TAC Infosec

Risks

• The company`s business will suffer if its fail to anticipate and develop new product and services thereon and enhance existing products portfolio in order to keep pace with rapid changes in technology and the industries on which the company focus.

• If the company does not successfully anticipate market needs or develop and introduce new solutions that meet users` needs on a timely basis, its may not be able to compete effectively and the company`s revenue, reputation, financial conditions, results of operations and cash flows may be adversely affected.

• Its investments in technology may not yield the intended results especially on the company technical development.

• There may be potential conflict of interests between the Company and other group Companies / entities or enterprises promoted by its Promoters or directors or in which its promoters / directors may be interested.

• Any inability to license or incorporate software and technology rights held by third parties in its solutions may adversely impact the company`s business, financial position, results of operations and cash flows.

• Its pricing structures does not accurately anticipate the cost and complexity of performing its work and if the company is unable to manage costs successfully, then certain of its contracts could be or become unprofitable.

• The company has certain outstanding litigation against the Company, an adverse outcome of which may adversely affect its business, reputation and results of operations.

• The Company is dependent on few numbers of customers for sales. Loss of any of this large customer may affect its revenues and profitability.

• Intense competition in the market for technology services could affect its pricing, which could reduce the company share of business from clients and decrease its revenues and profitability.

• The company intend to utilize Rs. 1,865.00 Lakhs of the Net Proceeds for Investment in Human resources and Product Development. The company has relied on the management estimates for number of employees to be hired and average salary to be deployed to such hired employees. Such estimates have not been appraised by any bank or financial institution or any other independent agency.

• Failure to offer customer support in a timely and effective manner may adversely affect its relationships with the company`s customers.

• Its Promoters, members of Promoter Group and director have provided personal guarantees to certain loan facilities availed by it, which if revoked may require alternative guarantees, repayment of amounts due or termination of the facilities.

• The company is subject to risks associated with expansion into new markets.

• The company may be liable to its clients for damages caused by system failures, disclosure of confidential information or data security breaches, which could harm its reputation and cause the company to lose clients.

• If there is a change in tax regulations, its tax liabilities may increase and thus adversely affect the company financial position and results of operations. In addition, the company has availed benefit under section 80IAC of Income Tax Act 1961.

• The company has entered into a number of related party transactions and may continue to enter into such transactions under AS 18, in the future, and there can be no assurance that the company could not have achieved more favourable terms had such transactions not been entered into with related parties.

• The company does not own the Registered office and other office premises. Any dispute in relation to lease of its premises would have an adverse effect on the company`s business and results of operations.

• Its insurance coverage may not adequately protect the company against certain operating hazards and this may have a material adverse effect on its business.

• Any Penalty or demand raised by statutory authorities in future will affect its financial position of the Company.

• Changing regulations in India could lead to new compliance requirements that are uncertain. The regulatory environment in which its operate is evolving and is subject to change.

• The company`s business is operating under various laws which require its to obtain approvals from the concerned statutory/regulatory authorities in the ordinary course of business and its inability to obtain, maintain or renew requisite statutory and regulatory permits and approvals for its business operations could materially and adversely affect the company`s business, prospects, results of operations and financial condition.

• The company requires certain approvals and licenses in the ordinary course of business, some of the approvals are required to be transferred in the name of `TAC Infosec Limited, the company is yet to update the some of the said registrations and the failure to successfully update such registrations would adversely affect its operations, results of operations and financial condition.

• Within the parameters as mentioned in the chapter titled "Objects of this Issue" of this Red Herring Prospectus, the Company`s management will have flexibility in applying the proceeds of this Issue. The fund requirement and deployment mentioned in the Objects of this Issue have not been appraised by any bank or financial institution.

• The company has not identified any alternate source of raising the funds required for the object of the Issue and the deployment of funds is entirely at its discretion and as per the details mentioned in the section titled "Objects of the Issue".

• The Company has in the past not complied with the certain provisions of the Companies Act, 2013. Further, there have also been instances where the Company has inadvertently filed incorrect information with the RoC in its statutory filings.

• In addition to normal remuneration, other benefits and reimbursement of expenses to its Promoter, Directors, key Managerial Personnel and ; they are interested to the extent of their shareholding and dividend entitlement thereon in the Company and for the transactions entered into between the Company and themselves as well as between the Company and its Group Companies/Entities. The Company in future may enter in related party transactions subject to necessary compliances.

• The average cost of acquisition of Equity shares by its Promoters is lower than the Issue price.

• Its success depends heavily upon its Promoter, Directors, Key Managerial Personnel and Senior Managerial Personnel for their continuing services, strategic guidance and financial support. Its success depends heavily. upon the continuing services of Promoter, Directors, Key Managerial Personnel and Key Managerial Personnel who are the natural person in control of the Company.

• Its Promoter and Promoter group will continue jointly to retain majority control over the Company after the Issue, which will allow them to determine the outcome of matters submitted to shareholders for approval.

• The company faces competition from both domestic as well as international markets and its inability to compete effectively may have a material adverse impact on its business and results of operations.

• There is no monitoring agency appointed by the Company to monitor the utilization of the Issue proceeds.

• Industry information included in this Red Herring Prospectus has been derived from industry sources There can be no assurance that such third-party statistical, financial and other industry information is either complete or accurate.

• Any future issuance of Equity Shares may dilute your shareholdings, and sale of the Equity Shares by its major shareholders may adversely affect the trading price of the company Equity Shares.

• Its ability to pay dividends in the future will depends upon the company future earnings, financial condition, cash flows, working capital requirements, capital expenditure and restrictive covenants in its financing arrangements.

• Its inability to effectively implement the company`s business and growth strategy may have an adverse effect on its operation and growth.

• The requirements of being a public listed company may strain its resources and impose additional requirements.

• There are certain discrepancies and non-compliances noticed in some of its financial reporting and/or records relating to filing of returns and deposit of statutory dues with the taxation and other statutory authorities.