Spectrum Talent

Risks

• Its top 10 and top 5 customers contribute majority of the company revenues from operations for the financial year 2021-22, 2020-21 and 2019-20. Any loss of business from one or more of them may adversely affect its revenues and profitability.

• The company may face decrease in profits due to any change in taxation policy.

• Any failure to attract and retain qualified Associates who meet the staffing requirements of its clients may adversely affect its business prospect, reputation and future financial performance.

• The company operate in a highly competitive and fragmented industry with low barriers to entry and may be unable to compete successfully against existing or new competitors, particularly in the unorganized segment.

• Loss of major clients or the deterioration of their financial condition or prospects could have a material adverse effect on its business.

• Due to the nature of the staffing services business, its may be exposed to employment-related claims and losses that could have a material adverse effect on its business and reputation.

• The company may discontinue its Electronics export business in the near future.

• Its may be unable to perform background verification procedures on its Associate Employees prior to placing them with the company clients.

• The company could be harmed by employee misconduct or errors that are difficult to detect and any such incidences could adversely affect its financial condition, results of operations and reputation.

• The company businesses are subject to various operational risks and any adverse incident or accident involving employees in its businesses may adversely affect the company reputation, business, results of operations and financial condition.

• The restated consolidated financial statements have been provided by peer reviewed chartered accountants who is not statutory auditor of the Company.

• Its business is significantly affected by fluctuations in general economic activity.

• The Company, its Promoters, its Directors, Group Companies and Subsidiaries are involved in certain legal proceeding(s). Any adverse decision in such proceeding(s) may render it/them liable to liabilities/penalties and may adversely affect its business and results of operations.

• The company business is subject to extensive government regulation, which may restrict the types of services its permitted to offer or result in additional tax or other costs that reduce its revenues and earnings.

• The company may be unable to fully realize the anticipated benefits of any future acquisitions successfully or within its intended timeframe.

• The company has Pan India tie ups with colleges & NGOS to provide its Human Resource services. However, The company don`t have any formal agreement with these Colleges & NGO`s for its services.

• Within the parameters as mentioned in the chapter titled "Objects of the Offer" beginning on page 65 of this Draft Red Herring Prospectus, the Company`s management will have flexibility in applying the proceeds of this Offer. The fund requirement and deployment mentioned in the Objects of this Offer have not been appraised by any bank or financial institution.

• If the company is unable to identify expansion opportunities or experience delays or other problems in implementing such projects, its growth, business, financial condition, results of operations and prospects may be adversely affected.

• Inability to effectively manage its growth and related issues could materially and adversely affect its business and impact the company future financial performance.

• India has stringent labour legislations that protect the interests of workers, and if the company employees unionize, its may be subject to industrial unrest, slowdowns and increased wage costs.

• The company ability to operate its business, maintain its competitive position and implement its business strategy is dependent to a significant extent on its senior management team and other key personnel.

• Client contracts are generally of a short duration and contain termination provisions that could decrease its revenues and earnings.

• Clients may delay or default in making payments for services which could affect the cash-flows and liquidity of the Company.

• The Company had negative cash flows from its Operating activities, Investing activities as well as Financing activities in some of the previous year(s).

• The COVID-19 pandemic, or any future pandemic or widespread public health emergency, could adversely impact its business, results of operations, financial condition and cash flows.

• The company revenues and profitability vary across its business verticals, thereby making its future financial results less predictable.

• Any excess payment made to its Associates may result in irrecoverable losses.

• Its indebtedness and the restrictions imposed by the company financing arrangements could adversely affect its ability to conduct the company business and operations.

• The company Promoters have provided personal guarantees to loan facility availed by it, which if revoked may require alternative guarantees, repayment of amount due or termination of the facilities.

• The Registered Office of the Company is not owned by it. The company has taken No Objection Certificate (NOC) for the use of such premises. In the event, the NOC is withdrawn its may suffer a disruption in the company operations.

• The Company is still using one of the offices even after rent agreement has expired.

• The average cost of acquisition of Equity Shares by its Promoters is lower than the Offer Price.

• The company insurance coverage may not be adequate and this may have a material adverse effect on its business financial condition and results of operation.

• Upon completion of the Offer, its Promoters and Promoter Group will continue to retain control over it, which will allow them to influence the outcome of matters submitted to the shareholders for approval.

• There may be potential conflict of interests between the Company, Subsidiary and Group Company promoted by its directors or Promoter Group Members/ Entities.

• The company has in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.

• The company has not independently verified certain industry data in this Draft Red Herring Prospectus.

• Any change in Data Protection Regulations may affect its profitability.

• The deployment of funds raised through this Offer shall not be subject to any Monitoring Agency and shall be purely dependent on the discretion of the management of the Company.