 Tax at statutory rate 20.0% 21.0% 20.0% U.S. state taxes, net of federal (1.9) 9.9 — Foreign rate differential 18.0 (214.6) 10.7 Meals and entertainment (7.9) 24.3 (0.6) Branch income / loss 0.3 (2.7) (0.6) Share-based compensation (7.3) 90.8 (0.1) Foreign exchange 7.4 (215.4) (2.1) Non-deductible interest expense (13.9) 76.2 — R&D credit and R&D enhancement 7.9 — (4.4) Change in valuation allowance 48.1 243.5 (23.0) Deferred tax true-ups (61.0) — — Tax reserves (23.8) — — Provision to return (6.5) — — Non-deductible expenses (3.9) — — Effect of U.K. rate change (12.8) — — Other 0.9 1.8 — Effective Tax Rate (36.4)% 34.8% (0.1)% Although the Company’s parent entity is organized under the laws of Jersey, our affairs are, and are intended to continue to be, managed and controlledin the United Kingdom for tax purposes and therefore we are F-28 Table of Contentsresident in the United Kingdom for tax purposes and therefore we are resident in the United Kingdom for U.K. and Jersey tax purposes. The Company’s parententity is domiciled in the United Kingdom and its earnings are subject to a statutory tax rate of 20.0%, 21.0% and 20.0% for the years ended March 31, 2016,2015 and 2014, respectively. The Company’s effective tax rate differs from the statutory rate each year primarily due to the valuation allowance maintainedagainst the Company’s net deferred tax assets, the jurisdictional mix of earnings (profits earned in foreign jurisdictions are taxed at different rates than theUnited Kingdom statutory tax rate), the effect of tax rate changes, tax reserves for uncertain tax positions and the impact of permanent differences (primarilyrelated to non-deductible expenses, true-ups, and foreign exchange).Deferred tax assets and liabilities reflect the net tax effects of net operating loss carryovers and the temporary differences between the carrying amountof assets and liabilities for financial reporting and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets(liabilities) are as follows: At March 31, 2016 2015 Deferred tax assets/liabilities: (in thousands) Net operating loss carryforwards $12,362 $14,676 Share-based compensation 2,369 2,136 Deferred revenue 1,609 1,203 Fixed assets 1,097 509 Accrued compensation 732 624 Accrued costs 203 141 Deferred rent 284 159 Income tax credits 184 — Other 149 164 Gross deferred tax assets 18,989 19,612 Valuation allowance (18,355) (19,612) Prepaid expenses (139) — Fixed assets (442) — Other (53) — Deferred tax assets, net $— $— In assessing the ability to realize the Company’s net deferred tax assets, management considers various factors including taxable income in carrybackyears, future reversals of existing taxable temporary differences, tax planning strategies and projections of future taxable income, to determine whether it ismore likely than not that some portion or all of the net deferred tax assets will not be realized. Based on the cumulative losses that the Company has incurredin the jurisdictions in which it operates and consideration of other negative evidence, the Company has determined that the uncertainty regarding therealization of its deferred tax assets is sufficient to warrant the need for a full valuation allowance against its worldwide net deferred tax assets. The netdecrease in the valuation allowance of approximately $1.3 million from 2015 to 2016 is primarily due to the impact of foreign exchange, the impact ofdeferred tax true-up adjustments and the operating results of the Company.As of March 31, 2016 and 2015, the Company had U.K. net operating loss carryforwards of approximately $10.3 million and $9.5 million, respectively.These net operating loss carryforwards do not expire. At March 31 2016 and 2015, the Company had U.S. federal net operating loss carryforwards ofapproximately $31.5 million and $30.4 million, respectively and U.S. state net operating loss carryforwards of approximately $24.4 million and $27.4million, respectively. These net operating loss carryforwards expire at various dates through 2036. As of March 31, 2016 and 2015, the Company had SouthAfrican net operating loss carryforwards of zero and $3.0 million, respectively. As of March 31, 2016 and 2015, the Company had Australian net operatingloss F-29 Table of Contentscarryforwards of approximately $7.7 million and $3.2 million, respectively. These net operating loss carryforwards do not expire. As of March 31, 2016, theCompany had a U.K income tax credit carryforward of $0.2 million. This credit does not expire.Included in the March 31, 2016 net operating losses carryforwards above, the Company has U.S. federal, U.S. state, and U.K net operating losses ofapproximately $2.8 million, $2.8 million and $6.6 million, respectively, related to excess share-based compensation deductions. These net operating losseshave been excluded from the above deferred tax table. In accordance with ASC 740 and ASC 718, recognition of these assets would occur upon theutilization of these deferred tax assets to reduce taxes payable and would result in a credit to additional paid-in capital within shareholders’ equity rather thanthe provision for income taxes.Under Sections 382 and 383 of the U.S. Internal Revenue Code, if a corporation undergoes an ownership change, the corporation’s ability to use itspre-change net operating loss carryforwards and other pre-change tax attributes, such as research tax credits, to offset its post-change income and taxes maybe limited. In general, an ownership change generally occurs if there is a cumulative change in our ownership by 5-percent shareholders that exceeds 50percentage points over a rolling three-year period. Similar rules may apply under U.S. state tax laws. The Company believes that it has experienced anownership change in the past and may experience ownership changes in the future as a result of future transactions in our share capital, some of which may beoutside of the control of the Company. The Company is still in the process of determining whether historic ownership changes will result in any materiallimitation on the use of its U.S. net operating losses. As a result, if the Company earns net taxable income, its ability to use its pre-change net operating losscarryforwards, or other pre-change tax attributes, to offset U.S. federal and state taxable income and taxes may be subject to significant limitations.The Company previously adopted ASC 740-10, which clarifies the accounting for uncertainty in income taxes recognized in the financial statements.The Company had no unrecorded liabilities for uncertain tax positions upon adoption and the adoption did not have an impact on the Company’s balancesheet or retained earnings. As of March 31, 2016, the Company had liabilities for uncertain tax positions of $2.3 million, none of which, if recognized, wouldimpact the Company’s effective tax rate.A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: At March 31,2016 (in thousands) Balance at April 1, 2015 $— Additions based on tax positions related to current year 1,258 Additions for tax positions of prior years 1,068 Reductions for tax positions of prior years — Settlements — Balance at March 31, 2016 $2,326 Interest and penalty charges, if any, related to uncertain tax positions would be classified as income tax expense in the accompanying consolidatedstatements of operations. As of March 31, 2016 and 2015, the Company had no accrued interest or penalties related to uncertain tax positions.The Company is subject to taxation in the United Kingdom and several foreign jurisdictions. At March 31, 2016, the Company is no longer subject toexamination by taxing authorities in the United Kingdom for years prior to March 31, 2015. The significant foreign jurisdictions in which the Companyoperates are no longer subject to examination by taxing authorities for years prior to March 31, 2013. In addition, net operating loss carryforwards in certainjurisdictions may be subject to adjustments by taxing authorities in future years in which they are utilized. F-30 Table of ContentsThe majority of the Company’s foreign subsidiaries have incurred losses since inception and do not have any undistributed earnings as of March 31,2016. Income taxes have not been provided on the undistributed earnings of certain foreign subsidiaries of approximately $1.4 million because such earningsare considered to be indefinitely reinvested in the business. The amount of tax payable on the earnings that are indefinitely reinvested in foreign operationswould be immaterial.13. Subsequent EventsThe Company has completed an evaluation of all subsequent events after the audited balance sheet date of March 31, 2016 through May 25, 2016, thedate this Annual Report on Form 20-F was filed with the SEC, to ensure that this filing includes appropriate disclosure of events both recognized in thefinancial statements as of March 31, 2016, and events which occurred subsequently but were not recognized in the financial statements. The Company hasconcluded that no subsequent events have occurred that require disclosure within these consolidated financial statements.14. Quarterly results of operations data (unaudited)The following tables set forth our unaudited quarterly consolidated statements of operations for each of the eight quarters in the period endedMarch 31, 2016. We have prepared the quarterly consolidated statements of operations data on a basis consistent with the audited consolidated financialstatements included elsewhere in this Annual Report on Form 20-F. In the opinion of management, the financial information reflects all adjustments,consisting only of normal recurring adjustments, which we consider necessary for a fair presentation of this data. This information should be read inconjunction with the audited consolidated financial statements and related notes included elsewhere in this Annual Report on Form 20-F. The results ofhistorical periods are not necessarily indicative of the results to be expected for any future period. Quarter ended Jun 30,2014 Sep 30,2014 Dec 31,2014 Mar 31,2015 Jun 30,2015 Sep 30,2015 Dec 31,2015 Mar 31,2016 (in thousands, except per share amounts) Revenue $26,943 $28,603 $29,824 $30,715 $33,328 $34,507 $37,130 $36,876 Gross profit 18,018 19,466 20,240 21,540 23,452 24,314 26,479 25,787 (Loss) income from operations (2,651) (5,067) 2,619 1,669 2,110 1,503 (2,138) (4,049) Net (loss) income (4,048) (3,384) 4,064 3,653 (2,249) 2,168 (1,199) (1,964) Net (loss) income applicable to ordinary shareholders—basic (4,048) (3,384) 2,920 2,630 (2,249) 1,572 (1,199) (1,964) Net (loss) income applicable to ordinary shareholders—diluted (4,048) (3,384) 3,003 2,705 (2,249) 1,612 (1,199) (1,964) Net (loss) income per share applicable to ordinaryshareholders: Basic $(0.13) $(0.10) $0.09 $0.08 $(0.07) $0.05 $(0.03) $(0.04) Diluted $(0.13) $(0.10) $0.08 $0.07 $(0.07) $0.04 $(0.03) $(0.04) Weighted-average number of ordinary shares used incomputing net (loss) income per share applicable toordinary shareholders: Basic 31,884 32,230 32,505 32,802 33,066 33,673 42,514 54,172 Diluted 31,884 32,230 36,146 36,449 33,066 36,991 42,514 54,172 F-31 Table of ContentsSIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned tosign this Annual Report on its behalf. MIMECAST LIMITED/s/ Peter BauerBy: Peter BauerTitle: Chief Executive Officer (Principal Executive Officer)Date: May 25, 2016 Table of ContentsEXHIBIT INDEX Incorporated by Reference Exhibit Description Schedule/Form File Number Exhibit File Date (mm/dd/yyyy) 1.1 Articles of Association of the Registrant F-1/A 333-207454 3.2 11/06/2015 2.1 Subscription and Shareholders’ Agreement, dated September 18, 2012, by andamong Mimecast UK and the other parties thereto F-1 333-207454 4.2 10/16/2015 2.1.1 Shareholders Agreement, dated November 5, 2015, by and among the Registrant,Mimecast UK and the other parties thereto F-1/A 333-207454 4.2.1 11/06/2015 2.2 Registration Rights Agreement, dated September 18, 2012, by and amongMimecast UK and the other parties thereto F-1 333-207454 4.3 10/16/2015 2.2.1 Registration Rights Agreement, dated November 5, 2015, by and among theRegistrant, Mimecast UK and the other parties thereto F-1/A 333-207454 4.3.1 11/06/2015 4.1# Form of Indemnification Agreement F-1 333-207454 10.1 10/16/2015 4.2# Mimecast UK 2007 Key Employee Share Option Plan and Form of Share OptionAgreement F-1 333-207454 10.6 10/16/2015 4.3# Mimecast UK 2010 EMI Share Option Scheme F-1 333-207454 10.7 10/16/2015 4.4# Mimecast UK Approved Share Option Plan and Form of Share Option Certificate F-1 333-207454 10.8 10/16/2015 4.5# Mimecast Limited 2015 Share Option and Incentive Plan F-1/A 333-207454 10.9 11/06/2015 4.6# Mimecast Limited 2015 Employee Share Purchase Plan F-1/A 333-207454 10.10 11/06/2015 4.7 Third Amended and Restated Loan Agreement, dated May 22, 2015, by and amongMimecast Services Limited, Mimecast North America, Inc. and Silicon ValleyBank, as amended F-1 333-207454 10.5 10/16/2015 4.7.1 Amendment Letter and Confirmation, dated November 13, 2015, by and amongMimecast Services Limited, Mimecast North America, Inc. and Silicon Valley Bank F-1/A 333-207454 10.5.1 11/13/2015 4.8 Underlease, dated August 7, 2013, by and between Mimecast Services Limited andSands Service Company (No.2) F-1 333-207454 10.2 10/16/2015 4.9 Lease, dated November 12, 2012, by and between Mimecast North America, Inc.and Farley White Aetna Mills, LLC F-1 333-207454 10.3 10/16/2015 4.9.1* First Amendment to Lease, dated October 19, 2015, by and between MimecastNorth America, Inc. and Riverworks Watertown Holdings, LLC 4.10 Agreement of Lease, dated June 24, 2013, by and between Mimecast South Africa(Pty) Ltd and City Square Trading 522 (Pty) Ltd F-1 333-207454 10.4 10/16/2015 Table of Contents Incorporated by ReferenceExhibit Description Schedule/Form File Number Exhibit File Date (mm/dd/yyyy) 8.1* Subsidiaries of the Registrant 12.1* Certification by the Principal Executive Officer pursuant toSecurities Exchange Act Rules 13a-14(a) and 15d-14(a) asadopted pursuant to Section 302 of the Sarbanes-Oxley Actof 2002 12.2* Certification by the Principal Financial Officer pursuant toSecurities Exchange Act Rules 13a-14(a) and 15d-14(a) asadopted pursuant to Section 302 of the Sarbanes-Oxley Actof 2002 13.1** Certification by the Principal Executive Officer andPrincipal Financial Officer pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 15.1* Consent of Ernst & Young LLP. 101.INS* XBRL Instance Document 101.SCH* XBRL Taxonomy Extension Schema Document 101.CAL* XBRL Taxonomy Extension Calculation LinkbaseDocument 101.DEF* XBRL Taxonomy Extension Definition LinkbaseDocument 101.LAB* XBRL Taxonomy Extension Label Linkbase Document 101.PRE* XBRL Taxonomy Extension Presentation LinkbaseDocument *Filed herewith.**Furnished herewith. The certifications furnished in Exhibit 13.1 hereto are deemed to accompany this Annual Report on Form 20-F and will not bedeemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Such certifications will not be deemed to beincorporated by reference into any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except tothe extent that the Registrant specifically incorporates it by reference.#Management contract or compensatory plan or arrangement. Exhibit 4.9.1Execution VersionCHS 7032911v3FIRST AMENDMENT TO LEASEThis FIRST AMENDMENT TO LEASE (this “Amendment”) is entered into and effective as of the 19th day of October, 2015 (the “First AmendmentEffective Date”) by and between RIVERWORKS WATERTOWN HOLDINGS, LLC, a Delaware limited liability company, as landlord (“Landlord”), assuccessor-in-interest to Farley White Aetna Mills, LLC, having an address for purposes hereof at One Market Plaza, Spear Tower, Suite 4125, San Francisco,California 94105, and MIMECAST NORTH AMERICA, INC., a Delaware corporation, as tenant (“Tenant”), having an address for purposes hereof at 480Pleasant Street, Watertown, Massachusetts 02472.W I T N E S S E T H:WHEREAS, Landlord and Tenant arc the present parties to that certain Lease dated November 12, 2012 (the “Original Lease”), as affected by thatcertain Commencement Date Agreement executed by Landlord and Tenant on or about June 6, 2013 (the “Confirmation”, and together with the OriginalLease, the “Existing Lease”), pursuant to which Landlord leases to Tenant and Tenant leases from Landlord a portion of the First Floor and Mezzanine Levelof the Building located at 480 Pleasant Street, Watertown, Massachusetts, designated as Suite C-10, and containing approximately 33,669 Rentable Square(the “Existing Premises”); andWHEREAS, all initial capitalized terms used and not otherwise defined in this Amendment shall have the meaning ascribed to such terms in theExisting Lease; andWHEREAS, Landlord and Tenant desire to enter into this Amendment in order to expand the Existing Premises to include a stipulated 10,501 RentableSquare Feet on the first (1st) floor of the Building shown as “Suite BI00” on the plan attached hereto as Schedule 1 (the “First Expansion Premises”) and tomodify certain other terms and provisions of the Existing Lease in connection therewith, all subject to and upon the terms and provisions contained in thisAmendment.NOW, THEREFORE, for good and valuable consideration, and in consideration of the mutual agreements contained in this Amendment, Landlord andTenant hereby agree and amend the Existing Lease as follows:1. Recital. The above recitals arc incorporated herein by this reference.2. Lease. As of the First Amendment Effective Date, all references to the “Lease” both in this Amendment and in the Existing Lease shall mean andrefer to the Existing Lease, as amended and affected by this Amendment.3. Extension of Term and Expansion of Existing Premises. The initial Term of the Lease, presently scheduled to expire on October 15, 2020, ishereby extended for all purposes under the Lease until October 31, 2020 (the “ Expiration Date”). Effective as of the date upon which Landlord’s FirstExpansion Premises Work and Landlord’s Additional Expansion Premises Work are Substantially Complete (as defined in Section 6 hereof) and Landlorddelivers the First Expansion Premises to Tenant free and clear of all other tenants and occupants (the “First Expansion Premises Commencement Date”); (a) in addition to the Existing Premises, Landlord hereby leases to Tenant, and Tenant herebyleases from Landlord, the First Expansion Premises, subject to and upon all the terms of the Existing Lease, except as set forth in this Amendment; (b) allreferences in the Lease to the “Premises” shall mean and refer to the Existing Premises, together with the First Expansion Premises; and (c) the expiration ofthe Term shall occur on the Expiration Date set forth above in this Section 3, unless validly extended by Tenant in accordance with the terms of the Lease toinclude the Extension Term, as defined in Section 10.23 to the Lease, or sooner terminated in accordance with the terms of the Lease. The period of the Termbeginning on the First Expansion Premises Commencement Date and continuing through the last day of the Term is hereinafter referred to as the “FirstExpansion Premises Term”. The following Terms and provisions of the Existing Lease shall be inapplicable to the First Expansion Premises: (i) Article IV(excluding Section 4.4, which shall remain applicable) and Exhibit B and Exhibit 0; and (ii) Section 10.9.4. Amendments to Option to Extend. Notwithstanding anything contained in the Existing Lease to the contrary. Landlord and Tenant agree thatTenant’s option to extend the Term pursuant to Section 10.23 of the Lease: (a) maybe exercised only with respect to the entire Premises (i.e., the ExistingPremises and the First Expansion Premises) and not any part thereof; (b) unless Landlord expressly agrees otherwise, may only be exercised by Mimecast,North America Inc. (or any Affiliate which has succeeded to Tenant’s interest in the Lease in strict accordance with the terms and provisions contained inSection 6.3(b) of the Original Lease) and only if Mimecast North America, Inc. (or such Affiliate), both on the date of its extension exercise notice and on thefirst day of the Extended Term, remains the Tenant under the Lease and itself occupies at least seventy percent (70.0%) of the Premises (and if either suchconditions are not satisfied, Landlord, at its option, may elect to void Tenant’s exercise of its option to extend by written notice to Tenant); and (c) must beexercised by written notice delivered to Landlord delivered on or before October 31, 2018, with time strictly of the essence.5. Base Rent.(a) Existing Premises Base Rent. Tenant shall continue to pay Base Rent for the Existing Premises in the same amounts and in accordance withall terms and provisions of the Existing Lease. For the avoidance of doubt, Lease Year 7 of the Lease shall include the period of time between October 15,2020 and the Expiration Date set forth in Section 3 above, and during such lime Base Rent for the Existing Premises shall continue to be payable in theamount of $74,352.38 per month, as set forth in Section 1.2(m) of the Existing Lease.(b) First Expansion Premises Base Rent. In addition to the Base Rent payable by Tenant pursuant to the Existing Lease for the Existing Premises,Tenant shall, commencing as of the First Expansion Premises Rent Commencement Date (as hereinafter defined) and on or before the first day of eachcalendar month thereafter through the Expiration Date, pay Base Rent to Landlord for the First Expansion Premises in accordance with all of the terms andprovisions contained in the Lease governing payment of Base Rent, but in the following amounts: - 2 - Period Per RSF Annual Monthly First Amendment Effective Date through the First Expansion Premises Rent Commencement Date. $0.00 $0.00 $0.00 First Expansion Premises Rent Commencement Date through the last day of the calendar month during whichthe one-year anniversary of the First Expansion Premises Rent Commencement Date occurs (the “FirstExpansion Year”‘) $33.50 $351,783.50 $29,315.30 The 12-month period immediately following the last day of the First Expansion Year (the “Second ExpansionYear”) $34.50 $362,284.50 $30,190.38 The 12-month period immediately following the last day of the Second Expansion Year (the “Third ExpansionYear’) $35.50 $372,785.50 $31,065.46 The 12-month period immediately following the last day of the Third Expansion Year (the “Fourth ExpansionYear”) $36.50 $383,286.50 $31,940.55 The day immediately following the last day of the Fourth Expansion Year through October 31, 2020 $37.50 $393,787.50* $32,815.63 *Prorated to reflect a partial year.For purposes hereof, the “First Expansion Premises Rent Commencement Date” shall mean the earlier to occur of (i) the First Expansion PremisesCommencement Date, or (ii) the date upon which the First Expansion Premises Commencement Date would have occurred in the absence of any TenantDelay, as defined in Exhibit B, after duly accounting for any failure by Landlord to perform its obligations as set forth in Exhibit B within any applicabledeadline set forth therein, provided, however, that if the First Expansion Premises Rent Commencement Date would otherwise occur on or before March 1,2016, then the First Expansion Premises Rent Commencement Date hereunder shall be March 1, 2016. Tenant acknowledges and agrees that, under theforegoing clause (ii), the First Expansion Premises Rent Commencement Date may occur prior to the First Expansion Premises Commencement Date, and thatTenant maybe liable for Base Rent respecting the First Expansion Premises prior to its being delivered by Landlord to Tenant hereunder. - 3 - Promptly following the First Expansion Premises Commencement Date and within ten (10) days following Landlord’s written request, Landlord andTenant shall execute and deliver a confirmatory amendment to the Lease or letter agreement prepared by Landlord documenting the First Expansion PremisesCommencement Date and the First Expansion Premises Rent Commencement Date in accordance with the terms of this Amendment. However, the provisionsof this Amendment shall be self-operative and no failure by Landlord or Tenant to execute such confirmatory amendment shall have any effect on the parties’rights and obligations hereunder.As set forth in the schedule set forth above, Landlord has agreed that, subject to the terms hereof, no Base Rent for the First Expansion Premises (andonly the First Expansion Premises) shall be due and payable during the period of time beginning on the First Amendment Effective Date and continuingthrough the First Expansion Premises Rent Commencement Date. The Base Rent that would have otherwise been payable during such time is hereinafterreferred to as the “Abated Base Rent”. Tenant acknowledges and agrees that the value of the Abated Basic Rent is $33.50 per rentable square foot of the FirstExpansion Premises per annum, and that Landlord’s agreement to provide the Abated Base Rent is conditioned upon no monetary Event of Default occurringat any time during the Term. Tenant agrees that Tenant’s right to the Abated Base Rent shall immediately terminate if (i) a monetary Event of Default occursat any time during the Term, and (ii) Landlord terminates this Lease or Tenant’s right of possession on account of such monetary Event of Default, in eithersuch case (in addition to any other rights or remedies which may be available to Landlord on account thereof) a pro-rated amount of any Abated Base Rentpreviously credited to Tenant pursuant to this Amendment shall (notwithstanding that Landlord is not obligated to deliver the First Expansion Premises toTenant until Landlord’s First Expansion Premises Work and Landlord’s Additional Expansion Premises Work is Substantially Complete) becomeimmediately due and payable from Tenant to Landlord, such amount to equal the amount of the Abated Base Rent previously credited to Tenant pursuant tothis Amendment multiplied by a fraction, the numerator of which shall be the number of full or partial calendar months remaining in the First ExpansionPremises Term as of the date the monetary Event of Default occurs and the denominator of which shall be fifty-six (56), being the number of full or partialcalendar months between the anticipated First Expansion Premises Commencement Date of March 1, 2016 and the Expiration Date.6. Condition of the First Expansion Premises; Landlord’s First Expansion Premises Work. Tenant shall accept delivery of the First ExpansionPremises upon Landlord’s delivery thereof with Landlord’s First Expansion Premises Work and Landlord’s Additional First Expansion Premises Work (asdefined herein below) Substantially Complete, and Landlord shall have no obligation to perform any construction or other work therein or to otherwiseprepare the First Expansion Premises for Tenant’s occupancy, except Landlord shall, following the First Amendment Effective Date: (a) at Landlord’s solecost and expense, perform the work described in Exhibit A attached hereto and incorporated herein by reference, other than any work described therein asbeing the responsibility or obligation of Tenant (“Landlord’s First Expansion Premises Work”); and (b) perform certain additional work to the FirstExpansion Premises to prepare the same for Tenant’s occupancy (the “Landlord’s Additional First - 4 - Expansion Premises Work”), subject to and in accordance with the terms and provisions contained in Exhibit B attached hereto and incorporated herein byreference. Landlord agrees to use commercially reasonable efforts to complete Landlord’s First Expansion Premises Work and Landlord’s Additional FirstExpansion Premises Work on or before March 1, 2016, and Tenant shall provide Landlord with reasonable access to the Premises for such purposes. In theevent Landlord’s First Expansion Premises Work and Landlord’s Additional First Expansion Premises Work is not “Substantially Complete” (as hereinafterdefined) on or before March 1,2016, Landlord shall have no liability therefor (except as expressly provided in this Amendment), and Tenant shall acceptdelivery of the First Expansion Premises when the same is delivered by Landlord with Landlord’s First Expansion Premises Work and Landlord’s AdditionalFirst Expansion Premises Work Substantially Complete. In the event Landlord’s First Expansion Premises Work and Landlord’s Additional First ExpansionPremises Work are not Substantially Complete on or before May 1, 2016, as extended by each day of Tenant Delay (as defined in Exhibit B) and/or ForceMajeure (the “Rent Credit Trigger Date”), then Landlord shall issue a credit to Tenant in the amount of $963.79 for each day from and after the Rent CreditTrigger Dale until the date upon which Landlord’s First Expansion Premises Work and Landlord’s Additional First Expansion Premises Work areSubstantially Complete, with such credit to be applied towards Tenant’s installment(s) of Base Rent for the First Expansion Premises first due hereunder untilfully credited.For purposes hereof, “Substantially Complete” shall mean Landlord’s First Expansion Premises Work and Landlord’s Additional First ExpansionPremises Work are completed in substantial accordance with the Construction Drawings (as defined in Exhibit B hereto) and a certificate of occupancy (orsuch other governmental approval which lawfully permits Tenant to use the First Expansion Premises for the Permitted Uses) has been issued therefor, exceptto the extent that such certificate of occupancy or other approval cannot be issued due to incompletion of or defects in any Tenant First Expansion PremisesWork, Notwithstanding the foregoing, Landlord’s First Expansion Premises Work and Landlord’s Additional First Expansion Premises Work shall be deemedSubstantially Complete notwithstanding that certain work items thereof remain incomplete and/or require remedial work, provided that the incompletion ofor defects in such items could not reasonably be expected to materially and adversely interfere with either (i)the performance of any Tenant First ExpansionPremises Work (as defined in the Work Letter) theretofore approved by Landlord, if any, or (ii) use and occupancy of the First Expansion Premises for thePermitted Uses (subject to completion by Tenant of any Tenant First Expansion Premises Work).7. Operating Expenses and Taxes. Notwithstanding anything contained in the Existing Lease to the contrary, from and after the First AmendmentEffective Date and during the First Expansion Premises Term, Tenant shall continue to pay Operating Expenses and Taxes for the Existing Premises inaccordance with all terms and provisions contained in the Existing Lease. In addition to and without in any way limiting such payments, with respect to theFirst Expansion Premises Tenant shall pay to Landlord, commencing on the First Expansion Premises Rent Commencement Date and through the expirationor earlier termination of tire First Expansion Premises Term; (a) Tenant’s First Expansion Premises Percentage (as hereinafter defined) of the amount by whichthe annual Operating Expenses exceed the Operating Expenses for calendar year 2016; and (b) Tenant’s First Expansion Premises Percentage of any increasein Taxes over the Taxes attributable to fiscal year 2016 (i.e., July 1, 2015 through June 30, 2016), - 5 - in each case upon all the same terms and provisions applicable to Tenant’s payment on account of Taxes and Operating Expenses for the Existing Premises,as set forth in the Existing Lease. For purposes hereof: (i) “Tenant’s First Expansion Premises Percentage” shall mean 5.37%; and (ii) a fiscal year shall bedeemed to fall within the Term and/or the First Expansion Premises Term (as applicable) if such fiscal year falls within the Term or First Expansion PremisesTerm in whole or in part, but in the latter case the Taxes for such year shall be pro rated on a per diem basis.8. Electricity. Notwithstanding the terms and provisions contained in Section 3.3 of the Lease, Landlord shall not be obligated to install a sub-meterfor measurement of electricity consumption in the First Expansion Premises. In the event that such sub-meter is not installed and at any time during whichsuch sub-meter (if installed) is not operational, Tenant shall pay to Landlord, within thirty (30) days following Landlord’s invoices therefor, suchcommercially reasonable charge for electricity service to the First Expansion Premises as Landlord may impose from time to time, it being agreed that suchcharge shall initially be $1,312.63 per month. Such charge shall be subject to increase from time to time by written notice from Landlord to Tenant, exceptthere shall be no profit to Landlord therefor.9. Security Deposit. There shall be no increase to the security deposit described in Section 10.19 of the Original Lease for the First Expansion Premisesunder the Lease.10. Brokers. Neither Landlord nor Tenant has dealt with any broker or agent in connection with the negotiation or execution of this Amendment, otherthan DTZ and Cassidy Turley Commercial Real Estate Services, d/b/a Cushman & Wakefield, whose commissions shall be paid by Landlord pursuant toseparate written agreements. Landlord hereby indemnifies Tenant against any claims arising due to Landlord’s failure to pay such commissions as aforesaid;and Tenant and Landlord shall each indemnify the other against all costs, expenses, attorneys’ fees, liens and other liability for commissions or othercompensation claimed by any other broker or agent claiming the same by, through, or under the indemnifying party.11. Parking. During the First Expansion Premises Term (and during the Extended Term, if validly exercised by Tenant), and in addition to the parkingrights granted to Tenant in Section 2.1 (c) of the Lease, Tenant shall be entitled to use thirty (35) parking spaces at the Property, of which twenty (20) shall bein the Upper Lot and fifteen (15) shall be in the Lower Lot, all subject to and upon the same terms and conditions applicable to the parking rights granted toTenant in the Existing Lease.12. Miscellaneous. Landlord and Tenant hereby acknowledge and agree that, except as specifically amended by the terms of this Amendment, all ofthe terms, covenants and provisions of the Existing Lease are hereby ratified and confirmed and shall remain in full force and effect. Tenant hereby certifies,represents and warrants to Landlord that, to the best of Tenant’s knowledge and as of the First Amendment Effective Date, (a) Landlord is not in default underthe Existing Lease, and (b) except as set forth on Schedule 2 attached hereto and incorporated herein by reference, no state of fact or condition exists which,upon either the passage of time and/or the giving of notice, could give rise to a default of Landlord under the Existing Lease, This Amendment maybeexecuted in two (2) or more counterparts, and by the exchange of facsimile or other electronic signatures with the same force and effect as original ink - 6 - signatures, When each party has signed and delivered at least one (1) such counterpart, each counterpart shall be deemed an original, and, when takentogether with the other signed counterparts, shall constitute one Amendment, which shall be binding upon and effective as to Landlord and Tenant as of theFirst Amendment Effective Date, Each of Landlord and Tenant hereby represents and warrants to the other that the individual(s) executing this Amendmenton their respective behalf are duly authorized to do so, and that such authorization remains in full force and effect and has not been modified or revoked.[SEE NEXT PAGE FOR SIGNATURES] - 7 - IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the date first above-written, LANDLORD: TENANT:RIVERWORKS WATERTOWNHODLINGS, LLC,a Delaware limited liability company MIMECAST NORTH AMERICA, INC.,a Delaware corporationBy: /s/ Rajir S. Patel By: /s/ Peter Campbell Name: Rajir S. Patel Name: Peter Campbell Title: President Title: CFO - 8 - Schedule 1 FloorPlan of First Expansion Premises S1-1 Schedule 2Exceptions to Tenant Estoppel Certificate 1.On-going roof issues: Tenant has experienced leaking in certain areas of the office continuously since commencement of the Term. Such leakingconsistently occurs, particularly when there is rain or snow. Landlord has been notified of this issue. Landlord shall promptly repair all damagesincurred from such leaking roof, including, but not limited to: a.Inspection, repair and/or replacement of affected carpets and any other finished floor surfaces or coverings. b.Repairs to affected walls, floors, ceilings and any other wall coverings. 2.Pipe Burst/Leaking: A pipe/pump burst in the Premises on October 12, 2015, Such pipe burst is the second burst to occur in the Premises; hence, suchpipes need to be inspected and sensors need to be installed in any area containing a main water pump or pipe that is located in the Premises (SuiteC10). Landlord has been notified of this issue. Landlord shall promptly perform the following actions and/or repair all damages incurred from suchburst pipes and flooding, including, but not limited to: a.Inspection, repair and/or replacement of affected carpets and any other finished floor surfaces or coverings. b.Testing and remediation, if necessary, of affected areas (including carpeting and drywall) to ensure no evidence of the existence of moldor mildew. c.Reimbursement for the cost of personal property belonging to any employee directly damaged by such burst pipe and/or flooding. d.Reimbursement for the cost of personal property of Tenant directly damaged by such burst pipe and/or flooding. 10 Schedule 2Exceptions to Tenant Estoppel Certificate S2-1 Exhibit ALandlord’s First Expansion Premises WorkHVACThe Premises (10,501 RSF) is serviced by a 15 ton air handling unit located on the side of the building, At this time, there is no main distribution line fromthe unit supply side. Landlord, at Landlord’s cost shall install a main distribution line from the unit supply side, Tenant shall be responsible for distributionwithin the Premises from the main distribution line.ElectricalLandlord shall be responsible for bringing power into the Premises. Landlord shall run a power line into the Premises from the 480-volt panel located by theelevator s in Lobby A. In addition, Landlord shall install a transformer to step down the power to 120/208-volt and install a 1207208-volt panel in thePremises to allow for Tenant distribution. Landlord shall do the above electrical work at Landlord’s cost. A-1 Exhibit BTerms and Conditions for Landlord’s Additional First Expansion Premises WorkAll initial capitalized terms used and not otherwise defined in this Exhibit B shall have the meaning ascribed to such terms in the Lease, It is agreedthat time is of the essence for purposes hereof.1. Landlord’s Additional First Expansion Premises Work. Subject to and upon the terms and provisions contained in this Exhibit B, Landlordshall perform Landlord’s Additional First Expansion Premises Work (as hereinafter defined). As used in this Exhibit B, “Landlord’s Additional FirstExpansion Premises Work” shall mean those certain improvements to the First Expansion Premises described on the final construction drawings (andany related specifications) approved by Landlord and Tenant as provided in Section 2 of this Exhibit B, as the same may be amended from time to timein accordance with this Exhibit B (the “Construction Drawings”).2. Approval of Construction Drawings for Landlord’s Additional First Expansion Premises Work.(a) Preparation and Delivery of Draft Construction Drawings. Tenant shall cause Jim Dean, of Dean Associates Architects located at 4Railroad Ave,, Suite 301, Wakefield, MA 01880 (the “Architect”) to prepare proposed construction drawings and specifications for allimprovements to be installed in the First Expansion Premises as part of Landlord’s Additional First Expansion Premises Work, and Tenant shalldeliver such plans and specifications (in form and substance sufficient for issuance of a building permit and in accordance with reasonablestandards of professional care) to Landlord on or before November 1, 2015, time being of the essence, for Landlord’s review and approval.Landlord’s approval thereof may be given or withheld by Landlord in accordance with the same standards applicable to Alterations by Tenantunder the Lease, as set forth in Section4 of the Original Lease. Further, Landlord’s Additional First Expansion Premises Work shall be deemed“Alterations” under the Lease for purposes of Section 4.4(d) of the Original Lease. Accordingly Landlord reserves the right to require that all orany portion(s) of Landlord’s Additional First Expansion Premises Work be removed from the Premises by Tenant (at Tenant’s sole cost andexpenses) upon the expiration or earlier termination of the Lease by giving Tenant written notice thereof at the time Landlord approves theConstruction Drawings.(b) Approval Process. Landlord shall notify Tenant whether it approves of Tenant’s submitted draft construction drawings andspecifications within fourteen (14) days after Tenant’s submission thereof, time being of the essence. If Landlord does not approve of suchconstruction drawings and specifications, then Landlord shall notify Tenant of such non-approval within said fourteen (14) day period,specifying in reasonable detail Landlord’s reasons for such non-approval (or requesting additional information), in which event Tenant shallcause the Architect to revise such construction drawings and specifications in response to Landlord’s comments and submit the revisedconstruction drawings and specifications to Landlord for its review and approval within seven (7) days following Landlord’s notice of non-approval. Landlord B-1 shall then notify Tenant in writing whether it approves of the resubmitted construction drawings and specifications within seven (7) days after itsreceipt thereof. This process shall be repeated until the construction drawings and specifications have been finally approved by Landlord andTenant. At Landlord’s request, Tenant shall sign such Construction Drawings to evidence Tenant’s approval thereof. To the above-describedreview and approval process, Tenant may submit draft schematic plans and/or construction drawings and specifications for designated portionsof the First Expansion Premises or major systems (e.g., HVAC or life-safety systems) to Landlord for its preliminary, non-binding review.Notwithstanding anything contained herein to the contrary, Tenant acknowledges and agrees that Landlord’s approval of the ConstructionDrawings shall be for administrative purposes only, that Tenant (and not Landlord) shall remain fully responsible for compliance of the ConstructionDrawings with the terms of the Lease and all applicable laws, statutes, codes, rules and regulations, and that Landlord’s approval thereof shall notconstitute a representation or warranty of any kind by Landlord,In the event that for any reason Tenant fails to deliver to Landlord its proposed construction drawings and specifications for all improvements tobe installed in the First Expansion Premises as part of Landlord’s Additional First Expansion Premises Work on or before November 1, 2015, each suchday thereafter until such proposed construction drawings and specifications are delivered to Landlord shall constitute one day of “Tenant Delay” forpurposes of this Amendment. In addition, “Tenant Delay” shall also include the following, but only to the extent that Landlord’s First ExpansionPremises Work and/or Landlord’s Additional First Expansion Premises Work is actually delayed thereby, and then only where Landlord has givenTenant prompt notice thereof (which may be by e-mail or telephonic) describing the delay in reasonable detail and setting forth the actions required ofTenant to eliminate or reduce the applicable delay: (i) any delays by Tenant in submitting revised construction drawings and specifications inaccordance with the deadlines set forth above, or any other delay in the performance of Landlord’s First Expansion Premises Work and/or Landlord’sAdditional First Expansion Premises Work to the extent caused by Tenant’s failure to timely perform any of its other obligations under this Exhibit B;(ii) any delay or interference in the performance of Landlord’s First Expansion Premises Work or Landlord’s Additional First Expansion Premises Workto the extent caused by Tenant or anyone employed by or contracted for by Tenant, including, without limitation, contractors, material suppliersand/or utility providers in connection with the Tenant First Expansion Premises Work (as hereinafter defined); (iii) any delay caused by the failure ofthe Construction Drawings to meet the requirements hereof and/or to otherwise fail to comply with applicable laws or codes; (iv) any delay caused byTenant’s inclusion in the Construction Drawings of any materials which are inconsistent with the Building and Existing Premises or which are notavailable to Landlord from reputable local suppliers with no unusual lead times, provided Landlord provides prompt notice to Tenant (which may betelephonic or by e-mail) following Landlord’s obtaining actual knowledge of such unusual time and an opportunity to substitute materials for suchunusual lead time materials; (v) any delay caused by Tenant’s or the Architect’s request or instruction to Landlord or any contractor, subcontractor ormaterial supplier for Landlord’s Additional First Expansion Premises B-2 Work once work thereon has commenced, to the extent such request or instruction is inconsistent with the Construction Drawings; (vi) any ChangeOrder (hereinafter defined) or request for a Change Order made by Tenant, or any change or request by Tenant for change in any Tenant First ExpansionPremises Work (hereinafter defined) previously approved by Landlord; and (vii) unless previously approved, each day from and after December 1,2015until the Construction Drawings arc approved by both Landlord and Tenant.3. Change Orders. Following approval of the Construction Drawings as provided in Section 2 above, Landlord or Tenant may from time to timeprior to completion of Landlord’s Additional First Expansion Premises Work initiate changes in Landlord’s Additional First Expansion Premises Work(each, a “Change Order”). Each Change Order initiated by Tenant must receive the prior written approval of Landlord, such approval to be governedby the standards governing Landlord’s approval of Alterations as set forth in the Lease. Landlord may initiate Change Orders as reasonably requireddue to construction or other circumstances in the interests of the Building and/or compliance with applicable laws and/or codes, and Tenant’s approvalof any such Change Orders proposed by Landlord shall not be unreasonably withheld, conditioned or delayed.4. Cost of Landlord’s Additional First Expansion Premises Work.(a) Construction Cost/First Amendment Allowance. Soft Costs Cap. The entire cost of Landlord’s Additional First Expansion PremisesWork, including both hard costs and soft costs thereof of any kind or nature, and including, without limitation, the costs and expenses of theArchitect (collectively, the “Construction Cost”), shall be paid by Tenant as provided herein, except Landlord shall, subject to and upon theterms and conditions contained in this Exhibit B, contribute the sum of Three Hundred Eighty Eight Thousand Five Hundred Thirty-SevenDollars ($388,537.00) (the “First Amendment Allowance”) towards the Construction Cost. Notwithstanding the foregoing, it is understood andagreed that not more than Seventy Seven Thousand Seven Hundred Seven and 40/100 Dollars ($77,707.40) of the First Amendment Allowance(the “Soft Costs Cap”) may be used to pay costs incurred (i) to prepare or revise the Construction Drawings and/or any and all other plans,drawings specifications and renderings related to Landlord’s Additional First Expansion Premises Work, (ii) for other architectural, engineering,design, consulting, project management, oversight, or for other expenses of any kind related to Landlord’s Additional First Expansion PremisesWork not involving the provision of construction labor or building materials to the Existing Premises, or (iii) for materials and/or labor to installany telecommunications or data cabling (collectively, “Soft Costs”). The entire First Amendment Allowance in excess of the Soft Costs Cap (i.e.$310,829.60) shall only be available for hard construction costs of Landlord’s Additional First Expansion Premises Work [e.g., labor, materialsand other costs customarily included in contractor “general conditions” (e.g., temporary utilities and permanent connection fees, dumpster andcleaning fees, permit fees and equipment rental fees)] (collectively the “Hard Costs”). Further, notwithstanding anything contained herein to thecontrary, Landlord shall have no obligation to provide any portion of the First Amendment Allowance for materials which Landlord reasonablydeems to be B-3 materially not in accordance with its construction standards for the Building, provided however, materials which are reasonably consistent withthe Building and Existing Premises are deemed to be in compliance with construction standards for the Building. Any portion of the FirstAmendment Allowance not utilized for design or construction of Landlord’s Additional First Expansion Premises Work shall accrue to Landlord,and Tenant shall not be entitled to any credit or abatement of its financial obligations under the Lease on account thereof.(b) Excess Construction Costs/Construction Manager. Any Construction Cost in excess of the First Amendment Allowance and any SoftCosts in excess of the Soft Costs Cap (each an “Excess”) shall be paid solely by Tenant as hereinafter provided. It is further understood andagreed Landlord shall be entitled to engage Holm & Associates or another construction manager reasonably satisfactory to Landlord (the“Construction Manager”) to coordinate and oversee Landlord’s Additional First Expansion Premises Work for Landlord’s sole benefit and paythe Construction Manager a fee therefor, which fee shall fee not exceed 5.0% of the Hard Costs. The actual costs of the Construction Manager(subject to the foregoing cap of 5.0% of the Hard Costs) and any actual third party architectural, engineering or other design professional orconsultant review cost reasonably incurred by Landlord in connection with the Construction Drawings or Landlord’s Additional First ExpansionPremises Work shall be included in the Soft Costs.In the event Landlord at any time (or from time to time) determines in its sole but reasonable discretion that the Construction Cost is expected toexceed the First Amendment Allowance or that the Construction Cost is otherwise expected to result in any Excess, then Landlord shall notify Tenantin writing of the same and provide commercially reasonable back-up documentation therefor to Tenant. In such event, Landlord shall be thereafterentitled to submit invoices respecting the Excess to Tenant on a monthly basis in accordance with the following procedure: (i) not more frequentlythan on one occasion during each calendar month, Landlord shall be permitted to submit an invoice to Tenant (which Tenant shall be obligated to paywithin 30 days following its receipt thereof) for the portion of the Construction Cost incurred by Landlord during the prior calendar month, suchportion to equal the amount of the Construction Cost incurred during the prior calendar month by a fraction, the numerator of which shall beLandlord’s then-current reasonably estimated Excess, and the denominator of which shall be Landlord’s then-current reasonable estimate of the overallConstruction Cost (and by way of example, if the then-current estimate of the Excess is $100,000 and the then-current estimate of the ConstructionCost is estimated to be S488.537, then Tenant would be responsible for 20,47% of the Construction Cost incurred by Landlord during the priorcalendar month); and (ii) after the actual Construction Cost has been determined, Landlord shall determine the final Excess amount (suchdeterminations to be made by Landlord in its sole but reasonable discretion, absent manifest error, and Landlord shall provide commercially reasonableback-up documentation therefor to Tenant). In the event such final Excess amount is less than the aggregate amount (if any) which Tenant haspreviously paid on account of the Excess, Landlord shall provide Tenant with a credit against its Base Rent for the First Expansion Premises in theamount of the difference between Tenant’s estimated Excess payments and the actual Excess for which Tenant is B-4 responsible. In the event such final Excess amount is greater than the aggregate amount Tenant has previously paid on account of the Excess, Tenantshall pay to Landlord the remaining portion of the Excess for which it is responsible within thirty (30) days following Landlord’s written invoicetherefor.5. Performance of Landlord’s Additional First Expansion Premises Work. After the Construction Drawings have been approved as provided inSection 2 hereof, Landlord shall solicit at least two (2) general contractor bids and shall then identify the contractor it selects for the performance ofLandlord’s Additional First Expansion Premises Work and submit such contractor’s bid to Tenant for its review and information. Landlord shall usecommercially reasonable efforts to avoid or minimize use of union labor in connection with Landlord’s Additional First Expansion Premises Work,provided that Landlord determines, in its reasonable discretion, that use of non-union labor would not have any material adverse effect on laborrelations at the Building. Unless Tenant requests and Landlord agrees in writing to use an alternative contractor (which agreement Landlord maywithhold in its sole discretion), Landlord shall engage such contractor to obtain a building permit for Landlord’s Additional First Expansion PremisesWork and cause Landlord’s Additional First Expansion Premises Work to be performed in accordance with the Construction Drawings in all materialrespects, such construction to be performed during Building standard construction hours. Landlord shall cause its contractors to use commerciallyreasonable efforts to minimize, to the extent practicable, interference with Tenant’s use of and access to the Premises while performing Landlord’s FirstExpansion Premises Work and Landlord’s Additional First Expansion Premises Work; however, Tenant acknowledges that the performance ofLandlord’s First Expansion Premises Work and Landlord’s Additional First Expansion Premises Work may cause unavoidable interference withTenant’s use of and access to the Premises, and Tenant hereby waives and relinquishes any claims or demands against Landlord on account thereof andagrees that there shall be no abatement of Base Rent or any other financial obligations of Tenant under the Lease on account thereof. Tenant shallcooperate in all reasonable ways and provide Landlord, the Construction Manager and such contractor (together with its subcontractors) reasonableaccess to the Premises for purposes of constructing Landlord’s First Expansion Premises Work and Landlord’s Additional First Expansion PremisesWork. In addition, Tenant shall, at Landlord’s request from time to time, make the Architect available to provide such construction administration andrelated services as Landlord may reasonably request in connection with Landlord’s First Expansion Premises Work Additional First ExpansionPremises Work, including, without limitation, review of samples, shop drawings, requests for information and the like. All costs of the Architect inconnection with the foregoing shall be included in the Soft Costs.6. Construction Representatives. Landlord’s and Tenant’s representatives (each, a “Construction Representative”) for purposes of Landlord’sAdditional First Expansion Premises Work will be as follows, provided that either party may change its Construction Representative by written noticeto the other given in accordance with the terms of the Lease: B-5 Landlord’s Representative: Christina Holm Holm & Associates 29 Plain Road Westford, Massachusetts 01886 Phone: (978) 692-9276 E-mail: cholm@holm-associates.com Tenant’s Representative: Kayla Keefe Mimecast North America, Inc. 480 Pleasant Street Watertown, MA 02472 Phone: (781)966-5340 E-mail: kkeefe@mimecast.comTenant and Landlord acknowledge and agree that Tenant’s Construction Representative and Landlord’s Construction Representative shall havefull power and authority to act on their respective behalf in connection with Landlord’s First Expansion Premises Work, and any action taken by eitherof them in such capacity shall be fully binding upon Tenant or Landlord, respectively, for purposes of this Exhibit B.7. Work by Tenant. The parties acknowledge that Landlord’s Additional First Expansion Premises Work may not include each and every item ofwork and/or preparation necessary to make the First Expansion Premises fully functional for any use, and that Tenant may employ separate contractorsto install Tenant’s trade fixtures, trade equipment, wiring, telecommunications and data systems, security systems, and furnishings therein(collectively, the “Tenant First Expansion Premises Work”). Subject to the terms and provisions hereof and to such reasonable insurance andconstruction requirements as Landlord may reasonably impose, Landlord shall use commercially reasonable efforts to permit Tenant to enter upon theFirst Expansion Premises approximately thirty (30) days prior to the First Expansion Premises Commencement Date for purposes of design, spaceplanning, inspection and the like, and for performance of any Tenant First Expansion Premises Work duly approved by Landlord in accordance withthe terms of the Lease-Tenant, and not Landlord, shall be responsible for all matters relating to the Tenant First Expansion Premises Work, including,without limitation, the design and construction thereof and coordination of the same with Landlord’s First Expansion Premises Work and Landlord’sAdditional First Expansion Premises Work, and the Tenant First Expansion Premises Work shall be considered Alterations for all purposes under theLease. In connection with Landlord’s First Expansion Premises Work, Landlord’s Additional First Expansion Premises Work and the Tenant FirstExpansion Premises Work, both Tenant and Landlord agree to make good faith efforts to maintain harmonious labor relations, and any reasonable costsincurred by Landlord in connection therewith shall be included in the Construction Cost. In furtherance of the foregoing, Tenant shall take allnecessary or reasonable measures to ensure that Tenant’s contractors and their respective subcontractors and material suppliers in connection with theTenant First Expansion Premises Work (and any related activities) shall avoid any delay in the performance of Landlord’s First Expansion PremisesWork and/or Landlord’s Additional First Expansion Premises Work. If the B-6 construction of the Tenant First Expansion Premises Work interferes in any material way with the construction of Landlord’s First Expansion PremisesWork or Landlord’s Additional First Expansion Premises Work, Landlord may, in its reasonable discretion, require that Tenant cease the constructionof Tenant First Expansion Premises Work until such time as Landlord reasonably determines that Tenant First Expansion Premises Work may resumewithout such interference. Landlord may inspect any of the Tenant First Expansion Premises Work at all reasonable times.8. Quality and Performance of Work. Landlord’s First Expansion Premises Work and Landlord’s Additional First Expansion Premises Work shallbe performed in accordance with the Construction Drawings in all material respects, and in a good, workmanlike and lawful manner. Except to theextent to which Tenant shall have given Landlord written notice that Landlord has not performed Landlord’s First Expansion Premises Work and/orLandlord’s Additional First Expansion Premises Work in accordance with the foregoing requirements, specifying Landlord’s failure in reasonabledetail, not later than eleven (11) months following the First Expansion Premises Commencement Date, Tenant shall be deemed conclusively to haveapproved the construction of Landlord’s First Expansion Premises Work and Landlord’s Additional First Expansion Premises Work and shall have noclaim that Landlord has failed to perform any of Landlord’s obligations under this Exhibit B and/or the Lease with respect thereto. Notwithstanding theforegoing, Landlord shall use commercially reasonable efforts to enforce any manufacturer warranties which it may receive in connection withLandlord’s First Expansion Premises Work and Landlord’s Additional First Expansion Premises Work upon Tenant’s written request(s) therefor fromtime to time during the entire First Expansion Premises Term (provided the applicable warranty remains in effect at the time of Tenant’s request). B-7 Exhibit 8.1Subsidiaries of the Registrant Name of Subsidiary Jurisdiction of Incorporation or OrganizationMimecast Limited England & WalesMimecast Services Limited England & WalesMimecast North America Inc. Delaware Exhibit 12.1Certification by the Principal Executive OfficerPursuant to Section 302 of the Sarbanes-Oxley Act of 2002I, Peter Bauer, certify that:1. I have reviewed this annual report on Form 20-F of Mimecast Limited (the “Company”);2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) for the Company and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;(b) [Deliberately omitted](c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annualreport that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theCompany’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control overfinancial reporting.Date: May 25, 2016 By: /s/ Peter Bauer Name: Peter Bauer Title: Chief Executive Officer (Principal Executive Officer) Exhibit 12.2Certification by the Principal Financial OfficerPursuant to Section 302 of the Sarbanes-Oxley Act of 2002I, Peter Campbell, certify that:1. I have reviewed this annual report on Form 20-F of Mimecast Limited (the “Company”);2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) for the Company and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularlyduring the period in which this report is being prepared;(b) [Deliberately omitted](c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annualreport that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theCompany’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the Company’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control overfinancial reporting.Date: May 25, 2016 By: /s/ Peter Campbell Name: Peter Campbell Title: Chief Financial Officer (Principal Financial Officer) Exhibit 13.1Certification by the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002In connection with the Annual Report on Form 20-F of Mimecast Limited (the “Company”) for the year ended March 31, 2016, as filed with the U.S.Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Peter Bauer, as Chief Executive Officer of the Company, and PeterCampbell, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of 2002, that to the best of his knowledge:(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.Date: May 25, 2016 By: /s/ Peter Bauer Name: Peter Bauer Title: Chief Executive Officer (Principal Executive Officer) By: /s/ Peter Campbell Name: Peter Campbell Title: Chief Financial Officer (Principal Financial Officer) Exhibit 15.1Consent of Independent Registered Public Accounting FirmWe consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-208384) pertaining to the Mimecast Limited 2007 KeyEmployee Share Option Plan, the Mimecast Limited 2010 EMI Share Option Scheme, the Mimecast Limited Approved Share Option Plan, the MimecastLimited 2015 Share Option and Incentive Plan, and the Mimecast Limited 2015 Employee Share Purchase Plan, of our report dated May 25, 2016, withrespect to the consolidated financial statements of Mimecast Limited included in this Annual Report (Form 20-F) for the year ended March 31, 2016./s/ Ernst & Young LLPBoston, MassachusettsMay 25, 2016
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