TAC Infosec Ltd Management Discussions

The discussion hereunder covers Companys performance and its business outlook for the future. This outlook is based on assessment of the current business environment and Government policies. The change in future economic and other developments are likely to cause variation in this outlook.

The Managements views on the Companys Performance and outlook are discussed below:

ECONOMIC REVIEW: Global Economy:

Global economic growth is anticipated to reach 3.1 percent in 2024 and 3.2 percent in 2025. The forecast for 2024 exceeds the October 2023 World Economic Outlook (WEO) by 0.2 percentage points due to stronger-than-anticipated resilience observed in the United States and several prominent emerging market and developing economies, alongside scal measures implemented in China. Nevertheless, the projected growth rates for 2024-2025 fall short of the 3.8 percent historical average recorded during 2000-2019. This divergence is attributed to heightened central bank policy rates aimed at combating in ation, reduction in scal support amidst elevated debt levels that impose constraints on economic activity, and sluggish underlying productivity gains. Notably, in ation rates are declining more swiftly than earlier projections across most regions, driven by the resolution of supply-side disruptions and the implementation of restrictive monetary policies. Global headline in ation is expected to decrease to 5.8 percent in 2024 and further to 4.4 percent in 2025, with downward revisions made to the 2025 forecast.

Indian Economy Outlook:

India has maintained a strong economic performance despite global challenges and geopolitical concerns. This resilience can be attributed to robust domestic demand, a pickup in rural demand, strong investment levels, and sustained momentum in manufacturing. Despite global challenges, India stands out for its robust economic growth, demonstrating broad-based expansion across various sectors and rea rming its pivotal role in supporting global economic growth.

The combined e orts of the government and the Reserve Bank of India (RBI) to tackle in ation through strategic policy rate adjustments, bolstering food reserves, and facilitating easier imports have successfully managed in ationary pressures. As a result, retail in ation in the scal year 2023-24 saw a notable decrease, reaching its lowest point since the onset of the Covid-19 pandemic. Core in ation speci cally declined to 3.3% by March 2024. Moreover, the forecast of an above-normal monsoon in 2024 augurs well for agricultural productivity, which is expected to further alleviate concerns regarding in ation.

The backdrop of slowing global trade poses challenges for economies globally. However, India is poised to reduce its trade de cit in the upcoming years, supported by the expanded coverage of the Production Linked Incentive (PLI) scheme across multiple sectors. Strong export performance and robust remittance in ows are anticipated to contribute signi cantly. International agencies and the Reserve Bank of India (RBI) forecast that the Current Account De cit (CAD) as a percentage of GDP will likely have moderated to below 1% in the scal year 2023-24.

India remains the fastest-growing major economy, with international organizations and the Reserve Bank of India (RBI) providing positive assessments of its growth outlook for the currentfinancial year.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

Indias IT & BPM sector is a key driver of economic growth, contributing signi cantly to GDP and societal well-being. With a current GDP contribution of 7.4% (FY22) and a projected 10% contribution by 2025, the sector is poised for further expansion. Leveraging its large internet user base and a ordable internet rates, India is well-positioned for the next phase of its IT revolution. The governments Digital India Programme has established a robust digital infrastructure, enabling rapid digital adoption and empowering citizens. This has resulted in improved economic value creation and enhanced citizen experiences. Indias innovation ecosystem has also seen signi cant growth, with a six-place jump to 40th position in the 2022 Global Innovation Index. Key success factors include government initiatives, private sector innovation and investment, and the proliferation of digital applications across various industries and work ows, ultimately driving positive change in citizens daily lives.

According to National Association of Software and Service Companies (Nasscom), the Indian IT industrys revenue touched US$ 227 billion in FY22, a 15.5% YoY growth and was estimated to have touched US$ 245 billion in FY23.

In 2022, the Indian domestic IT & Business Services market was valued at US$ 13.87 billion and recorded a 7.4% yearover-year (YoY) growth as compared to 7.2% in 2021. IT spending in India is expected to increase to US$ 110.3 billion in 2023 from an estimated US$ 81.89 billion in 2021. Indian software product industry is expected to reach US$ 100 billion by 2025. Indian companies are focusing on investing internationally to expand their global footprint and enhance their global delivery centres.

The data annotation market in India stood at US$ 250 million in FY20, of which the US market contributed 60% to the overall value. The market is expected to reach US$ 7 billion by 2030 due to accelerated domestic demand for AI.

Indias IT industry is likely to hit the US$ 350 billion mark by 2026 and contribute 10% towards the countrys gross domestic product (GDP), Infomerics Ratings said in a report.

As an estimate, Indias IT export revenue rose by 9% in constant currency terms to US$ 194 billion in FY23. Export of IT services has been the major contributor, accounting for more than 53% of total IT exports (including hardware). BPM and engineering and R&D (ER&D) and software products exports accounted for 22% and 25%, respectively of total IT exports during FY23.

Exports from the Indian IT industry stood at US$ 178 billion in FY22. Export of IT services was the major contributor, accounting for more than 51% of total IT export (including hardware). BPM and engineering and R&D (ER&D) and software products export accounted for 20.78% each to total IT exports during FY21. The ER&D market was expected to grow to US$ 42 billion by 2022. The IT industry added 2.9 lakh new jobs taking the industrys workforce tally to 5.4 million people in FY23.

Government Initiatives:

The IT & BPM sector is a signi cant growth driver for the Indian economy, contributing substantially to GDP and public welfare. With a projected GDP contribution of 10% by 2025, the sector is poised for further expansion. Indias large internet user base, a ordable internet rates, and solid digital infrastructure have created a fertile ground for digital adoption and innovation.

The governments Digital India Programme has been instrumental in driving digital growth, with initiatives like data localization, cybersecurity, hyper-scale computing, AI, and blockchain. The IT industry has attracted signi cant investments, with Japanese investments growing 4X between 2016-20.

The sector has seen substantial growth, with top Indian IT companies like TCS, Wipro, and Infosys o ering numerous job opportunities. The IT spending in India is estimated to record a double-digit growth of 11.1% in 2024, totaling $138.6 billion.

Indian IT rms have a signi cant global footprint, with delivery centers worldwide and strategic alliances with international players. The sector is well-diversi ed across verticals like BFSI, telecom, and retail.

The government has provided policy support, with an allocation of Rs. 97,579.05 crore (US$ 11.8 billion) for the IT and telecom sector in the Union Budget 2023-24. Indias Digital Competitiveness Score of 60 re ects the rise of tech talent in the country.

The IT industry is expected to hit the US$ 350 billion mark by 2026, with exports from the Indian IT services industry standing at US$ 199 billion in FY24. The sector has added 2.9 lakh new jobs, taking the industrys workforce tally to 5.4 million people in FY23.

Overall, Indias IT & BPM sector is poised for continued growth, driven by innovation, digital adoption, and government support.

OUR BUSINESS:

Our Company was originally incorporated as ‘TAC Infosec Private Limited as a Private Limited Company, under the provisions of the Companies Act, 2013 vide Certi cate of Incorporation dated August 01, 2016, issued by the Registrar of Companies, Central Registration Centre. Subsequently, theCompany was converted from a private limited company to public limited company and consequently, the name of the Company changed to "TAC Infosec Limited".

Our company is benefited from the extensive experience of our Promoters, Mr. Trishneet Arora and Mr. Charanjit Singh who is associated with our company since its incorporation and having combined experience of more than 10 (Ten) years in the Cybersecurity and vulnerability management. Our Board of Directors and other Key Managerial Personnel including Senior Management Personnel (SMP) and Advisory to the Board has also provided signi cant contribution in the growth of our company.

Our company is engaged in the business of providing risk-based vulnerability management and assessment solutions, cybersecurity quanti cation and services of Penetration testing to organizations of any scale, size, and business through "SaaS model". Our company o ers security software products and solutions both in India and internationally. Our end customers are Banks andfinancial Institutions, government regulatory bodies and departments, large-scale enterprises (including business o ces) like HDFC, Bandhan Bank, BSE, National Payments Corporation of India, DSP investment Managers Private Limited, Motilal Oswal Financial Services Limited and NSDL e-Governance. Our agship software product is ESOF (Enterprise Security in One Framework) which was launched in 2018. ESOF is a vulnerability management platform consisting of various product portfolio namely ESOF Appsec, ESOF VMP, ESOF VACA, ESOF PCI ASV, ESOF CRQ. All the products launched under ESOF Platform have wide range of applications ranging from vulnerability management solutions for web and application-based data, compliance assessment, and cyber risk quanti cation.

Vulnerability Management is the continuous process of identifying, assessing, prioritizing, mitigating, and remediating the vulnerabilities across the complete Information Technology infrastructure of the organization. Cybersecurity of the organizations needs to be monitored in real-time and remediated as soon as possible to avoid attacks, this activity is often overseen by organizations through vulnerability management tools or products. While, Risk-Based Vulnerability Management (RBVM) is the process of prioritizing vulnerabilities for remediation based on the level of risk each vulnerability discovered, poses to your organization and IT Infrastructure. The RBVM method allows the organization to priori-tize their vulnerabilities discovered on the basis of the severity, making it time and cost-effective while having a concrete cybersecurity process in place. ESOF o ers a robust vulnerability assessment mechanism that scans and identi es potential security loopholes within the IT infrastructure and along with con guration assessment, it ensures that IT systems are not only free from vulnerabilities but also con gured optimally to resist potential threats. Also, ESOFs auto-prioritiza-tion feature utilizes advanced algorithms to rank vulnerabilities based on their severity, potential impact, and exploitability, ensuring that critical issues are addressed promptly.

Apart from above, ESOF also provides Asset Tiering, Business Unit Regrouping and Cyber score services. These services, coupled with risk quanti cation, provide senior management and board members with a well-informed and strategically planned approach to navigating the challenges and opportunities within their organizations. ESOF platform is more than just a vulnerability management tool as it provides comprehensive framework that empowers organizations to navigate the complex cybersecurity landscape.

We have been successful in augmenting our portfolio of solutions over time through continuous Product Development which we believe is a key di erentiator of our business model. Over the past ve years, we have introduced a range of solutions focused on risk-based vulnerability management, risk quanti cation, and compliance assessment. Our commitment to innovation is evident as we consistently invest in both enhancing our existing solutions and developing new ones.

ESOF (Enterprise Security in One Framework)

Our company launched ESOF Platform on SaaS (Software as a Services) Model in 2018 under the guidance and leadership of our Promoters and Directors. Under the umbrella of ESOF our company has launched total of 5 (Five) Product by the name of ESOF Appsec, ESOF VMP, ESOF VACA, ESOF PCI ASV, ESOF CRQ. Overview of each product is mentioned below: ESOF Appsec: ESOF Appsec is a Uni ed Vulnerability Management Solution to Detect & Protect your Web and App Assets from risk-based vulnerabilities along with other features such as Scheduled scans, Vulnerability timeline, Cyber risk score, Historic trend data and Prioritising vulnerabilities

ESOF VMP: ESOF VMP provides vulnerability management platform. Vulnerability management is a crucial aspect of cybersecurity and ESOF VMP provides risk-based vulnerability management services by y identifying, prioritizing, safely exploiting and helping to remediate vulnerabilities before it can be a material threat to the organization.

ESOF VACA: ESOF VACA (Vulnerability Assessment Con guration Assessment) provides Identify, Evaluate, Prioritize, and Mitigate all the dominant vulnerabilities and risks in real-time across the entire IT landscape via an allin-one platform providing various benefits Single Platform with Cloud Agent, E ortless Deployment and Boost Productivity.

ESOF PCI ASV: ESOF PCI ASV is a comprehensive and integrated solution to ensure compliance with PCI (Payment Card Industry) requirements. PCI Compliance is adherence to the set of policies and procedures developed to protect details and transactions of cardholders. It provides comprehensive reporting, automatic scheduled scan, enterprise vide compliance dashboard and scheduled scan.

ESOF CRQ: ESOF CRQ (Cyber Risk Quanti cation) providesfinancial risk assessment by way of quanti cation of cyber risk through Arti cial Intelligence and Machine Learning in order to identify potential threats before it can be materi-alised and management can take informed decision.

Other Services: We also provide services of Penetration Testing, commonly known as pen testing, is a form of ethical hacking aimed at discovering and remedying security vulnerabilities in networks, systems, and applications. Our company is a CREST (Council for Registered Ethical Security Testers) certi ed company o ering assurance to clients regarding the security of their data. The companys services align with regulatory requirements such as GDPR and

ISO 2700.

Opportunities:

Digital Modernization:

The Company is poised to capitalize on the burgeoning demand for digital transformation in the IT industry, driving business growth and di erentiation. By developing cutting-edge solutions for process automation, document management, and work ow optimization, we can empower organizations to streamline operations, enhance e ciency, and unlock new levels of productivity.

Leveraging our expertise and innovative capabilities, we can deliver tailored solutions that address the unique needs of our clients, enabling them to navigate complex digital landscapes and achieve sustainable competitive advantage. Through this strategic focus, we can outperform our peers, solidify our market position, and drive long-term success.

Cloud Enablement:

The paradigm shift towards cloud-based solutions presents a transformative opportunity for to expand its cloud service portfolio, delivering agile, scalable, and cost-optimized solutions that cater to the evolving needs of our clients. By capitalizing on this shift, can diversify its o erings, enhance its competitive edge, and drive business growth by delivering exceptional value to clients through increased e ciency, exibility, and reduced costs. This enables to strengthen its position as a trusted partner in the digital transformation journey of its clients, unlocking new revenue streams and fostering deeper relationships, thereby solidifying its position as a leading provider of cloud-based solutions.

Regular Compliances:

This presents a lucrative opportunity for the Company to showcase its expertise in delivering compliance-centric solutions, tailored to meet the escalating demands of these highly regulated industries. By doing so, the Company can capitalize on this growing market requirement, establishing itself as a trusted partner for organizations seeking to navigate complex regulatory landscapes and maintain impeccable compliance standards. This strategic focus can yield signi cant revenue growth, while reinforcing the Companys reputation as a leader in compliance-focused solutions.

Advanced Technologies:

The advent of Arti cial Intelligence (AI) and Machine Learning (ML) technologies is revolutionizing various industries, presenting a transformative opportunity for the Company to expand its portfolio and bolster its competitive edge. By investing in these cutting-edge technologies, the Company can harness their power to drive business transformation, enhance operational e ciency, and foster innovation. This strategic investment will enable the Company to stay ahead of the curve in a rapidly evolving market, unlock new revenue streams, and drive sustainable growth. As AI and ML technologies continue to shape the future of various industries, the Companys investment in these areas will position it for long-term success and business excellence.

International Market Development:

Venturing into emerging markets presents a lucrative opportunity for the Company to diversify and expand its customer base, thereby driving business growth and increasing market share. The growing demand for innovative software solutions to modernize operations and enhance e ciency in these markets will serve as a catalyst for the Companys growth, enabling it to capitalize on the burgeoning need for digital transformation. By developing cutting-edge software solutions tailored to the unique needs of emerging markets, the Company can establish itself as a pioneer in the industry, foster long-term partnerships, and unlock new revenue streams, ultimately propelling its growth trajectory and solidifying its position as a leader in the global market.

THREATS, RISKS AND CONCERNS: Intense competition:

Launched in a highly competitive IT services landscape, your company navigates a complex ecosystem where both entrenched industry leaders and agile startups vie for market share. To sustain a competitive edge in this dynamic environment, Zensar must prioritize continuous innovation, harnessing the power of cutting-edge technologies, and pioneering novel solutions to address evolving client needs. By fostering a culture of innovation, Zensar can di erentiate itself, stay ahead of the curve, and maintain its relevance in a rapidly changing market, ultimately driving business growth and reinforcing its position as a forward-thinking leader in the IT services sector.

Cyber-attacks:

In todays digital landscape, the proliferation of technology has precipitated a surge in cyberattacks, posing a signi cant threat to sensitive client data. Consequently, it is essential for the Company to prioritize investment in comprehensive and robust security measures, ensuring the forti cation of its digital infrastructure and the protection of con dential client information. By doing so, the Company can mitigate the risk of cyber breaches, maintain the trust and con dence of its clients, and uphold its reputation as a secure and reliable partner. Proactive investment in cutting-edge security solutions will enable the Company to stay ahead of emerging threats, safeguard its digital assets, and ensure the integrity of its operations.

Your Companys software demand is inherently tied to the ebbs and ows of the global economy, rendering it susceptible to economic downturns and market uctuations. During periods of economic instability, a corresponding decrease in IT investment can have a deleterious impact on the Companys revenue streams and growth trajectory. As such, it is crucial for the Company to be cognizant of these market dynamics and develop strategies to mitigate potential risks, ensuring the maintenance of a stable revenue foundation and the continuation of growth initiatives, even in the face of economic uncertainty.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate internal control procedures commensurate with its size and nature of business in India. The Company has clearly laid down policies, guidelines and procedures that form a part of the internal control systems. The adequacy of Internal Control Systems, which encompasses the Companys business processes andfinancial reporting systems, is examined by the management at regular intervals.

The Company has maintained internal control system in order to identify weaknesses and suggest improvements for better functioning. The observations derived are regularly noted by the management and relevant steps are taken to mitigate the same in order to ensure effective functioning within the Company.

OUTLOOK:

The security software industry is characterised by continuous advancement in technology. To maintain and advance our position in the market, we intend to continue to strengthen our Product Development capabilities, which shall enable us to innovate and develop solutions with the latest technology for existing and upcoming platforms. In addition to continued R&D and technology investments in development of new solutions, we may pursue acquisitions of, or investments in, or licensing of, technologies that complement our portfolio. In our continuing e ort to strengthen our Product Development abilities, we propose to utilise _ 1800.00 Lakhs of the Net Proceeds towards funding of our inorganic and organic growth through investment in Human resources and Product Development. Your company is providing risk-based vulnerability management solutions, cybersecurity quanti cation and services of Penetration testing to organizations of any scale, size, and business through its SaaS model. AI and ML algorithms can analyze vast amounts of data to identify patterns and anomalies indicative of potential security threats. Automated threat detection enables the rapid identi cation of vulnerabilities, ensuring a timely response to potential risks providing Real time monitoring, prioritizing of risks and vulnerabilities, Reduced False positive and Predictive Analysis for potential material vulnerabilities and threats.

Your company has a proven track record of successful operations in India as well as Outside India. At present we provide solutions to our clients under ESOF solutions having various sub-solutions encompassing on vulnerability management, cyber risk quanti cation and continuous assessment of clients system in accordance with the need of our clients. At present, we have 5 (Five) products under ESOF and further we are planning to continuously add new products through R&D. We are soon launching ESOF Ensure which deals with Risk Rating & Cyber Insurance Solutions.

Your Company is customer oriented and always strives to maintain good relationship with the customers. Our Companys marketing team approaches existing customers for their feedback and based on their feedback any changes in the products if required are carried out. Our Company provides quality products and effective follow-ups with customers who ensure that the customers are satis ed with the product and do not have any complain.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

The key strategy will be focused around:

1. Financial strength & liquidity

2. Professional Management

3. Timely completion of Orders

4. Customer care

5. Brand Equity

Financial Performance and Review of Operations:

The Company has adequate internal control procedures commensurate with its size and nature of business in India. The Company has clearly laid down policies, guidelines and procedures that form a part of the internal control systems. The adequacy of Internal Control Systems, which encompasses the Companys business processes andfinancial reporting systems, is examined by the management at regular intervals.

The Company has maintained internal control system in order to identify weaknesses and suggest improvements for better functioning. The observations derived are regularly noted by the management and relevant steps are taken to mitigate the same in order to ensure effective functioning within the Company.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFORE:

DISCLOSURE OF ACCOUNTING TREATMENT

Thefinancial statements of the Company have been prepared in accordance with Accounting Standard ("AS") noti ed under the Companies (Accounting Standards) Rules, 2021 read with section 133 of the Companies Act, 2013. The Company has adequate internal control procedures commensurate with its size and nature of business in India. The Company has clearly laid down policies, guidelines and procedures that form a part of the internal control systems. The adequacy of Internal Control Systems, which encompasses the Companys business processes andfinancial reporting systems, is examined by the management at regular intervals.

The Company has maintained internal control system in order to identify weaknesses and suggest improvements for better functioning. The observations derived are regularly noted by the management and relevant steps are taken to mitigate the same in order to ensure effective functioning within the Company.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS:

The Companys relations with the employees continued to be cordial and harmonious with its employees. It considers manpower as its assets and that people had been driving force for growth and expansion of the Company. The Company acknowledge that its principal assets is it employees. The Company has continued its e orts in building a diverse and inclusive workforce.

As on March 31, 2024 the Company has 63 employees on its roll. The Company will continue to create opportunity and ensure recruitment of diverse candidates without compromising on meritocracy.

CAUTIONARY NOTE:

Statements in this Report, describing the Companys objectives, projections, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Forward looking statements are based on certain assumptions and expectations of future events. These statements are subject to certain risks and uncertainties. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results may be di erent from those expressed or implied since the Companys operations are a ected by many external and internal factors, which are beyond the control of the management. Hence the Company assumes no responsibility in respect of forward-looking statements that may be amended or modi ed in future on the basis of subsequent developments, information or events.